Borrow Buy Build Blog
How Far, How Fast: Are 1% Mortgages Really Coming?
You know it’s August when Target starts selling Halloween. Pumpkins, skeletons, jumbo size bags of candy that no parent wants to see return are back on the shelf. Yes, back again, but with 30% more. Before the weather starts to cool my house is ready for trick-or-treaters. You see the signs first, then the season changes. Oh Henry! Mortgage rates work the same way.
The Fed only cut by 25 basis points, I get it. But lately I have seen some scary rate offers. Some lenders are pricing some freakishly attractive offers along their mortgage aisle. Outside the industry looking in, it looks awesome. To me, it’s just the early decorations before the season turns. Last time I had these chills it was 2019.
Here is why the mortgage business is the best business in the world. Every cycle ends the same way. Rates climb too high, the economy sputters out, followed by a cascade of refinancing. Lower rates aren’t just inevitable, it’s the candy that keeps the next round of buyers returning to your doorstep. After 20 years writing loans, it does get old, yet history says mortgage rates always fall further than anyone expects.
I’m not here to blame the rain. I’m here with the receipts. The last rate spike was the biggest head-fake in years. However, the long-term trend still points lower, and why 1% mortgages are that house on the block giving into consumption with that full size candy bar.
Orange the new Black [6% the New 18%]
Back in October (LOL) 1981 , 30-year fixed mortgage rates blasted sky high to 18.63% [1]. This was the result of Federal Chair “Tall Paul” Volcker’s aggressive monetary policy. These moves ultimately pushed the federal funds rate above 20% to mitigate runaway inflation. The aggressive form of monetary policy was known as the Volcker Shock.
Under the Volker reign, a quarter-million home with 20% down ($200,000 mortgage), would have cost beyond $3,000 per month in principal and interest. The shock was short-lived and within two years, rates were half of what they were at the highs. By the 1990s, they were in the single digits. The market psychology that drives rates to unsustainable levels are the same reasons they find ways back down to new all time lows. Today’s 6% rates feel like the 18% of the 80s because we just came off a historic low of 2.65% in January 2021 [1]. Everyone thought that double digit rates were the new “normal.” Then they collapsed…
Law of low mortgages
Rates are made in a Lab, not a Market!
We don’t live in the same world as the 1980s. Today, consumer spending accounts for 70% of U.S. GDP [2]. High interest rates choke consumer demand, slow the economy, and risk tipping it into deflation, not inflation. Jerome Powell’s monetary policy is working, its leading to demand destruction. Just ask the home builders.
Central banks now control rates with levers that were not widely used in the past. For example:
Quantitative Easing (QE): Between 2008 and 2017, the Fed’s balance sheet exploded from $882 billion to over $4.47 trillion [3]. That pushed long-term rates down.
Forward Guidance: Policymakers shape market expectations before policy even changes.
Liquidity Tools: Reverse repos, swap lines, and “emergency facilities” give the Fed direct control over the cost of money.
Unlimited Support: Fed’s MBS purchases escalated quickly from $500B to $1.2T after 2008. During the pandemic, ballooned from $1.7T to $2.7T [6].
This isn’t a free market setting rates. It’s a Frankenstein system that requires black magic to keep the economy running. When growth falters, policymakers invariably agree on the same solution. The market needs lower rates. During the credit crisis the Fed bailed out Wall Street. During the pandemic the Fed bailed out Wal Street, Main Street, and every man, woman and child. The problems will change but I do not have any faith in restraint.
Godzilla vs. King Kong Dollar
The divergence in monetary policy between the world’s major economies provides another clear signal.
As of late 2025, the Bank of Japan raised its benchmark rate to 0.5%, its highest since 2008, aiming to strengthen the yen [4].
Meanwhile, the U.S. Federal Reserve cut rates to 4.25% in response to slowing growth and higher unemployment [4].
Forget what you hear about the dollar. The global cost of capital still follows the Fed. Not Tokyo’s, not anyone else. As the U.S.-Japan rate gap narrows from 5.4% in June 2024 to 4.0% today this depletes the carry trade; borrowing yen to invest in dollars. Mortgage rates do not need to wait on the Fed. Expect mortgage rates to improve well before the official Fed pivot.
Inflation Leads, Rates Recede
Rates don’t drive inflation but inflation drives rates. Here’s the cycle:
Inflation rises → Central bank hikes → Economy cools → Central bank cuts
We are already seeing clear signs of disinflation:
PCE inflation: the Fed’s preferred measure, is sliding back toward the 2% target [1].
Supply chains: have long since normalized [1].
Wage growth: is softening in real terms, reducing upward price pressure [1].
By the time the Fed declares inflation “under control,” the bond market will have already sold the story. That’s why mortgage rates often fall well before the Fed pivots.
One Crisis away from 1% Mortgages
Ignore recency bias and the interest rate paid on your first home. I understand our system rewards spenders and punishes savers. However, the big picture says the 40-year trend of interest rate cycles continues. Each peak has been successively lower than the last, and each trough has pushed the boundaries of what was previously thought possible. In January 2009 rates were in the low 5’s and many of my clients objected that rates were going to give more, even another full point. By 2015, 4% rates lost its shine.
Is this a pattern? Is it an accident? Is it a result of an economy carrying more debt each cycle? As of Q2 2025, total U.S. household debt stood at $18.39 trillion [5]. Higher for longer sounds reasonable if the market can bear it. In a payment over price economy, cheap money is no longer just stimulus. It’s surviving until next summer. That is why the next rate cycle could take us not just back to 3%, but potentially lower than 2%. Unfortunately, I have no idea how long it will take to get there. Perhaps it’s just a single crisis away. It is the illogical math meeting monetary policy in an illogical leveraged world.
No better, no time soon
References
[1] Federal Reserve Bank of St. Louis. (2025). 30-Year Fixed Rate Mortgage Average in the United States (MORTGAGE30US). https://fred.stlouisfed.org/series/MORTGAGE30US
[2] U.S. Bank. (2025). How does consumer spending impact economic growth?
https://www.usbank.com/investing/financial-perspectives/market-news/consumer-spending.html
[3] Federal Reserve Bank of St. Louis. (2017). What Is Quantitative Easing, and How Has It Been Used?
https://www.stlouisfed.org/on-the-economy/2017/november/quantitative-easing-how-used
[4] Reuters. (2025). BOJ to unwind ETF holdings as split board signals hawkish tilt.
[5] Federal Reserve Bank of New York. (2025). Household Debt and Credit Report.
https://www.newyorkfed.org/microeconomics/hhdc
[6] The Evolution of the Federal Reserve's Agency MBS Holdings.
Rate Revolution: Why I am thankful for the “Red ❤️”
History of Rates 1971- Present: Courtesy of Mortgage News Daily
If you look at the history of mortgage rates since 1971, your eyes go straight to the big peaks of the early 1980s. My eyes see something of greater significance, the period we're in right now.
That "red circle thingy" on the chart, where rates shot up from all time lows into the 7%+ range, has changed the mortgage industry in ways we're only beginning to understand. I am so grateful for it. The band Semisonic reminds me that “Every new beginning comes from some other beginning's end.” The COVID market was great on the wallet but heavy on the heart. Working at breakneck speed for every deal that had to be done yesterday - good riddance. I actually enjoy this market. More time to shop. More time to compare. More time equals better decisions. At the end of the day, its better for the client, the focus of this business.
Despite the high probability for a Fed rate cut next week [1], we are not out of the woods yet on this mortgage market.
Here's why I think this red-circle moment isn't just a painful transition it's the setup for the most productive era in mortgage history. Ever.
I. The Great Reset
For years, the mortgage industry carried a kind of unspoken hierarchy: purchase money loans = priority, refinances = back of the bus. I remember a recruiter calling me right before the pandemic, telling me that if I wasn't a purchase money mortgage loan officer, I was "cruising for a bruising." The message was clear: refinances were for the bottom feeders, purchases were where the real professionals played. When 2022 came along - stocks were down, bonds were down. Loans meant less, deposits meant way-way more. Banks did not want your credit - they wanted your cash.
When rates jumped, it didn't matter whether it was a purchase, a refi, a cash-out, or a construction loan—every deal needed attention, creativity, and strategy. Tyler Durden said, “Its only after we have lost everything that we are free to do anything.” When everything gets destroyed, everything matters. What hurt most about the business was lending deviating from lending. Banks are chasing deposits, limiting their portfolio options. Local institutions like Mid-First cut their mortgage staff by 95%. Other regionals like WaFd only offer credit cards. No lot loans, no construction loans, just Visa and Mastercard. Will anyone bother to stay up late for Monday Night Football when it features the Jets & Colts? Lending is a sad state of affairs when players can't play (turn a profit). Every day I see a post of another lender forced to close shop.
The best loan officers stopped thinking in buckets of refinance or purchase. It should be in service to last names, “Smith,” “Johnson,” and “Brown.” It is all about the customer's entire financial picture. Solutions over sales. The post-pandemic mortgage market changed the business, for the better, and for the long term. It forced us to realize that customer focused means customer relationship, and the mortgage business is back to being the service business.
II. It Exposed the Real Affordability Crisis (Not Just Rates)
In the 1970s, double-digit rates defined an entire housing era. My parents' generation bought their first home at 14% and thought that was just how things were. In the early 2000s and especially at the closing table, everyone reminded me that when they bought their home with a 12-handle, it could not get any better. True, in the 80s when mortgage rates hit 18%, the median home price was about 2.5 times the median household income [2]. Borrowing was expensive, but houses themselves cost as much as today’s Crate & Barrel sofa.
Fast forward to 2022: We were living in a fantasy world of sub-4% mortgage rates, but home prices had exploded to 4.4 times median income in most markets, some places even higher. We had cheap money, but expensive everything else. Then rates doubled in what felt like five minutes, and suddenly we had the worst of both worlds: expensive borrowing costs AND expensive houses.
The market seized up. Required a new perspective. It wasn't just the rate shock. Rather, the collision of two unsustainable trends that had been building for over a decade. Buyers who could barely afford payments at 3% certainly couldn't afford them at 7%. Sellers who had watched their home values triple weren't ready to accept that the party was over. In Phoenix, if the price is not right, a seller just may take their ball and leave [3]. Suddenly, affordability mattered again. Buyers had to think hard about what they could actually afford long-term. Sellers had to offer concessions they hadn't considered in years. Homeowners locked into 3% mortgages are not moving unless they absolutely must. This is called the "lock-in effect" that dropped existing home sales by 40%. But here's what most people missed: That wake-up call wasn't just about remembering that housing can be expensive. It was about remembering that our clients need us most when we can help them navigate complexity, not when everything is easy.
III. It Forced Us to Remember That One Size Doesn't Fit All (And our Clients are more Sophisticated)
Can I level with you? The mortgage industry is not innovative. In fact, we'd been moving backward. Some big banks are still using DOS applications. Even more frightful that the pandemic, many of those same institutions started pulling ARM products from their rate sheets. That was partly due to the yield curve, but how can you make housing affordable based on the most premium priced product?
Most lenders ran the same playbook and had the same sale, take it or leave it!
Everyone wanted to be the cheapest lender offering the same exact product, but nobody was asking how to be the best lender offering the right product for each customer. Was this not the purpose of financial reform? As rates spiked, the 30-year fixed became unaffordable for most people, and suddenly we remembered: Not everyone needs to borrow money for 30 years at a fixed rate.
The best part of the new era is that the customers got way smarter than we gave them credit for.
These aren't the borrowers from 15 years ago who needed us to explain what "points" mean. Today's customers understand discount points, origination fees; they know how to shop rates across multiple lenders, and they're coming to the table with knowledge about programs we haven't offered in years. They're asking about interest-only HELOCs versus principal and interest options. They know the difference between a HELOC and a cash-out refi, and when to use each one strategically. They've done their homework on 7/1 ARMs versus 7/6 ARMs and want to know the spread and which one fits their timeline better.
The pandemic left a lasting impression that became crystal clear: Real estate is fundamental. People get that now in a way they haven't since before the Financial Crisis. I don't care how much A.I. shapes the future, how many people work remotely, or how digital everything becomes. All of us need to live somewhere. Unlike every other asset class, you can't outsource housing to a server or live in your stock portfolio. During the Great Financial Crisis, both lenders and customers wouldn't touch real estate with a 10-foot pole. People were walking away from homes, banks were afraid to lend, and the industry was the disease.
Real estate is again what is always was and will always be, an essential. Never mind a hedge on inflation or a way to diversify your portfolio. The pandemic proved that when everything else was uncertain; jobs, stocks, supply chains, even the dollar - having a roof over your head that you owned, was the ultimate security.
We forgot that CHOICE is a feature, not a bug. And when rates shot up and made the 30-year fixed unaffordable, we suddenly had nothing else to offer these sophisticated customers who knew exactly what they wanted. The pain forced us to remember that our job isn't to sell one product to everyone; it's to match sophisticated customers with the sophisticated products they're asking for.
The Small Long: My calls for the next wave in Mortgage Lending
First, interest rates will improve, when you give them time to breathe. In my opinion, interest rates are going lower than anyone expects. Not just back to the 2-3% range, but potentially even lower than that within the next 10 years. How so? Further investments in technology, especially A.I., is the ultimate deflation bomb. It will unleash a productivity that will drive down the cost of everything, including the cost of money [4]. It's a competitors dream because it will level the playing field for the best loan officers to use to their advantage. If A.I. can process a loan application in minutes instead of days, that will impact the production costs and change the economics of lending, completely.
Lower costs per loan means lenders can afford to lend at lower margins. Lower margins mean lower rates. Lower rates mean higher volume. Higher volume means more scale. More scale means even lower costs. What’s not to love?
Second, the volume that's coming will dwarf anything we saw in the refi boom. The refi boom made every loan worthy of a refinance. If not for a lower P&I payment, a lower rate for cash out to remodel your home, or pay off other higher cost debt. As rates drop to 1-2%, the entire housing market becomes accessible to people who couldn't afford it at 6-7%. Plus, the demographics are on our side. Millennials are hitting peak home-buying years and Gen Z has yet to enter the market.
Famous Last Words…
The period within the red circle on the history or rates chart might appear as the scarlet letter. To me, it is a touchstone to the days long ago when there was a thing called the lock-in effect. The media claimed that low rates were gone forever, and that only the wealthy would be able to afford homes. Rather, the start of a new era when we stopped taking customers for granted and started earning their business every single day. Our clients have upped their game, so should the industry. More tech and even more education is how we are going to help our clientele. Trust me, the best has yet to come.
Mortgages aren't scary anymore. Customers understand the principles. They get how to use debt as a tool to build wealth, not just to buy a house. They know when an ARM makes sense, when to tap equity, and how to structure their financing to match their life plans. Thus, hungry lenders, the ones who learned to hunt during this red-circle period will absolutely dominate the next round.
Five years from now, when we're originating loans in volumes that make the refi boom look quaint, with profit margins that make today's numbers look like a rounding error, we'll look back at this red-circle moment as the catalyst for the most productive period in mortgage history.
For that, my heart is thankful. My wallet, a little excited.
Get Low!
1- https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
2- https://www.moneygeek.com/living/home/1980s-vs-today-homebuyers-comparison/
3- https://www.phoenixnewtimes.com/news/phoenix-homeowners-delist-properties-en-masse-market-shifts-22643073
4- https://www.housingwire.com/articles/how-ai-is-already-transforming-and-improving-the-mortgage-underwriting-process/
2025 Housing Suds: Tastes Great or Less Filling?
What is better for your housing budget, lower prices or lower interest rates?
Remember those classic Miller Lite commercials? Two sides passionately argue whether a light beer "tastes great" or is "less filling" never able to agree, always ending in a shouting match. So goes the housing market in 2025. Same debate, different beverage.
The New York Times [1] recently captured our current predicament perfectly: homebuilders are offering incentives worth more than 13% of a home's cost (double the normal rate), as nearly 40% are cutting prices by an average of 5%. Talk about “shrinkflation” the article references that they are building homes on lots that are 460 square feet smaller than just seven years ago. Moreover, home sales are down 8.2% year-over-year, and inventory is at its highest level since 2019. Ever wonder why it could never work the other way, where builders cut 13% from the list prices? That will never happen! While the pours are many, the collar always rises to the top.
Do do not let the housing pundits tell you what you already know about it. It’s unaffordable without a mortgage [2]. Like those old commercials, we've got two new teams screaming at each other plus a third option worth hearing out.
Team “Less Waiting” (Lower Home Prices)
The very best way to make real estate zesty again, is to lower the price. My uncle was a home builder in Colorado, and he once told me, “eventually everything sells.” That may have worked in the 1980s in Parker, but today is era of buy now-pay later. High mortgage rates aren't helping, inventory keeps climbing, and sellers are showing “bitter beer face.”
This is the crowd that's been waiting for affordability to return willing to buy it with both hands, and feet. The only problem is they want home prices to drop enough that real estate becomes palatable for regular families again not just Blackrock and tech titans.
Here's why it’s the most likely outcome:
Inventory: Housing inventory has been climbing for 14 consecutive months. When you've got 17% [3] more homes on the market than last year, sellers are listening to offers.
Profitability: Major players like Lennar are still offering massive incentives. D.R. Horton reported home sale revenues dropping from $9.2 billion to $8.6 billion year-over-year. When the big guys are feeling pressure that should have a ripple effect, on suppliers and the industry.
Mentality: As one Zillow economist noted, "price cuts are the clearest signal sellers recognize the market has shifted" [4]. Once that mental shift happens, "tastes great" pricing becomes the new normal.
PBV [Probability By Volume]: The longer the rates stay with a six-handle [5], the longer it takes to sell a home. Increased marketing times only invite competition, and force sellers to compete. The Fed is not on a preset course; they are data first, cut rates later. Let’s set the line of 11:9 that lower prices bring relief.
Team "Great Rate!" (Lower Rates)
The next best way to enhance real estate taste - lower the payment. The Fed has stated for years now that the current policy is “restrictive” [6]. They are 100 basis points closer to neutral, wherever neutral rests. If the Fed pivots and mortgage rates drop to the mid-5s, everyone may grow beer muscles for bigger monthly payments. Meaning, more house, more debt, more leverage- advantage sellers.
This is the camp that doesn't mind paying peak prices because the hangover comes 30 days later. Lower rates are like light beer, sure, the total consumption might be the same, but it goes down easier, tricking you into drinking more.
Here's the less fulfilling scenario:
Fed Funds: Jerome Powell recently acknowledged that "the shifting balance of risks may warrant adjusting our policy stance." Meaning, prepare for the Fed to shift from neutral. However, seeing is believing.
Demand: The NYT mentioned "a ton of pent-up demand" sitting on the sidelines. Drop rates by 150 basis points, and that means everyone is 150bps closer to qualifying.
Supply: How deep is this housing shortage [7]? We have had solid inventory growth, but home prices are hardly “on sale.” If more buyers come out from the woodwork, then more buyers are chasing the same homes means prices won't fall, enough!
PBV: Perhaps the less likely scenario, let’s set the line at 7:13. It looks better by the day to those in the industry but akin to the classic "be careful what you wish for" outcome. Lower monthly payments based on paying peak prices for the privilege.
Win, Lose, or Withdrawal! The Meds Nobody Wants
It’s hard to turn off the lights and ask everyone to leave. Hemmingway taught me, the sun also rises. Least likely, but most rewarding, would let the economy and housing market work it out. No Fed intervention. No dramatic rate moves. No price crashes. Just... sobering up, allowing wages to slowly, painfully catch up to home prices while we all deleverage (debt withdrawal). This was the quasi-rebuttal Jerome Powell alluded to in past FOMC pressors [8]. The housing market is not part of the dual mandate.
Let's be honest this is the outcome nobody's rooting for, even though it might be the healthiest long-term. We're addicted to leverage, love the idea of Fed intervention. Salvation is just one or four hundred basis points away. Besides, Home Equity and the National Debt are nearly at parody (opposite but equal).
The withdrawal symptoms include:
Wage growth of 4-5% annually while home price appreciation slows to 2-3%
Smaller homes on smaller lots becoming the new normal
Cities relaxing building requirements
Creative financing products keeping the addiction manageable
PBV: 1:9, at best. Honestly, when has America ever chosen the sober option when debt is for dinner?
The Hangover
Here's the reality nobody talks about: everyone says they want "less waiting" pricing (lower home prices), but the minute they own real estate, they desperately want the "great rate" outcome (lower rates that drive prices up). It's like the aftertaste effect. You complain about expensive beer while you're buying it, but once it's in your system, you want everyone else to pay even more for the same brew.
That's why the "going sober" option feels so unappealing. It requires admitting we're addicted to debt, to Fed intervention, to the idea that asset prices only go up. Withdrawal in a consumer driven economy is uninspiring, uneventful, and unexciting.
Last Call
The essence of the “Lite” beer campaign was that it never resolved the argument. It was tribal before tribal was a buzzword (ha)! Both sides were right, and both sides were wrong, and they got you to pick a side.
The housing market is the same way. Whether prices become more palatable or rates make consumption easier, the real winners are those who show restraint.
Because at the end of the day, whether it tastes great or is less filling, the goal is getting it “right,” not “lite!” In other words, it’s the right home at the right price with the right rate and the right time. Those are odds you will have to calculate for yourself.
Chin Chin!
References
The New York Times: [https://www.nytimes.com/2025/08/25/business/housing-market-builders-demand.html#:~:text=A%20slow%20start%20to%20the,and%20build%20on%20smaller%20lots.&text=High%20mortgage%20rates%2C%20anemic%20housing,or%20selling%20their%20existing%20one.]
National Association of Realtors: [https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index]
Realtor: [https://www.realtor.com/research/july-2025-data/]
Zillow: [https://www.zillow.com/learn/home-prices-falling/]
Freddie Mac: [https://www.freddiemac.com/pmms]
Federal Reserve: [https://www.federalreserve.gov/newsevents/speech/powell20250822a.htm]
Newsweek: [https://www.newsweek.com/map-shows-states-biggest-housing-shortages-2093408]
Fortune [https://fortune.com/2024/09/19/jerome-powell-fed-cant-fix-housing-crisis-mortgage-rates/]
The Mortgage Draft: Matching Offense to Lending Strategy
This strategy may pressure your pre-qualification letter…
Football season is almost here, and millions of fantasy General Managers are obsessing over their draft boards. When you are “on the clock” should you grab that trusty veteran who consistently adds 25 points week after week, or go deep with that zesty rookie with the low-four forty? If it’s up to me, I prefer the sleepers, because I am all about value.
Since I am terrible at Fantasy Football, I’ll stick to what I know, which is mortgages. I enjoy writing, so let me draw a quick parallel… you need to look at drafting a mortgage originator like it’s part of your fantasy housing roster. When you are borrowing money, you're not just the general manager making picks, you're also the head coach calling the plays to move the ball.
Bill Belichick shined by leveraging the running game or a spread offense based on his personnel. Likewise, you need to decide what lending philosophy matches your financial situation. Then ask yourself if you prefer the no frills ground and pound that favors reliability? Perhaps you prefer the creative, innovative approach of an Andy Reid?
Every bank, credit union, and brokerage runs its own "scheme." Some prefer to pound the ball between the A and B gaps with a single back. Others spread the field wide and rack up yards with the deep threat. RPOs can be exciting systems but realize they only work when you've got exactly the right personnel.
Hopefully you refrain from the auto-draft method and manually select the players that match your system. The smartest borrowers don't just pick any lender, they research and decide what kind of "offense" they want to run with a rate sheet that matches their coaching philosophy.
Now grab your favorite color of Gatorade, collect your dry erase pens, and let's break down the Mortgage Draft Board for Fall 2025. Five coaching philosophies, five offensive schemes, and five distinct types of lenders that could help you execute your game plan and score the ultimate touchdown: homeownership.
Think Like Bill Parcells? Draft a Big Bank (Power Run Offense)
Pigskin Parallel: Remember the dominance of the Dallas Cowboys dynasty of the 1990s? Aikman and Irvin always put on a good show, but it was Smith that made it clinical. Emmitt let that massive offensive line create a hole, and methodically marched down the field. Madden said it wasn't pretty, but it got results.
However, it was Bill Parcells not Jimmy Johnson that epitomized this approach. The Big Tuna was no-nonsense, fundamentally focused, and required everyone to be a blocker. "You are what your record says you are," he reminded the press. His teams reflected that philosophy: tough, reliable, and a championship contender.
Mortgage Model: Look no further than your national banking giants: Chase, Wells Fargo, and Bank of America. Like Parcells coaching the Giants, they believe in fundamentals: massive infrastructure, proven technology, and the rates to grind out victories even when the game gets tough.
Their Playbook:
Massive resources that permit loan amounts of any size
Standardized processes refined over decades
Relationship advantages provide their existing client base a home field advantage
When They Excel: Big banks dominate when your financial profile fits their mold perfectly. Think steady W-2 income, excellent credit scores and traditional property. They’re like the hotdog at Costco, never going away, and for all the wrong reasons. But, they will march you down the field all the way down to the peanut gallery.
Where They Struggle: Predictability can be a weakness. These institutions run the same plays repeatedly, and if your situation requires creativity, unlimited timeouts will not help. If you're self-employed, have unconventional income, or want to finance a unique property don't expect them to go to the booth for a replay.
The Bottom Line: Working with a big bank often feels like watching a methodical 12-play touchdown drive. It gets the job done reliably, but you might have to settle for field goals instead of highlight-reel scores.
Think Like Andy Reid? Draft an Independent Mortgage Broker (Spread Offense)
Pigskin Parallel: The spread offense revolutionized football. From Glanville’s Run & Shoot to the Mahomes Air Raid, this system spreads defenders thin and attacks from every conceivable angle.
Andy Reid perfected this art using creative play-calling, innovative formations, and the ability to find mismatches. He'll call a flea-flicker on 3rd and long or design a play that gets Tyreek Hill matched up against a Mike. Reid sees opportunities where others see problems.
Mortgage Model: That has independent mortgage brokers written all over it. Like Andy, they're constantly scheming, always looking for the creative angle that gets you to the end zone when traditional routes are covered.
Their Playbook:
Multiple wholesale lenders at their disposal (plus the Tackle for an eligible receiver)
Speed and flexibility to pivot when one option gets shut down
Creativity to find unconventional solutions for one of a kind borrowers
Personal attention since you're not just another file number
When They Excel: Brokers shine brightest for borrowers who don't fit the traditional mold. Gig workers, 1099 specialists, real estate investors, or anyone chasing specialized loan programs. Brokers can find the open receiver while traditional lenders cover the obvious routes.
Where They Struggle: Like the Air Raid offense in bad weather, brokers can sometimes stall when regulations tighten or with custom requests like single close construction loans and lot financing.
The Bottom Line: A good broker is like a quarterback with perfect field vision and legs to scramble. Should your first lender get flagged for holding, brokers should be able to make up for the penalty yards and loss of down.
Think Like Bill Walsh? Draft a Credit Union (West Coast Offense)
Pigskin Parallel: Bill Walsh literally invented the West Coast offense and changed the NFL forever. Instead of launching bombs, Walsh revolutionized football with precision missiles via short passes, perfect snap counts, and surgical drives that deconstructed defenses.
Walsh believed in fundamentals and preparation, but prioritized treating every player with respect. His "scripted plays" approach meant the first 15 plays of every game were carefully planned, designed to set the tone through precision.
Mortgage Model: Welcome to the credit union model, the Bill Walsh approach to lending. Like Walsh's 49ers, credit unions succeed through precision, preparation, and genuine care for their "players" (members).
Their Playbook:
Member-first philosophy that prioritizes your interests over shareholders
Competitive rates and lower fees for the perfect catch!
Personal relationships built on community trust
Steady, reliable service without the flashy marketing
When They Excel: Credit unions perfect the fundamentals. Some offer some exotic loan products, but they deliver what matters most: affordability, transparency, and genuine care for their members' financial well-being.
Where They Struggle: Limited brick & mortar and geographical restrictions. Like the West Coast offense, they stick to what works. If you are looking for super jumbo loan amounts or wealth management needs, their concessions stand may not have those snacks.
The Bottom Line: Credit unions run the mortgage equivalent of a flawless 80-yard drive, lacking drama and sidearm throws. They rarely force you into the punt formation.
Think Like Bill Belichick? Draft a Regional/ Community Bank (Pro-Style Offense)
Pigskin Parallel: The hallmark of pro-style offense is adaptability. No coach exemplified this better than than Bill Belichick. Teams like the Patriots could run or pass with equal effectiveness, reading the defense and adjusting at the line of scrimmage.
Belichick's mantra was "do your job” and the everyone bought into his situation schemes. One week he could run the ball 40 times, then the following week throw 50 passes, leveraging their strengths over opponents situational weaknesses. "The Patriot Way" wasn't just a slogan; it was a philosophy of accountability and execution.
The Mortgage Model: Regional and community banks embody a balanced approach to lending. They'll adapt their strategy to the market and focus on the results. Their playbook is a bit more diverse than the big banks and they are a bit more efficient.
Their Playbook:
Flexibility and feature jumbo products and alternative underwriting
Relationship lending where your banker actually knows your name
Quick decision-making without layers of corporate bureaucracy
When They Excel: Community banks shine when local knowledge counts. Need a construction loan or unique local property type? They can call the time out and set up the formation for the perfect play.
Where They Struggle: Sometimes they get squeezed between the rates from the big banks and the speed of brokers. They may lack the deepest product menus to compare apples to apples with the competition.
The Bottom Line: Community banks offer the “Goldilocks” package - not too big and not too small. They can be a perfect fit for borrowers who value relationship and local expertise.
Think Like Pete Carroll? Draft a Private Bank (RPO Specialists)
Pigskin Parallel: Today's offenses love deception, and who else would you select other than Pete Carroll for the job. He mastered the art of modern, dynamic offense, with a sprinkle of RPO and slip in the play-action fake. He would keep you guessing and brought out the best in dual-threat QBs like Russell Wilson. He could punish you with with his arm or his legs and you never knew what was next.
Carroll's philosophy was about creating multiple ways to win. It felt like spin the tail on the playbook because you could often see the deep ball, followed by a scramble, followed by a screen pass. His offenses were designed for players with elite skills who could make the same play look brand new.
Mortgage Model: Private banks and boutique lenders are the Pete Carroll disciples of mortgage lending. They offer sophisticated, multi-option strategies for clients with elite financial profiles.
Their Playbook:
Sophisticated financing strategies most people never hear about
Portfolio products based on assets, not income
Wealth management integration that coordinates lending with investment strategies
Customized terms that adapt to complex financial situations
When They Excel: Private banks execute plays that others can't even see. Need to finance a $5 million vacation home while maintaining your entire stock portfolio? They'll design solutions with all the cheat codes.
Unlike traditional lenders who send files to distant underwriting centers, private banks often make decisions in-house with loan committees focused on relationship. When you're leveraging $10 million in investment assets to buy a property, these teams stack the box with bankers who know your complete financial picture. Here guidelines are guidelines. Rules are for rookies.
Where They Struggle: Sad face because they are not options for everyday borrowers. The minimum account sizes and asset requirements put their services out of reach for most homebuyers. You are likely going to need those hefty deposits and wealth management accounts to get a callback.
The Bottom Line: Private banks are like perfect play action pass that only an elite QB can make. They are not for every play and every player, but when they do it, it’s unstoppable.
Your Championship Strategy?
In fantasy football, your draft determines whether you're golden or going home early. As a head coach selecting your mortgage strategy, and your lineup, you can dictate the outcome.
The secret isn't finding the "best" lender or “lowest” rates. The first call comes from you, deciding what kind of coach you are, how to manage your team, then then drafting the lender that matches your style:
Think Like Bill Parcells? Go Big Bank especially when you want predictability and have a straightforward financials
Think Like Andy Reid? Trade for a Broker because your situation requires creativity and multiple options
Think Like Bill Walsh? Pick a Credit Union when you prioritize community, precision, and competitive rates
Think Like Bill Belichick? Draft that Community Bank for local expertise and adaptability
Think Like Pete Carroll? Select a Private Bank when you need sophisticated, multi-option strategies
As your mortgage originator, my role shifts from offensive coordinator to assistant coach. I help you identify you gameplan (to defend your financial situation), aiding the right offensive scheme (lender type), and then suggest plays that give your team the best chance to drive down the field and score that preverbal six points: homeownership.
At the end of the day, whether you're drafting a fantasy lineup or a mortgage lender, one principle remains constant: the best strategy is the one that matches your philosophy and execution style.
Questions: msiket@libertyfcu.org or (602) 400-6518