The Lending Coach

Coaching and teaching - many through the mortgage process and others on the field

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The Fed’s Latest Announcement Has Little To Do With Mortgage Interest Rates

close up of dollar bill

The Federal Reserve board announced last week that they think the federal funds rate will remain at close to zero through at least 2023. 

That’s pretty bizarre…and they must have some sort of an amazing crystal ball that we don’t know about.  I don’t know of any Federal Reserve Board that has given 2+ years of guidance in one day. Evidently they’ve turned into economic soothsayers.

As a reminder, the federal funds rate that is set by the Fed and mortgage rates (not set by the Fed) are two totally completely different instruments. 

The Federal Funds Rate

building

The federal funds rate is the target interest rate set by the Federal Reserve Open Market Committee at which commercial banks borrow and lend their excess reserves to each other overnight.  It really has limited impact on the mortgage market.

I’d invite you to read this article that I’ve written that outlines what really drives mortgage interest rates: https://lendingcoach.net/mortgage-rates-the-fed/ (hint…it isn’t the Federal Reserve).

Mortgage Interest Rates

This graph shows the deviation of the 30-year mortgage versus the federal funds rate – and you can see there’s quite a dramatic difference.

30 year mortgage rate graph

Inflation Worries

Secondly, the fact that the Federal Reserve stated that they are OK with inflation levels over their original 2% target will not help the bond market or mortgage backed securities (the true drivers of mortgage interest rates). 

They stated that they would allow inflation to run moderately above 2% “for some time” – and many in our industry are worried that once inflation gets rolling (and it has been moving up, even in today’s COVID economy) it will be impossible to stop. 

percentage clipart

Mortgage rates will be affected by inflation because inflation erodes the buying power of the fixed return that a mortgage holder receives.  And interestingly, the best way to combat inflation is by raising the Fed Funds Rate. 

If inflation begins to rise, and there are already some signs of this, Mortgage Rates will start to climb in response.  All this can absolutely still occur while the Fed Funds Rate is at zero. 

Today’s Opportunity

With all of that said, the current mortgage rate environment presents an incredible opportunity that should be taken advantage of for either a purchase or refinance. Contact me so I can help you benefit before things change too dramatically!

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Baseball Dynamic Warm-Up | Flexibility and Stretching

video of dynamic warm up

One of the major performance enhancers for baseball players is muscular flexibility – and I bet that’s the last thing that players work on.  Players take loads of batting practice, fielding practice, do long toss – and spend a great amount of time on strengthening on the field and in the weight room.

But what about flexibility to both improve performance and prevent injury?

pictures of baseball workouts

Well, I’m linking to a KBands Training article that outlines a great warm-up stretching protocol that all baseball players should check out here – Baseball Dynamic Warm Up – Flexibility and Stretch

I’d invite you to check out the video, as well!

Here’s an excerpt:

“All baseball players need to warm up properly before performing high impact activities or speed and agility training. Static stretching was considered the norm in the past, but in recent years static stretching has become an addition to the everyday dynamic stretch routine.”

“Baseball players must stretch their hip flexors, quads, hamstrings, calves, trunk, glutes, IT bands, groin, and upper body. Each and every muscle throughout the body is used to maximize a baseball player’s performing potential”

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10 Ways to Improve Your Mental Game

ball of baseball field dirt

Athletes do all sorts of physical things to prepare for competition…from nutrition, weight training, sport-specific drills and all sorts of other things.

But what about mental preparation?  Are you taking the time to develop a strong mental game that gives you an advantage over your competition?

Dr Patrick Cohn

I’m linking to an article from one of my favorite mental game teachers, Dr. Patrick Cohn of Peak Sports Performance. Dr. Cohn is a sports psychologist out of and he’s always preaching on how to build mental toughness – as well as the techniques athletes can use to grasp it.

I’d invite you to read the entire piece here…

Here are Dr. Cohn’s top 10 ways to improve the mental game:

  1. Pushing past the discomfort of a hard training session.
  2. Maintaining a positive attitude when you experience a rough patch during your season.
  3. Ignoring distractions and keeping your focus during grueling competitions.
  4. Sustaining motivation throughout a long season.
  5. Bouncing back after a mistake in competition.
  6. Rehabbing from injury and readying yourself for your return to competition.
  7. Managing your competitive emotions especially when playing in hostile environments or playing against opponents who try to taunt you.
  8. Being confident when your performance is not up to par.
  9. Overcoming comfort zones in sports and breaking out.
  10. Coping with high expectations from others to perform well.

Dr. Cohn has put together a free online e-book that can be found here: http://www.peaksports.com/baseball-softball-confidence-report/

If you are a player, or parent of a player, I’d recommend that you download it and get to know the contents!

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Is Making an Offer Over Asking Price a Good Idea?

finger pointing at a graph

Making an offer over the asking price on a house often makes buyers wince.

But let’s face it, paying above list price is just a reality in certain circumstances—at least if you really have any hopes of getting that house!

Is it a good idea?  Well, this article from Realtor.com outlines a few reasons why it might be.  It’s a good read and I highly recommend it.

Reasons to Offer Over Asking

In many parts of the country we are in what would be considered a “sellers market”, so buyers must adapt.  A good rule of thumb: ‘If houses are selling in your neighborhood in less than 10 days, it’s a strong seller’s market’.

green piggy bank on calculator

Here are a few other reasons you may want to bid more than list price:

  • You love the home and want to make sure you get it
  • You know there’s a bidding war or lots of competition for the property
  • The house is undervalued (comparable sales can help you judge this)
  • There are cash bids on the table

How To Decide

With that said, does it really make financial sense to pay more for a home than the asking price?

The answer is…it depends – and you should do the math to make sure.

desk with notebook and computer

My friends at The MBS Highway have put together a tool that helps buyers decide if making an offer over the asking price is a good financial decision. 

Their “Buy Over Ask” tool takes into account a myriad of factors – from the asking price itself to expected appreciation – even to a break-even point that shows the exact month you should expect your return.

AVM accuracy level

In the example above, by offering $7,500 over the seller’s asking price, a buyer’s break-even point is only one month away…and they can expect appreciation of nearly $100K over the next 5 years.  In this case, it looks like paying a bit over asking would be a good idea, indeed.

Find Out If Offering Over Asking Is Right For You

It would be my pleasure to help any potential buyer find out if bidding over list is a good idea. 

Reach out to me and I can easily put together a summary just like the one above for you to help determine if making an offer over the asking price is something you should consider!

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The Mental ABCs of Pitching

baseball

H.A. (Harvey) Dorfman’s book – The Mental ABCs of Pitching: A Handbook for Performance Enhancement – is one of those classic mental game pieces.

My friend Jordan Zimmerman (ZB Velocity) turned me on to Dorfman’s book, as he said it helped him become a mentally strong pitcher and was crucial to his success as a professional pitcher.

book mental abc's of pitching

He still uses it today in his teaching…he told me he keeps going back to his highlighted and dog-eared copy.

Here’s the Amazon link, and I highly recommend that pitchers pick up a copy!

Brief Biography

Dorfman was best known as an mental skills/sports psychology coach who worked in education and psychology as a teacher, counselor, coach, and consultant. Prior to starting a business as a mental skills coach. he also wrote for a local paper, taught English, and coached basketball at Burr and Burton Academy in Vermont.

He earned World Series Championship rings by serving as a mental skills coach for the 1989 Oakland A’s and the 1997 Florida Marlins. In 1999, Dorfman became a full-time consultant teaching the skills of sport psychology and staff development for the Scott Boras Corporation, an agency that represents professional baseball players.

Dorfman

Through his books and his teaching experience, he helped thousands of people get more of what they wanted from life through his tough love and clear insight. Some baseball greats give him credit for their success in life as well as in baseball.

Editorial Reviews

When Harvey left our organization to go work for Florida, we didn’t even try to replace him because, quite frankly, his legacy was already throughout our system. All of the players and coaches and staff he touched over the years… had become imbued with his philosophy and approach to the game. They have become Harvey’s disciples.

-SANDY ANDERSON, former President and General Manager, Oakland Athletics, former Executive Vice President, Office of Major League Baseball, currently General Manager, New York Mets.

When you talk to Harv, you get the truth from him, whether you like it or not. He always says, ‘I don’t care about your feelings. I care about your actions.’

-TIM BELCHER, former Major League Pitcher and Pitching Coach.

He’s truly amazing. It’s clear most people don’t want to hear the truth about themselves, but Harv gets in your face, uses a few choice words to get your attention, and he’s got you.

-AL LEITER, former Major League Pitcher, currently Studio Analyst and Commentator.

Harv is absolutely unique. He’s for real – a straight shooter. He gives it to you right on the line, whether you like it or not. Not many people can – or will – do that.

-WALT WEISS, former Major League All-Star Shortstop, currently manager of the Colorado Rockies.

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