THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – the 2/10 Inverted Yield Curve
- PRODUCT HIGHLIGHT – SE for Jumbo and Govt Loans
- MARKETING – WHO is selling.
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THE 2 / 10 INVERTING YIELD CURVE
You may be hearing some jabber about a flattening or inverted yield curve. Ole Lucy, has been driving me bananas about making sure she understands it so thought I would share with you.
The 2 stands for the 2 Year Treasury. You give Uncle Sam your money for 2 years and they will give you a typically low rate of return. Very similar to going to your bank and doing a 2 year CD you get a little bit of a return because they only get to use your money for 2 years.
BUT, give them your money for 10 years and they will give you a much better rate of return. Same goes for a bank because they can use your money risk free for 10 years vs 2 years.
When a yield curve flattens that means that the 2 year is receiving a very similar rate of return as the 10 year and an inverted curve means the 2 year is receiving a higher rate of return than the 10 year.
The end result a large part of the time is a recession that will follow in 1 – 4 years after the curve does this. One reason is if you can get the same rate of return short term as you can long term then nobody will invest in the long term causing pricing to decrease so that investors can get more return to purchase longer term bonds like our Mortgage Backed Securities.
The good news about a yield flattening curve for us is we do really well in recessions because bonds always do well in bad economies.
Give this tidbit of information in your conversations with clients today and be seen as the trusted advisor.
FYI, if a recession is coming then it is usually better to roll costs in to rate and then when rates drop due to recession in a couple years they can refinance without getting hit as hard. Just something to think about.
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SELF EMPLOYED FOR JUMBO AND GOVT
Last week I did a Self-Employment how to for conventional loans which spurred a few other questions and I thought this would be a good reminder for everyone.
See last week for SE breakdown on conventional.
Jumbo is old school. They take the K-1 and take your net income. None of this distributions and Schedule L and cash flow analysis. Just net income plus normal add backs.
On govt loans it is old school as well. FHA, VA and USDA are all just use the net income with no distributions required.
They still require the P&L’s and Balance Sheet but I do not believe the bank statements are required like conventional.
Good to know if it dies one way you can go FHA possibly.
Marketing Ideas And Opportunites Little Things That Can Make A Big Impact
WHO IS SELLING?
My friend Lucy asked me, Jack, what is my first step in making sure I am marketing and selling correctly.
Oh, Lucy, that is a great question.
Well, one of the first things in marketing and selling is knowing WHO is actually selling. Hmmmm? What does that mean?
Some people call it their avatar but at the core who is marketing and selling whatever product or service you offer.
The first vital piece is that WHOever you are you must be seen as a “Trusted Advisor”. People want to work with people who know what they are doing. First and foremost.
That does not mean you advertise all of your accolades but what you do is reference your experience and relate your WHO to what you are marketing and selling.
People must know WHO they are dealing with. This means how you present yourself, how you position yourself, how your packaging is received is of vital importance.
Every email, every interaction, every document must represent WHO you are.
You think you are marketing and selling a product and service but the WHO is selling is just as important as what you are selling.
So, Lucy, if you had to define WHO you are marketing what would you write down?
Please be careful and hear I am not saying advertise yourself and your service and years of experience. Nobody cares. You have to get your WHO across in what you market.
Stay tuned tomorrow for a big piece in understanding WHO you are selling.
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 | 2 |
| USDA | 2 | 2 |
| Jumbo | 1 | 1 |
| Conditions | 1 | 1 |
