THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – The War Moves On
- PRODUCT HIGHLIGHT – Jumbo ARM Buying Power
- MARKETING – Give Compassion Where Compassion Is Due
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THE WAR MOVES ON
The peace talks going on with the war and I do not mean between Will Smith and Chris Rock but OMG what an absolutely awesome video to watch on you tube.
Come on! If you have not watched that then you should. I would assume there are very few people that Chris Rock would look at and go I am the man and I am untouchable but seeing Will Smith come at me would be the exception. I could care less about the should have or not should have because the entertainment was amazing!
But the other war meaning Ukraine and Russia caused some drama yesterday and depending on when and if you locked yesterday it could have been a difference of 76 BPS. That is $760 per 100K in loan amount just knowing where you are when you lock.
It was a roller coaster of roller coasters yesterday. Not just a single push up or a single push down which is the abnormal normal nowadays but it was like a yo yo yesterday. INSANE!
Flying crazy high in the morning and crashing right after rates then flying back up. What a scene to watch.
We ended the day up 48 BPS which is great.
BUT WHY???
Who knows is the answer but if the war stops then oil gets cheaper. If oil gets cheaper then inflation calms down. If inflation calms down then the value of the dollar is valuable again and fixed rate securities like bonds is cool again and good for rates.
But uh oh, if the war goes away we start thinking about being business owners again and while the getting is good and international war is on the downsize then lets get out of the safe haven of mortgage bonds and in to the equity or ownership of stocks which is bad for mortgage bonds.
But wait, there is more! The 2 yr treasury is worth more than the 10 yr treasury. Guess what! We compete with the 10 yr and not the 2 yr so why in the world would investors not go for the 2 year.
In the end, the war will do what it is going to do. The FED will make comments that impacts rates, people will continue to buy houses and the rate you have is the rate you have. SELL IT! It is what it is until it is no longer it 2 hours later.
Good things ahead my friends but just wait it out and see. Lock em when you have to for short term and then see what the market does for long term.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
JUMBO ARM BUYING POWER
I wanted to give you this little chart to make sure you fully understand the difference in buying power in the jumbo market and explain the numbers when you see ARM products listed with their caps.
This chart is based on a 740 score with a person making 150K per year and a housing ratio of 31% and a 20% down payment. This is just an example but based on these numbers this is the difference in buying power utilizing the same payment amount for each product.
| Buying Power | |
| 30 yr fixed | $ 680,000.00 |
| 10 yr arm | $ 835,000.00 |
| 7 yr arm | $ 880,000.00 |
| 5 yr arm | $ 910,000.00 |
Now some particulars on ARMS.
When you see the 5/6, 7/6 and 10/6 ARMs the 5, 7 and 10 is the fixed period of the product so the product is fixed for 5, 7 and 10 years. The 6 stands for the frequency of rate changes after the initial fixed period is over. In this case it can change every 6 months. A 5/1, 7/1 or 10/1 the 1 stands for a rate change every 1 year.
The 5/6 ARM has 2/1/5 Caps. Say what??? So, you have a 5 year fixed then adjusts every 6 months after that. The first adjustment after the fixed 5 years can be a max of 2%, then each 6 months thereafter it can go up or down 1% with a 5% max cap over the life of the loan hence the 2/1/5 caps.
The 7/6 and 10/6 ARMs have 5/1/5 caps. So after the fixed 10 year period the first change can be up to 5% initially then every 6 months thereafter the max up or down is 1% and it cannot exceed 5% more or less over the life of the loan.
As you can see the 5 year is more favorable on the initial adjustment but the fixed period is much shorter.
Be the one that knows and can answer your borrowers questions.
Marketing Ideas And Opportunites Little Things That Can Make A Big Impact
GIVE COMPASSION WHERE COMPASSION IS DUE
I have a problem with compassion for folks who whine about life not being fair. I tend to give compassion where compassion is due : )
I heard a phrase the other day that said when people say they never got a chance to do or accomplish something it is actually because they never stood up and took a chance.
I could mention bucket lists or starting businesses or relationship quests and many other things but what I really want to say is what are the small things you never took the chance on?
Most people never take a chance because of fear. Fear of rejection, fear of the unknown, fear of it not working out.
What is something small in your business that you have always wanted to try but never had the guts to pull the trigger?
Is it trying a new form of advertising like direct mail post cards or advertising in a local paper or putting yourself out there with realtors and organizing a lunch and learn and invite them or even the age old first time homebuyer platform.
When you say to me Jack my business is hurting, I say I feel for you but what are you doing about it? If you say nothing then ooops there goes my compassion but if you say I am stepping up and trying something I will get in the passenger seat with you and enjoy the ride.
You mail fail miserably but at least you will know one more thing that does not work but when you find the right thing it will make a difference in your life and those around you.
Now get off your tail and do something besides whine. If you are stepping up then cudos to you and let me know how I can help.
Turn Times As Of This Morning Lookin Good!
| TURN TIMES | Purchase | Refinance |
| Business days | business days | |
| Conv Non-MI | 1 | 1 |
| Conv MI | 1 | 1 |
| FHA/VA | 1 | 1 |
| USDA | 1 | 1 |
| Jumbo | 1 | 1 |
| Conditions | 1 | 1 |
