Where R Rates / MBS Market Update

INFLATION # HURTS RATES

Well folks, inflation rears it’s ugly head again this morning with CPI (Consumer Price Index) inflation number coming out much hotter than expected.

The overall inflation rate came in year over year at 3% vs the expected 2.9% which could have been managed. It is the month over month inflation number that got us. It came in at .5% vs the expected .3%. If we kept this over a 12 month period that would take our annual inflation to 6% so that was a big number this morning and the markets are reacting to it.

The Core Inflation number which excludes food and energy came in at 3.3% year over year vs expected 3.1% and month over month was still high at .4% which annualized is a 4.8% inflation rate. Not good news friends.

The stock market is down pretty heavily as well on the news of inflation coming in higher.

On top of that, today we have a 10 year note auction at 1 PM today and if demand is low for that then that could really hurt.

On the brighter side mortgage applications were up 2.3% week over week with refinance applications up 10% and purchase transactions were down 2% week over week. With todays hit to rates we will likely see a reduction in refinances as they are very temperamental to rates.

Lets hope the markets calm as we go through the day.

GREEN is GOOD for Rates – RED is BAD for Rates

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Product & Guideline Highlights

VA THINGS YOU DON’T KNOW

Ok, so many of you may know some of these things but curious if you know many or all of these things.

I thought this would be a fun topic and helpful knowledge that makes you go hmmmmm.

HERE WE GO!
#1) VA does not have a max loan limit at 100% on a purchase. 20 million if you want to if you can find a lender that will do it. 
#2) If they already have entitlement used then the max the VA will guarantee is up to the conforming loan limit. They are ok with you owning one 20 million dollar house but not two houses that equal 20 million. The reason is they do not want you building a real estate empire on their 25% guaranty.
#3) VA does not have a minimum credit score. Lenders usually do.
#4) CODES on Certificate of Eligibility
CODE 1 – Served in World War II
CODE 2 – Serve in Korean War
CODE 3 – Served in Post-Korean War
CODE 4 – Served in Vietnam War
CODE 6 – Eligible Surviving Spouse
CODE 7 – Spouse of POW/MIA
CODE 8 – Post-Vietnam
#4) Who is eligible for VA loan?
Active military that has served for 90 days.
Veterans – Depends on when you served.
Click this link to find out
National Guard – 90 days active duty ever or 6 creditable years in the Selected Reserve AND were discharged honorably, retired, transferred to Standby reserve or continue to serve in Selected Reserve.
Surviving Spouses – If they remain unmarried and spouse died on active duty, died from service-related injury, listed as MIA or POW for at least 90 days or was totally disabled where disability may not have been the cause of death.
Options for Surviving Spouse who IS married but married after the age of 57. Pretty much all of the above as well but the key is marrying after the age of 57 after service member spouse died.
#5 – Other options than above. If discharged for a hardship or convenience of govt assuming you served at least 20 months of a 2 year enlistment or if you got an early out after serving 21 months of a 2 year enlistment or part of a reduction in force, certain medical conditions or a service connected disability related to their service.
#6 – REALLY BET YOU DID NOT KNOW THIS
Can get VA loan if you are a U.S. Citizen who served in the Armed Forces of a GOVERNMENT ALLIED with the United States in World war II
OR
You served as a member of one of these organizations. Public Health Service Officer, Cadet at the US Military, Air Force or Coast Guard Academy, Midshipman at the US Naval Academy, Officer of the NOAA or a Merchant Seam during World War II.

Hopefully you know more now than you did three minutes ago : ) 

Jackism of the Day

WHEN THE GUN GOES OFF

It was 4:15 AM this morning and it was nice out so I was walking to the gym for my morning workout. As I was making my way down the somewhat well traveled two lane road to my gym it hit me with my thought for the day.

I saw two large pickup trucks pulling some trailers which looked like construction work of some sort. A couple other cars that revved up their engines as they took off down the road to wherever they may be going. A couple were pulling in to the gym parking lot as I was making my way.

I know what I was doing at that time of the morning. I then began to think to myself what are they doing? Where are they going? How much of a head start are they getting on their day compared to others that do what they do?

I arrived in the gym parking lot and to my surprise I counted 19 cars in the parking lot at 4:15 AM. I usually see 3 to 5 cars and between 5 and 6 AM that is where you see the masses coming in. I was told by someone else the reason is that it is snowbird season down here in Orange Beach and the oldies take over so folks gotta get in earlier and earlier to do their thang!

That got me thinking about track and field races, Nascar races, horse racing and any other race where there are folks competing with each other to make it to the finish line in first place.

As the shot of the gun clicks of on your day which for you it may be that alarm clock or whatever gets you going in the morning. The better your start and the quicker you take the lead the more likely it is that you will finish ahead of those around you.

In a Nascar, horse or track and field race you rarely see the folks in 4th, 5th, 6th, 7th, 8th place and beyond ever win the race after falling behind at the beginning of a race. As a matter of a fact when you get behind far enough many times you lose so much momentum that those in front of you will even lap you as they come flying around the track. Their momentum and focus is lasered in on their objective while those who got off to a bad start are just trying to get to the end of the day.

I always have and always will preach that how you start when the gun goes off to start your day will almost always dictate how you end the race at the end of your day. If you start out slow and unfocused then as the world and the day enters it will wear you down much faster than if you started out strong and got ahead of the pack.

Here is the interesting part. I get ahead each day by doing my workout, my quiet time, my devotions and prayer with my wife, my morning reports and marketing and writing these articles. BUT my race is not your race.

I remember when I had kids in the house. True success during that amazing season of my life especially as my kids were in elementary and middle school were completely different. Getting a head start on my day meant not looking at my phone, holding off on my work out til lunch time. Coming downstairs and sitting down and eating breakfast with my kids. Taking them to school and attending all of their life events. Man oh man. When I got to take my kids to school once each week and we would go to Waffle House and then drop them off I was on top of the world. It set me up for a successful business day because my day started out front with a successful family time.

How are you starting your days? Are you taking off as the gun goes off and staying ahead of the pack or are you getting a slower start and then dying out after the first turn as you see hope of a first place finish dwindle by the minute.

As you think about this and your race for each day. Remember in old racing games you could see a ghost car on the screen? That ghost car was your previous best time. Today, when you try to finish your race strong make sure you are competing with yourself and what your best has been in the past..

Find yourself in first place at the finish line today by starting your day strong when the crack of the gun goes off in the morning.