March 21st, 2019

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What’s that sound? Probably the huge sigh of relief sweeping across the mortgage industry. Yesterday, the Fed announced that it wasn’t going to hike interest rates, leading to a drop in rates. Furthermore, the majority of Fed officials have stated that there will likely be no more rate hikes this year, even though the expectations leading into 2019 were for 2-3 rate hikes. This is giving lenders and borrowers a big break, with refinance volume increasing (and expecting to surge) as consumers look to take advantage of the opportunity.

It can’t be said enough: NOW is the prime time to connect with both new and old leads and let them know of the opportunities presenting themselves in the housing market. Rates are low, inventory is on the rise, and and home values are leveling out. However, keep in mind that every other lender is moving to pounce on this market as well, which means loan officers main focus needs to be on differentiating themselves, creating as much value as possible, and developing true relationship with their clients.

March 18th, 2019

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Bankrate.com did a recent survey of almost 2700 people asking them what their main barriers to homeownership were. The number 1 answer: inadequate income. The article goes on to give some good advice to borrowers on what to do to make sure they understand the expenses of homeownership, including things like knowing your income and being aware of unexpected expenses, which is something we talk about a lot at Mortgage Champions. An analyst at named Deborah Kearns had a great quote when giving advice to borrowers, saying “You need to look at what is your list of monthly expenses, including what a lender doesn’t consider when assessing your eligibility for a loan. You need to take into account all of the other bills.”

We talk about this a lot. It’s always been a trend that people buy homes they can’t afford. The problem is that most of the time, those people really do think they can afford it but other expenses pop up and make finances very tight. We’ve seen reports where many Millennials are now reporting they regret buying their homes because the payments are a lot more difficult to manage than they expected. This means that loan officers need to truly inform and educate their borrowers on everything to expect when buying a home, not just in the mortgage process, but for years after as well. If someone has a young family, you need to discuss daycare expenses; or if someone has a long-distance commute, you need to discuss both the monetary costs and time costs of that; if someone is buying their first home, talk about moving expenses, and furnishings, and house maintenance costs, and all of the other costs that don’t typically appear on a 1003. In today’s market, the best way for a loan officer to survive is through repeat and referral business, which means your borrowers need to be extremely happy with not just the process, but with their financial scenario after the process ends. That means you have to be an expert on everything involving homeownership, instead of just being focused on closing a loan

March 14th, 2019

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Last year was a dang good year for many homeowners: according to a new report from CoreLogic, the average homeowners gained roughly $9700 in equity from Q4 2017 to Q4 2018. This is big news for lenders and loan officers (especially in the home equity loan market), who can educate homeowners on wise ways to utilize those gains to meet their families’ financial needs and goals. The western region of the US experienced the highest gains in home equity (for example, the average increase in Nevada was $29,400, and Hawaii saw average increases of $26,900), so if you’re an LO licensed in western states, now would be a great time to talk to your customers about the advantages of using home equity to achieve major life goals such as home improvements, college, retirement, etc.

March 13th, 2019

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Good news for lenders and loan officers: rates are now sitting at a 14-month low. And no, that doesn’t mean it’s time to start selling rate again. Today, focus on sticking to your process with a little added inspiration, energy, and persistence on the phones. Make sure your borrowers are aware that now is a great time to consider refinancing or settling on a home purchase because this rate drop won’t last for long, as influences such as Brexit and new economic data are likely to shift and push rates back up soon.

March 7th, 2019

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As reported by CoreLogic’s January Home Price Index (HPI) and HPI Forecast, home prices are still rising, but at a decreasing rate. January saw a 4.4% year-over-year increase, and a 0.1% month-over-month increase in home prices. That year-over-year percentage is the lowest seen since August of 2012, meaning home price growth has been cooling going through the beginning of this year. However, the CoreLogic Forecast expects 2019 to see an annual average home price increase of 3.4% above 2018’s average. With rates remaining low going into the spring season, the housing market is expected to heat up a boost the rise in home prices throughout the rest of the year.

Loan officers need to bring their A-game going into the spring market. That means having a fine-tuned selling system, a client follow-up system, an updated/relevant marketing campaign, and a strong realtor/referral network.

March 5th, 2019

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Despite the challenges the housing market has seen in recent years, last year actually saw something very positive: according to Genworth Mortgage Insurance’s First-Time Homebuyer Market Report, first-time homebuyers had their biggest year since 2006, with 2.07 million first-timers buying single-family homes. On the flip side, repeat buyers saw a 7% decrease in 2018. Last year also saw the highest level of first-time homebuyer mix in 18 years as those consumers accounted for 39% of single-family houses sold and representing 56% of new purchase loans. However, Q4 saw a not-so-mild decline as the number of homebuyers diminished due to rising home prices and interest rates.

One big statistic to note from the report is that 2018 saw 682,000 first-time buyers obtaining conventional loans with PMI, which was 53,000 more than FHA loans. At the same time, the average house price for this group declined 2% year-over-year.

So what does all this mean for mortgage professionals? It means that first-time homebuyers are a major demographic in today’s mortgage arena and they are actively looking for opportunities to buy homes they can afford. They’re also not as reliant upon government loans as they may be painted to be. As a long officer, be sure to actively market to first-time buyers, present to them multiple loan options, and stick with them through the process of finding and securing a home.

February 28th, 2019

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Looks like the purchase boom is only getting started, according to a new report from Nerdwallet. Their recent Home Buyer Report shows a lot of positive signs that Americans are going to be buying a lot of homes in 2019. The report shows that 36% are planning on buying a home in the next 5 years, with 24% planning on buying in the next 12 months. As potential buyers start re-entering the housing market given the low interest rates and cooling values we’re seeing, mortgage lenders should be preparing for a big bump in purchase applications. For loan officers, that means perfecting the purchase process and getting into a systematic groove in order to not only manage, but excel in the 2019 market. It also means being able to truly educate their home buying clients because the report also shows that many potential buyers hold a lot of misconceptions about the purchase process (for example, 62% believe a 20% down payment is required). It is the LO’s job to educate on the benefits of homeownership, to take an advisor’s approach, and to make the process as simple and seamless as possible.

February 27th, 2019

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Millennials may finally be coming to the housing market’s rescue. Two years ago, Millennials passed Gen X as the new leader in new mortgage originations. The end of last year saw Millennials holding 45% of all new mortgage, 9% higher than Gen X. Furthermore, they also took the top spot on another front: the total dollar volume of mortgages, showing that they currently are more willing to take on larger mortgages than other generations. This is due to older Millennials having stable, well-paying jobs and gaining purchasing power. However, they are still flocking to more affordable areas to look for homes. Last year, the median-priced home for millennials was $238,000, higher than Gen X but less than Baby Boomers. Millennials are also much more prone to putting less down on home purchases than other generations typically have.

So what does all this mean? Millennials are the talk of the industry, and loan officers need to adjust their ways they sell and communicate to them. Technology, ease, and efficiency need to be at the forefront of each transaction, along with taking a position of advisor over “mortgage person”. A loan officer’s focus should be on education, simplification, and advocacy. They also need to adjust their marketing tactics to include more Millennial-targeted campaigns, high use of social media, and a refresh of personal branding.