Spring Fever

Mark’s Market Update – 3/4/2022

​Spring Break – you know what that means!  

Spring break is upon us – and that means the beginning of the “Spring Buying Season” – and that’s going to influence this market significantly. Now, more than ever, knowledge and experience will be key when dealing with lending and Real Estate. Rates are down a little – watch the video to learn why and what’s causing it.  

Underwriting tip of the week: It’s now happened more than once – and I think it’s good to relay this to borrowers and Realtors: The Leased Car Problem

Car leases cause problems with underwriting – because if a borrower has DTI ratios that are too high, and it is being caused by a car lease – traditionally, there wasn’t anything you could do because if you tried to accelerate the term of the lease to pay it off – invariably, there would still be the residual cost that would have to be dealt with. So, with upside-down value, and residual cost, it was usually impossible to terminate a lease – meaning a borrower may not be able to buy a home.   

…Until COVID kicked in and has disrupted the used car market like we’ve never seen….

So – if you’re seeing a car lease that needs to be eliminated – it may be easier than ever to do so. Contacting the dealership and say, “Hey – I’ve got a lease on a car that I’d like to get rid of – are you interested in buying back the car?”  

The answer that we’re seeing is, “Yes – and not only will we terminate the lease and you won’t owe anything in the way of residual costs – we’ll also write you a check to get the car. You will owe nothing, and have money in your pocket!”  

In 27 years – I’ve not seen this happen. So – if you have a lease – now may be the time to get rid of that car and pocket some money, especially if you don’t need the car.  

Cheers – enjoy the weekend, and enjoy Spring Break!