A Market Update From Two Loan Officers With Different Experience Levels and the Same Commitment

Geoff Ricker and Owen Garris of the GO Team at Bay Capital Mortgage sat down to break down the inflation data released this morning and what it means for buyers, agents, and anyone navigating the current mortgage market. Geoff brings 27-plus years of mortgage experience. Owen brings nearly a decade of his own. Together they cover territory that neither covers alone.

What the Inflation Data Actually Shows

The inflation reading came in at 4.2 percent overall this morning which landed essentially as expected. Oil prices are the primary driver of that number and crude oil remains a significant factor in the broader inflationary picture. The market is on a rocky road and that volatility is what is keeping rates elevated and preventing the kind of consistent downward movement in inflation that would give the Federal Reserve confidence to cut rates aggressively.

That said Geoff locked in a conventional rate at 6.25 percent today. That is not a rate that should be stopping buyers from acting. Geoff has been in the mortgage business long enough to remember when rates were 10.5 percent and buyers were purchasing homes at those levels without hesitation. Rates came down from there. Rates came down from the 7-plus percent levels seen at the end of 2023. The same pattern is likely to repeat and buyers who are waiting for sub-3 percent rates to return are waiting for conditions that neither the GO Team nor anyone else expects to see again.

The reason rates that low caused problems was inventory. Sellers did not want to give up their low-rate mortgages so they stayed put. Inventory dried up. Competition became extreme. Home values shot up 38 to 40 percent. The market that buyers are sitting in today is more functional than that market was and the opportunity it presents is more sustainable.

Why Buyers Are Still Writing Contracts Right Now

The GO Team currently has approximately 10 active files with closings scheduled for June and July. Buyers who are in the market are not being deterred by current rates. They are writing contracts and competing for properties. Two offers fell out in recent days for reasons unrelated to rates. One was an inspection report. One was cold feet from a first-time buyer which is understandable and human. But those buyers are still actively looking and still writing offers.

The agents who are working with buyers that the GO Team has pre-approved are seeing multiple offer situations on good product. When a well-priced home in good condition hits the market in the current environment it does not sit. What is sitting is overpriced or problematic inventory.

Sellers are also giving credits and seller help again which was absent during the peak competition years. That tool is back and buyers who know how to use it are capturing meaningful financial benefit as part of every well-structured offer.

Why Pre-Approval Matters More Than Pre-Qualification

The GO Team does not issue pre-qualifications. They issue true pre-approvals backed by actual income verification, asset documentation, and credit review. That distinction matters enormously in a market where multiple offers are common and sellers and listing agents are evaluating the quality of the financing behind every offer they receive.

The GO Team is also issuing mortgage commitments with pre-approvals which is a level of confidence in the file that goes beyond a standard pre-approval letter. That commitment is what allows buyers to close loans in 30 days or less. The team has closed files in 15 days in situations where the appraisal cooperated. The goal is to be ready so that when an agent and client need to move on a tight timeline the GO Team can deliver.

Non-QM Loans: The Programs Most Buyers Do Not Know Exist

One of the most important topics the GO Team covered in this conversation is non-QM lending and it is a topic that Owen has been diving into deeply with Geoff's experience as a guide.

Non-QM loans are not the dangerous products that gave adjustable-rate and subprime lending a bad name in 2008. These are fully underwritten loans with real guidelines that happen to use alternative income documentation rather than traditional tax returns and W-2s. The rates are competitive. Owen described them as approximately half a percent above conventional financing for comparable credit profiles which is a meaningful but not prohibitive difference for borrowers who cannot use traditional documentation.

Bank statement loans use 12 or 24 months of actual deposits to establish qualifying income rather than relying on tax returns that have been optimized to minimize taxable income. For self-employed borrowers whose write-offs make their tax return income look dramatically lower than their actual cash flow this program evaluates what is actually coming in rather than what the filing strategy requires them to show.

DSCR loans evaluate investment properties based on whether the property generates enough rental income to support the mortgage payment rather than requiring the investor to qualify on personal income. Both programs open doors that conventional lending closes for borrowers who earn differently than the W-2 framework was designed to accommodate.

Geoff shared a specific example of a physician client who had been a W-2 employee for five or six years before purchasing the practice she had been working in. Her transition from employed to business owner made her unqualifiable under conventional guidelines despite continuing to earn at the same level. The bank statement program solved that problem by evaluating her actual deposits rather than requiring two years of business tax returns that she simply did not have yet.

What the GO Team Commits To

If they can get a file done they will find a way to get it done within the guidelines that govern the loan programs available to them. If they cannot get a file done the client and the agent will know immediately rather than weeks into a transaction that was never going to work. No one gets dragged along. No one goes under contract on a home they cannot qualify for. Accountability to clients and agents is the foundation of how the GO Team operates.

Reach out to Geoff Ricker at 443-532-1620 or Owen Garris at 443-422-9534 to talk through your specific situation and find out what programs and options are available to you right now. The GO Team is always on the go and ready to get you home.

Sources

FederalReserve.gov
BureauOfLaborStatistics.gov
MortgageNewsDaily.com
NationalMortgageProfessional.com
BankRate.com