Do you want to learn more about mortgage assistance for employees relocating to work? Then keep reading this article!
Do you know that employees relocating is a challenge? Irrespective of the situation, it is usually stressful. Sometimes it is heartbreaking to uproot a family and move them to a place they are not familiar with.
However, explaining the process and making it easy as possible for the employees is essential.
When you don’t understand what a relocation mortgage is, it’ll be harder for you to explain to your employees. So read through this article so you can better serve the employees who serve you.
READ MORE: Corporate relocation experts and home lending specialists
Mortgage Assistance for Employees
Table of Contents
Most relocation management companies work with one or more mortgage lenders. However, these lenders are experts that work with relocation employees.
Moreover, they assist the employees to get preapproved before their first home-finding trip so that they can make an immediate offer on a home.
These preferred lenders also can usually direct bill most of the closing costs. It means that the employee doesn’t need to pay these charges upfront and wait for reimbursement, or help during the transition.
It is essential to note that direct billing may not be available when the employee works with the lender outside the employer’s network.
Additionally, other costs associated with homeownership, like property taxes and insurance are still the employee’s responsibility. Many policies include the miscellaneous allowance to assist with other transition costs not specifically spelt out in the spelt.
Who Qualifies for Mortgage Assistance for Employees
Mostly, only employees who currently own a home qualify for the New Home Purchase benefits. Only a few companies offer New Home Purchase Benefits to current renters, either as a matter of policy or on an exception basis.
However, the renter-to-homeowner transition is more common when the employee is being transferred from a high-housing cost area to the less expensive one, that is another reason why Home Purchase benefits for renters are relatively rare.
READ MORE: Domestic Relocations: New Home Assistance/Mortgage Assistance Benefit
Things Mortgage Assistance for Employees Covered
The New Home Purchase and Mortgage Assistance covers some or all of the common expenses incurred in obtaining the mortgage and closing on the home. These can include:
- Mortgage application fee
- Credit reports
- Attorney’s fees
- Mortgage points
- Inspections
- Loan origination fee
- Appraisals
- Property surveys
- Title insurance
- Title Search
- Escrows
- Transfer taxes
- Deed recording fees.
Why New Home Assistance?
The costs associated with purchasing a new home are often an afterthought. Employees are excited about the move and are more focused on the price of the home and imagining themselves living in it.
New Home Assistance and Mortgage Assistance will help to speed up your transition, increase employee satisfaction and support your company’s overall workforce strategy.
How Does the Relocation Home Loan Help Employees?
This provides extra cash that employees can need during relocation and help them to make the best decision for themselves and their families. It is good if the new location is far away.
Sometimes, an employee can need to buy that perfect home before it’s sold off to someone else. It may also need some extra money during the process of relocation.
Moreover, this may be due to some additional work that is needed in the current home before the sale or in the future home.
Some employees prefer to take advantage of the relocation feature jn their current home loan by paying extra charges. However, as an employer, you can try to provide the best counsel and help them to find the top moving companies.
Handling the extra financial needs of employees that are not experienced will be challenging. The supply of extra cash to handle emergencies can go a long way to support the employees during a stressful period and ease the overall transition.
The Features of Relocation Mortgages
When you know the goals behind offering a mortgage package, you can point out the main features you need to have.
It can be difficult for inexperienced employees to estimate the total relocation cost upfront. The mortgage package can offer comprehensive coverage to the employee who need not dig into his/her own pockets for any surplus amounts.
However, here are some standout features that employers should consider:
- You can consider subsiding covering the closing costs involved during the real estate transaction and the interest rate buydowns. These can be part of the employer’s financial contributions. The costs are around 2% to 5% of the loan value. This way employees may not need to be included in the loan.
- The mortgage can be offered at a low basic point that concerns the current market rates. It helps to reduce the monthly payment of the borrower.
- Relocation mortgages can also supplement as bridging loans for employees. The selling of the old property should happen instantaneously as buying the new one.
- For employees relocating outside the country, expatriation assistance can be considered. Overseas trips for house hunting, complex logistics, obtaining visas for the family, and finding suitable schools for the children are in consideration.
- The lender can give the service of home loan consultants and real estate agents to assist the employee in the buying and selling process. It can speed up the entire process and also reduce the overall loan processing time.
- Lastly, the overall mortgage experience should be simple, transparent and timely for the employees. With the smooth process and best practices, the employee will be able to settle for their new location at the earliest possible convenience.
READ MORE: Mortgage Down Payment Assistance Programs For Employees
Conclusion
Having the right talent at the right location is a key factor in building your business. To boost productivity and performance, the process of relocation can be managed carefully. In that context, relocation can be an effective way to motivate employees.
