CEO Mat Ishbia breaks down the offer
United Wholesale Mortgage is offering borrowers credits of up to $600 to offset appraisal costs through March, the company’s chief executive told Mortgage Professional America.
The nation’s largest wholesale and purchase lender, UWM is extending the offer until March 31, 2022, on all primary purchases – including jumbos. In a telephone interview, UWM president and CEO Mat Ishbia said the offering would yield a significant edge for independent mortgage brokers with both real estate agents and borrowers amid a purchase-focused environment with rising rates.
He called the $600 credit – which effectively covers the typical cost of an appraisal – a win-win for borrowers and brokers, the latter helped in gaining relationships with real estate agents while increasing client referrals.
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“It’s jump-starting the purchase season, giving our brokers an advantage to go out there in the market to real estate agents and have something unique to sell,” Ishbia said during a telephone interview. “We’re going to cover appraisals up to $600 for them. The average appraisal is $540. In unique situations, it won’t cover the whole amount, but for the great majority it will cover it. This gives consumers a better deal and helps our brokers too. It’s a win-win.”
The offer was introduced on Wednesday (Jan. 26) and runs until March 31. “We’ve gotten amazing response so far today, and we only rolled it out six hours ago,” he told MPA on the day the offer was launched. Asked to quantify the response, he noted it was “The amount of mortgage brokers saying ‘thank you’. It’s just opening the doors for our brokerage brokers, and that’s what it’s about. And, of course, it’s going to be great for consumers as well. Everyone’s winning.”
Appraisal costs are hefty for many people, Ishbia noted, particularly for first-time homebuyers. The credit will help ameliorate the costs involved in buying a home.
“People don’t realize when they’re buying a $250,000 house or a $450,000 house, paying $500 or $600 up front for an appraisal is a lot of money. What if it doesn’t go right? It’s the same price for an appraisal for a $500,000 house than it is for a $200,000 house or a $100,000.”
In a time of record-setting home values making homeownership more elusive for first-time buyers, anxiety levels in buying a house are heightened. Offering to cover their appraisal costs helps alleviate the tension, Ishbia suggested.
“It’s a scary time for a lot of first -time homebuyers,” he said. “We’re taking some of that pressure off of them by empowering mortgage brokers to tell them ‘Hey listen, we’ve got you. You’re not going to have to pay for this. Let me help you move this process forward.’ It helps people buying affordable homes, maybe first-time homebuyers, even more because it’s a bigger credit card cost or bigger check to write than someone who’s buying a bigger house.”
“This announcement follows UWM’s Appraisal Direct launch in last September which gave the company the ability to handle the appraisal process directly as the lender, according to a company statement. The arrangement eliminated the need for broker clients to utilize an appraisal management company.
The announcement also comes one month after the company announced the addition of rate/term refinances as an added option of its popular MI buster product. The result was current homeowners with a loan-to-value (LTV) ratio of 80.01% and 89.99%, and loan amounts of at least $200,000 can lower their monthly payments by dropping their existing MI when they refinance with MI Buster. In doing so, the company said, homeowners can potentially achieve savings in the thousands of dollars.
The new rate/term refinances option emerged a month after United Wholesale Mortgage launched the MI buster as an exclusive purchase product, eliminating mortgage insurance for borrowers who put as little as 10.01% down. This enables borrowers to put less down without having to pay mortgage insurance to “…help some get more home for their money,” company officials said in unveiling the new product option.