Five Questions With: David Johansen

"WITH RATES remaining at all-time lows, the market for purchases and refinances remains very active." / COURTESY HOMESTAR MORTGAGE
"WITH RATES remaining at all-time lows, the market for purchases and refinances remains very active." / COURTESY HOMESTAR MORTGAGE

David Johansen is a mortgage loan officer at Homestar Mortgage in Providence. He was recently recognized by Rhode Island Housing as one of the top three officers in 2015.
He spoke with Providence Business News about his experience working with Rhode Island Housing, what trends he’s seeing in the mortgage lending market and what that’s telling him about the overall economy in Rhode Island.

PBN: Congratulations on being named one of the top loan officers by R.I. Housing, what would you say is best – and most challenging – about working with the organization?
JOHANSEN:
Having the ability to work with R.I. Housing allows me to offer the most advantageous mortgage products for first-time homebuyers in Rhode Island. Saving for a down payment is the biggest challenge for first-time buyers today and R.I. Housing allows purchases with little or no money down. In addition, [the organization] offers grants to eligible recent graduates … and homebuyers purchasing foreclosed or short-sale homes in certain areas within Rhode Island. These products have been vital to helping my clients obtain homeownership when their specific needs cannot be met by other mortgage products. The challenges in today’s mortgage environment are mostly compliance-driven and that is across all lending spectrums. R.I. Housing’s programs have to follow state and federal guidelines, so there is an added layer of compliance. With the high volume of R.I. Housing loans I originate, I am able to help my buyers navigate through this and set the proper expectations for all parties involved in the real estate transaction.
PBN: Do you specialize in any specific type of mortgage lending, or lend to any specific client group? Why?
JOHANSEN:
At Homestar Mortgage, we are fortunate to have a very extensive range of mortgage products available to clients looking to purchase a home or refinance an existing mortgage loan. Although I am experienced with all products available in market, I work the most with first-time homebuyer programs (R.I. Housing, VA, FHA, conventional) and doctor loans (a portfolio loan for physicians). For first-time homebuyers, purchasing their first home can be an intimidating process. I take the time to educate my clients on the financial components of their new loan, about the process, and am with them the whole way, from preapproval to closing. I sincerely enjoy taking the first-time buyer through their transaction and then seeing their excitement when they close on their first home. I also work with many physicians, including recent graduates of medical school who are starting their residency. Our physician loan is unique as it requires a low down payment [and] no mortgage insurance, and, if they have student loan debt, allows us to qualify them based on the income-based repayment option available on their student loans. It’s a huge benefit to have a program to help these physicians obtain a mortgage that is not available to most lending institutions.
PBN: How would you characterize the lending market right now in Rhode Island?
JOHANSEN:
Hot. With rates remaining at all-time lows, the market for purchases and refinances remains very active. One can purchase a nice home and pay the same monthly payment as they would for rent. This is very appealing, especially since rents have increased over the last few years.

PBN: Have you identified any new trends this year compared to years past?
JOHANSEN:
Without a doubt, mortgage lending to first-time homebuyers has never been more available. The use of low down-payment options and grants to fuel the economy and homeownership in Rhode Island has been a great stimulus. The trend of offering these options to keep people living in Rhode Island will have significantly positive long-term benefits for the state, and our economy as a whole.

PBN: What does the lending market here in Rhode Island tell you about the overall Ocean State economy?
JOHANSEN:
I started my career as a mortgage loan officer in 2003 and saw the economic downturn that occurred around 2008. Eight years later, you can see the stabilization and increase of home prices, a significantly lower amount of short sales and foreclosures, and continued historically low interest rates. All of these factors contributed to 2016 being one of the busiest years in home buying that I have seen. Homebuyers that lost their homes over three years ago due to economic hardship are purchasing homes again. This is a great indicator that people are comfortable with the economy and want to stay and live in Rhode Island. I look forward to seeing the continued positive progress Rhode Island is making as we move into the future.

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