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. Joined today by one Tim Holdman ,

Speaker 4 0:46

Buenos Diaz

Speaker 3 0:46

Senior Loan consultant. My individual NMLS ID is 3 2 8 8 4 7. Tim's individual NMLS ID is one five Niner 3 1 4 6 . Thank you for the niner and a happy Easter to you, Mr. Holden. Yeah . Happy

Speaker 4 1:01

Easter to

Speaker 3 1:02

You as well, David. Thank you very much. Um, if you listeners would like to grab a previous episode of the Anette Mortgage and Realty Show. You can do so wherever you get your podcasts .

Speaker 4 1:13

Yes, indeed.

Speaker 3 1:14

Okay, Tim. So , um, this last week was quiet and I was glad for that <laugh> for rates and mortgages and

Speaker 4 1:25

A little bit more relaxed than the previous week.

Speaker 3 1:27

A little bit more relaxed. And the nice part about that is markets began to , uh, give back recover. Sure. What otherwise was their heartburn in the week or two that came before mm-hmm <affirmative> . And with financial markets, predictability and, and stillness allows for markets to get their footing <laugh> to uh , figure out what is what. Right. Particularly around data and not policy. Correct. So when the policy becomes more quiet, then Wall Street can go and then begin to look back at the data without wondering if there's this guillotine of policy Yeah . Coming down the line. Uh , so what I , at the end of the week on a 30 year fixed, I, the scenario that I pulled up, if you wanted to buy a $300,000 home and put 25% down and all the other Right. Stuff had low overhead academic mortgage, we could offer 6.875% with no points

Speaker 4 2:35

And no origination fees. So not just no points. That's no lender fees, no fees. Yeah. No processing fee, no underwriting fee, no application fee, no . None of that. Make no makeup your name for this fee, fee

Speaker 3 2:47

Fees , the paper fee. And the a PR on that was 6.89. Of course, because we like to offer options. If a client was like, Hey, I'd like that low rate. Yeah. Can you give that to me? Yes, I can. And then we should talk about it. Oh, do you want 6.375% mm-hmm <affirmative> . We can do that for sure. The A PR is 6.58. I, a lot of times though with clients describe that interest rates are like hotel rooms and if you would like to sleep in the presidential suite, it costs money to sleep in that interest rate. And so in order to get to 6, 3, 7, 5, oh man, that's so much more attractive, Tim, than the half percent higher. Well, it's 'cause it's 4,400 more dollars. Right. To get it.

Speaker 4 3:31

Well, and there's a another sort of dark horse third option that I've started to talk to with my customers more about, and maybe we save this for the next segment, but there is such a thing as called a temporary rate buydown, where, 'cause the, the buydown that traditionally people think of is you're getting that lower rate for the full 30 years. Yes . Which is great, but because you're getting that rate for the full life of the mortgage, you are paying more for it logically. Right? Yes. The reason that may not be the most prudent investment of your funds is that you're not gonna keep this mortgage for 30 years. Right. Because literally show me , uh, someone who has, and that's gonna be the first person I've seen <laugh> , who's , who's kept their mortgage for the full 30 years. Yes. Right . So there's another option where you can choose to get a well below market rate intentionally, not <crosstalk>

Speaker 3 4:19

An equivalent payment.

Speaker 4 4:20

Yeah. An equivalent lower monthly payment for either the first year or first two years of this mortgage. And because you're getting that lower rate for a finite period of time Yeah . It is much cheaper to do that. Yeah . So we can break down that math. I don't know if you want to do it now or we can do it as a whole standalone segment,

Speaker 3 4:38

But just , but, but I think the , uh, the point is as we step back, it's like, okay, these are what rates are today. Again, this past week, as I've said in previous weeks, none of my clients called me this week and said, David, thank God markets were quiet. I'm back in

Speaker 4 4:55

It. Back in it. I was out the week before, but two

Speaker 3 4:57

Weeks ago I was out. Now I'm back in. I was like, okay, so you're not buying a home because of what rates are. You're buying a home for real life reasons. Yeah . You've got a client who I want to talk about

Speaker 4 5:06

For sure. When we get to story time , I, I literally talked to him Friday afternoon and it's a great, great , uh, fodder for the show.

Speaker 3 5:13

A real story. A real person. Yeah.

Speaker 4 5:15

He , he might be listening.

Speaker 3 5:16

We'll see who, who must have thought, you know how I can get on the academic Mortgage and Realty show is what

Speaker 4 5:20

We're gonna do . Call him on Friday afternoon. Yeah .

Speaker 3 5:22

<laugh> and , and , and give real life reasons of why my wife said I want more house. Amazing. That's the reason why. But regarding rate and closing costs, the ACU net mortgage team, I don't wanna say that we're agnostic, but again, it's like, if rates are like a ribeye, I was like, I will cook your steak however you want. Mm-hmm <affirmative> . But may I share with you the chef's recommendation? May I describe to you how it will taste? But then if you order it hockey buck , yeah . We'll give it to you hockey book . I'll yell back to the kitchen and they will make it that way. But let's look at what your options are as we put this plan together. Not just in, you know, where we are today, but also where do we think life will be one year, two year , five years from now. This is why we are consultants and not just order

Speaker 4 6:12

Takers. McDonald's mortgage is the term I've been using lately. Thank you. It's like we are, we are not that

Speaker 3 6:18

We are fancy restaurant mortgage. Yeah. Alright . Uh , some stories from the front lines of mortgage and real estate. After this first break, you are listening to the Acuate Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2 6:33

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 6:42

Welcome back to the Acuate Mortgage and Realty Show. I'm David, that's Tim over there. Good morning. We turn the page to the front lines of mortgage lending and real estate where clients for 26 years here at Acue have bought homes for real life reasons and not ever because of what rates are or anything e esoteric or spreadsheet related. Tim, you've got a client, has this client been a client of ours for 10 years? Uh , at this point? Uh , I

Speaker 4 7:15

Think eight May , maybe longer. I'd have to go back and and look through the archives, but long , long time customer of of ae and he calls me up Friday afternoon and we hadn't talked for a , a good while, but, you know, we helped him . Well 'cause

Speaker 3 7:30

He had refinanced in like Covid

Speaker 4 7:32

2020. Yeah. It was

Speaker 3 7:33

Like, look, I'll take your call anytime , but like , don't ever trade that in. No. There's no reason.

Speaker 4 7:38

Yeah. We helped him . So we helped him and his wife buy their current home in 2018. They refinanced in 2019 and then again in 2020. And then , you know, they , that rate they were gonna keep as long as they were gonna keep the house. Yeah. And that's the key because he called me up and said, Hey Tim, my wife and I, you know, everything's great. We got a 5-year-old and a 9-year-old at home and my wife wants to get a little bit more space, get out into the country a little bit more, maybe get a little bit more land. And he even said, and

Speaker 3 8:05

He stubbornly said, no honey, I am unwilling to give you what you

Speaker 4 8:09

Want. No, no, he did not. And he even said though, he is like, you know, it , it's gonna pain me to give up the, the rate I have with my current mortgage and current

Speaker 3 8:19

Home spreadsheet pain.

Speaker 4 8:20

Yeah. And I said, Mr. Customer, I totally agree with you, but you and I both know from your own past experience that we're gonna get you the, the most non-painful rate and payment that we can at the time of you buying the home. But the key is you're gonna get that home that you want and more importantly, that your wife wants. And then as the markets change every available opportunity for you to save money on that payment when it comes along, we're going to help you with

Speaker 3 8:45

Well, and and you have a track record of having done just that. Yeah. Hey, remember how we helped you buy your house in 2018 and refinance rice ?

Speaker 4 8:51

Right. So, and he understood that. And that's, you know, his own personal past experience with that whole journey has already made him realize, you know what, this is the right thing to do for our family. That is not rate related at all. No. Not to mention that, you know, in the area , in the area that he's buying, he's never going to pay less for the property that he wants to buy than he is right now. I told him, you can trade in your rate in the future. You can't trade in the value of the property. Meaning if he waits whatever, two years for some magical lower rate to come along, he's probably gonna pay more for that property

Speaker 3 9:26

Two years from now

Speaker 4 9:27

Yeah . Than he would if he would've just pulled the trigger on it and and bought it in and , you know, spring of 2025

Speaker 3 9:33

And you get to live your life in the interim then there too.

Speaker 4 9:35

Exactly. Exactly. So we , uh,

Speaker 3 9:38

As I like to say, you can either , uh, you can buy your new ho house and stay married or you can become single and hang on to your old house if you won't give Sure . Your spouse what they ask for. Yeah .

Speaker 4 9:49

It's extreme but possible. <laugh> . Um, so we, we got the, the new pre-approval game plan going. Uh, I uh , believe they made an offer Friday afternoon. We're waiting to, to hear back on that. But the other discussion that we had, which is again, very common for anyone not a first time home buyer, is, Hey Mr. Customer, there's kind of two different ways we can pre-approve you. 'cause you own a home right now and you wanna buy a new primary home. Yes. So in that scenario, a a pre-approval is you're way of presenting your qualifications to the seller. Right. So you can present yourself two different ways. The first is, hey, I own a home right now and I want to, or need to sell it on, or before the day I buy your new home. And that is the only way I'm willing to move forward. The technical term for that is called a home sale contingency. Right? Yes . And in real life, that's the most comfortable thing for the buyer almost a hundred percent of the time. Right . The

Speaker 3 10:43

Risk reduced version.

Speaker 4 10:45

Yeah. You don't have a period where you own two homes. You get all your home proce , uh, proceeds out when you sell that home that you can use then however much of that you want towards the down payment for the new home. Yep . And it's all nice and clean. However, from the seller's perspective, that's the least desirable of the two scenarios. Yes . 'cause from their perspective, they're like, oh, well, in order for this person to buy my house, they gotta go out and sell this house first. They're reliant on this whole other transaction to go on successfully. So I , I said the other scenario, which

Speaker 3 11:15

By the way, you know, it occurs like we have clients do that, but the listing agent or not the listing, the seller needs to be in a position where either they are desperate or they don't care. Right. And I've had some clients, like they're trying to buy a home and the seller's building a new house mm-hmm <affirmative> . And maybe that house isn't ready or won't be ready for a while . So like they don't Yeah. Go ahead, sell your house 'cause we're gonna be waiting anyways. Right.

Speaker 4 11:42

And it's a seller's market and it's, you know , highly unlikely that someone isn't able to sell their home in a timely manner in this environment, you know, if it's priced appropriately. So that pivoted to the second scenario of pre-approval that we will cover after this next break. You are listening to the Anette Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2 12:02

Getting you into the home of your dreams. Here's more of the Anette Mortgage and Realty Show with Brian Weer on WTMJ.

Speaker 4 12:11

Welcome back to the Accident Mortgage and Realty Show. I am Tim joined with me , uh, with David. So David, before the break we were sharing , uh, you know, story of a longtime past customer who wants to get ready to buy his new home and they , they own a home right now that we'd helped him buy several years ago. Yep . So the second way to pre-pro someone, and this is how I kind of explained it to my customer, is you can show that you can qualify to buy this new home without needing to sell your current home first. So the way you're presenting yourself to the seller of that property you wanna buy is , listen, hey, I do own a home. I'm letting you know I own a home right now. Yeah . My ability to buy

Speaker 3 12:52

Don't be silent about it. Yeah.

Speaker 4 12:54

Bring it to light.

Speaker 3 12:56

I'm so strong Yeah . That

Speaker 4 12:57

I

Speaker 3 12:58

Can own the new house and the old house.

Speaker 4 12:59

Yes. My ability to buy your house. Mr. And Mrs. Seller isn't dependent or contingent on selling my home first. So we talked about the pros and cons and you know, he said, yeah, Tim, that that's the way I want to get pre-approved. 'cause I don't know if there's gonna be competition. I I want to , you know, he's like, it's, it's a relatively worth it trade off to show that I can buy this house without needing to sell my current home first. And I said, great. I said, okay, you have about $200,000 worth of equity in your current home. I know. Eventually you're gonna get that .

Speaker 3 13:31

Can we talk about that? Yeah . Yeah . Because like they bought this home in 2018. Yeah . And seven years later, I can only imagine the amount of appreciation they've had bonkers in that. Okay. Yeah . But it's kind of trapped at the moment because Yes . It's just, oh my gosh, I got all this equity, but until someone writes me a check

Speaker 4 13:49

Yeah. How do I get it? Yeah . So not relying on selling the home and getting all the equity out that way. We talked about the different ways that he could get, you know , shooting for a 20% down payment on the new home. Uh, which is a nice, you know, healthy goal if we can get there. Yep . Not saying you , he could put less down, but he wants to get to 20%. So we talked about a bridge loan, which is something we've talked about on the show many times before . I

Speaker 3 14:13

Have, I have a story on that too later

Speaker 4 14:15

As well. Okay. But also something he brought up is he was like, oh yeah, you know, my father-in-law in the past when we bought our current home, he, he did this thing where he gifted us money , uh, to use for our down payment. Uh, and then, you know, whatever we decide to do with him privately after I buy the new home and sell my current home is private. Yes . And none of our business is the mortgage guys. Nope. I said , uh, Hey Mr. Customer, that might be the smoothest way to go for a few reasons. Number one, you don't incur any transactional costs of doing a bridge loan. Yeah . 'cause that is a whole other transaction. The costs aren't terrible, but why not pay pay if you don't have to. Yeah . And then that bridge loan also does accumulate interest on a daily basis. Right . Which, you know, can add up to a

Speaker 3 15:00

Few hundred

Speaker 4 15:02

Thousand , you know , some dollar amount. So if you have a family member with deep pockets that is able and willing to help you out, it's

Speaker 3 15:09

A father-in-law bridge loan. Yeah.

Speaker 4 15:11

For relatively no risk to the father-in-law. 'cause he knows you're gonna sell your current home at some point in the past or in in the

Speaker 3 15:17

Future. Do you love your daughter enough to do this? Yeah. You just have to. And it sounds like grandpa's probably willing to For

Speaker 4 15:23

Sure. So it's, yeah. You want your grandkids to, that's, that's the leverage . You want your grandkids to have this fun new big yard to play in.

Speaker 3 15:29

Yeah . Oh no, sorry, kids grandpa wasn't willing to. Yeah.

Speaker 4 15:32

So there were really a couple different ways to solve , solve that little, you know , uh, bump in the road for these particular borrowers.

Speaker 3 15:41

It's not a bump, but this is why you have to have a, a mortgage pro a mortgage planner. Right. Because I , because they decided we want this house and then they're , they call Uncle Tim and they're like, how do we do this? Yes.

Speaker 4 15:51

We can see into the future. Yes . Because we've done this so many times. We know what the things are going to be that come up that need to be addressed in order to actually get a loan fully approved and Yeah . Get the money to the closing table. Right. So we got him pre-approved with no home sale contingency. Um , really multiple different ways that they could cobble together that 20% down payment. Yeah . At the end of the day. And now they just have to decide if they really want this house. And that's really the only big decision left on their plate for the time being. Everything else we can take care of for them , uh, in the smoothest, you know, least stressful way possible.

Speaker 3 16:27

Do you feel like this was property specific for them? Or if not this house you had described that mrss client was like, we need more space. Yeah . And they're gonna go do that regardless.

Speaker 4 16:39

This property fit the criteria that they wanted, but if this isn't the one, they're gonna keep looking. Okay . So that's the other beautiful thing about the pre-approval is like, now if this property isn't the one, the game plan's already in place, so then they just keep on

Speaker 3 16:54

Yeah. You've handed them the firearm. It's like, okay , now go out and hunt for a house. Yeah,

Speaker 4 16:57

Exactly. Yeah. You, you see a 10 point buck , uh, you know , uh, uh, house there . I've

Speaker 3 17:02

Never gone hunting out . I'm just , just like,

Speaker 4 17:04

You , you , you , you go out and get it. Yeah. Or , or you wait for a bigger buck to come along and that's fine too. But you know, the, the conversation of doing the right thing when calling your expert loan consultant anette before walking through the house is crucial. Not to say that we can't get something together really quickly because we can, but why wouldn't you want to go into a home showing with the confidence that you know what is happening? Yeah. And , and that you know, what the next steps are

Speaker 3 17:32

To that point. Uh, I'd like, after this next break, tell a story about a bridge loan. Right . Because again, it's, it is putting on paper the plan that might be rattling around in your mind and just scoping out how all of those different pieces come together. Mm-hmm <affirmative>. So we'll get into that after this break, but right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2 17:56

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

Speaker 3 18:04

Welcome back to the ACU Mortgage and Realty Show. A happy Easter Sunday. Yes , indeed. Uh , to everybody. Um , and we have been sharing the almost predictable stories when clients come and say, I want more house. Yeah . But I own this old house. How do , how do I do that? I've decided in my heart, we have decided in our hearts that we want more house help my brain put together the plan that my heart has decided. You are describing, you're a client. I got referred to a client this past week by their real estate agent because hey, we're gonna go write an offer on this home , uh, in , uh, Waukesha County. Okay, great. They own a current home, a huge amount of equity. And is as is the case, they're thinking to themselves, okay, well they wanna write the offer not contingent on their home. How do we, you know, utilize and or either before or after the closing, man, we're gonna have all this equity from the sale of our house. How do we do that? Yeah. And then the added element is , uh, grandma and grandpa are also going to be moving in Ah,

Speaker 4 19:20

Okay.

Speaker 3 19:21

As well and would like to contribute Okay . Toward the , uh,

Speaker 4 19:26

Expense of owning that home,

Speaker 3 19:27

The down payments, ah , of the home. Okay. Uh, it is appropriate , uh, that this last week was tax day and I fielded the question, you know, David, if my parents , uh, contribute a hundred thousand dollars to the down payment, is there like a tax, you know , concern or Yeah . Consequence. And I, I, I just said, I was like, are your parents worth $29 million <laugh>?

Speaker 4 19:54

No . No, they're not. Okay.

Speaker 3 19:55

And I said, I'm not a tax professional. I can connect you with one, but also I have been on the irs.gov website. You have no concern. Yeah. And , and so set that aside. Great. And then they also have their own liquid funds. This is really , as you were telling your story, sometimes it's a little bit of cobbling it together. Yeah.

Speaker 4 20:17

Down payment can come from multiple sources. Yes. Like it doesn't all have to be sitting in one bank account Exactly. In order to get it to the closing table. And

Speaker 3 20:25

So for my client, it was going to be a gift from grandma and grandpa, some of their own savings, and then also bridge loan. Okay. On the old house. And as I , um, remark from time to time, there is no mortgage class in high school or college or

Speaker 4 20:43

Ever . I say that to almost every first time home buyer I

Speaker 3 20:46

Talk to. And so sometimes a client just brings what they think, their understanding of like, well, what's a bridge loan? Is that, and, and as my client was describing it to me, I was like, well , in a , in a world of make believe that makes all the sense in the world, but in the real world, <laugh> is not how I can do it. They were thinking, well, can I just, you know, push the equity in my old house over to my new house? Like can I just somehow lop it off and like move it over? Yeah .

Speaker 4 21:16

Uh , partially yes. But

Speaker 3 21:18

<laugh> and so I was able to describe to them there is a amount that we can extract from the old house while maintaining a level of buffer Yeah. In the old home. So for them, the math was gonna be they owe a hundred thousand, the home is worth 400.

Speaker 4 21:35

Right. So they have 300 K of equity, but they cannot take all 300 K of that equity out ahead of selling the home to push it over towards the down payment. Because then you would essentially owe a hundred percent of your home's

Speaker 3 21:49

Value and no lender. Like even if you thought that 400,000 was conservative on the value of your old home, I don't wanna lend you up to that number. No. Even if, oh my gosh. Yeah. It's gonna , this house is gonna sell in a nanosecond and probably for more it's like great. I would still like some level of buffer. Yeah. So for these clients it was, they owe a hundred, the house is worth 400. Hey, we can help put a $200,000 second lien Yep .

Speaker 4 22:19

Called a bridge loan. Called

Speaker 3 22:20

A bridge loan on the old house. I metaphorically hand you that $200,000 and you can turn around and use that as down payment on the new house. Correct. That's how a bridge loan works. It's Yes. Putting a debt on the old asset called the house. Yep . You get the cash and you can use the ca I mean, you could use the cash to buy a boat,

Speaker 4 22:42

You could do whatever you want, but

Speaker 3 22:43

You're trying to use it for down payment. Then when you sell the old house, you don't owe just the 100 anymore. Now you owe 100 plus 200. Yeah. 300. And you need to pay that off. And let's just for the sake of conversation, say you sell the house for 400 and you don't have any expenses, you will, but if you sell it for 400 and pay off the 300 that you owe. Yeah . That's , then you walk away with the rest,

Speaker 4 23:09

That's when you get the rest of the equity out the

Speaker 3 23:11

Buffer. Yes. And , uh, in text, I was actually kind of proud of myself that I was able to articulate that in a text paragraph that was not just like four scrolls worth

Speaker 4 23:22

That's an art. Yeah .

Speaker 3 23:23

But laid out that like, here is the rather explicit way that we're going to help you unlock the money that's trapped in your old house. And it was like the scales fell from their eyes and the heavens opened up and Oh ,

Speaker 4 23:38

They understood. Also, we, we can help game plan for when you get that remaining a hundred K out after you do sell your home, there are ways you can reduce your principal balance Yes . On your new mortgage, on your new home after the fact. Um , so we can talk about that next

Speaker 3 23:53

Of that. Yeah . Perhaps in the next segment. My , but as we note, it's like, don't do this planning by yourself, phone a friend at Acue so that we can help scope out that plan together. You're about to climb Kilimanjaro. Don't start walking up the mortgage Mountain by yourself. All right . When we come back, I've got another story and I'm gonna pepper you for another one of yours. Tim, you are listening to the Acuate Mortgage in Realty Show on AM six 20 WTMJ.

Speaker 2 24:23

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

Speaker 3 24:33

For hanging out with us here on the Anette Mortgage and Realty Show. I'm David, that's Tim. Happy

Speaker 4 24:38

Easter everybody.

Speaker 3 24:39

So I , um, share with clients a lot that we can put the preapproval game plan together on paper. Yeah. But then you must go forth and win. And that can be a whole other element.

Speaker 4 24:56

It's the biggest challenge for a lot of folks. Yes . Not everybody, but many .

Speaker 3 25:00

And I don't wanna , I don't wanna walk past what we had talked about earlier in the show. Like sometimes putting the plan together is a key if not crucial element for sure. But then you must go forth and be like, and now I will do what it takes to win. Yes. So one of the tools Yeah,

Speaker 4 25:18

Let's talk about what it takes.

Speaker 3 25:19

Let's talk about what it takes. One of the key tools that the AC unit team uses week in and week out is, oh, Tim and Grace, you're thinking about buying 1, 2, 3 Main Street in Wauwatosa. Tell me about, call me on Thursday. Yeah . Before you walk through on Saturday. Let's see if we get an appraisal waiver Yeah . Through the mortgage underwriting software, we can know that it's the same like we can plan Yeah . How much house you can buy. We ,

Speaker 4 25:48

We have the ability to find out if you, if if we could not need an appraisal for loan approval, if you were to get an accepted offer, we can find that out ahead of you even making an offer. Yes. And that matters because from the realtor's perspective, if they know that they don't have to write an appraisal contingency Yep . Into their offer, which is by , by not writing that in, that is one of many things that can make your offer a little bit more attractive to the seller. It's, in my experience, David, and you'd probably agree, it's hardly ever just one thing that gets a customer's offer head and shoulders above the rest. It's a cumulative effect, a totality of several things. Right. And again, this is just one of them, but considering it would take me and you about 10 minutes to figure this out Yeah . And do this little due diligence exercise, why would we not turn over that stone and see if, you know , uh, we can leverage that detail.

Speaker 3 26:44

Well, and so , uh, that is, let me phrase it this way. If your agent is not messaging your lender to check in on if they mm-hmm . Can , if the appraisal waiver will go, you are not exploring or turning over every stone No . To see if you can pile it all up to win. Yeah . And let me just say this. I get lots of texts from lots , lots of the agents that I really like to work with mm-hmm <affirmative> . And the number one text is can we waive the appraisal? Can you check to see if this property will get an appraisal waiver? Yeah. And I'd like to just spend the 60 seconds to remind everybody an appraisal waiver is property specific as well as borrower specific. Yeah. And the, sometimes I think the text or the question that I'll get is, well, why can't , why can't this house get the appraisal waiver? It's like, well, I don't know.

Speaker 4 27:49

Yeah. Well and ultimately we're not the ones who decide. Right. It's Fannie Mae and Freddie Mac who decide we're leveraging their software and by plugging in that specific property address, they are

Speaker 3 27:59

The at that price.

Speaker 4 28:00

Yeah.

Speaker 3 28:00

They are the , for that client. Right . For that borrower. The funny version of the question from clients about all that is, well, but David, I am amazing as a buyer. I've got great income, I've got a great down payment. Yeah. Why can't I , why can't I get the appraisal waiver? It's like, well it is not about you.

Speaker 4 28:17

Yeah. Or not not solely about you anyways . Right .

Speaker 3 28:19

Well you need both halves. Yeah . You're awesome. But what if the property, if you're offering a billion dollars for this property, it's like, well you're not gonna get an appraisal waiver. Right. Even though you're awesome. Yeah. So it's both of those elements together. Right . Which

Speaker 4 28:32

Is why we can't really determine if we can waive an appraisal until a customer has a specific house that they're interested in and tells us this is what I'm planning to offer as a purchase price for this property. Then we have the full picture that we can run through the software to determine Yes. Borrower with your qualifications and down payment amount on this specific home. Yep . At this specific price. Yep . Is it a yes or a no for the appraisal waiver?

Speaker 3 28:58

I had a client who , uh, they , this was on a home that they didn't win. But one of the kind of yellow lights that I wanted to share was, Hey, you , there is an appraisal waiver on this home. You are considering it is at 20%. You have to be ready to commit Right . To that being your down payment. Yeah. Because if we change from 20% to 19% down payment, when I run that through the appraisal waiver goes away. Yeah.

Speaker 4 29:29

And that's a conversation worth having too. 'cause normally appraisal waiver aside , typically I like to give my customers the knowledge that they have flexibility and , and maybe even adjusting their down payment amount after they have their accepted offer up until, you know, a week or two before closing is really when , when you want to get that nailed down. Yeah. In , in most

Speaker 3 29:47

Cases. Right . But not if you want to use that. Right . But computer generated appraisal waiver,

Speaker 4 29:51

If you wanna use that appraisal waiver, you kind of have to decide on day one that you're gonna stick with that down payment amount. And, and I'd say in my experience you could do

Speaker 3 29:59

More just to say that.

Speaker 4 30:00

Sure. But I, you know, and I'd say more often than not, my customers actually don't change the down payment game plan anyways after it's a taking the initial one. But sometimes, sometimes they do.

Speaker 3 30:10

For me it's a eyes wide open thing. Right . Yeah .

Speaker 4 30:12

You gotta know that you're giving up that flexibility potentially in deciding to change your down payment or be willing to say, ah , you know what? I do need an appraisal and I'm willing to go forth with that. And whatever comes after, you know, as a result of getting the appraisal. Exactly.

Speaker 3 30:26

These are the <laugh> , all the tools that we reach for 'cause

Speaker 4 30:30

And more

Speaker 3 30:31

Winning is the only goal. Uh , not just the preapproval but actually getting to the closing table. Correct. Alright . When we come back, you wanted to touch base and circle back on temporary buy downs . Yep . Uh, and then we will just give a map out what might be coming next this week in economic news. Thanks for hanging out. You are listening to the ANet Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2 30:56

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

Speaker 3 31:04

Welcome to the last segment of the Acuate Mortgage and Realty Show. We will be on an Easter egg hunt at my house a little later today at my in-laws. Yeah . Hopefully they don't, hopefully my kids don't find any , uh, backyard caviar as cousin Josh likes to call it

Speaker 4 31:19

Backyard

Speaker 3 31:19

Caviar. Yeah. Only eggs, colored eggs and other prizes. Uh, as we are describing, Hey, clients, listeners, are you looking to get into your new backyard for your Easter egg hunt? Yeah , maybe next year. Next year. One of the tools that you are keen on, Tim, is temporary buy downs . Yeah . So ,

Speaker 4 31:40

Which is just a fancy way of saying like, listen, if you're not ecstatic about where rates are right now, but still want to , you're

Speaker 3 31:47

Not pot committed. Yeah.

Speaker 4 31:48

But you, but you still wanna do that thing of getting a new house for all the real life benefits that that comes with. We have a way to lessen the paying of where rates are , and it's called a temporary rate buydown. So kind of as we talked about in the first segment, traditionally you can pay something called points to manually lower the rate, but since you are lowering the rate permanently over a 30 year mortgage, it's expensive to do that. And typically you can only lower that rate a quarter, three eighths, maybe a half percent. Yeah. But to do it on a more temporary basis, you're kind of pouring gasoline on that fire of how low you can get the rate because you're not lowering the rate for the full 30 years. So a lot of times what I will show

Speaker 3 32:30

Customers, that's a good way of, you're kind of slamming in the savings Yeah . More on the front end here.

Speaker 4 32:34

Absolutely . Exactly. That's what you're doing. So, you know, if you were to get , get a 6.875% rate off of our generic quote, that's the no points rate that you can get permanently for 30

Speaker 3 32:44

APR 6.97 . Yes . Thank

Speaker 4 32:45

You. Why not get an effective interest rate of 6.25% Yeah. For the first year still without paying points. And the way we can do that

Speaker 3 32:57

APR r is 7.4.

Speaker 4 32:58

Correct. The , the reason we can do that is we choose a note rate of 7.25% and then ANet actually funds the money to get you a monthly payment for the first year that's equivalent to a 6.25% rate. Yep . And then after that first year, it does a one time singular adjustment up to 7.25 if you have the mortgage L on. Right. But for that first year, you're at a 6.25% for no points, which otherwise you'd have to pay thousands upon thousands of dollars Yes . To get that rate permanently locked in. And the reasoning behind this is that I, as your loan consultant, and certainly you as well, will be on the lookout for, hey, when have rates improved enough where I enough where I can refinance this mortgage anyways Yep . Into a permanent lower rate. Right. But in the interim, I'm getting way lower rate for free in essence. Yes. Right. And I look at that in comparison to the permanent 30 year fixed examples. And then I , my job is just to be a mortgage professor, right? Yeah . I

Speaker 3 33:59

Lay out the pross and cons , here's, here's what's available to

Speaker 4 34:01

You. I show them the math, I show them the break even calculations. We

Speaker 3 34:04

Even talk about the risk. It's like Yeah. If you get to month 13, I

Speaker 4 34:07

Always want to talk about the worst case scenario. Yeah, yeah.

Speaker 3 34:09

Well, because hey, remember we sometimes you get to month 13 in your example, oh my gosh, my payment went up. It's like, well , remember all that savings you had for the first year? Let's not discount that you are already ahead of things.

Speaker 4 34:23

Absolutely.

Speaker 3 34:23

While we wait for a refinance to make sense. Yeah .

Speaker 4 34:26

So I just want the listeners out there to know that this is an option that we can absolutely show you as a point of consideration. And it might be the thing where maybe this makes your monthly payment that much more comfortable, that gives you the good enough feeling to say, you know what, yes. Maybe I am ready to go out and look for a house.

Speaker 3 34:43

My , my version of that too, sometimes what I pair, Hey, we can get you a little bit of savings for that first year or two. And then I was like, Hey, do you think you're gonna get a a raise next year? Mm-hmm <affirmative>. Do you think you're gonna get a raise the next two years? Which effectively, as is the case with mortgage and real estate, you're trying to skate to where the puck's gonna be a little bit. Yeah . And as you pointed out right now , right, it's like if, if we can massage making it comfortable now, and you believe you'll continue to earn well in the near future, that might be the tag team you need to get comfortable Absolutely. For your next house.

Speaker 4 35:21

Yeah . Unless let's not forget in the meantime you're living in your new home and then join life in that new home, which is, I I still think that's the thing that matters the most ,

Speaker 3 35:30

Uh , more than ever. Uh, so if you are looking to connect with the type of mortgage architect who can share with you the tools that you need in order to fashion that future, all you have to do is click on the blue button@anet.com. That's A-C-C-U-N-E t.com. Tim, I'm looking forward to many more Bucks Games, this , uh, playoff run. Yes. We'll see how that unfolds. But for you listeners, you have been listening to the Accu 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 Accu Mortgage and Realty Show are solely that of the host or guests of academic mortgage and ATE realty advisors and not WTMJ Radio or Good Karma Brands, Milwaukee, LLC.