Speaker 1 0:00

The following program. The ENT , mortgage and Realty Show is paid for in full by ENT mortgage, LLC and equal housing lender consumer access.org number 2 5 5 3 6 8. The advice and opinions expressed during the Academic Mortgage and Realty Show are solely that at the hosts and guests of ENT mortgage, LLC, and not WTMJ or Good Karma Brands.

Speaker 2 0:20

Welcome to the Accu Net Mortgage and Realty Show, getting you inside information on buying, selling, and financing your home with expert advice from Accu Net Mortgage and Realty. And now here's David Wicker and Tim Holdman.

Speaker 3 0:35

Good morning and welcome to the Accu Mortgage and Realty Show. I am David Wicker, president and managing owner, where my individual NMLS ID is 3 2 8 8 4 7. Joined today by Tim Holdman, senior loan consultant, whose individual NMLS ID is 1 5 9 3 1 4 6. Yes . Good morning, Tim. Yes,

Speaker 4 0:57

Indeed. Good morning, David. How are you

Speaker 3 0:58

Today? I'm excellent, thank you. Good. Uh , for any of our listeners, if you'd like to catch up on where we've been in weeks past, you can catch this show and past shows wherever you normally get your podcasts. So, Tim, it was an eventful week <laugh> in the bond market. It was, it was , uh, and

Speaker 4 1:17

It was

Speaker 3 1:17

Eventful and, and , uh, capped off by Friday morning at seven 30 Central. Yeah. When the Department of Labor announced the jobs report, the employment report for December, you know, last Friday, you know, it was barely 2025. Yeah . So they gave themselves another week at the Department of Labor to announce that. Well, they were expecting, well , not they, the economy , smart , smart economists, people with PhDs thought across the board. Somehow consensus is made. We thought, you know what? We think the American economy will add 160,000 jobs in December. Yeah . And the American economy in December said, hold my beer <laugh> , we are gonna add 256,000 jobs to cap off 2024. Woof . Wow. So, as I was watching CNBC live, you know, digesting this, it's kind of, it's, it's both like good news and bad news. Yeah. It's great news. Like,

Speaker 4 2:25

It's good news for the economy when

Speaker 3 2:26

People , when people have jobs, that's good. That's really good. When

Speaker 4 2:29

People have jobs, they have money, and then when they have money, they can spend that money. Right.

Speaker 3 2:33

And , uh, but guess what? Interest rates went, ugh .

Speaker 4 2:37

Yeah.

Speaker 3 2:38

Oh , right . 'cause when people have money, they spend that money and it could be a harbinger for not tackling inflation as fast as we thought we could. Correct . 'cause if people have jobs, they have money, they spend that money, it can drive up the price of things. Yep . If there's not enough of those things. So, but here's how I wanna frame this to you, Tim, on Friday, I'm not gonna talk about rates.

Speaker 4 3:00

We're not talking about rates.

Speaker 3 3:01

On Friday, your monthly payment went up $42 a month.

Speaker 4 3:05

Yeah. 42 bucks a

Speaker 3 3:07

Month. Do you know how many phone calls I got at Friday at 10:00 AM saying, David, I saw the news this morning and my monthly payment on my $250,000 loan, it went up $42. My wife texted me at 7 31. Stop

Speaker 4 3:21

The home search.

Speaker 3 3:22

Called it off. Yeah.

Speaker 4 3:23

Cancel everything. No , we're not touring any open houses this weekend. Right? Yeah . No, you got we

Speaker 3 3:28

Were planning to, yeah.

Speaker 4 3:29

You got zero of those phone calls .

Speaker 3 3:30

I got zero of those phone calls and

Speaker 4 3:31

I got zero of those phone calls. I mean, yes, I had customers ask me about rates. But let's not forget all our listeners out there that the interest rate is really just affecting the monthly payment. Yeah . And that's in real life. What matters to people. Sure . No one , no one remembers their mortgage rate even six months after getting the mortgage to buy the home. You do remember the dollar amount that leaves your bank account every month when you make your mortgage payment. So yes, that did go up, but it went up by $42 a month kind of using What , what loan size David, are you using? For

Speaker 3 4:08

Example? I was using $250,000 loan . Yeah . So I'll give you another example here in a second. Yeah.

Speaker 4 4:12

A median, you know, average loan size that we're using for that example. But it's like if your monthly payment going up by $42 a month is gonna be the thing that breaks your back financially, then yes. You , you should not , uh, look to buy a home right now. But I think for most people that are looking to buy a home for real life reasons, they're gonna stomach that $42 a month increase in , in payment

Speaker 3 4:35

Here. If you, you wanna borrow $600,000 Oh man, on Friday, the payment went up 102 bucks.

Speaker 4 4:42

102 bucks. Yeah. That's what

Speaker 3 4:43

Like Yeah. You'd much rather it go down $102. Right. But the, the difference if you're deciding to be in the house hunt Yeah. That wiggle on payment is not the thing that's gonna keep you from getting out there and looking at a house on, well, I guess what time's kickoff, 3 30, 3 15,

Speaker 4 5:04

Get out there, gonna get out the

Speaker 3 5:05

A hundred bucks, the 42 bucks. That is not the thing that's gonna hold you back. No .

Speaker 4 5:09

Especially 'cause as we all know, you're gonna be able to refinance this mortgage down when rates eventually go down. I know everyone's tired of this conversation because most people predicted rates would be lower by now, but that doesn't mean they're gonna stay high forever. Yes . They are going to go down and then if you've bought a home, you can refinance the mortgage to get that payment relief, you know, as soon as possible or as soon as it makes sense to do so.

Speaker 3 5:31

By the way, you know what you get to do in between the time that you buy the house and you refinance

Speaker 4 5:35

Live in the house, you get to, you

Speaker 3 5:36

Get to live life .

Speaker 4 5:37

Live , live your life. Yeah. Literally live your life.

Speaker 3 5:40

Um , yeah . So that's , uh, and then coming up next week , uh, we have more data around , um, inflation. Yeah. Uh , consumer price index. And, you know, just

Speaker 4 5:53

One other thing I'll mention quick before we go to break, David, is that in response to these rates creeping back up , you know , uh, I think they're probably easily over 7% for most folks now. Sure. We've seen this before and I'm seeing a resurgence in the conversations around temporary rate buy downs. Sure. As a product that makes sense. It's like, if you were gonna get seven and a quarter, why not take six and a quarter for the first year with no extra upfront cost to you as the

Speaker 3 6:19

Borrower with an a PR of 7.4?

Speaker 4 6:21

Yeah. And then refinance , uh, you know, around the time that your rate was gonna adjust anyways.

Speaker 3 6:27

Yeah, that makes sense. But at least

Speaker 4 6:28

For the first year, you're getting a well below market rate. So, just something for folks to keep in mind

Speaker 3 6:32

When we come back, I would like to tell a story about a Navy veteran who I spoke to this week and the fun consulting, a lot of the moving parts that we went through. Awesome. So after this break, you are listening to the Accu Net Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2 6:52

Home buying advice from the guys who know it best. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 3 7:00

Welcome back to the Acuate Mortgage and Realty Show. I'm David, that's Tim over there . Hello. Tim. I spoke with A-W-T-M-J listener excellent. On Thursday afternoon, who is a Navy veteran. Bought their home out in Walworth County, you know, let's say seven or eight years ago. Okay. God bless. They paid off their mortgage like

Speaker 4 7:25

Fantastic during Covid .

Speaker 3 7:27

Beautiful. And but guess what they've got? I think I , they've got, let's say an 8-year-old, a 6-year-old, and a 4-year-old. Hmm . And you know what? They want more space. Those

Speaker 4 7:37

Kids . Uh, I got a six and an 8-year-old at home and , uh, soon , almost 9-year-old, soon to be 9-year-old. Happy birthday Samuel. They , uh, they make a house feel real small. <laugh>, we got them roller skate for , for

Speaker 3 7:48

Christmas. This guy has 50% more children than you too . Oh

Speaker 4 7:50

Geez . That's terrifying.

Speaker 3 7:51

So , so they want more space. Yeah . Not because of what rates are. His current rate is zero 0%, but they need more space. Yeah. So they're interested in a house that just came up , uh, on the market and a couple moving parts. Right. So the timing wise , they will not be selling the soon to be old house. Let's pretend they, you know, oh my God, we love this house. It's amazing. We wanna buy it. We wanna move in.

Speaker 4 8:18

Yeah. You want to , you want to get it before anyone else does. Yeah . And you wanna be able to sell the seller. Yeah. I can close whenever you want and I don't need to sell this other property. I have first, like I'm going to later. Right. But,

Speaker 3 8:29

But that was the first diagnosis because we can't just assume that you can swing even on the old house. We still need to count mm-hmm <affirmative> . Any HOA dues.

Speaker 4 8:39

Right.

Speaker 3 8:40

Property taxes and homeowners insurance Yeah . On that old house. 'cause those bills still exist even if you don't have a loan . That's

Speaker 4 8:46

A good PSA for everyone out there. It's even if you don't have a mortgage on your current home, if you're retaining that, at least for the immediate own future, we have to count what I call the monthly ongoing expense of owning that property.

Speaker 3 9:00

The equivalent monthly expense.

Speaker 4 9:01

Yeah. Which is , yeah. It's, I know taxes and insurance are an annual bill, but we gotta divide that by 12 Yep . And throw it in as a hypothetical monthly expense for the purpose of qualifying for the next mortgage.

Speaker 3 9:12

So that was our first, you know, take out the ruler and say, well, tell me about your income. Yeah. And can I fit this new house payment in with the carrying cost of the old one? Plus he's got basically no debt otherwise. Sure. So he qualifies for that , um, tightly

Speaker 4 9:30

Gotcha. And VA income , uh, rules are luckily a little bit more lenient in some cases compared to conventional lending for sure.

Speaker 3 9:38

The other element that I did ask, just being mindful, this is only chapter one in the book, right. We all the time, as we alluded to in the first segment, owning a home as many chapters in a book, I'm thinking, okay, well, is chapter two gonna be you sell the old house and you wanna pay down Right . The new home. There are very strict rules about you cannot , uh, recast

Speaker 4 10:05

For a VA mortgage, a

Speaker 3 10:06

VA mortgage, even if you've got a chunk of mm-hmm <affirmative> . Proceeds looking at you in your bank account. Yeah .

Speaker 4 10:13

They, you can pay down the principle. They're just not gonna ream, amateurize the monthly payment for you lower Yeah. Based on the new loan balance. So like, you can still pay down the loan

Speaker 3 10:23

And , and for as much as want folks , they haven't decided yet if they're gonna sell it or if they're gonna keep it. Sure. I think they are flirting with the idea of like, oh, what can we get for rent? Yeah. By the way, if you're looking for David's personal opinion, <laugh> , if you have a $300,000 house paid for, sell it and take the money rather than , um,

Speaker 4 10:41

Take the money and run Steve Miller Bank .

Speaker 3 10:44

Hey , come on. Milwaukee Zone. Whatcha talking about , um, Les Paul was his godfather, by the way. I didn't know that . RIP Les. Wow . I'll look that up on the break, but okay. Music tangents. But take the $300,000 in my example rather than the rent payments.

Speaker 4 11:01

Not to mention then now you're the hassle . Now , now you're a landlord and have to deal with the ,

Speaker 3 11:05

The calls on Christmas to be like, you know , the fridge isn't working anymore. Mm-hmm <affirmative> . Et cetera . That's just, that's just me. Yeah. So they haven't decided yet, but the, the next part of our conversation went to, as he shared, he is a Navy veteran. He, when they bought their soon to be old house, he used his VA benefit. Got it.

Speaker 4 11:28

Which

Speaker 3 11:28

Is awesome for anybody. Yeah. Just as a reminder, you can put as little as 0% down as a military veteran on a home purchase. And there is no monthly PMI. Yeah. There is or can be a funding fee, which is what a is the cost. Yeah . To the VA

Speaker 4 11:47

Of utilizing the VA loan

Speaker 3 11:49

Loan product benefit . If you have a service related , uh, disability , that funding fee is waived. By the way, when ACU net goes to the VA website, we get something called a certificate of eligibility. Yeah . That lays out your name, rank , and number. Um ,

Speaker 4 12:06

And , and even if we can't get that, we can actually order one from the VA on the veteran's behalf , uh, utilizing a form called a DD two 14, which

Speaker 3 12:14

I so many acronyms

Speaker 4 12:15

I have yet to find a veteran or talk to a veteran who did not know exactly what that was or where to find it. 'cause it's an important document

Speaker 3 12:22

As our , as our colleague John Bells used to say. That's the kind of thing you put up on the mirror and you look at every day while you're

Speaker 4 12:28

Shaving frame . You frame that Right, right. Along next to your Social Security award letter once you're retired <laugh> . Exactly.

Speaker 3 12:34

<laugh> . So , um, at the time , so he, this particular client does not have a service related disability. So I think at the time that they bought the ho , you know, the, their first home, they did pay the funding fee. Sure. I want to get into the analysis of VA versus conventional. Yeah. As we keep going along on this story, after this break, you are listening to the ACU Net Mortgage and Realty Show on AM six 20 WTMJ getting

Speaker 2 13:02

You into the home of your dreams. Here's more of the ACU Net Mortgage and Realty Show with Brian Wicker on wg.

Speaker 3 13:10

Mj, thanks for hanging out with us here on Playoff Sunday. Are you gonna be wearing your Donald driver jersey? You know it.

Speaker 4 13:16

Okay.

Speaker 3 13:16

Yeah.

Speaker 4 13:17

Packer's hat, Donald driver jersey. That's my playoff victory.

Speaker 3 13:21

Not bad

Speaker 4 13:21

Uniform.

Speaker 3 13:23

Uh, so telling the story here of a Navy veteran thinking about buying their next house and the VA benefit is mortgage benefit is awesome. Yeah.

Speaker 4 13:35

It's great.

Speaker 3 13:35

But it does warrant ,

Speaker 4 13:36

There is warrant potential drawback to it .

Speaker 3 13:39

It , well, it warrants analysis. Yeah. So when you take out a VA home loan, you may incur the VA funding fee. Right. 'cause when the VA guarantees these loans, they need to , they're bugging you for some money so that they can make sure that if they need to make whole, any investor who buys a VA loan, that that investor gets all their money back. Yeah .

Speaker 4 14:02

And the funding fee, I think it's worth noting, isn't something that the borrower slash veteran needs to pay out of pocket .

Speaker 3 14:08

They can, but they can

Speaker 4 14:09

Exactly.

Speaker 3 14:10

Zero times have I seen that?

Speaker 4 14:11

But you can finance it into the loan amount. So even in the scenario where a veteran would choose to put 0% down, the VA will allow you to finance technically in total above a hundred percent of the purchase price. If , uh, some of that is to finance the VA funding fee . So when we , you know, just wanna clarify, when we're talking about paying the VA funding fee,

Speaker 3 14:33

You can

Speaker 4 14:33

Borrow it. You can , you can borrow it, which basically just equates to a little bit of a higher loan balance, a little bit of a higher monthly payment as a result. Yeah . So go on David.

Speaker 3 14:40

So our client , uh, has available cash funds in a checking account. Okay. That they could get to as much as a 10% down payment. Nice . And that's a big deal. So they might borrow up to $600,000 for this new house. Yeah. If, if you're a Navy veteran or any branch and you're about to use your VA benefit for a, for a subsequent time, time number. Yeah . 2, 3, 4, 5, 6, not just the first time. And putting less than 10% down <laugh> , the VA funding fee can be 3.3% oof . Of the loan amount, which for this client on a $600,000. I

Speaker 4 15:26

I did that

Speaker 3 15:27

Mortgage is Yeah. Gimme a

Speaker 4 15:29

$19,800. That's a big chunk of change

Speaker 3 15:35

I

Speaker 4 15:35

For the privilege of doing a VA loan. Yeah.

Speaker 3 15:38

As I was describing it to this client, I said, I will, you know, proceed with any plan that you tell me. Absolutely. But I wanna show you all of what's possible. 'cause the break that you get if you put more than 10% down, is that VA funding fee becomes 1.25% or a little over 8,000 bucks.

Speaker 4 16:03

7,500. Okay . Way better than 19,800. But ,

Speaker 3 16:08

But still, what I said, and and what I prepared and shared with him was I just want to show you what a conventional loan looks like in comparison. Yeah . Because tacking on rolling in either 19,000 or $7,000 payable to the VA is like, I'll do it, but I just wanna show it to you in comparison to what else you could do.

Speaker 4 16:29

Yeah. The right choice is whatever gives him the warmest and fuzziest feeling. But this is the part of the job that I love probably the most is Yeah. The consulting, which is we're gonna show you all the paths that you can take to get to this thing called home ownership. And the other nice thing is it's like all the paths are still available literally until he is under contract. Yes. At that point you gotta pick the game plan. Yeah. Because it's a different approval process with conventional versus va. Correct. But you know, laying out the options as you're doing for this customer, just stuff for him to chew on right now, he doesn't even need to make up his mind until he has a specific property in mind with a specific purchase price. 'cause like, as we all know, you know, maybe one house he doesn't have to do anything to , but maybe another house, you know, he is gonna want to keep 15

Speaker 3 17:17

Grand . Yeah . Maybe he only wants to make a 5% down payment . Yeah .

Speaker 4 17:20

Because he wants some cash on hand to, you know, remodel a bathroom or put in new carpets or, or something like that. So

Speaker 3 17:25

For me, for me, the analysis is if you're gonna do the VA loan, you cannot do less than 10% down. 'cause you just get,

Speaker 4 17:32

You get hammered. Yeah . Yeah.

Speaker 3 17:33

You get hammered on that VA funding fee. Right. If, if you're gonna do less than that 10% down, it may be the smartest path to do the conventional loan. Mm-hmm <affirmative> . Which doesn't preclude, he could always come back to, you can refinance a conventional loan into a VA loan Sure . If sometime in the future. That makes sense. Yeah. Um,

Speaker 4 17:55

And you know, there's, there's so many different aspects to consider. 'cause you know, if they do decide to sell their current home, which I know you mentioned, they're up in the air about anyways, but if they do sell it, they'll have a windfall of cash at that point, which obviously they can then replen

Speaker 3 18:09

Oh, the old

Speaker 4 18:10

House. Yeah. Yeah. They can replenish their, you know, depleted savings account that they use to maybe get to 10% down. Uh, and then they have a VA loan, which is very easy to refinance into a new VA mortgage through what's called an interest rate reduction loan. VA refi, I jokingly call it the fog of this mirror , uh, refinance. Oh yeah. I'm helping a customer do it right now. I helped buy a home last year on a VA loan and we're doing an , uh, an interest rate

Speaker 3 18:36

Reduction. It's a streamline.

Speaker 4 18:37

Yeah. There's no appraisal. Uh, you don't have to verify employment or income or assets. It is very much like, oh, you have a VA loan now and can we prove to the VA that you're getting a new VA mortgage at a lower interest rate and lower monthly payments. Yeah.

Speaker 3 18:51

The VA says,

Speaker 4 18:52

Do it. Yes. Boom. Save that veteran money. And the funding fee on those streamlines is I think only a half of

Speaker 3 18:58

1% or waived if you are eligible, but a half percent on the borrowed money.

Speaker 4 19:02

So a lot of things to consider. We

Speaker 3 19:04

Know how to spell VA. Oh , a hundred percent . Which amazingly is not the case across the board in mortgage lending. No. So for any of our military veterans who wanna at least explore that benefit, we're gonna give it to you straight. 'cause I , for this client, again, a hard time advising such a large funding fee unless there's, unless they get to that down payment about , I've

Speaker 4 19:24

Talked veterans , veterans where I've flat out done the comparison and we determined together that the best choice was not to use a VA mortgage. Yeah . Let's look at And sometimes that's the case too. Yeah. Let ,

Speaker 3 19:32

Yeah. Alright . It's time to turn it over to the WTMJ Breaking News Center.

Speaker 2 19:39

Don't break the bank to get into a house. Back to the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 4 19:47

Welcome back to the ACU Net Mortgage and Realty Show. I am Tim, senior loan consultant joined by president and CEO of Anette Mortgage. David Wicker. Uh, David, I wanted to pivot to another conversation around helping home buyers, particularly younger first time home buyers, because

Speaker 3 20:04

We were off the air last week after, because after the first of the year, the skies open up and everybody says, I wanna buy a house this year. This ,

Speaker 4 20:13

This is the year, this is the year happening . And we do a lot of , um, business with first time home buyers who are sometimes sent by their parents who are either, you know, WTMJ listeners or past customers of aced or , or both in many cases. Um, and I personally en enjoy this 'cause it is a lot of good consulting and a lot of times I view the parents as a , an extension , uh, as a client, of course, you know, of , of their kids who are ultimately the ones , uh, you know, getting the mortgage and buying the home. So the topic I wanted to discuss and maybe provide a little bit of clarity to , for all of our listeners, both young and old, is regarding down payment amount. Because talk to me. I'm , you know, you've heard this a million times. I've heard a million times. The the adage and general wisdom that many parents , uh, pass down to their children is you gotta get to 20% down on the down payment. That's the magic number. Everything will be so much better for you, Johnny and Susie. Yes . If you get to 20% down and there's nothing , uh, to be clear, borrow from Jason or Jerry Circuit . To be clear, I think we all agree <laugh> , there's nothing wrong with getting a 20% down. That's great. Yes . If you've got the pile of cash that you can put that money down, obviously the more money you put down, that means the less money you have to borrow, which means that your loan amount's lower, which means that your monthly payment's lower general, good wisdom.

Speaker 3 21:38

Godspeed. But

Speaker 4 21:39

What I don't want anyone to think is that you have to get to 20% down No . To buy a home or qualify for a mortgage. Um , the difference is, is that if you're a young first stem home buyer and have excellent credit and good income in relation to your debts, a lot of times it actually makes sense to put less than 20% down even if you have that money available.

Speaker 3 22:02

Heresy. Tim, I I

Speaker 4 22:03

Don't wanna leave anyone much less. First time home buyers with five bucks left in their bank account after they buy a home. 'cause guess what?

Speaker 3 22:11

That's only the start after

Speaker 4 22:13

You buy a house. Oh my God, you're a homeowner. Yes . You have to buy a lawnmower. And it's snowblower . It's like

Speaker 3 22:18

The air conditioner is listening for when you move in and says, oh , guaranteed I'm gonna croak in about 30 days.

Speaker 4 22:22

Your water heater just went out. Exactly . <laugh> . Yeah. It's like right now. Um , you know, so things like that, it just, it's good to have some money liquid in the bank, not

Speaker 3 22:32

Just good like vital.

Speaker 4 22:33

Yeah. I would say crucial. Right. And you're not damaging the mortgage the way that a lot of folks might think by putting less than 20% down. Uh, PMI is a lot cheaper now than I think it was back in the day whenever that day Day ,

Speaker 3 22:47

Yes . Which was a Wednesday <laugh> .

Speaker 4 22:48

It was a Wednesday. Is that a Dane Cook reference? Thank you. Yes. Nice. Um, and, you know, we can do that math and I , I do this all the time where I'll share my screen with a customer and I'll show them, here's what your mortgage payment looks at 20% down, here's what it looks like at 15% down. Here's what it looks like at 10% down. And oh my goodness, if you wanted to get real crazy and do 3% down, we

Speaker 3 23:09

Call that the wicker special. Yeah.

Speaker 4 23:11

Here's what the payment looks like that. And it's about balancing those competing factors. We show you monthly payment, we show you total money needed at the closing table, not just down payment, but also closing costs and

Speaker 3 23:23

Homeowner's insurance premium,

Speaker 4 23:25

Setting aside money for property taxes, all that , all that stuff. Right. The whole comprehensive approach. And then just like we were talking about with your VA customer. Yeah.

Speaker 3 23:34

What feels good? Yeah.

Speaker 4 23:35

What feels good . You tell me , I'm not going to force you to put 3% down, just like I'm not gonna force you to put 20% down, but I just want everyone who's listening to know if you're, if you haven't even called acuate because you don't have 20% down, oh my goodness. Please call. Yes. Because the worst case is that I tell you, you , you're right. You do need 20% down. Let's circle back in another year or whenever you've saved up those funds. Right. But the result of the conversation might be entirely different, which is

Speaker 3 24:06

Very rarely is that No . The follow up . Yeah.

Speaker 4 24:08

Yeah. A lot of times it's like, Hey, here's what your monthly payment would be if you bought this much house and you could do that tomorrow, right now if you wanted to. And it's like, wow. How would you ever know that unless you inquired with a professional at ACU net ? Yeah . The answer is you wouldn't and we wouldn't expect you to. But this is our call to action for anyone sitting on the sidelines because they have been told by a , a trusted loved one that they need to get 20% down before they begin their home buying journey. Just check in with us, we'll let you know. And not

Speaker 3 24:39

Just first time home buyers too . Oh , anybody. The, the , um, among move up buyers trying to buy more house mm-hmm <affirmative> . That minimum down payment is with no income limits on a conventional loan can be as low as 5% down. Yeah . So it's like, you wanna buy , uh, $700,000 house. You, you don't need 20% down, you need five. It's 35,000 bucks. Not $140,000.

Speaker 4 25:06

Literally. My personal example of this is when Grace and I moved from our, you know , uh, TOA bungalow to our TOA ranch, we put 5% down when we bought the ranch because we wanted all the cash we could on to have on hand for a big remodel.

Speaker 3 25:22

Your house needed some love when you on the day you moved in. So,

Speaker 4 25:25

You know, we looked at it and we're like, well, why would we put 20% down just to have to claw back some money later out of that equity Yeah . To do a remodel. It's like we put the minimum down and then paid cash for the remodel. Yes. So

Speaker 3 25:39

When we come back, I talked to a client this week and I had, I wanna piggyback on what you said 'cause it was a version sister to what you just described now. Excellent . Let's get into that. After this break. You are listening to the Accident Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2 25:57

Important home buying questions and answers you can count on. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 3 26:06

Thanks for hanging out with us. I'm David, that's Tim. This is the Anette Mortgage and Realty Go Package . Uh , so Tim, you were describing a good refresher for our clients in the previous segment about down payment. Yeah. I was introduced to a young couple this past week by their real estate agent.

Speaker 4 26:25

Excellent.

Speaker 3 26:26

And on our phone call miraculously, I had 3% battery on my phone, <laugh> . And it lasted for a 23 minute conversation. Amazing . I I felt like I was staring at 1% battery for like six minutes living

Speaker 4 26:37

Dangerously,

Speaker 3 26:38

But it last , but it lasted. And in our call as I'm just trying to get familiar with what their plan is mm-hmm <affirmative> . I asked the question, I was like, how much do you guys want for a monthly payment mm-hmm <affirmative> . And how much do you want to spend on your down payment? Yeah .

Speaker 4 26:54

Which if a mortgage professional isn't asking you those questions in the first phone call, you need to run away and find a different mortgage lender.

Speaker 3 27:01

Well, you're just kind of avoiding the whole point of the conversation. Yeah . If you're not getting down to the nuts and bolts of it. Correct. So they shared what they wanted their monthly payment to be. Let's say it was around $2,000. Okay. Which I can't help myself in those I, you know, conversations or as for my follow up , I say, what about $2,050 <laugh>? Like for the right house would , would you consider $2,080? And I , I can remember one gentleman <laugh> in the last year who was like, Nope, this is my number. Great . Not a nickel over. It's like, Hey , he

Speaker 4 27:35

Knew what he

Speaker 3 27:35

Wanted. At least you know that. Yep . But for most clients it is a,

Speaker 4 27:40

It's a range. Yeah.

Speaker 3 27:41

What's more than squishy? It's , um, malleable.

Speaker 4 27:46

There you go. It's silly putty.

Speaker 3 27:47

Exactly. Yeah . 'cause they would consider for the right house, of course. Maybe it doesn't need as much love. It's like, oh , 2150. It's like, find, find the money in your monthly budget if possible. Great. We now I know what your monthly payment goal is. Yep . Now Yeah. How much do you want to spend on your down payment? And maybe the other way that I ask that sometimes is how much do you wanna leave your checking account? Mm-hmm . And how much do you want left over in your checking account? Yeah . When the dust settles to what you said, oh, I want $20,000 to leave my account because I want $10,000 still in my checking account after I don't wanna send 29,995 and then I have five bucks left over in my checking account.

Speaker 4 28:29

And it's the , the best way to ask the question is exactly what you said. How much money do you want leaving your bank account at closing? Not, not what do you want your down payment to be? Right. Because the down payment is the bulk of that. Right.

Speaker 3 28:41

But it's not , but you're paying for

Speaker 4 28:42

Other stuff. It's not all of that. So the, the holistic approach is how much money in total do you ideally want to bring to the closing table?

Speaker 3 28:52

They gave me their reply, they said 20%. Shocker. And then, and then I had this reply why?

Speaker 4 29:05

And their answer was crickets.

Speaker 3 29:07

Yeah.

Speaker 4 29:08

Because that's what they were. And this is not an indictment on anybody, but it's like, that's what they were told I'd imagine from the internet or <laugh> their parents or

Speaker 3 29:16

People not wanting to look dumb or poor.

Speaker 4 29:19

Yeah. It's like, oh yeah . 20% down. Yeah.

Speaker 3 29:22

So

Speaker 4 29:22

This is the way which,

Speaker 3 29:24

And so that led us to the conversation of what you alluded to before was like, well great. Is that, is that what makes you comfortable? Like, 'cause again, I, we, the whole ACU net team, we're gonna, you call the play, we're

Speaker 4 29:43

Gonna run , we're

Speaker 3 29:43

Gonna snap the ball and throw it and we're

Speaker 4 29:45

Gonna , we're gonna score. You're the coach, we're the quarterback. We'll run what We're not gonna, Aaron Rogers audible it at the line into what we want. Okay . We're gonna do the play that you call

Speaker 3 29:54

So <laugh>. So for them, the incrementalism of, you know, they say 20% down I did in the conversation. So I said, why? And then I'll say something like, why not 19% down <laugh>? And then if they say, oh , I guess we would consider that. And then I'll say, well, why not 18% down? And it becomes this slippery slope. Yeah. Approaching whatever their comfort zone might actually be. Because I think what a lot of first time home buyers , your down payment is not going to bring relief to your monthly payment as much as you might pray it would. Nope . And for it to share with our clients that for every thousand dollars, more or less, it's gonna move your monthly payment.

Speaker 4 30:41

Six bucks a month. I

Speaker 3 30:42

Was gonna say, let's just say seven. Sure . For the sake of, you know , round up conservative seven bucks. And I, I even posed it to 'em the other way. I said, imagine if you're gonna make a 20% down payment and then you got 10,000 more dollars burning a hole in your pocket. Yeah . Above your 20% down

Speaker 4 31:00

You would you want a $70 a month lower monthly payment or $10,000 sitting in your bank account? Personally, I would take the 10,000 sitting in my bank account Yes . And deal

Speaker 3 31:10

With the you'll find the 70 Yeah . In the, in the holdman budget. Yeah .

Speaker 4 31:14

I'll skip door dashing , uh, two meals.

Speaker 3 31:17

Yes.

Speaker 4 31:18

Za . And then you got it back .

Speaker 3 31:19

We did two less door dashes we're fine. Um, and, and to just share with them that like this is available to them. Yeah. Uh , especially given, did

Speaker 4 31:31

They, did they even know they could put less than 20% down

Speaker 3 31:35

Maybe intrinsically. Sure. Uh , but to maybe have the permission from the mortgage doctor to be like, or better , you don't have to cut out every Oreo, just eat Oreos on Saturday or just , you know , not every day .

Speaker 4 31:48

Pull the curtain back and show what that looks like. Exactly. Because like, oh, this isn't that scary. No . Right . Not nearly as scary as they probably thought it would be.

Speaker 3 31:59

These are the ways in which we consult Tim , uh, for our last segment, I want you to tell me about your duplex client that you connected with Sure . This past week. Uh , cover that in our last segment. You are listening to the Anette Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2 32:16

Find a place to call home without the headache. This is the Anette Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 4 32:24

Welcome back , uh, to the last segment of the Anette Mortgage and Realty Show. Last segment for this week, obviously. Uh, David, I just wanted to share one quick hit story of a customer of mine , um, young man , first time home buyer , uh, buying a duplex mm-hmm <affirmative> . In McGonagal . And , um, I , I think a couple things I wanted to highlight about this story for our listeners. The first is that I actually got him connected with a real estate attorney to draft up the purchase contract. Sure. Um, you know, we, we don't expect our customers to always come to the table with the full team of people that they actually may need to complete a home purchase. And that's fine. We've got,

Speaker 3 33:00

We know

Speaker 4 33:01

Peeps, we know people, we've got lots of connections. We've been doing this a really long time. Uh , so to

Speaker 3 33:05

Your point , I have a divorce client , uh, needs an appraisal. I was like, call, call my people over at Heritage. Yeah . They'll help you out.

Speaker 4 33:12

Absolutely. Right. So got him connected with a real estate attorney to draft up the purchase contract. He got his offer accepted Hazah , and he was , um, you know, he is , um, just beginning his professional career. He's about a year and a half outta college and, you know, the monthly payment really matters to him. And he was looking for Oh , sure. You know, the best terms possible, the best

Speaker 3 33:33

Execution.

Speaker 4 33:34

And for that, especially in this higher rate , uh, environment we're in is something called a WIDA loan. WIDA is an acronym. It stands for the Wisconsin Housing and Economic Development Authority. Mm-hmm <affirmative> . It is a Wisconsin State specific program.

Speaker 3 33:48

I had that loan for my first house.

Speaker 4 33:49

I, you know, I think race and I did too actually. Yeah . There you go . And , um, if a borrower makes underneath a certain income threshold, they can tap into this program and essentially borrow the mortgage money at a lower rate of interest. The PMI or mortgage insurance is also , uh, very severely discounted. Yes . Which is nice. Um, and he, he had,

Speaker 3 34:12

It's a great tool when you can reach for it.

Speaker 4 34:13

Huge. And he had in his mind that he wanted to do 10% down. Oh. He had the funds available. Plenty still in reserve. Um , WIDA does have some very nice down payment assistance programs where you could even do as little as 0% down in total. Yes . He wanted

Speaker 3 34:30

Current a PR on that is like 6.4, give

Speaker 4 34:33

Or take. Yeah . The , the rate for WIDA as of today is 6.25%. Yep . Uh , 'cause I looked up, which

Speaker 3 34:39

Is severely below Yeah . Otherwise going

Speaker 4 34:41

Rate . And that's, that's the rate for no points. So the borrower is not paying any extra buy down closing costs Yep . To manually lower that rate. That is

Speaker 3 34:50

Simply Well , 'cause the state of Wisconsin knows if you put people in houses, they go out to Menards and buy other stuff.

Speaker 4 34:56

Exactly. And this is a , a Fannie Mae backed conventional mortgage. Yes . So this isn't any weird voodoo mortgage out there. Uh , well

Speaker 3 35:04

This is about as plain vanilla as it gets. Yeah.

Speaker 4 35:06

Yeah, yeah. Truly. And if the income is cut and dry, which it is in , in this borrower's case , uh, this is a tool in my tool belt that I'm looking at more and more for first time home buyers. WIDA doesn't reserve this extra low rate for repeat buyers is only for first time home buyers. Sure . Um, and if

Speaker 3 35:27

You're meaning you have not owned a home within the last three years. Correct.

Speaker 4 35:31

Yeah. Good point. And , um, yeah .

Speaker 3 35:34

And , and this is what we do. We reach for the tools that, that are available to us mm-hmm <affirmative> . And we bring that to our clients. Right. Exactly. So , uh, thanks for hanging out with me today. Uh, for any of our listeners or your , uh, family, friends, coworkers , even your frenemies, we'd be happy to help . Help . Even people you don't like all sorts. Um, all they have to do to get started is click on the blue button@acuate.com. You've been listening to the Acuate Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 1 36:04

The proceeding was a paid program. Advice and opinions expressed during the ACU Net Mortgage and Realty Show are solely that of the host or guests of Acuate Mortgage and Acuate Realty Advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.