⏱ THE MORTGAGE MINUTE

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If there’s one thing that working in a finance-related field has taught us at The Mortgage Minute, it’s that the industry goes through plenty of ups and downs. But just like ocean waves continuously coming into shore, whether it’s high tide or low, the industry keeps chugging along! 

We had some positive jobs data that dropped on Friday, with 254,000 new jobs added to the economy. That was a whopping 100,000 more than what anyone expected.

Unemployment dropped back down to 4.1%, and wages are up 4%, staying above the pace of inflation—finally.

So, what does all of this mean for real estate and mortgage professionals? Plenty.

While the economy charges on, expect the Fed to continue the easing of rates between now and the end of the year. We’re predicting a steady (albeit small) trend over the next 30 to 60 days for rates to continue to fall. It’s not the full-on plummet we were hoping for, but it sure beats the alternative.

And then, of course, there’s the wild card: the upcoming election. Election season always throws a wrench in predictions, and this one is no different. 

Elections = uncertainty = market jitters. 

Investors tend to get a bit nervous, especially when they don’t feel like they can predict what’s going to happen. We’re recommending to plan for some rate volatility as we get closer to that first Tuesday in November everyone keeps talking about.

Market Sentiment & Economic Calendar

Next week could create some major volatility for mortgage rates with several big reports on the horizon. If you're looking to make strategic moves, these are the ones to keep on your radar:

FOMC Minutes

• Release Date: Wednesday, October 9th at 2:00 PM ET

• The minutes from the Federal Reserve's last meeting will give us a deeper look into their thinking. Watch out for any hints about future interest rate cuts or hikes, especially their stance on inflation. Depending on the tone, this could either stabilize rates or create upward pressure.

Core Consumer Price Index (CPI) Month-over-Month

• Release Date: Thursday, October 10th at 8:30 AM ET

• This report measures inflation without the volatile food and energy sectors. If the Core CPI comes in hot (higher than expected), it might push mortgage rates up as the Fed could be hesitant to lower rates too quickly. However, if inflation is cooling off, we could see some relief in mortgage rates.

Producer Price Index (PPI) Core

• Release Date: Thursday, October 10th at 8:30 AM ET

• This measures the price changes from the perspective of producers. Core PPI tends to foreshadow future inflation. A higher-than-expected PPI could signal more inflationary pressure, pushing rates higher. If the data shows a slowdown, we might get a break in rate hikes.

Pipeline Save of the Week

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Mortgage Hack

Delayed Financing for Investment Buyers

We talk a lot at The Mortgage Minute about stacking up as many tools in your toolkit as you can because you never know when your borrower might need a hammer, and all your competitor has is a screwdriver!

Well, this week we’ve got a beauty for when you’ve got a borrower purchasing investment (or primary residence) properties: Delayed Financing

A lot of the time, if they’ve got the liquidity, investors like to buy properties all cash without the hassle of traditional financing. This makes the offer more attractive to a seller because there’s less red tape to get the deal done. But if you’re a mortgage professional, that doesn’t really help you much, right? No financing means no originating—and that’s what we do best!

Well, the other side of the coin is that investors want to stay liquid. They don’t want their cash tied up any more than you want to call over to underwriting and ask them a question. 

And here’s where the pitch comes in: after closing on that all cash purchase, the investor can quickly get their cash back via Delayed Financing.

Here, your borrower can get a cash-out refinance, allowing them to quickly access their funds to re-invest somewhere else. And thanks to a recent rule update, the time that they need to wait is even shorter. Fannie Mae used to require a six-month seasoning period, but now that requirement is no longer in place! 

This is a massive advantage for investors who would prefer to stay liquid. And a lot of investors out there don’t even know about Delayed Financing, meaning you just might be their new best friend!

But how do you find the clients to begin with? Our recommendation is to partner with your local title rep and pull up a list of homes in your market that recently sold for 100% cash. Send out marketing materials to these homeowners, offering them immediate cash-out refinancing. You can pitch it however you see fit for your market, but emphasize that it’s a way for them to once again have access to those liquid funds that they can then use to purchase more properties!

A few Key Conditions to keep in mind:

1. The property must have been purchased in an arm’s-length transaction (no related parties).

2. The original purchase must be documented, including bank statements or personal loan details.

3. The new loan amount can cover the original investment plus closing costs.

4. All other eligibility rules for cash-out refinances still apply.

For a deep-dive, you’ll want to look here:

• Fannie Mae Selling Guide, Section B2-1.3-03 (for cash-out details and exceptions)

This is a perfect opportunity to help investors keep moving quickly in the market. Get your title rep involved and start marketing this financing option to recent cash buyers today!

Who Moved My Rate?

Have you noticed that Non-QM (Non-Qualified Mortgage) rates barely moved during the recent rate drops? There’s a good reason for that! Unlike conventional mortgage rates, which are heavily influenced by fluctuations in the bond market, Non-QM rates tend to be more stable. 

This is because Non-QM loans are not sold to government-backed entities like Fannie Mae or Freddie Mac. Instead, they are often held by private investors who aren’t reacting to daily bond market volatility, so those rates may stay in place even if you’re expecting a move.

This means you have more time to lock in your Non-QM rates, even when there’s a lot of market movement happening. While conventional rates can swing throughout the day based on real-time bond market activity, Non-QM loans give you a bit of breathing room.

Have you also noticed that most economic news, which can affect market sentiment, is released early in the morning, right when lenders are still working on repricing? So, even if you wanted to lock in a loan ahead of a big report, pricing may be frozen. 

And for those times that economic news is released later in the day, you still can be at a strategic advantage—if you stay on top of it! Once the news hits it still takes lenders at least 30 minutes to an hour to reprice, so you still have a short window where you can lock in your pipeline before rates tick up from a negative news correction.

That’s why it’s essential to stay ahead of the game—monitor upcoming economic releases and make smart decisions about when to lock your pipeline, especially during potentially volatile seasons.

The Little Refi Boom That Could

As mortgage rates approach 6%, optimism throughout the industry is brewing, with lenders preparing for a “mini refi boom,” according to this recent article. While it’s not predicted to be the game-changing boost that we’ve seen in previous booms, there will certainly be opportunities in the coming months to take advantage of.

Refinance production is expected to triple next year from 2023 numbers, as it’s projected that nearly $3 trillion worth of loans are primed for refinances as rates keep coming down. 

This will be a good time to sharpen your basic streamline refinance skills, as there are many reporting that loan officers have just flat-out forgotten how to get one done.

There’s never been a better time to hone those skills and stay ahead of the competition.

It’s the perfect time to refocus, refresh, and ride the wave to new opportunities.

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!