Ask A Lender: Joe Caltabiano, Guaranteed Rate

by Chicago Agent

Q. Where Do You See the Housing Market Going in 2013?

A. I am very bullish on the housing market. I think we are amidst a full real estate recovery. There is a shortage of good properties for sale, historic low interest rates and buyers are anxious to get back into the real estate market. These items combine for a very busy 2013 because of the number of transactions, as well as an increase in sales prices. Some of the severely depressed areas will still struggle, but desirable locations will thrive in 2013.


Q. Where will rates go in 2013?

A. The general consensus among real estate and finance experts is that interest rates will remain at or near historic lows until the housing market is fully recovered. In addition, the housing market needs to be able to sustain growth, even if rates begin to increase. For this reason, I also feel mortgage rates will remain below 4.0 percent on 30-year fixed rate mortgages through the end of 2013.


Q. When will banks start to loosen lending restrictions?

A. On one hand, we are already seeing banks and lenders loosen up on underwriting guidelines. That doesn’t mean we will see stated income or stated asset lending any time soon, but we are starting to see banks loosen up some guidelines. For example, some investors are only requiring one appraisal on purchase transactions over $1 million. They may still require a second level of review, but in many instances, they no longer require two appraisals for loan amounts below $2 million. We are also seeing more and more investors enter the jumbo lending space. This creates competition, and lenders will need to compete for business either through low rates or a more aggressive/streamlined underwriting process. Either way it’s a win-win for the consumer.


Q. Do you think the conforming loan limit will rise in Chicago anytime soon?

A. Given the dip in sales prices over the last few years, Chicago is still not going to be considered a high-priced real estate market, like L.A. or New York City. So we will not see the conforming loan limit rise above $417,000 this year.


Q. What about non-warrantable condo projects?

A. We are starting to have a few outlets for non-warrantable lending in the Chicago market. With Guaranteed Rate’s recent acquisition of Manhattan Mortgage in New York, we have increased our lending ability to high net worth borrowers and non-warrantable condo projects. This is good news for some people looking to buy in buildings that may not be 50 percent sold or have large investor concentrations, but there will always be a premium to the rate or a larger down payment required. Banks will price risk more appropriately than they have in years past.


Joe CaltabianoSince his start in the mortgage industry in 2001, Joe Caltabiano has continued to be a top originator. He is consistently recognized by Scotsman Guide, and was ranked the No. 7 producer in the U.S. and No. 1 in Illinois for number of purchase transactions closed in 2011. Caltabiano has closed in excess of $1.5 billion in home loans throughout the course of his career. Read more about him at guaranteedrate.com/joe, and contact him at 773.290.0335 or [email protected]

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