THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – When To Use ARMs VS Fixed Rates
- PRODUCT HIGHLIGHT – Flagstar Adds New AMCs
- MARKETING – The Most Alluring Item In Marketing
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WHEN TO USE ARMS VS FIXED RATE
With rates going in the tank ARM’s will become a topic of discussion with certain borrowers who have expectations of lower rates.
But, if you are going to use an ARM product then you need to know when to use them.
You see ARM’s are traded and sold the same as fixed MBS so they all have sweet spots of where you want to use them.
For example, yesterday if you were to price out a conventional purchase at 95% LTV with a 720 score and you want to go lender paid or zero origination say at 250 bps so pricing a loan at 102.50. If you were to price that same loan on a 5 year arm pricing would be different by about .375% in rate give or take and you would not even been able to make 250 bps. You would have about a 130 BPS discount. Arms do not like to pay as much as fixed rates.
On the 7 and 10 yr arm rates may be better by about .125% in rate and again would require some discount.
Now take that same loan and you charge the borrower an origination fee of 2.5% or whatever you are required to and price it at par.
On a 5 year ARM your rate will be about .625% better in rate and if they were to pay an extra point in discount you would be a full 1% better in rate.
Then even better the 7 year ARM is close to the 5 yr and the 10 year ARM is about .500% better in rate.
So, the trick to ARMs is to charge origination fees vs putting in the rate. ARMs are great on borrower paid or origination free loans.
As far as govt loans go you are typically better off on the fixed. Not a lot of great govt arms out there.
Another option is to look at FHA loan vs Conventional loan if they both have MI you may be better off FHA.
Bottom line is to know your options……….
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
FLAGSTAR ADDS TWO MORE AMC’S
For our brokers out there or for correspondent’s who like to use our AMC we just added two more AMC’s to our list of eligible companies to use.
This means for brokers when ordering an appraisal through our system when ordering conventional we have to choose for you but on any government loan you can choose which AMC you would like to use.
This is important because if you find an AMC with great coverage in your specific area you can choose them.
You also have the option of letting your great appraisers in the area know the eligible AMC’s and they can sign up with them so they can get your orders as well. Of course, it is not assigned directly but they will be given an option to accept when ordered in our system.
Here are the current AMC’s. The new one’s are ACT and Settlement One. Both are nationwide.
ACT Appraisal
Class Valuation
Dart Appraisal
Settlement One
Single Source
USRES
Marketing Ideas And Opportunites Little Things That Can Make A Big Impact
THE MOST ALLURING ITEM IN MARKETING
Do you know what the most alluring thing in all of marketing is?
It is The Human Face.
This is what people connect with the most in any and all forms of marketing.
This means that you must make sure that you put a Face on your marketing. This is your brand as well as your marketing.
Once they connect with you then it is time to connect with them.
The ideal situation is for those that you serve to know what you care about. The next item you need to know is what does your client or ideal client care about?
If you were to list 20 or 30 items of what you care about and they did the same thing and by this I mean your ideal client and not each individual client then where the items that intersect and you have similarities that is where you put your focus, your energy and your time.
It is at this intersection of shared values that your borrower or your client begins to form in to a relationship. This is where you begin to share a connection with those that you serve.
Remember, I am talking about marketing here and not selling a loan. This is what you are putting out there about yourself and your company.
For example, you know I love mentoring and education. It is a big part of what I do as an AE. You likely also know I believe strongly in my faith. I also spent years in homeless ministry and my favorite was women and children’s shelters. I also have spent a lot of time helping in marriage enrichment, pre-marital counseling and leading men’s groups. I also am big on spending time with family and of course my favorite is to travel in our RV. Impact is one of my number one initiatives in life and business. Oh, and one last thing. I remember watching Herschel Walker win the National Championship with Vince Dooley in 1980 when I was 10 years old and have been a fan ever since. GO DAWGS!!!!!!
If you connect with any of these items then you and I will likely connect in a closer relationship than if you do not agree with any of them. The bond will be based on our similar interests. The same goes for you and your client base and how you present yourself.
Of course, you do not send the above paragraph out but you say what you believe with your words and your expressions and then let the relationship grow from there.
Today’s lesson is if you sell them a product then you get a transaction fee but if you sell them your person then you gain a relationship and likely one that will last for many transactions to come.
So, do your clients know what you are passionate about?
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 |
