With the 30-year at 7.55%, keep the low first mortgage and talk equity

The credit score story picked up a new chapter Monday! Pennymac said it has deployed VantageScore 4.0 across all of its production channels, following the FHFA and HUD guidance that opened conventional and FHA lending to competing score models, and National Mortgage News reports the three largest lenders now offer VantageScore. FHFA's reported bi-merge plan is still unannounced, with Director Pulte scheduled to speak at a Chicago industry conference on October 12, so that is a dated beat to pre-write for without promising anything. Closer in, jobless claims and the Freddie Mac survey land October 8 and CPI falls in the October 10 to 15 window.

The rate context points the marketing at owners, not shoppers. Bankrate's 30-year reads 7.55%, the top of its 90-day range of 6.54% to 7.55%, so a refi pitch on rate alone has very little to offer anyone today. The bigger opportunity is the homeowner sitting on a low first mortgage who wants cash for a project or to clear higher-rate debt. A cash-out refinance replaces that whole first mortgage at today's rate: a $300,000 balance at 4% carries about $1,432 a month in principal and interest, and the same $300,000 at 7.55% is about $2,108, before a dollar of cash comes out. A second lien such as a HELOC or a closed-end second leaves the first mortgage untouched, which is the whole point of the conversation. The Mortgage Reports ran a HELOC-versus-cash-out comparison this week built on exactly that trade-off, which makes a timely piece to share with your past clients.

The tactical move this week is a short "keep your rate" series to past clients who closed at 5% or under: one email that explains the difference between replacing your mortgage and adding a second one, and one follow-up offering a side-by-side of both on their own numbers. If you advertise a HELOC rate or payment in any of it, the home-equity advertising rules in Regulation Z apply, so line up the disclosures before the first send.