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Jan 28: The Boring Stability You've Been Waiting For ☕

The One Basis Point That Doesn't Matter (But Here's What Does)

Author

Alex Veytsman
January 28, 2026

📬 The Lending Letter 🏡

Mid-Week Market Check: Rates Inch Up (But Don't Panic)

Happy Wednesday! ☕ We're halfway through the week, and if you're like most people, you're already mentally checked out and planning your weekend. But before you start doom-scrolling Instagram, let's talk about what happened with mortgage rates overnight and why it actually matters to your wallet.

📊 TODAY'S 30-YEAR FIXED RATE
6.16%
⬆️ +0.01% from yesterday | According to Mortgage News Daily | January 28, 2026

📈 The One-Basis-Point Bump (AKA: Basically Nothing)

So rates ticked up by 0.01% overnight. That's one basis point. To put that in perspective, on a $400,000 loan, this increases your monthly payment by roughly... drumroll please... $2-3 per month. That's literally less than a fancy coffee. ☕

But here's what's actually interesting: we're sitting in the low-to-mid 6% range, which feels like the new normal for early 2026. Bond markets are watching the Fed like hawks watch mice, and every economic data release is causing tiny ripples. The real question isn't "will rates move 0.01% tomorrow?" but rather "where are we headed over the next few months?"

🔮 What's Moving the Market Right Now

The bond market is laser-focused on inflation data and upcoming Fed statements. We've got some economic reports dropping later this week that could either validate the "soft landing" narrative or throw cold water on it. Translation: volatility ahead, but probably not the dramatic kind. Think gentle waves, not tsunamis. 🌊

💰 Lender Promos: Let's Talk Opportunities

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🏖️ Short-Term Rental Financing? STR loans are a different beast entirely. You need specialists who understand Airbnb revenue projections and how to structure deals for maximum profitability. Get connected with STR experts here who've seen it all.

🎓 Education Corner: The Hidden Cost of PMI (And How to Avoid It)

Let's talk about Private Mortgage Insurance—three words that make borrowers cringe. If you're putting down less than 20%, you're probably paying PMI, and it's costing you way more than you think. 😤

Here's the breakdown: PMI typically costs between 0.5% to 1% of your loan amount annually, divided into monthly payments. On a $400,000 loan, that's $2,000-$4,000 per year, or roughly $167-$333 per month. That's real money disappearing into thin air, providing zero benefit to you (it only protects the lender if you default).

💡 Four Ways to Avoid or Eliminate PMI

1. The Piggyback Loan Strategy (80-10-10)
Put down 10%, take an 80% first mortgage and a 10% second mortgage (HELOC or home equity loan). This structure avoids PMI entirely because your first mortgage is under 80% LTV. The second mortgage rate will be higher, but you can pay it off aggressively and it's tax-deductible. Math often works out better than paying PMI. 🧮

2. Lender-Paid Mortgage Insurance (LPMI)
Some lenders will cover PMI costs in exchange for a slightly higher interest rate. According to CFPB guidelines, this can make sense if you're planning to stay in the home long-term and don't want the hassle of requesting PMI removal later. Run the numbers—sometimes this is sneakily cheaper. 🤓

3. The Aggressive Prepayment Plan
Once your loan balance hits 80% of the original purchase price (not current value), you can request PMI removal. Or it automatically cancels at 78%. Want to speed this up? Make extra principal payments. Even an extra $200-300/month can shave years off your PMI timeline. 💪

4. The Refi Play (If Values Are Up)
If your home has appreciated significantly since purchase, you might be able to refinance into a loan without PMI even without hitting that 80% threshold of your original purchase price. If you've gained equity through appreciation, a refi could eliminate PMI payments immediately. Just make sure the math works after factoring in closing costs.

🏘️ For Real Estate Investors: The January Inventory Surge

Here's something interesting happening right now: January typically sees a mini-inventory surge as sellers who waited through the holidays finally list their properties. NAR data shows this seasonal pattern is playing out again this year. 📊

Why This Matters for Investors:

More Inventory = More Negotiating Power
When supply increases even slightly, buyers gain leverage. Sellers who list in January are often motivated (job transfers, life changes, financial pressure). This is the time to find those off-market-quality deals on the MLS. 🎯

The STR Winter Setup
Buying STR properties in January means you have time to renovate, furnish, and optimize listings before peak travel seasons hit. Spring break, summer vacation, fall foliage season—you're positioned for all of it. And if you're targeting ski markets or warm weather winter destinations, you can potentially start generating income immediately. ❄️🏖️

Q1 Financing Windows
Lenders often have Q1 quotas to hit, which can translate to better terms for borrowers. Plus, if you close in Q1, you have the entire year to benefit from tax deductions on a new rental property. It's a timing thing that smart investors exploit. 💰

Level Up Your STR Investment:

💎 Personal Finance Hack: The 1% Rule (That Actually Works)

🎯 Automate Your Way to Six Figures

Here's a stupidly simple wealth-building hack that financial advisors don't talk about enough: The 1% Monthly Increase Strategy. And no, this isn't about getting 1% returns—this is way more powerful. 🚀

Here's How It Works:

Every single month, increase your automatic retirement/investment contributions by just 1% of your income. Most people won't even notice 1%. That's the beauty of it—it's psychologically invisible but mathematically devastating (in a good way). 💪

The Math That'll Blow Your Mind:

Let's say you make $100,000 and currently save 5% ($5,000/year). If you increase by 1% each month for 12 months, you're saving 17% by the end of year one—that's $17,000 going into investments. According to Fidelity's retirement research, this acceleration pattern can add hundreds of thousands to your retirement accounts over a career. 📈

Year 1: You've ramped from 5% to 17%
Year 2: If you keep going, you hit 29% (though most people plateau around 15-20%)
Result: You're now saving at levels that put you in the top 10% of retirement preparedness

Why This Crushes Traditional Advice:

Most financial advice says "save 15% of your income." Cool, but going from 5% to 15% feels impossible. It's psychologically brutal. But going from 5% to 6%? That's one less dinner out. Behavioral economics research shows we anchor to our current spending levels, so small incremental changes bypass our mental resistance. 🧠

Pro Implementation Tips:

• Set It and Forget It
Don't manually do this every month—you'll forget or talk yourself out of it. Set up automatic increases through your 401(k) administrator or investment platform. Most have this feature buried in settings. ⚙️

• Time It With Raises/Bonuses
Got a raise? Immediately increase savings by that percentage. You never had that money in your paycheck, so you won't miss it. This is called "Save More Tomorrow" and it's backed by Nobel Prize-winning research. 🏆

• The Tax Kicker
Remember, traditional 401(k) contributions are pre-tax. So if you're in the 24% tax bracket, increasing savings by 1% of your $100k income only reduces your take-home by $760—not $1,000. Uncle Sam subsidizes your wealth building. 🇺🇸

The Real Talk: Most people spend their entire lives waiting for the "right time" to save aggressively. But there's never a perfect time. There's always a car repair, a wedding, a vacation, a whatever. The 1% strategy works because it doesn't wait for perfect—it just starts and compounds. And compounding is how ordinary people become wealthy. 💰

📊 Mid-Week Market Reality Check

Let's cut through the noise with some straight talk about where we actually are:

Rates Are Stable (Boringly So)
We've been hovering in the low-to-mid 6% range for weeks now. Freddie Mac's data shows this is roughly where the market expects us to stay for the near term, barring any major economic surprises. Not exciting, but predictability has value. 📉📈

Inventory Remains Tight (But Improving)
We're not back to 2019 levels, but active listings are creeping up. For buyers, this means incrementally more options and slightly less competition. For sellers, it means you might actually need to price competitively and make your property show-ready. Novel concepts, I know. 🏘️

The January Effect is Real
Serious buyers and sellers emerge in January while casual browsers stay on the sidelines. According to Zillow's research, deals that happen in Q1 often have less bidding war drama than spring/summer transactions. If you're ready to move, now is actually a smart time. ⏰

🤔 The Great Debate: Should You Buy Points?

With rates in the 6% range, a lot of borrowers are asking about buying discount points to lower their rate. Let's talk about when this makes sense and when it's throwing money away. 💸

The Quick Math:
One point = 1% of loan amount = roughly 0.25% rate reduction. On a $400,000 loan, that's $4,000 upfront to drop from 6.16% to 5.91%. Your monthly payment drops by about $60, so you break even in 67 months (5.5 years). Run the calculator yourself with your numbers. 🧮

Buy Points If:

  • You're planning to stay in the home 7+ years
  • You have extra cash that's not earning much elsewhere
  • The points are tax-deductible (check with your CPA)
  • You value the certainty of a lower monthly payment

Skip Points If:

  • There's any chance you'll move or refinance within 5 years
  • That cash could earn more invested elsewhere
  • You'd rather keep cash for renovations or reserves
  • You're betting rates will drop and you'll refi anyway

In today's market, buying points is a calculated bet on staying put. It's not universally good or bad—it's math plus personal circumstances. CFPB's loan comparison tools can help you model different scenarios. 📐

🎯 Your Mid-Week Action Plan:

Ready to make moves? Here's your playbook for the rest of the week:

🌟 The Bottom Line

Today's tiny rate bump is literally noise in the data. What matters is the bigger picture: rates are relatively stable, inventory is gradually improving, and serious buyers who move now face less competition than they will in spring. 🎯

The mortgage market isn't about to do anything dramatic this week. But here's the thing—new construction is ramping up, affordability is stabilizing, and the fundamentals look healthier than they have in a while. Not perfect, but moving in the right direction. 📈

And remember: You don't build wealth by timing the perfect market conditions. You build it by making smart decisions with the conditions you have, then letting time and leverage do their magic. A 6.16% mortgage on a cash-flowing rental property beats a 3% mortgage on a property you never bought because you were waiting for "better conditions." 🤷

Stay informed, stay rational, and remember: the best investment most people can make is in a property that serves their actual goals—not the theoretical perfect property in theoretical perfect conditions. 💡

The Lending Letter
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See you tomorrow (Thursday) for another dose of mortgage market intel! ☀️

Disclaimer: This newsletter is for informational and entertainment purposes only. Rates and terms vary by lender, borrower qualifications, and market conditions. The 1% savings strategy and PMI avoidance tactics discussed require evaluation of your personal financial situation. Always consult with licensed mortgage and financial professionals for your specific circumstances. Past performance doesn't guarantee future results.