March 24th, Monday Market Update and Mindset Call with Nikki, Cari and Angie

Mortgage interest rates are currently in the mid to high sixes, with positive movement expected as housing data reports are released this week and reciprocal tariffs appear less impactful than initially feared.

• Consumers without credit scores can qualify for mortgages through both FHA and conventional loans using non-traditional credit
• Having no credit score often results in better interest rates than having a low credit score
• Parents can help children establish credit by adding them as authorized users on credit cards at age 16. Establishing three trade lines with 12 months of payment history provides optimal mortgage qualification
• Success in real estate comes from stepping outside your comfort zone and doing the things you've been avoiding

Make it a goal to do something uncomfortable at least once a week that pushes your boundaries, because growth happens when you're uncomfortable.

Chapters

• 1:12 Mortgage Interest Rate Updates
• 3:09 Getting Mortgages Without Credit Scores
• 5:34 Building Credit for Young Adults
• 8:55 Growth Mindset for Real Estate

Transcript

Speaker 1: 0:37

Thanks everyone again for your patience. Nikki, I'll let you get right to it.

Speaker 2: 0:42

Well, good morning everyone and happy Monday as usual. So, mortgage interest rates this week. It's going to be a very interesting week this week because we're going to be getting a lot of data about housing prices, mortgage applications, how things are going from a shelter standpoint. We're going to get a lot of reports that are coming out that talk about how the home sales have been going so far this year, and so that's going to start to play into what the mortgage interest rates are going to do this week. Right now we're seeing 30-year fixed in the mid to higher sixes, which is good. We've seen some positive movement on that. The one thing that we also have coming up that we're going to want to take a look at after this week is the reciprocal tariffs and what that's going to do to the stocks and bond market. If we get some good information this week from a PPE standpoint and from a housing standpoint, we should get to see a rally towards the end of the week on bonds, which means when we have a rally on bonds, it usually just means that mortgage interest rates are going to dip a little bit lower than what we saw in previous weeks and previous time this week, so we're really hopeful for that. The tariffs are going to, if they go into effect from a reciprocal standpoint, those are going to affect the bond market. We're not entirely sure how much at this point, but it sounds like the amount of tariffs and the specific products that are going to be subject to those tariffs have narrowed down a lot, which means that they aren't going to be to the degree that was originally thought. So that's actually good news for us, good news for the bond market, because it won't create as much volatility as it could have if we were in fact tariffing that many countries for that amount of reciprocal tariffs. So we'll kind of keep an eye on that. Things are looking good, like I said, mid to high sixes for 30-year fixed loans, which is wonderful.

Speaker 2: 2:34

I did want to talk about today a subject that has came up, which is that you actually have I have some clients right now who actually do not have credit scores. So they're younger, they're in their, you know, mid twenties or low to mid twenties, and they actually came to me to get approved for a mortgage and they do not have a credit score. So it got me thinking like how many people know that you actually do not need to have a credit score in order to get a mortgage. It used to be that FHA was the only one that would allow this by establishing what we call non-traditional credit.

Speaker 2: 3:08

Non-traditional credit is establishing payment history on things like cell phones, utilities, rents, electricity, things like that, where they have a positive pay history and we can document that they've made 12 on-time payments, and then they are not required to have a credit score in order to obtain a mortgage. We can do that now, not only on the FHA side, but we can also do that on the conventional side. Fannie and Frenny both have allowances for clients who do not have credit scores. Believe it or not, not having a credit score gives you a better interest rate than having a low credit score. So it's really interesting that you can absolutely obtain a mortgage without a credit score, and it's really interesting that even it's better to actually not have a score than it is to have a low credit score. So just an interesting tidbit and something to keep track of, as we kind of see first-time homebuyers come through and we can talk through either one, establishing a credit history, or number two, just still doing the mortgage without the credit history.

Speaker 1: 4:12

Yeah, that's so interesting because I know way back when, when my husband and I went to get approved, he didn't have one because he just was taught, you know, I mean we're almost 50. So back then it was like stay away from credit cards, you know, don't do this. So he just did everything cash and he didn't have any of that history. So it's good to hear that now that's kind of coming around, any of that history, so it's good to hear that now that's kind of coming around, would you say, just as we're talking to the youth of today or just helping people that are going to be coming up and coming for that, for purchasing a home or getting a mortgage, what are some things that we can instruct either our kids to do, or our cousins or our nephews and nieces in order to get ready?

Speaker 2: 4:59

One of the best things a parent can do for a child who is 16 or older is to put them as an authorized user on one of their credit cards.

Speaker 2: 5:06

What that does is it allows this child to establish credit history that is from the parents, but as long as they're an authorized user. That credit history then becomes their credit history. So when they turn 18 and they go to get their first car or they get to go to get their first credit card or whatever it is they actually have a credit score already and that credit score as long as the parent is obviously paying on time, et cetera that credit score is usually starts off around between 750 and 800. So it's really nice to be able to have that. Do that for your child, or you could do it for pretty much anyone a niece, a nephew, whatever you want it to do but it helps them to establish credit history and gives them the opportunity to build more credit over time and also allows them to, right off the bat, have that score, which means that normally they'd pay less interest rates or lower interest rates by having a higher credit score.

Speaker 1: 5:59

I love that. That's great. Is there anything else we can do for our kids besides putting them on a credit card that you can think of?

Speaker 2: 6:07

Yeah, if they have a car that they want to buy, co-sign a car loan or have them do a 12-month car loan or something of that nature. What we really want to see is that they've made 12 on-time payments, and when we run our automated underwriting, it's looking for credit history over the last 12 months, and so we really want to make sure that, if we can help them establish at least three trade lines, that we do that for them for an entire year, because that's what's really going to help drive credit scores and it's really going to help from a mortgage qualification standpoint as well Not required, but it does help.

Speaker 1: 6:38

Yep. So three trade lines is what we're looking for. Correct, Good no.

Speaker 2: 6:45

I love that. So could that be three different credit cards? Or it can be three different credit cards. It can be a car loan, it can be you know what combination of all three student loan, whatever it is at least three trade lines that they are paying on Now. If they're not paying on their student loan, whatever it is at least three trade lines that they are paying on Now. If they're not paying on their student loan, that one doesn't really count. But if they are still wanting to pay on that student loan while they're in school or whatever that is, as long as there's a payment history, that's what we're looking for.

Speaker 1: 7:07

Got it. Love that. Yeah, so timely. My son turned 16 today. There you go. Well, happy birthday to him. I love it.

Speaker 2: 7:14

happy birthday Maybe his present will be an authorized user card. Oh, they'll have to have a good conversation before that. Well, see what I, what I would do, is I would do, I would put my kids on as authorized user, and then I would never give them the credit card. It makes sense yeah, so that they weren't spending on it.

Speaker 1: 7:33

I like that. That's good, that's good. Well, wonderful, raul, do you?

Speaker 3: 7:39

have any questions for Nikki or myself? No, so, nikki? Do they even know that you have put them as authorized users?

Speaker 2: 7:47

They do when they turn 18, but not before that.

Speaker 3: 7:49

Yeah, that's wise. I will do that as well, because my son is turning 15. So this is about the right time. Thank you for the tip absolutely absolutely perfect.

Speaker 1: 7:59

Well, wonderful, well, I, I appreciate it and I guess you know I just sent out um an email this morning to, uh, some of the growth collaborative and agents that I work with here and my whole mindset thing for this week is really just to do something that makes you uncomfortable or that you've been putting off. I know that so many times we make you know like someone will pop in our head that we should call or you know, especially if it's business related, or we don't want to reach out or we don't want to bother them or we don't want to appear salesy, and I just say kind of, get over it, because we're in our own heads so much and telling ourselves these stories or what they're going to think or what they're going to say, and it's just most of the time, not true. So my whole thing is, as we're going into this spring market and things are heating up, do something at least once a week, if not once a day that makes you a bit uncomfortable, because, again, the growth happens when you're uncomfortable. If you stay comfortable and keep doing what you're already doing, you're going to keep getting what you already got. So if you do want that bigger goal or that thing that's just out of your reach. Know that it's when you become different and you stretch yourself and you get used to and you get comfortable being uncomfortable. That is where the magic and the beauty and the goals happen.

Speaker 1: 9:25

So, yeah, I just want to encourage everyone to even if it's just one thing this week that you've been putting off or that just makes you a little bit uncomfortable or a lot a bit uncomfortable, do it and do it now and don't wait for sure. Well, good, well, as usual. Everyone, thank you so much for joining. I appreciate you all and I'll get the recording on my YouTube channel and podcast and throughout social media as well. So if you want to listen to it again, you can absolutely find it there. And until next time, make it a great week and go sell something.