This post was originally published on this site

Posted on May 13th, 2020

Pontiac, Michigan-based United Wholesale Mortgage (UWM), which refers to itself as the #1 wholesale lender in the nation, has launched an exclusive new program that offers mortgage rates as low as 2.5% on the 30-year fixed.

That’s basically the lowest rate in history on the popular loan program, and a direct jab at local competitor Quicken Loans, whose CEO recently said 30-year fixed mortgage rates wouldn’t fall below 3%.

CEO Mat Ishbia announced the new loan program, known as “Conquest,” in a Facebook Live post this morning. Let’s learn more about it.

Conquest: What’s in a Name?

  • Exclusive program designed to help mortgage brokers win new business
  • Offers “significantly better pricing” than UWM’s other offerings
  • Mortgage rates range from 2.5% to 3% on the 30-year fixed
  • Rates may be even move lower (or higher) based on mortgage market conditions

First off, UWM is a wholesale-only lender, meaning they don’t work directly with the public. Instead, they work with mortgage brokers, who are client-facing.

So if you want a loan with UWM, you’d need to hook up with a broker who is approved to work with UWM.

Anyway, the new Conquest program was basically launched to grab more market share as UWM goes head-to-head with Quicken Loans for nation’s largest lender.

While Quicken is #1 thanks to a recent stellar first quarter, UWM hasn’t been far behind lately.

And Ishbia didn’t mince words this morning, saying, “Conquest is about domination.”

In other words, he launched the program in an attempt to become #1 by taking back borrowers from competing lenders.

He said if you lost a loan two months ago, or even two weeks ago, the goal is to go get it back via Conquest.

Apparently, February, March, and April were their best months of all time, so they’re already in a great spot to fight for the overall lead.

And Ishbia sees the purchase market coming on strong in June, meaning a product that differentiates could separate them from the crowd and keep home buyers coming back.

Who Is Eligible for a 2.5% Mortgage Rate via Conquest?

  • Conventional home loans only (Fannie Mae/Freddie Mac)
  • No government loans (FHA/VA/USDA)
  • Home purchase loans and rate and term refinances
  • Primary and second homes only (no investment properties)
  • No cash out refinances
  • Must obtain financing via a mortgage broker who works with UWM
  • Borrower must not have recently closed a refinance through UWM (in the past 18 months)
  • Max rate lock period of 22 days

The program went live today, and per Ishbia, rates are anywhere from 130-150 basis points better than what was on the rate sheet yesterday.

So mortgage broker partners may see interest rate options of 2.50%, 2.75%, and 2.99% to offer to their best borrowers.

Remember, rates will always vary based on personal loan attributes, market movements, and so on.

He expects competitors to follow suit and offer similar rates, or even lower rates. But Conquest isn’t just about good pricing, it’s also supposed to deliver an excellent customer experience.

That being said, it’s well-suited for brokers who can close loans fast, as the max rate lock period is just 22 days. And lock extensions on the program will be “very expensive.”

Ishbia said the best brokers they work with are closing loans in around nine days, so the 22-day rate lock period is apparently plenty long.

In terms of who’s eligible, it’s only available on home purchase loans and rate and term refinances. No cash out is permitted due to the recent turmoil in the mortgage market.

Additionally, it’s only for Fannie and Freddie conventional loans, no government loans like FHA, USDA, or VA.

It is available on both primary residences and second homes, but not investment properties.

And as a borrower, you must not have closed a rate and term refinance in the past 18 months.

Ishbia said he expects Conquest to account for roughly 50% of their business volume.

Separately, he announced that the company removed overlays on conventional loans, though a 50% max DTI still applies to government loans.

This is great news for borrowers, whether they use UWM or not, because it means mortgage rates are likely heading even lower than they are today.

That’s due to the Fed continuing to buy mortgage-backed securities, namely 2% coupons, which is increasing their value and driving down rates.

It appears UWM is just trying to get a head start on the competition by marketing this new low-rate environment as a unique product.

About the Author:

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

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