Morning! This is MF Lending - the fool-proof way to serve up mortgage and real estate market knowledge without any of the guesswork. So you’ll look like the smartest agent in the room (and you are!)

Here’s what we’ve got for you today:

1. September PPI & CPI Reports 📝

2. How close is the Fed to their goal? 📽️

3. Maximize Seller Concessions with this rule: 3-6-9 (damn she fine)🕺🏻

By the way, this article on How Isreal-Hamas Conflict Affects Mortgage Rates is the most clicked link in this newsletter, you should check it out if you are interested.

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Rates Today 📈

September PPI & CPI Reports 📝

PPI Print (10/11)

Yesterday, the PPI Report was released for the month of September. This measures the selling prices of final goods and services.

PPI rose .5% in September (above the forecasts of .3%). The Core PPI [which excludes energy costs] rose .3% (forecasts of .2%).

While these reports are slightly higher than the forecasts, the market seemed to digest the news rather quickly. In fact, by the end of the day yesterday, rates improved by about 25bps.

CPI Print (10/12)

The more impactful report came out this morning - the September Consumer Price Index (CPI).

Fortunately, the CPI report came in matching economic forecasts. Month-over-month consumer prices rose .3% (same as last month) and year-over-year prices rose 4.1% (down from 4.3% last month).

Slowly but surely, we are chipping away at the inflation numbers.

What does this mean for your borrowers?

This is positive news that we are on the right track when it comes to inflation. If we continue to see CPI fall, that means that inflation will continue to fall as well.

Additionally - according to serval Fed officials in their notes released yesterday there are several top Fed members that believe an additional rate hike will not be necessary and that we have reached an sufficiently restrictive point in policy.

If that holds true, it means we may have reached the top of this interest rate market.

How close is the Fed to their goal? 📽️

Mark Zandi from Moody’s says the Fed is “well on it’s way” to its goal on inflation.

You can see the full interview (3min) here:

Maximize Seller Concessions with this rule: 3-6-9 (damn she fine)🕺🏻

Concessions are more popular than ever in this market. But how do you know how much your buyer can receive in from a seller?

Remember this simple rule: 3-6-9 (damn she fine) for conventional loans

• When the putting down less than 10% - max concessions is 3% of the purchase price.

• When down payment is between 10-25%: max concessions is 6%.

• When down payment is at or above 25%: max concessions is 9%.

All Investment properties (regardless of LTV) = 2%

For FHA loans (regardless of LTV) = 6%

For VA loan (regardless of LTV) = 4%

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Remember - these percentages do NOT include the title policy. So you can have title paid on top of these caps.

Example: you have a client putting down 5% on a home for $500,000.

Max seller concessions = $15,000 (3% * 500k) + any seller paid title

Concessions can be applied to all closing costs, prepaid items (escrows), or discount points to get a lower rate on the loan.

Use this rule the next time you are in negotiations so you don’t have to wait on your LO to call you back (or use MF Lending cause I always answer 😉).

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Thanks for reading - that is all we have for today 😎

Please forward this to your friends and colleagues if you found it valuable.

— Michael F DiLucchio