RATES UP still leaves room for FLEXIBLE lending and LOWER PAYMENTS

Current Price of FNMA 5.5% Bond:  $96.09, -12bp       

Just how bad was it yesterday?  Mortgage Bond prices saw their sharpest single-day loss in three years.  Investors sold off their positions in US Bonds on the news of Central Bank rate hikes in other countries, as these hikes make other global investments more attractive in relation to US Bonds, and therefore diminish the demand for our Bonds.  But it was not other Central Banks hiking rates that caused the extreme reaction - it was that this event was the proverbial "straw that broke the camels back".  We knew the floor of support from two days ago was important, and once broken, Bonds dropped almost 140bp within a day and a half.  They are now testing a couple of powerful floors of support to see if they can gain their footing, and perhaps mount a gradual comeback.

Rates have increased dramatically in the last few days, but business must continue.  Continue to educate yourself and understand how the mortgage market is flexible to buying Real Estate. Our Pay Option programs are fantastic at providing solid alternatives to help you better serve your customers needs.

Premier Hybrid ARMs
If you have not already taken a look at out Hybrid Option ARM, now is the time to consider using. It provides the security of a 3, 5 or 7 year fixed rate with the flexibility of an Option ARM. Even if your customer is not interested in the minimum payment option, the Hybrid ARM pricing is better than conventional ARMs in many scenarios.

Premier 30 Year Fixed Pay Option
We also have a New 30 YEAR FIXED PAY OPTION program that gives a customer long term security against large rate increases while giving them a minimum payment option to make a home more affordable initially. While the 30 YEAR FIXED PAY OPTION is not the loan for everybody, it is a niche product to help win customers and outsmart your competition.

Here is an example of a $400,000 Mortgage using an Option ARM:

Minimum Payment Rate: 1.250%

Fully Indexed Rate (FIR): 7.772%

• Minimum Payment: $1,333.01 ( Deferred Interest: $1,257.66 )
• Interest Only Payment: $2,590.67
• Fully Amortizing 30-Year Payment: $2,871.73
• Fully Amortizing 15-Year Payment: $3,770.15

NOTE:  This program is intended to be used on a home that is appreciating to offset the deferred interest.  The net effect is utilizing your cash flow today instead of waiting 2 to 3 years to refinance and pull it out with fees.