Lenders, appraisers, agents benefit from residential boom

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Published: December 6,2004

Realtors aren’t the only ones benefiting from the continuing residential real estate boom. Mortgage lenders, appraisers and insurance agents are also pleased with this business trend.

Lenders with AmSouth Bank, BancorpSouth and Dryades Mortgage all say it’s been a good year for business and that the majority has been in purchase loans rather than refinancing.

Todd Chapman, vice president of mortgage sales with AmSouth Bank in Jackson, says 2004 has been a purchase market with his organization where 75% of all closings have been purchase loans.

“The interest rates have stayed favorable and that gives us an opportunity to help our customers move up in house and also helps to qualify even more first-time homebuyers,” he said. “This rate environment benefits everyone, whether they’re in a large metro area or a small community.”

Chapman says he expects the current rate environment to continue well into 2005 and that new home starts will stay strong. “We’re looking forward to 2005 and are confident we’ll exceed the production of 2004,” he said. “We have several products tailored for the person building a new home.”

That could be enhanced lot loan programs along with a one-time close construction-permanent product that combines two loans to turn a construction loan into a permanent home loan, saving time, money and paperwork.

At Dryades Mortgage Company in Gulfport, manager Sharon Rice is also pleased with the year’s steady business. She believes business has been brisker for purchase transactions due to her company’s active role in building relationships with Realtors.

“That’s where we need to be for the long haul,” she said. “We’re hoping interest rates will remain low.”

Rice, however, will remain competitive no matter what. In the mortgage business for more than 30 years, she recalls when interest rates were 16% and creative financing was the order of the day.

“We’re spoiled to low rates, but I’ve seen a wide spectrum and I think it’s easier now to qualify for loans,” she said. “There are more options and different programs and products available.”

She says interest-only loans that delay paying on the principal amount and 100% loans with no down payment are good for young, first-time homeowners. “There are some stiff requirements to qualify for these loans,” she said. “My advice for these and any loan is to work with a reputable lender.”

Bill Edwards of Tupelo is president, mortgage division, of BancorpSouth where there’s been a record year for mortgage writing three years in a row. He believes that’s due to low interest rates and new products that help get customers into new homes.

“There’s no question that financing is available. It’s out there,” he said. “There are abundant products, and the investors we service loans for are more creative than ever.”
Edwards’ advice to customers is to prequalify for a loan if they’re thinking of moving up in a house or downsizing. “Get all the options while rates are at historic lows,” he said. “It’s free advice from lenders. Also, land and building costs will continue to rise, so don’t wait to buy if you’re planning to do so.”

For Gulfport real estate appraiser Stuart Huffman business is rising. New home sales in the area are above what they were last year. He projects that trend to hold in the first two quarters of 2005 based on plans and specification appraisals his company is doing for builders.

“There’s a holiday lull right now, but that will pick up in the last two weeks of December as people try to get into homes before the end of the year to qualify for homestead exemption,” he said. “It takes three to five days to get an appraisal, and this time of year it’s important to order appraisals as early as possible.”

Kathy Towne of Stephenson & Associates of Memphis became licensed to do residential appraisals in Mississippi four years ago. Her work has been in rapidly growing DeSoto County where she’s seen home sale prices increase from $60 a foot to $100 and over.

“I used to do two or three appraisals a month and now I do five each week,” she said. “The real estate market is huge in DeSoto County. I love doing business there. It’s always easy and pleasant.”

A member of the Northwest Mississippi Association of Realtors, Towne said she is now beginning to do appraisals in Marshall County, to the east of DeSoto, where residential real estate is also booming. She’s looking to expand to Tate and Benton counties too.

Biloxi State Farm Insurance agent Vernon McHan is pleased with the increase in home building and sales. “The more real estate being built definitely helps our business. We’d like for them to build 200 houses a day,” he said. “Coverage of homes will be written, but it may be harder to find and cost more due to restrictions.”

He laments insurance company restrictions in the state’s coastal area. For some, their ability to cover homes is restricted to a limited amount of coverage for homeowners close to the beach. State Farm’s restrictions are for homes located south of the railroad tracks, but for others it’s anything south of Interstate 10. No companies will cover wind damage, and homeowners must obtain that coverage through a statewide wind pool.

“It’s more expensive now because of the number of storms that have come across here,” said McHan, who’s been an agent for 27 years. “In the northern part of the state, they can write all they want when they want but on the Coast we’re limited to what we can and can’t do.”

In Jackson, Allstate Insurance agent Matt Leach says business has picked up with rates being restructured and companies becoming more competitive. He thinks 2005 will be a great year for the real estate and insurance industries.

“Insurance is state specific, and some companies were not writing in Mississippi for a couple of years,” he said. “Allstate has had no restrictions and business has been good, but we could always write more.”

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.

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