Home-Financing Finesse

Your mortgage advisor’s knowledge and experience can help you through the homebuilding or purchasing process. By Judy Dahl

It’s a good time to build a home, affirms Karen Wedvick, senior mortgage loan officer at Johnson Bank. “Builders are eager to accommodate buyers and are more flexible in allowing different options than in past years,” she says.
And if you’re among those searching for a neighborhood that fits your family’s needs and lifestyle, and the perfect lot therein, Wedvick recommends you consult your mortgage advisor first. “That’s the best approach from the financing standpoint,” she says. “That way your advisor can walk you through the whole process, from buying land, to picking a builder, to having blueprints developed. You’ll be informed every step of the way, which makes it less stressful.”
If you’ve already found a lot or a finished home, even the best borrowers should seek advice from a mortgage professional before putting in an offer. “There are so many unique situations out there in the market, especially today,” says Wedvick.
“Your mortgage advisor can really be a great resource,” she adds. “As you put an offer on a home, or even accept an offer on yours, they have such a breadth of experience and insight that they can oftentimes give you additional information you may not have been exposed to.”

A focus on individual needs
The mortgage advisors at family-owned Johnson Bank—with its motto, “We treat you like family”—specialize in working closely with potential buyers to understand their individual needs and determine the best loan options available to meet those needs. In fact, Freddie Mac recently recognized the bank as one of only 11 in the nation to meet its Tier One Gold standards for excellence in mortgage servicing.
“In keeping with the Johnson tradition, we’re focused on the individual and his or her needs. We recognize that each situation is unique and work through it with the borrower to ensure the process is smooth and as painless as possible,” Wedvick says.
“Being a local bank with local underwriting decisions, and being able to use our own appraisers, allows us to tailor lending transactions to individuals,” she adds. “A lot of big banks with centralized lending functions—often located in faraway states—don’t have that flexibility.”

Tailored loan options
Johnson Bank offers options that some lending institutions can’t, such as bridge loans. “If you want to buy a new house before your current one sells, we can pull equity out of the existing home and bring it to the
closing of the new one,” explains Wedvick. “The bridge loan pays off your existing mortgage, and then you have your down payment. When your home sells, the proceeds pay off the bridge loan.”
A loan servicing enhancement Johnson Bank offers, a 2–1 buy-down, is increasingly popular. “If you wanted to buy a house, you could lock in your rate on a 30-year fixed mortgage at the current rate, say five percent,” says Wedvick. “We could give you a rate two percent below that rate, or three percent, in the first year of the loan. In the second year you’d pay one percent below the five-percent note rate, or four percent, and in the third and subsequent years you’d pay the note rate.”
The seller of the home pays for the loan
discount. “So it’s not really a product we offer, but a servicing enhancement we’re able to accommodate,” Wedvick clarifies. “We have that ability because we service our own loans. Many banks outsource loan servicing, so they have no say in the servicing decision.”
Many home sellers are offering 2–1 buy-downs rather than lowering the selling price repeatedly. “For the buyer, the lower monthly payments go much further in saving money than a price reduction would,” says Wedvick.
The bank offers other flexible down
payment arrangements as well. “Certain borrowers can purchase a home with as little as $500 of their own money; the rest can be gifted,” says Wedvick.
Johnson Bank doesn’t offer products such as subprime loans, or negative amortization loans (where the monthly payment is insufficient to cover the interest and the balance actually rises, at least in the early years of the loan). Part of the bank’s relationship-based service includes helping borrowers make decisions that are in their best interests.
Wedvick’s top tip for home buyers? “Really focus on developing a strong relationship with a mortgage advisor you trust who’s working for an institution you trust.”


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