Loan officer Shant Banosian is set to close $ 1.5 billion in mortgages this year, a staggering record – and one that gives him a top spot for the hottest mortgage market in decades.

Banosian, a secured rate mortgage originator in Waltham, Massachusetts, spoke to Bankrate on Instagram Live. One of his pro tips: don’t get carried away by the mortgage interest rate so much that you neglect closing costs.

What mortgage trends are you seeing right now?

Banosian: It’s the most motivated market I’ve seen in my entire career. You have more motivated buyers than ever before. Potential buyers re-evaluate everything. They re-evaluate where they want to live, what they want in their home. This pandemic is causing people to rethink their entire lifestyle. On top of that, you have all the homeowners considering whether to refinance because the rates have come down. You have refinancing activity at 20 year highs. You have purchase requests at 10 or 12 year highs all at the same time. So there is a lot going on in the market.

When someone asks you if they should refinance, how do you tell them about their decision?

Banosian: If you have a mortgage and haven’t refinanced in the past six or seven months, you should take a look. There is no cost to just having a conversation with a loan originator. There are many reasons people refinance. The most obvious is to lower your rate and save money. With the fall in rates, house prices have appreciated. There has been massive demand and stocks are low. So you have people who maybe put 3%, 5%, 10% down, who can now refinance and get out of a product that would have charged them a PMI, or private mortgage insurance, so there are additional savings there. I have a lot of clients who take advantage of their increased equity to withdraw money. We are seeing a lot of money for home improvement and debt consolidation. I’ve also seen a lot of people shorten their terms, going from a 30-year mortgage to a 15 or 20-year term, so they can pay off the balance faster and pay less interest over the life of the loan. ready.

You described different scenarios – some people go into more debt, others pay off their debts. Do you offer any advice on this, or is it just a matter of personal preference?

Banosian: It’s really a personal preference. We try to present the different options. One of the first things I ask when I sit down with a client is, “What are your goals? “

Amidst this flood of mortgage applications, what’s the biggest mistake borrowers make?

Banosian: The biggest mistake is that everyone is hanging on to the interest rate. It’s like window shopping; no one is looking under the hood. Often times there are a lot of charges buried in these quotes, so they make their decision based on an interest rate without looking at what else is in it. I watch thousands of loan scenarios per year, and have been doing so for over 15 years. So for me, it’s very easy to help them decipher and ask the right questions. But I also remember when I bought my first home, before I was in this business, and how little I knew about it. Everyone rates loans differently, and there are a million different ways to decide on them. It’s really about comparing rates and closing costs as a whole, not just one or the other.

My experience as a consumer is that there are so many details in a mortgage, and it’s so confusing, that the rate is the easiest thing to focus on.

Banosian: Everyone is focusing on the rate. It’s not called “Bank Closing Fees”, it’s called Bankrate. The guaranteed rate is the name of the company I work for. Everyone always asks, “What’s your rate?” I can’t really answer this question. I have hundreds of tariffs. We have fixed rates and adjustable rates. We have short term loans and long term loans. Some have no closing costs. Some have built-in points. It’s really about putting the options side by side and comparing the costs.

I always hear that closing costs can range from 2% to 5% of the loan amount. Is it correct?

Two to 5 percent is a bit high, especially for refinancing. On a purchase mortgage, it can go up there. This is a difficult question to answer, because each state has its subtleties. I’m licensed in 49 states, and each state has different taxes, fees, and closing costs. In a state like Massachusetts, when refinancing, closing costs will cost between $ 3,000 and $ 5,000 on average. On purchase, this can range from $ 5,000 to $ 6,000. But that includes so many things, like attorney fees, appraisals, title insurance. Then you go to a state like New York where they charge a transfer tax. These fees can get astronomical, and sometimes that makes a refi prohibitive.

I just heard from a Bankrate reader who said she owed $ 85,000 on her house and couldn’t get refinancing because lenders don’t want to deal with small loans. Is this a challenge in today’s market?

Banosian: Not with us. We do not have a minimum loan amount. We will help anyone, as long as it is a residential first mortgage. When it’s busy sometimes [lenders] make decisions based on what they want to do and what they don’t want. Generally speaking, if you talk to a large national lender, they will not cap on a minimum loan amount.

The New York Fed recently published some surprising research on credit scores. For the third quarter, the median FICO score for mortgage borrowers was 786, which is almost perfect. Does this match what you see on the market?

Banosian: Yes, it’s true. What has happened in the last five to ten years is that credit scores have become much more important to people. After the housing crisis, it was rumored that everyone – giant lenders, Fannie Mae, Freddie Mac – is rewarding you for having better credit scores. Credit has therefore become much more important to consumers. In general, people are more educated about credit these days. They’ve got credit monitoring, they’ve got credit locks, they’ve got alerts – everybody has that stuff. Someone with very good credit will be able to borrow money for less than someone with very bad credit. This is how most mortgage products work. The other thing that has happened in the last seven months is that people are saving more. They don’t go out to eat. They don’t take vacations. When I talk to my clients, I see a lot less credit card debt.

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