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Mortgage Rates (1 Viewer)
- Thread starter MechEng
- Start date
Chadstroma
Footballguy
Rates going
this hard and this fast... The curse and blessing of being slow for me is that I am not stressing about a pipeline because I have none really
I don't have any pre-approvals outstanding right now. When rates go upike this it can be bad... you have to readjust qualified clients... someone qualified and shopping for homes at $340K yesterday is suddenly now only qualified up to $320K... and my goodness... if you were floating a client under contract, they may not be qualified for that long anymore. Lots of other things... it just makes life hell for a MLO.
For me, I locked my last loan in Thursday. I kind have been focused on the kids and a little burnt out anyways. I haven't had the energy to go out amd get business. So not nearly as stressful for me right now in terms of pipeline but it will be a little stressful for the paycheck side.
-OZ-
Footballguy
So, when can I expect to stop getting the ads to refi?Rates going
The curse and blessing of being slow for me is that I am not stressing about a pipeline because I have none really
I don't have any pre-approvals outstanding right now. When rates go upike this it can be bad... you have to readjust qualified clients... someone qualified and shopping for homes at $340K yesterday is suddenly now only qualified up to $320K... and my goodness... if you were floating a client under contract, they may not be qualified for that long anymore. Lots of other things... it just makes life hell for a MLO.
For me, I locked my last loan in Thursday. I kind have been focused on the kids and a little burnt out anyways. I haven't had the energy to go out amd get business. So not nearly as stressful for me right now in terms of pipeline but it will be a little stressful for the paycheck side.
Chadstroma
Footballguy
I still see these ridiculous ads with rates that aren't going to happen. The junk I see and know they are hooking poor people who have no financial acumen at all breaks my heart. I mean, after all, there is a reason Rocket is the largest mortgage lender in the country and it ISN'T because they are that good or that cheap.
I’ve got friends that sold their house and “moved” to a semi-retirement location because house prices went up so much. I think it was January or so and I recall my wife saying her friend was worried because they are building their new house so I’m assuming they are too far out to lock. So, they may get completely hosed by rates and end up costing themselves a lot of money because they didn’t have to move yet. If they bought an existing or spec home they’d be in great shape. The house they are building was basically the same amount as what they sold their house for but the mortgage won’t be close now.Rates going
The curse and blessing of being slow for me is that I am not stressing about a pipeline because I have none really
I don't have any pre-approvals outstanding right now. When rates go upike this it can be bad... you have to readjust qualified clients... someone qualified and shopping for homes at $340K yesterday is suddenly now only qualified up to $320K... and my goodness... if you were floating a client under contract, they may not be qualified for that long anymore. Lots of other things... it just makes life hell for a MLO.
For me, I locked my last loan in Thursday. I kind have been focused on the kids and a little burnt out anyways. I haven't had the energy to go out amd get business. So not nearly as stressful for me right now in terms of pipeline but it will be a little stressful for the paycheck side.
culdeus
Footballguy
Chadstroma
Footballguy
There are no tax hikes from the Fed. What they do (among other things) is control the Federal Funds Rate which is the target rate. The Prime Rate is basically in lock step with this. The Prime Rate is what is used in pretty much all credit card and equity lending and drives other consumer debt like car lending. It does not have a direct impact on mortgage rates.
What does impact mortgage rates is the MBS market which largely follows the 10 Year Treasury Bond. When yields go up, rates go up. When yields go down, rates go down. There are other factors but this is the biggest factor to mortgage loan rates by far.
When the Fed wants to influence the mortgage lending rates directly they buy up bonds which pushes the yield down and then mortgage rates go down.
What happened Friday/Monday was that data showing inflation was higher than expected sent money flowing out of the stock market. The reason being an expectation that the Fed will hike up the Fed Funds Rate (influencing the Prime Rate) which will then slow the economy with the intent of getting inflation lower. Usually, when money leaves stocks the money flows into the safety of bonds but in this case, a ton of money basically said "screw it, I am sitting on the sidelines" (which is interesting as with high inflation, that money loses value even more so than the low returns on bonds). Meaning money left not only the stock market but the bond market too. That in turn drives up mortgage rates.
In other words... the market already priced in the higher Fed Funds Rate with money running scared through not buying bonds.
Chadstroma
Footballguy
Most likely... yes, they are going to take a bit hit. At least for now. I do believe there are some large lenders that have some ridiculous long lock in's through some relationship with a lender (you always pay for long locks).
However, I am still confident, actually more than ever, that rates will be crashing back down in the not too distant future. If they close before then then they will be able to refinance and get the rate down lower.
This economy is headed for some extremely rough waters and that drives rates down (with really the one exception being if we end up in the gawd awful mess of stagflation which I can't say I don't rule out but I don't think will happen).
-OZ-
Footballguy
Do you foresee further impact if, as suggested, the fed keeps raising rates to 3.4%? I’m just trying to figure out the impact to most, other than avoiding long term bonds for now. (I think)
Chadstroma
Footballguy
-OZ-
Footballguy
All of it. Tell me the future!
really though, I know you can’t predict the future but your comment about rates falling in the future seems contrary to the suggested rate hike. Unless you just mean falling next year from a higher rate by December
Poke_4_Life
Footballguy
@Chadstroma, I just want to thank you for this thread and all the information you provide. I work in banking and still learn things from your posts, just because I'm not as close to the mortgage industry.
The Z Machine
Footballguy
The Z Machine
Footballguy
Btw, ever since my broker pulled credit reports for the new loan app, I'm getting bombarded by calls and texts from people trying to sell me mortgages. Like 20x per day.
Yes, I'm on the do not call list.
Yes, I'm on the do not call list.
Chadstroma
Footballguy
Just for you... let me bust out my crystal ball!-OZ- said:All of it. Tell me the future!
really though, I know you can’t predict the future but your comment about rates falling in the future seems contrary to the suggested rate hike. Unless you just mean falling next year from a higher rate by December
Let me first say that I am not saying we are done or we hit peak. I think there is more pain to come. Inflation will be persistent and the Fed will raise rates more. However, we are 100% lock for a recession and that should be what finally kills inflation. Once that happens rates will all drop accordingly.
The Fed will by late and over react as it always does. It was clear inflation was going to be an issue last year when they kept insisting 'transitory' when it was obvious it was not. Fiscal policy with the stimulus has pretty much run through the system. Monetary policy is swinging. There are aspects that are unusual and out of control of the Fed (Ukraine, supply chain, Shanghai lockdown, etc).
My biggest concern is stagflation which would really suck but I don't think that that will happen.
Chadstroma
Footballguy
Thanks man- glad you have learned from it!Poke_4_Life said:@Chadstroma, I just want to thank you for this thread and all the information you provide. I work in banking and still learn things from your posts, just because I'm not as close to the mortgage industry.
Chadstroma
Footballguy
Yup... "trigger leads"
They purchase leads from the credit bureaus. With lending production drastically lower, these type of leads are being worked on more than before as lenders/loan officers get desperate.
optoutprescreen.com is the best way to avoid these since it scrubs them automatically.
The do not call registry is suppose to avoid these but if the lender does not scrub against the list then you will get calls. You can file a complaint against them with https://www.donotcall.gov/report.html but of course, that is more time and effort on your part.
Probably a lot of families sitting at the dinner table nowadays discussing if they can really afford the house they are looking at.
I mean, even a half a percent increase on a 30 year fixed $500k mortgage is about $165/month extra. These increases are really going to price some people out of the market.
I mean, even a half a percent increase on a 30 year fixed $500k mortgage is about $165/month extra. These increases are really going to price some people out of the market.
Capella
Footballguy
Yea if you just briefly glance at it, it doesn’t seem like a lot but you’re absolutely correct. Crazy.
Chadstroma
Footballguy
It will not set off another refinance boom but it is huge news for mortgage rates. The largest wholesale lender in the country (#2 overall) just announced an across the board lowering of pricing on mortgages by 50-100 bps (that is .5 to 1% for those who don't speak bps).
Brokers are Better.
Brokers are Better.
fruity pebbles
Footballguy
Probably because they are so big they can afford to make a little less and continue to gobble market share (the ol' smaller profit on each transaction but make it up in volume routine), knowing other lenders will be loathe to try and match. Pure speculation on my part.fruity pebbles said:
2Squirrels1Nut
Footballguy
Chadstroma
Footballguy
No. Strategy. They play chess while other lenders play checkers.fruity pebbles said:
They make moves not to just win now but win tomorrow. Many lenders are hurting right now and shedding payroll. UWM is the only lender of consequence that I know of that has not shed any jobs in one way or another. The expectation in the industry is that more than one lender will not make it through. They will sell for cheap or fail. UWM is pouring gas on that fire because they can. They have higher margins than all lenders because of their technology. The shedding of margins for them will force the weaker lenders out of wholesale or fold. Retail lenders, already having a hard time with margin compression and losing their LO's to the broker channel will find it even harder to compete.
This means they will continue to grow and take a bigger slice of the pie even though the pie is shrinking. When rates fall in a year or so and refinances come around, they will have the capacity to continue to dominate while other surviving lenders will try to hire up to take advantage of it.
In short... it is not weakness but basically the Championship team that puts it's foot on it's competitions throat so they can't even think of making a come back.
Chadstroma
Footballguy
The debt becomes less of a burden with the inflation and the valuation of the property is shored up as well.
Ron Swanson
Footballguy
Chadstroma
Footballguy
brun
Footballguy
So, last month, UWM moved my mortgage to Flagstar. Just curious if that means anything since @Chadstroma kinda made it sound like their strategy is to hold as many mortgages as possible.
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Chadstroma
Footballguy
No, not really. They do try to retain the servicing on most loans now (previously they sold a majority of them.... which was hilarious in a lowering rate environment as they sold the servicing and then the loans got paid off and often sent back to UWM- lol) The economics of the servicing rights is something that is more complicated than you would expect and I will be very honest and say that I don't have a full grasp on it. They are holding most servicing now with the exception being jumbos but Ishbia (CEO of UWM) recently said something about holding more of those as well. One thing I can say is that selling servicing rights isn't an indication of anything in terms of the company one way or another.
Chadstroma
Footballguy
Chadstroma
Footballguy
ghostguy123
Footballguy
Question for the lenders.
My daughter is 18, just graduated high school, has worked part time for a year and a half, maybe 2 years.
We talked last night, and she may be interested in taking a pause before starting community college. Instead, she has interest in working her job full time for a while, then buying a house, getting roommates, and starting some wealth building.
Anyway, exactly what will she need to be able to qualify for a loan? Probably a house/condo in the 90k-115- range. She didn't make a lot last year, maybe 12k, but will likely be going full time at like 15 an hour for the next few months.
No credit history yet, though I did make her an authorized user on my card.
Does she have a chance to qualify for the loan with a few months of full time work? Are there any 1st time home buyer programs that might make her path easier?
My daughter is 18, just graduated high school, has worked part time for a year and a half, maybe 2 years.
We talked last night, and she may be interested in taking a pause before starting community college. Instead, she has interest in working her job full time for a while, then buying a house, getting roommates, and starting some wealth building.
Anyway, exactly what will she need to be able to qualify for a loan? Probably a house/condo in the 90k-115- range. She didn't make a lot last year, maybe 12k, but will likely be going full time at like 15 an hour for the next few months.
No credit history yet, though I did make her an authorized user on my card.
Does she have a chance to qualify for the loan with a few months of full time work? Are there any 1st time home buyer programs that might make her path easier?
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Poke_4_Life
Footballguy
madshot31
Footballguy
I was disappointed earlier this year when our loan was sold to another company because of how much I liked flagstar and their portal compared to the other options I had no choice in using.
STEADYMOBBIN 22
Footballguy
Congrats to you both! :confetti:Just stopping in to thank Chad again for helping refi our home last year. Locked in an amazing rate and worked through all the common little bumps like the pro he is. I haven't been around footballguys at all since the kid was born so just stopping by.
Chadstroma
Footballguy
It can certainly be doable. A few things to ask and some to do's...
1) The timeline of how long she has been working is important. Need to get that nailed down.
2) The part time work she has done and the full time job she is going to work... are they the same job/company just going full time or different... if different, same/similar industry/job type?
3) How was she paid part time and now full time? Were both hourly? Or was there any commission/incentive or other variable income involved?
4a) The AU is a good start but she needs credit in her own name. You want to target 4 tradelines. The AU could be an issue as technically the only AU that is always ok is a when it is a spouse. Anything else can be questioned and forced off though normally underwriters do not enforce that much.
4b) She wants a mix of credit in there, so 1 term loan and then 3 credit cards/lines of credit (again, I would not count the AU to be on the safe side). For the term loan you can go one of two routes. Either establish a secured loan in her name with your CU or bank where you deposit money in a CD in her name and then do a secured loan off of that (make sure they report this to all credit bureaus) or you can do a Self https://www.selflender.com/refer/12828349 or Credit Strong https://tracking.creditstrong.com/SH4a they do the same thing just different companies. Essentially you start paying into an account every month, they report this to the credit bureaus as a term loan. At the end of the term (whatever you choose) they close it and give you the money paid into it back minus their fees/interest. The secured loan is cheaper but you have to deposit money or she will (which usually for a FTHB they need all the cash they can get), the Self or Credit Strong cost more but don't require tying up capital. If you do the Self or Credit Strong, do it for the lowest monthly in a term that goes longer than the expected purchase of the home.
4c) As mentioned, 3 CC's. The timeline is important on this. If this is a "we want to get her ready to buy ASAP" situation then there is no better card than the Credit Builder Card https://www.creditbuildercard.com/occasiosolutions.html it is a secured card but is designed to improve credit quickly and it speeds up the process over any other card by 2-3 months. If this is the case, then do two of these cards (min deposit is $200) and then another card- I am a huge fan of Discover and she should be able to get the Discover Student card easily enough. Discover https://refer.discover.com/s/CHAD726 (if you have Discover, you can sign on and get a link to give her and you get $100 credit and she will get a $100 if she uses it within the first couple of months- if you don't feel free to use this link). If timeline isn't as important and we are more like a year out then get the Discover student card and then pick up a couple of other student cards as well (apply for Discover first, they are more conservative than other cards)
5) Qualifying on her own depends on the above. If she can not qualify on her own, you could co-sign with her using your income to qualify as a second option. Using and using what for her income depends on the answers to the questions above. Credit depends on what she does as described above.
6) Most FTHB programs are marketing schemes to be honest. Most are DPA (Down Payment Assistance) and end up costing the borrower more over time than they get. Even more so in this rate environment as many tie the borrower up from not refinancing for a defined period of time depending on the program. Generally, should be avoided.
7) When ready to apply, reach out, I can get her connected to a broker that will help her out.
Chadstroma
Footballguy
It should be an up and down quickly... the economy is headed towards a recession which should kill inflation (along with the economy) and the Fed will jump into resurrection mode. I could be off on timing but I think it will happen fairly quickly.
Chadstroma
Footballguy
Chadstroma
Footballguy
THANK YOU! It was a pleasure to help. How is the munchkin doing?Just stopping in to thank Chad again for helping refi our home last year. Locked in an amazing rate and worked through all the common little bumps like the pro he is. I haven't been around footballguys at all since the kid was born so just stopping by.
I just finished a phone call earlier today where they are sending me an offer letter. I will be heading to a new brokerage which is going to be AWESOME! A couple of things that will make this awesome, first, it is brokerage that is licensed nationally (almost, a couple of states in the works) and I will be able to refer all FBG's to LO's licensed in their state but keep it 'in the family' so to speak. That will be awesome because this new brokerage is like an all-star brokerage (already several brokers I normally referred business to previously have moved to this new brokerage). This company is building a best in class processing department so this little bumps are eliminated or smoothed out even more for the clients.
It is pretty exciting. I am really pumped up about it.
Chadstroma
Footballguy
Called about refinancing? What in the world....
I mean, refi's never go away fully but cold calling for refi's is just silly to me. Some LO's don't know how to do purchase business and are freaking out about not having a steady stream of refi business coming in. Many will not make it to the next refi boom but they might sell you a car soon.
Ron Swanson
Footballguy
UWM sent mine to Nationstar and then to Mr. Cooper. Makes no difference to me. Somewhat of a pain to track for taxes and making sure the online pay gets set up to the right place but not that big of a deal for a super cheap rate.
Chadstroma
Footballguy
?
Nationstar IS Mr. Cooper. Maybe you went through the merger and thought it was a servicing change? But that was a number of years back.
A few notes....
Mr. Cooper has to be the WORST name in the mortgage business.
Mr. Cooper is actually what I refer to as the "ghost of WaMu". After Washington Mutual failed and Chase took over almost all the business, there was a small unit that did reinsurance and continued to do business in 'run off mode' as WMIF. Apparently, that run off business was quite lucrative and the got back into the mortgage business and merged with Nationstar then rebranded as Mr. Cooper.
Mr. Cooper sucks at doing mortgages.
-OZ-
Footballguy
I had to check which company actually has my mortgage now, as I just set everything up through UWM without issue. The last one I didn’t even realize had been sold to cooper before I refinanced. Apparently synergy has mine now, but UWM processes my payment
I don’t itemize. Similar threads
