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It’s Here. Rates Went Up.

It’s Here.  Rates Went Up.

Projections from the top economists were for rates to go up to the mid high 3’s by YEAR END.  I put that in caps to express the timing was at the end of 2022.  So what just happened?  This happened…

The bond market reacted to the Fed’s December Meeting minutes where it was revealed they were going to start actively engaging in Quantitative Tightening (QT).  What does that mean?  They already started doing Quantitative Easing (QE).. meaning they started buying less mortgaged back securities and treasuries as of last November and set to complete the tapering by March 2022.  Then they will start raising the short term Fed Rate.  QE removes the Fed as the number 1 buyer of mortgage backed securities and treasuries slowly removing the biggest buyer/demand in the market.  You know what this does to an asset class… it softens the prices; therefore increasing the yield (or rates).  This moved the market some in November, but it was expected.  Then the Fed will start raising the Fed Rate, which will move up short term rates for HELOCs, consumer debt, personal loans, etc.  This will also raise the short term mortgage bonds (i.e. the 2-year) and rates (i.e. the 5/1 ARM and 7/1 ARM).

So .. back to Quantitative Tightening.  It simply means the Fed will start cutting off their “repurchasing”.  So QE is purchasing less.  QT is allowing the balance sheet to run off naturally.  For example, when a mortgage pays off through a refi or completion of the loan, the Fed will allow that debt to mature instead of using those funds to buy more.  The market did NOT like that.  Just means less buying from the biggest buyer, less demand, more supply, softening prices, higher rates.

Higher Rates Means Tighter Affordability

Never before has partnering with a strong creative lender been so important.  Someone who understands the market, will move quickly towards a solution and has the products available to pivot when needed.  I wanted to highlight a few lending options we currently provide you and your buyers for options…

Investment Loans in an LLC with a 30 Year Fixed – WOW!!  Just WOW!!.  I am so excited for this product.  We can now do loans for investors either in their personal name or the name of their LLC with a 30 year fixed rate allowing them to now finance up to 50 properties.  So buyers will want to exhaust Fannie Mae and Freddie Mac first, then once they hit 10 financed properties, move over to this loan program.  Rates are similar to the Fannie/Freddie options with an additional 1% discount.

3.5% Down Jumbos – Want to purchase a home in this rising price market but have limited available cash?  We’ve got you!  You will need more in reserves (retirement or investment accounts), but can put as little as 3.5%, 5%, or 10% down with NO Mortgage Insurance.  

DSCR – That stands for Debt Service Coverage Ratio.. this program allows you to purchase an investment using ONLY the income from the investment.  So…. you do not need to be employed or show any of your income documentation.  Just have the assets to buy and the reserves.

Bank Statement Loans – Self Employed but write off everything?  Not a problem.. let’s get 12 to 24 months bank statements to show regular deposits.  We will assess your income and expenses from your bank statements not your tax returns.

10% Down ITINs – Most banks want 20 to 30% down on Individual Taxpayer Identification Number (ITIN) loans.  We have them with as little as 10% down.  This is HUGE for folks who need this product.

Closing in 10 Days!  GET AGGRESSIVE – We know this is a hard market for buyers.  And we are here to help.  With our TBD (to be determined) full underwrites, we are fully approving our buyers and getting them closed in 10 days waiving loan objection.  EVEN JUMBOS…. YES!  Even Jumbos.

Waive Loan Objection and Appraisal Objection – Want to look like cash?  Do our TBD underwrite and use our Appraisal Gap Insurance to waive loan and appraisal deadlines.


Bottom Line:

Lenders are lenders are lenders… until you get to the Rueth Team!  Then they are Super Lenders who will fight for your clients at every turn, ensuring they not only close on time but make you look good with a high level of communication, creative solutions and low stress.

Also … if your clients need even more help?  I am securing $1 Million to buy properties with cash for our TBD clients.  I want their success just as much as you do!

[author] [author_image timthumb=’on’][/author_image] [author_info]Nicole Rueth has been passionately advising clients on their wealth building and home financing strategies for over 17 years. Her path has been non-conventional and it is a benefit to her clients.  www.TheRuethTeam.Com.[/author_info] [/author]

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