Reverse Mortgage Blog | DDA Mortgage

Here’s what’s really happening and why consumers are confused: Why “low rates & no closing costs” isn’t true Rates aren’t actually low Headline ads often quote temporary buydowns, ARM teaser rates, or perfect-credit scenarios that very few borrowers qualify for. The real, fully indexed 30-year fixed rate is meaningfully higher once you look at actual pricing. “No closing costs” usually means one of three things Lender credits: The borrower pays through a higher interest rate. Seller concessions: Only possible if the seller agrees — not universal. Costs rolled into the loan: Still paid, just financed over time. Rate buydowns are being marketed as permanent 2-1 or 1-0 buydowns lower payments only for the first year or two. Many borrowers don’t realize their payment will increase later. AI-driven and online lenders amplify the issue Automated platforms advertise best-case pricing without explaining: LLPAs DTI adjustments Credit overlays Property type impacts What customers should be told instead (plain truth) There is always a trade-off between rate and costs. If closing costs are “covered,” the rate will be higher. If the rate is lower, the borrower is paying for it upfront. There is no free money — just different ways to pay. How professionals are reframing the conversation Showing side-by-side scenarios: Low rate / higher costs Higher rate / lender credit Focusing on total cost over time, not just the rate Explaining break-even points clearly Given your background in mortgages and rate behavior, this kind of misrepresentation usually shows up late in the process, when the borrower sees the LE and feels misled. If you want, I can help you: tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

If the **Federal Reserve cuts interest rates by 0.25% and simultaneously restarts a form of quantitative easing (QE) by buying about $40 billion per month of securities, the overall monetary policy stance becomes very accommodative. Here’s what that generally means for interest rates and the broader economy: 📉 1. Short-Term Interest Rates The Fed’s benchmark rate (federal funds rate) directly sets the cost of overnight borrowing between banks. A 0.25% cut lowers that rate, which usually leads to lower short-term borrowing costs throughout the economy — for example on credit cards, variable-rate loans, and some business financing. Yahoo Finance +1 In most markets, short-term yields fall first, because they track the federal funds rate most closely. Reuters 📉 2. Long-Term Interest Rates Purchasing bonds (QE) puts downward pressure on long-term yields. When the Fed buys large amounts of Treasury bills or bonds, it increases demand for them, pushing prices up and yields down. SIEPR This tends to lower mortgage rates, corporate borrowing costs, and yields on long-dated government bonds, though not always as quickly or as much as short-term rates. Bankrate 🤝 3. Combined Effect Rate cuts + QE = dual easing. Rate cuts reduce the cost of short-term credit, and QE often helps bring down long-term rates too. Together, they usually flatten the yield curve (short and long rates both lower). SIEPR Lower rates overall tend to stimulate spending by households and investment by businesses because borrowing is cheaper. Cleveland Federal Reserve 💡 4. Market and Economic Responses Financial markets often interpret such easing as a cue that the Fed wants to support the economy. Stocks may rise and bond yields may fall. Reuters However, if inflation is already above target (as it has been), this accommodative stance could keep long-term inflation elevated or slow the pace of inflation decline. That’s one reason why Fed policymakers are sometimes divided over aggressive easing. Reuters 🔁 5. What This Doesn’t Mean The Fed buying $40 billion in bills right now may technically be labeled something like “reserve management purchases,” and some market analysts argue this may not be classic QE. But whether it’s traditional QE or not, the effect on liquidity and longer-term rates is similar: more Fed demand for government paper equals lower yields. Reuters In simple terms: ✅ Short-term rates will be lower because of the rate cut. ✅ Long-term rates are likely to decline too if the asset purchases are sustained. ➡️ Overall borrowing costs fall across the economy, boosting credit, investment, and spending. ⚠️ But this also risks higher inflation if demand strengthens too much while supply remains constrained. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

That is wild — and honestly a sign of where mortgage tech is heading fast. A three-hour closing versus three days used to be unheard of. What likely made it possible: 🚀 Why it happened so fast 1. Automated income/asset verification Lenders now pull bank statements, payroll data, and tax transcripts digitally instead of waiting for uploads. 2. Instant credit + DU/LPA underwriting If everything lines up, AUS can issue an immediate approve/eligible. 3. e-sign + remote online notarization (RON) Cutting out scheduling delays saves days. 4. Title automation Many second mortgages use “property data reports” or streamline title searches that don’t need a full title commitment. 🧩 Why second mortgages close faster than first mortgages They don’t require an appraisal if AVM hits. Fewer compliance disclosures. Title and insurance requirements are lighter. No escrow setup. 📈 Bigger picture The mortgage industry is absolutely racing toward: close-in-a-day loans fully digital underwriting AI-assisted document interpretation more instant approvals for clean files We’re going to see more of what you just experienced—especially for HELOCs and seconds. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329 

✅ Why mortgage rates can rise even when the Fed cuts rates Mortgage rates don’t move directly with the Fed Funds Rate. Instead, they are primarily driven by the 10-year Treasury yield and investor expectations about inflation, recession risk, and future Fed policy. Here are the main reasons this disconnect happens: 1. Markets expected the rate cut already If investors already priced in the Fed’s cut weeks or months beforehand, then the cut itself is old news. When the announcement hits, mortgage rates may not fall—and often rise if the Fed hints at fewer future cuts. 2. Fed cuts can signal economic trouble Sometimes the Fed cuts because the economy is weakening. That can cause: Investors to worry about higher future inflation, or A “risk-off” move where money leaves bonds Both of these drive the 10-year yield UP, which pushes mortgage rates UP even though the Fed cut. 3. Bond investors wanted a bigger cut If markets expect a 0.50% cut but the Fed only delivers 0.25%, that’s seen as “too tight.” Result: 10-year yield jumps Mortgage rates move higher 4. Fed messaging (“forward guidance”) matters more than the cut Example: The Fed cuts today, but says: “We may need to slow or pause future cuts.” That single sentence can raise mortgage rates, even though short-term rates just went lower. 5. Inflation surprises after the cut If new inflation data comes in hot after a Fed cut, the bond market panics → yields go up → mortgage rates go up. Quick summary Fed Cuts Rates Mortgage Rates Move ✔ Expected or priced in Can rise or stay flat ✔ Fed hints at fewer future cuts Often rise ✔ Inflation remains sticky Rise ✔ Economy looks unstable Rise ❗ Only when 10-year yield falls Mortgage rates fall tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

 New conforming loan limits increase to $832,750, which is great considering we have had price decreases on homes this year. So if you put down 3% the purchase price would be $858,051, and 5% down would be $876,578. Why would that matter? Well, you go above, and you are in Jumbo territory, where you have to put 20% down vs the 3% or 5% down. So, really great news that there is an increase, and when rates do come down, there will be all the homeowners who have the low interest rates, probably make a move to either downsize or upsize on their home, which will create activity and an increase in home prices. So overall, exciting to see the loan amounts increase to help offset the higher home prices tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

What Does “No Credit Score Mortgage” Mean (for FNMA) Policy Change As of November 15, 2025, Fannie Mae’s automated underwriting system (Desktop Underwriter, or DU) will no longer require a minimum third-party credit score. Fannie Mae Instead of relying on a fixed cutoff (like “you must have a 620 FICO”), DU will use Fannie Mae’s proprietary risk-assessment model to evaluate credit risk. Fannie Mae That model considers more than just credit score: payment history, “trended” credit data, nontraditional credit sources like rent, utilities, and so on. Fannie Mae Nontraditional Credit Allowed Fannie Mae’s Selling Guide includes rules for “nontraditional credit” — that is, credit history documented without a standard credit score. Selling Guide When a borrower truly has no credit score, lenders must document nontraditional credit history. For example, they might look at 12 months of cash flow or payment history (rent, utilities, insurance, etc.). Fannie requires borrowers without any credit score to complete homeownership education before closing. Selling Guide Why This Could Be a Good Thing Greater Access to Homeownership This change will likely help people who are “credit invisible” (i.e., they don’t have a traditional credit score) get conventional mortgages. Historically underserved groups (such as those who rent, use nontraditional credit, or have limited credit history) could benefit. More Holistic Underwriting By removing the rigid score minimum, DU can look at the whole financial picture. This means more weight on things like debt-to-income ratio, reserves, employment, and nontraditional credit. Using more data (rent history, payment trends) can be more predictive of whether someone will make mortgage payments than just a credit score. Potential Cost Benefits for Some Borrowers If done right, borrowers with limited credit but solid finances could qualify for a conventional loan (which may have more favorable terms than some other high-risk or subprime options). It may reduce the need for more expensive or risky loan products for people who don’t fit the “traditional” credit profile. Risks and Downsides Higher Risk for Lenders → Possibly Higher Cost Without a credit score floor, lenders are taking on more uncertainty. They may require larger down payments, lower loan-to-value ratios (LTVs), or more reserves to compensate. If the borrower is truly “credit invisible,” the lender’s verification burden is higher (to safely assess risk), which could make underwriting more stringent in non-score cases. Potential for Higher Interest Rates / Pricing Risks Even if a borrower qualifies, the interest rate may be higher compared to someone with a very good credit score, because the risk model may not “discount” as heavily without a high score. There could be loan-level price adjustments (or other risk-based pricing) tied to the riskiness of nontraditional credit profiles. Performance Uncertainty This is a newer underwriting paradigm for Fannie Mae, so long-term performance is less “battle-tested” at scale for certain nontraditional credit borrowers. If default rates go up for these loans, it could have negative implications for lenders or investors (or for how such loans are underwritten in the future). Lender Overlays Just because Fannie Mae has this policy doesn’t mean all lenders will be aggressive in offering no-score loans. Some may add their own stricter requirements (“overlays”) that make it harder than it sounds. You’ll need a lender that is comfortable underwriting nontraditional credit and willing to do the extra documentation. Is It a Good Thing For You Personally? It depends on your situation: Yes, it could be great if: You don’t have a traditional credit score but have a solid financial picture (stable income, low debt, documented payment history for rent/utilities). You want access to a mainstream, conventional mortgage. You have enough reserves/down payment to satisfy lender’s risk assessment. Be cautious if: Your income or cash flow is marginal, because the lender may not be comfortable with “no score + limited reserves.” You don’t have much documentation of nontraditional credit (you’ll need to show 12 months or more of payment history). You’re not working with a lender that understands or is experienced with Fannie Mae’s nontraditional credit program. My Verdict Overall, yes — this is a positive shift by Fannie Mae toward more inclusive, flexible underwriting. It’s likely to help more people who’ve been shut out of conventional mortgages. But it’s not “free risk”: borrowers still need to show financial responsibility, and lenders will underwrite carefully. If you are considering this type of mortgage (or someone offered it to you), I strongly recommend: Talking to a lender experienced with Fannie Mae’s nontraditional credit program. Didier Malagies nmls212566 DDA Mortgage nmls324329 .

✅ the principal you borrowed ✅ all interest paid over the years ❌ It does NOT include taxes, insurance, or HOA unless noted. Because longer terms spread payments out more slowly, they lower the monthly payment but massively increase total interest paid. Below is a simple example to show how total payments change by loan term. ✅ Example: $300,000 loan at 6% interest 15-Year Mortgage Monthly payment: ≈ $2,531 Total paid: ≈ $455,682 Total interest: ≈ $155,682 30-Year Mortgage Monthly payment: ≈ $1,799 Total paid: ≈ $647,514 Total interest: ≈ $347,514 40-Year Mortgage Monthly payment: ≈ $1,650 Total paid: ≈ $792,089 Total interest: ≈ $492,089 50-Year Mortgage Monthly payment: ≈ $1,595 Didier Malagies nmls212566 DDA Mortgage nmls32432 Total paid: ≈ $956,140 Total interest: ≈ $656,140 ✅ Summary: Total Payments by Loan Term Term Monthly Payment Total Paid Over Life Total Interest 15-Year ~$2,531 $455,682 $155,682 30-Year ~$1,799 $647,514 $347,514 40-Year ~$1,650 $792,089 $492,089 50-Year ~$1,595 $956,140 $656,140 ✅ Key Takeaway A longer mortgage = lower payment, but the total paid skyrockets because interest accrues for decades longer. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Here are the main types of events that typically cause the 10-year yield to drop: Economic slowdown or recession signs Weak GDP, rising unemployment, or falling consumer spending make investors expect lower future interest rates. Example: A bad jobs report or slowing manufacturing data often pushes yields lower. Federal Reserve rate cuts (or expectations of cuts) If the Fed signals or actually cuts rates, long-term yields like the 10-year typically decline. Markets anticipate lower inflation and slower growth ahead. Financial market stress or geopolitical tension During crises (wars, banking issues, political instability), investors seek safety in Treasuries — pushing prices up and yields down. Lower inflation or deflation data When inflation slows more than expected, the “real” return on Treasuries looks more attractive, bringing yields down. Dovish Fed comments or data suggesting easing ahead Even before actual rate cuts, if the Fed hints it might ease policy, yields often fall in anticipation. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329