Ryan Young's (ryanyoung) Blog

ARM's are BACK....!

Ryan Young (WFS Mortgage, An Affiliate of Wells Fargo Home Mortgage) — Wed, 29 Jul 2009 01:50:31 -0700

As the overall mortgage market has become exceptionally conservative over the past couple of years, so too have borrowers. All you have to do is just mention the word "adjustable" and "rate" in the same sentence and from my side of the desk you will find looks of fear on the other. While it is true that many borrowers bought way too much house with the (ab) use of an interest-only adjustable rate mortgage, the ARM product is still a good choice. For SOME borrowers. Many of my customers will never live in their homes for more than 5 - 6 years. For the past year and half or so, you could obtain a 30 Year Fixed rate for the same and at times, less than, any adustable rate product. During this period we witnessed what is known as an "inverted yield curve" in the bond market. Simply put, the long term bonds were yielding less than the short term bonds. Obviously, while that weird phenomenon was happening, it made no sense to even consider an adjustable rate. Right now a 30 Year Fixed is about 5.25% for someone with 700+ credit scores. This is a great rate close to historic lows (still!). However, our 5/1 ARM is currently 4.00% for purchase loans. On a $350,000 loan, this would save the customer over $21,000 in interest over the first five years with a payment savings of $262. For the customer that knows they will not be in the home for more than 5 - 6 years, this is a huge amount of money they could save. I am a huge fan of the 30 Year Fixed rate mortgage and that will always make up the vast majority of the loans I write. But for the corporate employee that moves every few years, or those (such as my wife) that enjoy buying and fixing up homes and then moving on to the next one, right now it may be a good idea to look at an ARM product again.

DPA (Down Payment Assistance) is gone, 100% is gone....so why am I smiling?

Ryan Young (WFS Mortgage, An Affiliate of Wells Fargo Home Mortgage) — Thu, 02 Oct 2008 08:38:45 -0700

Over the past couple of weeks we successfully closed our last remaining DPA (Down Payment Assistance) transactions and thus the last 100% financing loans.... Possibly for ever? My last two DPA transactions were first-time home buyers, who "needed" the program. They didn't have enough money for a down payment, and these programs allowed them to get into their first home. After closing these loans I have actually felt a slight sigh of relief....actually feeling quite well knowing that for now, and possibly for a long time to come, my customers will need to put some money down when they buy a home. This is in great contrast to the way I felt when I heard FHA was stamping out all DPA programs (for good). I was angry. I sent emails. I signed petitions. I may have even emailed my congressman, in hopes that he would actually read my message. I "rallied the troops" in the office to do the same. However, that feeling of relief was still there, and I couldn't ignore it. After my last DPA transaction, I left the closing feeling like I had not done anyone any favors. Sure, my clients were happy....ecstatic even. My Realtor was happy....a nice smooth closing without any issues. But I still felt as though something was amiss. After I pondered things for a while, the reason behind my uneasy-ness became apparent.... I realized that I felt the customers had no "stake" in the game whatsoever. And I didn't like it. I felt very confident they will have no issues making their payments for many, many years to come. But, what if something happens? What if there's trouble in paradise and this young couple decide to go their separate ways? Besides a knock on their credit, what would keep them from mailing the keys to the lender and saying "c'est la vie?" I have closed several, maybe even hundreds of 100% financing transactions. I am young, having only been in the business for 7 years. I haven't really known any different, or even had a chance to think about what the consequences are of "investment-less" homes. I feel good about the future. I feel good knowing that from now on, when the clients come to closing they will have a check in hand. A check that they worked hard for, a check that they aren't going to just give up on, should things get tough down the road. Before I went to college I worked for two years to purchase a farily decent, reliable set of wheels that would last through those next four years and not give me too many problems. It was a small Mazda with a stick shift, with absolutely power nothing. But it was mine, and I worked hard for the money to buy it. A friend commented it was the "cleanest, newest looking 12 year old car he'd ever seen." Why did I take such good care of it? Because I worked hard for the money to buy it. I acquired it through no other means than via blood, sweat and tears (a lot of long, hot days performing manual labor). I'm fairly confident now that people have to put forth that type of effort to aquire their first home, we'll see them want to keep them. Even if there's trouble in paradise, and it's a 12 year old home....

Don't be like Vijay, share about your vision, your victories...

Ryan Young (WFS Mortgage, An Affiliate of Wells Fargo Home Mortgage) — Mon, 08 Sep 2008 04:13:41 -0700

I am a golf nut, golf fan, golf guru... Whatever you want to call it, I love that silly game. The majority of my friends still don't understand it, much less scratch their heads in earnest wondering why I would devote my precious hours at trying to get better at it. I'm not that great at it, but I love it still. And if I find a tip or learned something that helped my game, you can be sure I am going to share it with you. Do you do this in your office? At your meetings? Do you have a counterpart or "newbie" that is struggling (well, that may be a dumb question in this market) or someone that just needs some "swing tips?" Who helped you out when you first got into the business? What did they say that saved you time, headaches, etc.? In this business we all have to be self-starting individuals that are self reliant and motivated via our own accord. However, if you're doing something that is working, something that could be beneficial to others on your team or in your office, let them know. Talk about your success, talk about what is working. Everyone knows this market is rough and we have all heard enough bad news. We don't need another reminder. So...you are thinking... WHY do I need to share my tips / secrets / positive thoughts with others? I am 100% commission and this will benefit my checking account by exactly $0.00. You need to share because it will come back to you. Positive thoughts, positive conversation breeds more of the same. Would you rather walk into your Tuesday morning sales meetings and be greeted with nothing but frowns and aggravation or would you rather be surrounded by uplifting, forward-thinking conversation? YOU can make a difference, and it will benefit YOU down the road. So, what do I mean, "Don't be like Vijay?" Yesterday Vijay Singh (professional golfer on the PGA Tour) finished his round and walked straight past the press, the fans, everyone. Went to the clubhouse, packed his stuff, and flew his private jet back home. That's okay, maybe he was in a bad mood, right? Maybe he didn't play that well and he was frustrated? Well, after yesterday's round he wrapped up the FedEx Cup, the playoffs of this year's PGA Tour. The prize for winning the FedEx Cup is $10,000,000. Yes, that is correct. Ten Million Dollars. All he has to do is show up and play in two weeks at the PGA Tour Championship here in Atlanta. If he plays the requisite four rounds (there is no cut) he will win the FedEx Cup and his little paycheck of $10,000,000. And he couldn't take the time to speak to the fans, speak to the press about this. He is doing something right, and people are happy for him. He needs to share his thoughts, and his winning state of mind. Not keep it all to himself. Don't keep your winning mind and your winning thoughts all to yourself. Share the "wealth." Make someone's day.

The mad dash for last minute Down Payment Assistance (DPA) Loans is ON!

Ryan Young (WFS Mortgage, An Affiliate of Wells Fargo Home Mortgage) — Wed, 03 Sep 2008 08:58:48 -0700

I just got off the phone with yet another first time home buyer, whom is doing the mad dash to make the DPA deadline. They have a home picked out, they are pre-approved, and.....the seller is dragging their feet. The seller doesn't believe there is actually a time sensitive deadline at stake and that if they don't respond quickly then this sale may not happen and they could be back on the market. In these situations, I like to contact the seller directly. A simple phone call can eradicate much "he said / she said" and cut to the chase real quick. It amazes me the number of lenders that still refuse to have solid communication....not only with the other parties of the transaction (listing agent, seller, attorney, etc.) but even their borrowers themselves. When I told the listing agent I would like to speak with the sellers directly she was SHOCKED that I would do that. I have never known anything different....you take the steps necessary to make the deal work and that's that. I don't plan to be rude, crude or even the least bit offensive. But many times people are so skeptical that they don't believe what they're being told unless they talk to the horse's mouth directly. Sort of like the old negotiation tactic from the seller's market days.... "we have another offer that is supposed to be presented later today..." (remember those days? They were great, weren't they??) The sellers are thinking this is a ploy to get them to agree to a low offer before they have time to "digest it." It's 9/3/08 and we are looking to close 9/25/08. I hope the sellers have a home picked out already because here we come, guns blazing....