⏱ THE MORTGAGE MINUTE

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There’s an old saying that goes something like this: 

While you’re standing still, everything keeps happening around you. 

In the real estate and mortgage industry, that seems doubly true. 

If you keep waiting for things to happen, you’re going to miss all of the amazing things that are happening right now.

At The Mortgage Minute, we strive to encourage our readers to find the extra out of the ordinary. There’s lots of opportunity out there (right now), you just need to know where to look. 

Hopefully, this latest newsletter will give you a few extra bits of knowledge that you didn’t know before so you can get out there and close more deals. 

Here’s to making things happen around you while your competitors stand still.

Market Sentiment & Economic Calendar

Looking ahead, we have two key economic reports dropping October 17th that could impact mortgage rates and overall market sentiment. 

Both Initial Jobless Claims and U.S. Retail Sales for September are scheduled for early in the day, and they’ll provide fresh insights into how the economy is holding up—particularly in terms of employment and consumer spending. 

These reports are closely watched by the Fed, and any surprises could influence their future decisions on rates, which means it's important to stay on top of the data. 

Thursday, October 17, 5:30 AM ET — Initial Jobless Claims

This weekly snapshot of unemployment will show how the labor market is performing.

Impact on Mortgage Rates:  If claims rise, it could signal a slowing economy and potentially lower rates. If claims remain low, expect upward pressure on rates as the strong job market could fuel inflation concerns.

Thursday, October 17, 5:30 AM ET — U.S. Retail Sales for September

Retail sales give us a good read on consumer spending, a major driver of the U.S. economy. 

Impact on Mortgage Rates: Strong sales might push rates higher by reinforcing inflation worries, while weak sales could ease rate pressure as economic momentum cools.

Bottom Line

These two reports will help shape the narrative around the strength of the economy and inflation, both of which are key to where mortgage rates are headed. Strong data might keep rates climbing, while weaker data could provide some relief. Keep an eye on both and be ready to adjust your strategy—whether it’s locking in rates sooner or staying flexible, depending on how the market reacts.

It’s all about staying nimble and using these reports to your advantage as you navigate rate lock decisions in a fluctuating market!

Loophole Spotlight

Built-in Rental Income

What do you do when you have a borrower wanting to buy a property, but they don’t quite have the debt-to-income ratios to pull it off?

The default question to ask typically lands on: “Do you have someone that could cosign and buy it with them?”

But what happens when there isn’t a cosigner in sight?

Well, dear reader, that’s when multi-unit properties come into play! Duplexes, triplexes, and fourplexes all still fall under residential guidelines, so there’s no messing around with commercial units.

And when it’s already tenant-occupied, that income for the potential buyer is built-in!

Your borrower’s debt-to-income ratios improve, and a world of possibilities opens up for them when they take a tenant-occupied multi-unit as part of the consideration in their search.

A 1007 rent survey needs to be ordered along with the appraisal to confirm the rental value, as well as a current lease agreement for the tenant.

Typically, the lender will approve the income amount that is the lesser of the two, so be sure to play conservatively and use the lesser of the rent survey versus the lease agreement.

Suggesting properties with built-in rental income is a good thing to keep in your back pocket when you have a buyer who is open to finding a deal that works! 

These Rates Were Made for Locking

We've been seeing an uptick in the buying and selling of mortgage servicing rights (MSR) portfolios, including this latest from MIAC Analytics, consisting of $292.91 million in Fannie Mae, Freddie Mac, and Ginnie Mae servicing rights. As refinancing interest grows due to a more favorable rate environment, the competition is heating up.

With rates being elevated for the past several quarters, and now on a continued lower trajectory (albeit with the occasional hiccup), now is a good time to reach out to your existing book of business and current pipeline. 

Borrowers with rates that were secured higher 6-12 months ago are going to be drooling at these new rates, eager to drop down to a lower payment. 

It’s important to keep an eye on your Early Payoff (EPO) clocks (180 days is the standard). Funding even a day early could trigger an EPO leading to thousands of dollars of lost commission. Having a simple date and time calculator website saved to your shortcuts is always a good way to double-check the count on days!

Some lenders, however, will negotiate on EPO‘s if you pay a lump sum or if the comp was originally borrower paid. It’s important that you track these dates or negotiate ahead of time to avoid losing your commission, or, worse, having to pay it back from the last deal.

By checking in regularly, you show your clients that you're always watching the market closely and looking out for their best interests. If you don't call them, someone else will!

When Rates Dip, You Dip, We Dip

We all just got a nice little taste of what the next refinance wave could look like. Rates dipped, and many in the industry weren’t fully prepared for the surge in applications that followed. Now, with rates ticking back up, it’s the perfect moment to regroup and get ahead of what’s coming next.

Mortgage demand shrank 5.1% over the past two weeks, according to data released by the Mortgage Bankers Association, but don’t ease up just yet. Compared to this time last year, demand for refinances were still up a whopping 159%. 

This is the time to use that brief window of breathing room wisely. Tighten up those processes and make sure your team is fully prepared. 

The next rate drop is coming, and when it does, your clients will be looking to you for quick action.

Be ready.

Stay Connected

See! We told you! Five minutes or less!

Crazy how much we packed in there, right?

Thank you for being a part of The Mortgage Minute community. Stay tuned for next week’s insights and tips!