The average interest rate for a 30-year fixed mortgage currently sits at approximately 3.25%, which is just a few basis points off the all-time low set two weeks ago. However, customers of the nation’s second-biggest lender could soon receive an interest rate well below 3%.
United Wholesale Mortgage announced Tuesday that it is rolling out a new loan program that offers borrowers an interest rate as low as 2.5% for both purchase mortgages and refinances.
UWM is both the nation’s biggest purchase mortgage lender and the largest wholesale lender, meaning it doesn’t lend directly to borrowers. UWM works directly with mortgage brokers, who can in turn offer these low rates to their customers.
“Some people said we’d never see interest rates drop below 3% on a 30-year mortgage, but it’s now available when borrowers work with an independent mortgage broker,” UWM President and CEO Mat Ishbia said. “We believe that the housing market is going to be strong and we want to do our part to help more people get into their dream homes as we get through this pandemic together as a nation.”
Ishbia announced the new lending program in a Facebook Live post, which garnered more than 6,000 viewers as it streamed live.
In the video, Ishbia talked about how UWM now expects to see the purchase market “coming back strong” in June, adding that UWM wants to put mortgage brokers in a position to “get more customers than ever before.”
According to Ishbia, the new program’s low interest rates are more than a full percentage point lower than what was available to brokers just one day ago.
“I’m proud to announce a program that’s going to change the game,” Ishbia said in the video.
But Ishbia was quick to caution that the loan program is not available to all borrowers, nor are all borrowers a fit for the program.
According to UWM, the sub-3% interest rate will be available on conventional loans, both purchase and rate and term refinances. But the program is not available for cash-out refis.
Additionally, the program is not available on investment properties.
And perhaps most importantly for mortgage brokers, the program is not available to any borrower that has received a loan through UWM in the last 18 months.
According to Ishbia, the “Conquest” program is about enabling brokers to go after new customers, even ones that a broker lost to another lender just weeks ago.
According to Ishbia, UWM is setting a maximum interest rate lock period of 22 days for this program. And any broker who seeks to extend that lock period will find that to be an expensive proposition.
“Brokers that close loans fast are going to dominate,” Ishbia said. “Extensions are going to be very expensive. We’re talking about 10 basis points per day. Relocks are very expensive too. Conquest is not for every loan, but we’re focused on helping you grow your business and dominate.”
According to the company, UWM created the program to “help borrowers with affordability and keep the purchase market strong.”
By offering conventional 30-year fixed rates in the 2.5 to 2.99% range, UWM said that it “intends to increase demand for homes and spur a strong purchase season despite the economic impacts of COVID-19 across the country.”
Ishbia also noted that other lenders may chase UWM down on mortgage rates, meaning other lenders may push their rates to what UWM is offering or even lower, but Ishbia said that he believes in mortgage brokers and wants them to be as competitive as possible.
On UWM’s website, it lists other “key features” of the new loan program, including:
- Significantly better pricing
- Rates ranging from 2.5%-3.0% including 30-year fixed
- Available on purchases and rate/term refinances
- Conventional only
- Primary and secondary residences
- Borrower must not have closed with UWM within the past 18 months
- Exact Rate and Flex Term available
- Lock anywhere from 8-22 days (UWM average is 11 days sub to CTC)
- Not eligible for ASR rewards or L.O. Partner Points
- No max comp plan — all brokers eligible
“In addition to great rates, best technology and speed, this program is yet another reason why working with an independent mortgage broker makes the most sense,” Ishbia said. “This program allows mortgage brokers to earn new business as the economy begins to return and purchase season takes flight.”
Beyond unveiling the new loan program, Ishbia also said UWM will be removing many of its overlays it put in place as the economy sputtered over the last couple months.
