The Trend IS Your Friend

Time to really pay attention to a possible trend that could make for a big opportunity for you in the months to come; and that opportunity is REFINANCES!

Yes, I said refinances! If you follow the rate market, you will notice that interest rates are approaching significant levels compared to last year. In fact, if you look back at loans you closed between last March & December (2018), you will see that there might be some refinance opportunities to take advantage of? Clearly you have to be careful of EPOs and your company’s policy regarding any time restrictions you may have with your investors, but those opportunities might be out there for you to take advantage of. I’m not saying that it is time to abandon the purchase business, not by a long shot! The purchase arena is doing quite well for many of us right now and I expect a very solid first half of 2019, but part of your job is to manage these obligations over time and now might just be the time to take a good look!

The other trend we are seeing across the country is the power of explaining the rent vs. own analysis! In most markets across the country renting is not a great value! In fact, the effect cost rate on rent is 100%! No benefit financially, all the money is spent and is GONE! Owning has a number of advantages, the least of which is equity! Some of each payment is paying down principle and building wealth! The ongoing property appreciation is also a huge benefit and depending on your local rates of appreciation, it could be more significant than you ever thought!

February is a time for accumulation and execution of the strategies that push the beginning of the market. Use the tools! Take advantage of the strategies we are sharing. Get out in front of the market as a true mortgage professional and share many of the opportunity generating ideas with your referral partners! The possibility of some bonus refinance activity is great, but the strength of the purchase market building will depend on how you have positioned yourself!

Questions or comments: Mike@IMTcoaching.com

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Time to look at MI

Now is the time of the year I have my people focused on their business plans and the tools and strategies they will be bringing into the new year. One of the things I am pressing my clients to look at is the use and all the options surrounding MI.

MI companies have been doing a great job listening to the market and evaluating how MI pricing can be used as a tool to really help originators provide options for their clients to reduce total costs and monthly payments. If you haven’t spent some time talking to ALL your MI representatives about how their products, programs, and pricing can really help the payment shock of rising interest rates.

Another important thing to think about is how to use these new MI programs with your Realtor® referral partners to help make stronger offers and help Listing Agents and Sellers move properties more effectively.

Price reductions are nice, but could sellers see a lower cost and provide a bigger benefit by providing for seller paid MI? Take a look at your local market and run some numbers, would a $5,000 or $10,000 price reduction be more beneficial to the buyer than that same money or LESS MONEY, paying for the buyer’s mortgage insurance? How would the numbers compare on monthly payments? If you don’t do the work, you won’t know.

Another important concept is to understand each MI Company’s rates on LTV as well as credit score. These two factors can become very helpful if you just look. We often help people improve their credit scores and down payments to help qualify for certain loan programs, why don’t we do the same thing to help our clients save really big money by reducing the cost of their MI?

Buyers and sellers have become price and rate conscious, but often focus on numbers that are large and abstract. As mortgage professionals, we must focus on the reality that rates are still historically low, and that payments are much more important than price! Remember, interest rates are going up, but in most parts of the country, rental rates are rising even faster!

So take some time and connect with your MI representatives and talk about how MI pricing and programs can really benefit your local market by helping reduce the overall costs and affordability of homeownership!

Questions or comments: Mike@IMTcoaching.com