War, Oil, Rates, And Tax Timing - What you Need to Know!

We break down how conflict-driven oil spikes push Treasury yields and nudge mortgage rates, then map the usual one-week cooldown. We pivot to tax timing, IRS balances, and how Fannie vs Freddie rules shape approvals for self-employed and W-2 buyers.

• how oil shocks and uncertainty move the 10-year and mortgage rates
• why rate jumps often fade the following week
• lock strategy and watching reprices in volatile markets
• filing vs extension timelines for self-employed income
• proof of filing, transcripts, and IRS balance options
• asset verification vs approved IRS payment plans
• some key differences between Fannie Mae and Freddie Mac
• lender overlays and why early communication matters
• aligning contract dates with April 15 realities
• refreshing older pre-approvals before shopping

Find Angie in her free Community for Women Real Estate agent:
www.skool.com/rebusinessbuilder/about

You can find Nikki on Instagram and TikTok at mortgagesfromMNtoAZ, on Facebook or LinkedIn under Nikki Erickson or Kevnik Mortgage, and Phone: 952-484-1584

Transcript

SPEAKER_00 0:02

All right. It's Monday, March 2nd. Already March, everyone. Yes. Heading into the end of the first quarter. So absolutely.

SPEAKER_01 0:11

Good morning, everyone. We had a quite eventful weekend, as you all know, with the Iran situation and everything that's going on there. So I want to talk a little bit about how that affects mortgage interest rates, how that affects a 10-year treasury bond and oil prices. So usually when we look historically at conflicts when they happen, what will happen is, especially for incidences where there's heavy or countries who are heavy in oil production that we have

Market Shock: Oil And Rates

SPEAKER_01 0:37

a reliance on oil with, what will happen is you'll see a, you know, cost of oil per barrel. For example, let's just say it's at $60 a barrel, which is I think what it was right before this conflict started. The very next week after the conflicts, you'll see the cost of oil go up. And that's due to the uncertainty. So for example, I believe the cost of oil today now is upwards of $85 to $86 a barrel. So we've seen a huge significant jump in the cost of oil. Then what usually happens is once we see that jump, the very week after, it'll calm right back down into the oil prices that we saw before the conflict. So there's usually about a week of volatility. This is not only historical from years and years and years past, but this is actually recently historical as well. You know, when we, for example, when we bombed Iran for the nuclear facility, oil was at a certain level, it went up, and then it came back down the very next week. So this has been, you know, even in the most recent few years, the kind of general trend. Well, same thing happens kind of with the 10-year treasury bond. You'll see a base for the 10-year treasury bond. It'll rise the week after a conflict, and then it'll come right

Conflict Patterns And Price Volatility

SPEAKER_01 1:48

back down to the base level of where it was the week after. And so again, historically speaking, the most recent history with the nuclear facility bombing in Iran, we saw that exact same thing happen. So today, we of course saw the 10-year treasury increase about 30 basis points off the market, which basically meant that we were seeing interest rates 5.75, 5.5 in some cases, depending on where you're at from a market standpoint. Now we're seeing interest rates 5.99, 6.125, 6.25. So we are seeing the increase in interest rates. It is expected, but we do expect them again to calm down next week. Of course, there's no guarantees, and depending on other things that might affect mortgage interest rates, such as jobs numbers and et cetera, jobless claims numbers,

Treasury Moves And Mortgage Impact

SPEAKER_01 2:35

unemployment, things of that nature that are coming up this week. We should, however, see next week those numbers calm right back down. So no need to panic right now, no need to think that you lost a mortgage interest rate or that mortgage interest rates are going up. I'm sure that's what the media will report on is mortgage interest rates increasing as a result of the conflict. But again, just keep in mind that there's always going to be volatility in the market and that we do know that predictively what history has shown us is most likely what's going to happen in the future. So interest rates, high fives, low sixes. Hopefully by next week we can see those come back down into the mid to high fives. So all good things that are happening. So I want to talk a little bit

What To Expect Next Week

SPEAKER_01 3:15

about tax time. Tax time is just around the corner. And this is the time of year where we have, especially for self-employed borrowers, and then some W-2 borrowers, where the timing of filing tax returns is instrumental in mortgage qualifying for a number of reasons. From a self-employed borrower standpoint, you do not necessarily need to have your taxes filed for 2025 by April 15th in order to qualify for a mortgage loan. If you do file an extension, that would

Tax Time And Mortgage Timing

SPEAKER_01 3:48

push your qualifying time or push your tax filing time out to October. We can use your 2024 numbers for mortgage qualifying all the way through October 15th. Now, if we close after October 15th, we will need to use the 2025 numbers. If you do not file an extension and we close after April 15th, we will need to use the 2025 numbers. What does that mean? You need to have your taxes completed and filed and accepted by the IRS. If there is a payment plan, you need to either have a proposed payment or you need to have an installment agreement that's approved by the IRS, depending on your qualifying status. So when we talk about tax time, we talk about owing money to the IRS, we talk about, you know, things of especially for self-employed borrowers. If you owe money to the IRS, you have a couple of options that will not disrupt your mortgage qualifying. You can have enough money in your asset account in order to cover the amount that you will owe the IRS. You don't have to pay it because it's not due until April 15th, but you need to have the funds available in your account, not counting towards closing costs and down payment, but separate funds available that are there to pay the IRS so that we know that by April 15th, when that payment's due, you have the money to cover it. Or if you are not going to pay the IRS in full, you need to have a payment plan set up or a proposed payment plan set up with the IRS. It's interesting because when we we talk a lot about conventional loans versus FHA versus VA, but even on the conventional side, we have two different categories. We have

Extensions, Deadlines, And Documents

SPEAKER_01 5:27

Fannie Mae loans and Freddie Mac loans. There's some very small nuances when it comes to certain items from a mortgage qualifying standpoint. One of those that make those two different and we choose one or the other. For example, Freddie Mac is a lot more flexible on the student loan side than Fannie Mae is. And ironically, Freddie is a lot more flexible on the IRS payment agreement side than Fannie is. Freddie says, if you have a proposed payment, we can use your proposed payment, or we can take your balance and divide it by 72 months, whichever is greater, or we can use an accepted approved payment plan. Whereas Fannie Mae says, we need an accepted approved payment plan and you need to have made at least one payment to show that you are on time. So there's different flexibilities, different reasons we would use one Fanny over Freddie, et cetera. But when it comes to tax filing,

Paying Or Planning IRS Debts

SPEAKER_01 6:18

IRS deadlines, things of that nature, no matter if you are a W-2 borrower or a self-employed borrower, April 15th is either we have to verify you filed your tax returns, no matter what, or you have an extension. So those are some things that are going to be coming up. Those are kind of some disruptors from a closing standpoint. My biggest advice to you as a realtor on how this applies to writing purchase agreements, listing homes, setting timelines, things of that nature, if you're closing in April, close towards the end of the month. That way, or if you have a self-employed borrower, close in March, close in early April so that that payment is not due, or we can figure out an option for any money that's owed to the IRS and make sure we have all of our ducks in a row.

Fannie Vs Freddie Flex Differences

SPEAKER_00 7:02

It's a good point. Yeah. A lot of people don't think about that, like real estate-wise or realtor-wise when we're working with our clients or you know, asking the right questions and holistically looking at the full picture for sure.

SPEAKER_01 7:16

Absolutely. Now, keep in mind there are lenders that are going to have an overlay and going to require IRS debts to be paid, IRS payment plans to be approved, things of that nature that go above and beyond what the scope of Fannie and Freddie say. They're going to have those requirements. So if you do have a client that's writing a purchase agreement, they're self-employed or they're W-2, it doesn't matter. Make sure they check with their lender on what their requirements are going to be in order to get them closed before April 15th.

SPEAKER_00 7:45

Communication, communication, communication is Yes, absolutely. Questions, anything. I mean, I think Nikki, too, if you're talking with a new buyer, get them over to Nikki so she can ask the right questions. And again, I'm going to say it for the hundredth time, and I will say it a thousand more times. Who you're partnered with matters. And if you are looking for an amazing lender, look up Nikki because

April Closings And Realtor Strategy

SPEAKER_00 8:12

again, 25 plus years of experience.

SPEAKER_01 8:14

And I just realized this year, I'm in my 27th year. I'm like, oh my gosh, I don't know where the time went.

SPEAKER_00 8:22

Amazing. Yes. And that's why I have you as a business partner because I know I can just bring my buyer to you, and you're staying in your lane. And obviously, you're actually outside of it. In many cases, you know a lot about a lot of things. Um, but you're very good at what you do, and it just makes my job and my role that much smoother, and I can shine where I need to shine and want to shine, and knowing that you have that covered in the buyer's in amazing hands. It's just such a relief, or it's just a good way to run your business.

SPEAKER_01 9:01

Absolutely. Absolutely. And always, as always, you know, there's certain points in the year where we talk about prior pre-approvals that you need to get updated. This is one of those times of year. If you have a client that's been looking for a while, been pre-approved for a while, make sure they check with their lender on tax filings if they're required, and how that's going to affect their pre-approval as well.

SPEAKER_00 9:22

Such an amazing uh point. Absolutely. So those buyers that you started with end of last year, and you they're just kind of here there. I have one of those. So yeah, that's that's amazing. Definitely we'll they'll we'll reach out to her

Lender Overlays And Communication

SPEAKER_00 9:37

for sure.

SPEAKER_01 9:37

And just a little foreshadowing. We'll be talking in the coming months also about the new student loan implementation from the bill that was passed by the Trump administration, talking about that effects on student loans and then what that's done to Fanny and Freddie in qualifying for student loan payments as well. So we'll be talking about that. That'll be another check-in for your pre-approved buyers and making sure that you can get the updates needed for those.

SPEAKER_00 10:01

Absolutely. And if you have any questions in the meantime, Nikki, where do they find you?

SPEAKER_01 10:06

You can find me on Instagram and TikTok at mortgages from MN to A Z. You can find me on Facebook under Nikki Erickson or Kevnik Mortgage, and you can find me on LinkedIn under my name as well. And your phone number?

SPEAKER_00 10:18

952-484-1584. Wonderful. And I am so glad that you opened with what you did because I already

Refreshing Pre-Approvals Now

SPEAKER_00 10:26

have had two conversations today with agents about uh what's going on. So just to have that, yeah, just to have that historical viewpoint. And again, nothing is guaranteed, no one has crystal balls that they can look into and shake and figure out. However, you can go into it now of heard what Nikki said, and be calm, be cool, be neutral, and just say, you know what, this is what we know. We'll know more as it unfolds. And rest assured, history showed us and just all of that. So it's just really important to uh stay on top of this, get here every week because Nikki will have updates for us every week of what we need and should know in order to show up for our clients and our prospects in the best manner possible. And past clients or clients that have closed that might

Coming Student Loan Changes

SPEAKER_00 11:17

have questions or a good reason to reach out. Again, Nikki is very active on social media, so follow her. She's allowed us as agents to use whatever she you can stitch it, you can duet it, you can uh repost it, you can make it your own. But we just are looking to level up the industry and have all this relevant information ready to go for you and your sphere. So thank you so much, Nikki. Absolutely, absolutely. If you do have any questions, do not hesitate to reach out. Absolutely.

Where To Find Nikki

SPEAKER_00 11:49

All right, until next week. You have a good one and go sell something.

SPEAKER_01 11:54

All right, bye.

SPEAKER_00 11:55

Bye.