Welcome to 2023

Happy New Year All!

As we all know, 2022 was a Whirlwind.  Employment numbers, inflation, interest rates, the stock market, and the overall cost of living seemed to try their hardest to put us all in our places.  Thankfully, last year’s assortment of curveballs is in the rear-view mirror, and we can start fresh with a blank slate and true optimism in the New Year.

With interest rates falling and borrowers who had been waiting on the sidelines now starting to get into the game; our projections of another fast-moving and (very likely) even more competitive year in the housing market seem to be coming to fruition.   

With the highest YTD interest rate increase in the past 41 years, not only did we see mortgage payments go up drastically, but we saw total household debt increase along with them.  Here are some statistics on that:

• The number of credit cards YOY increased by 36.7M to 510.9M Nationwide.
• Average credit card debt rose by 13% to $5,474 per borrower with the number of borrower-level delinquency rates (90+ days late) increasing to 1.94% (this is up by almost 1% YOY).
• The number of unsecured personal loans increased by 4.8M and the Delinquency rate of 60+ days is 3.89% (up by 1.37%) with the average debt per borrower being $10,749 (up by $1,362)
• The average monthly payment on new car loans has increased by $82 per month while the delinquency rate of 60+ days has increased from 1.2% to 1.65% (the highest in over a decade).

The above figures emulate one of the biggest reasons that we got into this industry.  That is, we saw an opportunity.  An opportunity not only to help people achieve their goals of homeownership but more importantly to be able to help them change the trajectory of one of the biggest stressors in life; their financial future.  The aforementioned data begins to paint the picture of the direction we will continue to head in if we are not fulfilling our fiduciary responsibilities.  We saw a significant increase in the amount of bad debt and high-interest loans (not to mention, consistently lower credit scores at the time of application).  As loan advisors, we are not fond of this trend; however, it is a massive opportunity to do what we do best- helping to improve individual’s financial quality of life.

Tough times tend to be very revealing and what we have been affirmed of possibly more than ever over the course of the past year is this:  Not all lenders are created equal, and neither are all family finances. 

The true nature of what people want when taking out a new home loan is not some false impression of an impossibly low-interest rate or a seemingly mythical program that will edge out all other competition despite it looking, feeling, and sounding like there must be a string or two attached.  At the tip of the iceberg, it can sound great but what people really want is to save money regardless of where the savings are coming from.  Ultimately, because they are having a conversation with a mortgage professional, they feel as if the only savings that can be provided to them are entrenched in the home loan they are applying for.  We enjoy customizing action plans to help customers prove to themselves that this simply isn’t true.

For example, last week we received a call from a Madison homebuyer who had previously been working with a couple of other lenders but wanted to make sure they were getting the best deal.  Two days after our initial conversation, we re-connected by phone to discuss the file we had been able to put together for them.  Following our conversation, they had now been set up to have 3 of their outrageously high-interest rate debts consolidated into a new rate which averaged out to be about 17% lower. To top it off, their credit improved by 20 points, their current monthly credit payment obligations dropped by $288/month and the sale of home contingency from one of the other lenders was now able to be removed with their new pre-approval with us. All of this took place before they even went on their first showing.  We have found that the idea of, “getting the lowest interest rate so that I can afford a new mortgage payment”, becomes quite a bit less stressful when the customer is set up for success like this out of the gate; simply because their lender is selling them a customized plan, as opposed to a one size fits all rate or product.

We could continue with more examples of true money saving, but that’s not the point.  The moral of our story is that we truly care about our client’s best interests more than our own.  The statistics listed above tell us that there are a lot of people who could use a lender who will look at their situation with a holistic viewpoint so that they can truly do what is best for them moving forward. Considering all of the turmoil we have gone through and will continue to push back on in 2023, we are grateful and excited for the opportunity ahead.

“There is no exercise better for the heart than reaching down and lifting people up” – Booker T. Washington

Wishing everyone a happy and prosperous new year,

Tyler and Austin Quartullo