CORTLAND, Ohio – With the red-hot residential real estate market, an already-big decision has grown into something even larger for first-time homebuyers.
As Cortland Bank resumes its in-person homeownership seminars, the focus isn’t just on making sure those ready to take the leap know all about interest rates, their credit scores or how large a down payment they ought to make.
Now a big part of the job, says its vice president for retail mortgage banking, Mark Chuey, is being a life coach and armchair psychologist.
“It’s 99% of what we do. We share our knowledge … but we also end up doing a lot of personal coaching. Our jobs aren’t just financial coaching or homebuyer coaching,” says Chuey, who leads the seminars.
Beyond the basics of owning a house and financial aid programs, he also discusses the state of the market. And right now, it can be daunting for those who’ve never bought a home.
“It’s not so much demand – though it did start with demand – as it is a lot of decisions are being made to purchase [houses] that are entirely emotional. The fear of missing out is a big motivator,” Chuey says.
“The advice I give to homeowners – first-time, second-time, third-time, it doesn’t matter – is specific,” he continues. “First: understand what your comfort level is with the unknown. If you’re determined to purchase a home, you have to know that you’re not going to be able to look at it twice. There has to be a comfort level to ingest that thinking and make a rational decision.”
Items No. 2 and 3, he says, are identifying your maximum budget at the beginning of the process and trusting your real estate agent.
One of the issues first-time buyers often encounter, Chuey says, is coming up with the funds for a down payment. Cortland Bank works to connect customers with aid programs, such as those through Catholic Charities or Community Action Agency of Columbiana County.
The bank also offers loan programs aimed at new homeowners. These include its Welcome Home program through the Federal Home Loan Bank of Cincinnati or Community Reinvestment Act loans, which have lower barriers to lending than traditional loans, such as low credit scores or down payment requirements.
With all the information combined, it serves as a way to put potential borrowers at ease.
“The biggest benefit is peace of mind and knowing that you’re getting the information you need to get through the process. Without information, it’s almost impossible to do anything,” Chuey says. “To give people information and empower them to be successful and achieve homeownership – or anything financial – is rewarding for all of us.”
That information and coaching is aimed at preparing first-time homebuyers to enter a market that gets more competitive seemingly by the day. Chuey and Rocky Page, Cortland’s vice president of retail mortgage lending, say the bank has been busier than ever when it comes to home financing. In 2020, Page says, the bank did $150 million in mortgages, 60% above the goal it set at the beginning of the year.
“We didn’t know what to expect when the pandemic hit. Between the purchases and refinances, because of the interest rates, we’ve been incredibly busy,” Page says. “It’s been a crazy year and I’m not sure it slows down. We’re starting to hear from realtors that they’re slowing down. Not because they don’t have buyers, but because they don’t have houses to sell.”
In a market where prices are reaching higher and the window to find the perfect home is shrinking, the seminars play another important role for the bank: They ensure buyers understand what they’re getting into.
“If someone’s informed and educated and understands what their options are, defaults are lower. From a pure banking standpoint, that’s always a concern for us: keeping defaults at a minimum,” Chuey says.