After more than a year if getting fiscal policy completely wrong and just making up stories about the economy, it seems the FED members all want the microphone and to share their opinions on how they are going to “fix” the very problem they created! Every time one of them speaks, the bond market loses its mind and tries to figure out what they are saying, and this creates wild movement, all pushing rates higher. As we have been saying here for quite some time, if you like it, LOCK IT!
That said, it all goes back to PAYMENTS and how we can best help our clients maximize their borrowing power by helping them get into the best possible position to buy, even if rates and prices are going higher!
- 1. CREDIT! Credit is at the root of the cost of money, PMI, and insurance. Even just a modest improvement in a credit score can result in a significant improvement in borrowing power! Remember that according to Experian® the average credit score in the country is now 714.
- 2. CASH! While it may be taking weeks and months for people to improve their credit or find a home; they can be banking cash. They may even consider adding a part time job or two and bank the cash to either increase their offer, payoff debt to improve their ability to use their DTI for mortgage payments, increasing the amount they can borrow.
- 3. PMI! LTV and the use of single pay premiums can also help make the payment work!
While we wait and see how the actions of the FED impact the markets, we must deal with their words by using strategies that will make the payments work. Until then, we can just hope that the FED can just shut up until they actually DO SOMETHING!
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