THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – Big News Day
- PRODUCT HIGHLIGHT – Know Your Grids (Cash-Out)
- JACKISM OF THE DAY- Trimming The Fat
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Tour De Mortgage Finance Learn Something New Everyday About Your Industry
BIG NEWS DAY
First, lets cover yesterdays FED meeting. More good news for rates and the bond market going the opposite way. Seems to be a trend : )
FED did NOT raise rates which is great, so why did bonds go crazy yesterday. We dropped 50 BPS after the release and the press conference. Then we slowly made our way almost back to where we started by the end of the day which is great.
The reason the bond market reacted negatively is that they did not raise now but they plan on 1 and likely 2 more rate hikes this year. Not sure when but likely 2 more. They said no chance of lowering rates. This causes certainty in higher costs which is bad for bonds.
So consumer inflation was down this week, producer inflation was down this week and we did not raise short term rates. As of now we are pretty much where we started the week and yet again it leaves us scratching our heads.
NOW ON TO TODAY’S THOUGHT
This week we have had ups and downs and all arounds which is typical for our industry on any given day.
Sometimes I will say that today is a no news or no reports day that will impact markets or not impact it very much.
After Tuesday’s CPI and Wednesday FED Meeting we come to today.
I love monitoring different reports, both domestic and global to see what is happening in the markets and why they are reacting the way they are. Today, we have a ton of data coming out and I am not sure you understand completely how much is coming our way sometimes.
Every report impacts someone, somewhere and somehow. The question is who does it impact and what are they going to do that could cause a chain reaction that could impact us.
Click link below to see everything that is coming out today. This is just for the U.S.. Most of these do not impact the markets but what could impact the markets due to a chain reaction is anyone’s guess.
It is 2 pages and 33 different outcomes that others make decisions on.
When I give you updates I usually hone in on a couple items that is the driving force that particular day that can help you explain to clients and referral partners what is happening at a higher level. It is not a deep dive in to what is happening everywhere.
It is just important that folks know that markets can be impacted by numerous events that may not seem related.
Don’t get bogged down in the details when talking to clients. Just understand it may not always make sense and there is usually much more to the story and today is a great example that I wanted to share.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
KNOW YOUR GRIDS (CASH-OUT)
Today we finish our week of knowing your pricing grids to educate clients and referral partners on the sweet spots of different products.
We are basing these on the Freddie Mac Pricing grids located below. Click on grid and it will open up to a larger file that you can view easier.
As you look over these sweet spots do not overlook the option of offering FHA as well. Yes, you have the UFMIP but at this LTV your Monthly MI is only 50 BPS and your interest rate will likely be substantially lower especially on higher LTV’s. 80% LTV is max on FHA as a reminder.
For FHA Monthly MI Payment quick calculation if you do not know how to do. Take base loan amount x .50% / 12 to get the monthly MI payment for FHA. For example – 150K x .50% = $750 / 12 Months = $62.50 per month. (It is actually a different calculation but this easy version gets you within a couple dollars)
Your 760 and above borrowers for conventional are actually fairly reasonable up to 80% but the bigger hit happens at 75% LTV across the board. As the score goes down the hits get harder at the 75% LTV level.
If you can stay at 60% LTV or lower it is quite reasonable even at a <640 score. 680 and less are huge hits over 60%.
Investment and Second Homes are once again identical in pricing hits. Up to 70% it is reasonable but going to the full 80% will be a 337 BPS hit so be careful in what you advertise.
Condos are great up to 75% LTV then they hit you pretty hard if going to 80%.
In case you did not know our Advantage Product which allows from 100K to 3 Million will go to 85% cash-out on primary and second homes and 75% on investment properties if you run in to someone who needs the higher LTV on cash-out. We allow it down to a 680 score and up to 3 million.
Jackism of the Day Truths and Thoughts that make you go hmmm
TRIMMING THE FAT
John Wooden the basketball coach for the UCLA Bruins won 10 National Tiltes in 12 seasons from 1964 to 1975.
He also had 4 seasons where the team went undefeated in 1964, 1967, 1972 and 1973. It had never been done before nor since nor likely ever will.
He coached for 40 years with 885 wins and 203 losses winning 81% of the games he coached.
John Wooden has had many quotes over the years but said “Do Not let what you cannot do interfere with what you can do”.
He was never about making it to the end and winning it all. He was about being the absolute best at what you do, day in and day out. It was about the daily process that makes you successful.
When I look at my goals I want to achieve. First, I must ask myself a few questions.
#1 – Do I really want and desire to achieve this goal?
#2 – Am I capable of achieving this goal?
#3 – Does it align with the goals for my life overall?
If and when I answer yes to these questions I can then figure out the behaviors I need to do daily in order to accomplish what I have set out to do.
Any behavior or process that does not apply to said goals should not be done at all. Whatever is blocking you or dragging you down in your day to day process needs to go away. You need to trim the fat.
Do not let what you cannot or should not be doing get in the way with what you can and desire to do.
My Daily Business Behaviors Are:
Solving file level problems.
Forming new relationships.
Improving existing relationships.
Writing articles, how to and help guides.
Educating people.
That’s it. That is all that I do on my behaviors list. That is what I am the best at. I will find success if this is my focus day in and day out.
Everything else I need to review and trim and delegate what I can. I have an amazing team of folks that are great at other things and I let them do what they are the best at.
What behaviors should you be doing each day that will bring you success and what behaviors do you need to get rid of completely.
“Do not let what you cannot or should not do interfere with what you can or should do”.
