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: 0:21

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

Speaker 1: 0:36

Welcome to the Anette Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with a Cadet Realty Advisors and also the majority owner of a cadet mortgage. Where am my individual NMLS ID number is 2 5 9 6 1 0. And I'm here today along with my son-in-law, Tim Holdman, one of our awesome senior loan consultants at a cadet mortgage. And his individual NMLS ID is 1 5 9 3 1 4 6. I remember. You can grab a podcast of today's show anywhere you normally get your podcast. So Tim, thanks for , uh, filling in on the show today. I appreciate that.

Speaker 3: 1:07

Happy to be here, Brian , as always.

Speaker 1: 1:09

So we had a , a a week chalk full of economic news. Uh, one of the nothing burgers that might have , uh, influenced mortgage rates was the gross domestic product number that came out on , uh, Wednesday that showed the economy in the US shrank by 0.3% in the first three months. Mm-hmm <affirmative> . But that was all because , uh, consumers and businesses were accelerating their purchases of foreign goods right ahead of the tariffs. And so

Speaker 3: 1:36

The market that's to jump in there Yeah. <laugh>

Speaker 1: 1:38

Yeah. To get in before the price increases. And it turns out that that trade imbalance , uh, actually subtracts from GDP , I didn't realize that before. Right . And so the market figured that out and went, eh, no big deal on that.

Speaker 3: 1:48

Nothing. Yep . And

Speaker 1: 1:50

Not nothing burger. We also got the Fed's preferred inflation measurement , uh, for the month of , um, April. And , uh, that's the personal consumptions expenditure index, PCE. And that also came in pretty much as expected. So, eh , nothing happened there. Yeah . And then on Friday though, we got the jobs report. And the big question with the monthly jobs report for April was whether or not the tariff and all the unrest along with the federal job reductions, hey, was that gonna show a material weakening in , uh, the job market? And what did the job market tell us, Tim?

Speaker 3: 2:24

Uh, it turns out the economy gained about 47,000 more jobs , uh, last month than what was expected. Uh , so it seems that all that , uh, worry was unfounded, at least in terms of last month's job , uh, jobs added. So there were some revisions from previous months where we subtracted 58,000 jobs from prior month results. But generally there isn't as much of a reaction to the mortgage rate market from those revisions compared to the most recent data that comes out, you know, from the jobs report . So overall, that was relatively strong and on economic news, which cause mortgage rates unfortunately to , uh, worsen slightly on Friday as a result. Yeah.

Speaker 1: 3:06

And let's emphasize the word slightly. Uh , yeah,

Speaker 3: 3:08

Exactly.

Speaker 1: 3:09

Um , you could still fetch a 6.875% rate , uh, after all that. Uh, with an a PR of 6.9, that's on a 30 year fixed rate , uh, in the loan amount of $250,000 with 25% down payment and all the other Right. Stuff, you just would've had to pay , uh, $355 in points. So about $1,900 in loan costs to get that 6.875 rate, that's up maybe about $800 from last week. And the other alternative is you could have gone with the 6.99 rate mm-hmm <affirmative> . And then only had , uh, loan costs. Uh, and this is including if we needed an appraisal of 6 74 a PR , and that is 7.00. Yeah. And you know what the monthly payment difference is , uh, between those two at 250,000 bucks, $19 and 25 cents,

Speaker 3: 3:55

$19 a month. Yep . And that's , uh, really worth , uh, I think highlighting Brian . 'cause it's like we do spend a lot of time talking about rates, which makes sense 'cause we're mortgage bankers. Right. But I think , um, the thing to the home shopper or potential home shopper out there is like, what does this do to my monthly payment? Right? It's like we all care about rates, but the reality is, it's like the thing, the reason the rate matters is because that influences your monthly payment and ongoing expense of owning the home and rates getting a little bit better or a little bit worse for that matter if the real life change is $19 a month in your budget. Yeah. That isn't enough to move the needle in either direction, I think for 99% of the people out there. Right. It's like you're gonna wanna buy a house regardless of whether you're gonna pay more or less $19 a month. It's like, okay, skip a couple cups of coffee and , and you're there, you know? Well , even

Speaker 1: 4:44

When rates, you know, earlier this month ticked up to almost 7.5%, you know, when the everything was up in the air. Right. You know, that's, that's still not that , uh, you know, humongous a a difference in monthly payment. Yeah . Lemme see if I can calculate that real quick here. Uh , so this is for a half a percent , uh, difference in the rate. So comparing 6, 8, 7, 5 to 7 3 7 5 , that's 84 bucks a month. No . You know, that's still not nice. Not bad, right ? You'd rather not to have it, but it's not that big a deal. So , um, the other thing that we have coming up this coming week , uh, we've got the fed meeting and I had a client ask me, Tim, if I thought that, 'cause he read, saw some article online saying the Fed might cut rates by a half a percent. Oh .

Speaker 3: 5:30

Oh my

Speaker 1: 5:30

Goodness. I have not seen that. So I jumped on the , uh, fed Funds futures market and rest assured there is a 95% probability that the Fed is gonna do absolutely nothing when they mm-hmm <affirmative> . Meet this week and only a 5% , uh, probability of even a quarter point rate cut.

Speaker 3: 5:47

Yeah. Much less a half percent. Yeah.

Speaker 1: 5:48

Yeah. Yeah. So that's probably not , uh, anything to be concerned about. And , and you know, when, when the Fed does eventually I've read that there are some predictions, Hey, maybe two rate cuts in the Fed , uh, by the Fed before the end of the year. Remember that's on the super short end overnight , uh, interest rates. Yeah.

Speaker 3: 6:05

The friendly reminder to the listeners, the Fed doesn't control long-term mortgage rates and mortgage rates react more to what the expectation is that the Fed is going to do. They react more to that than what the Fed actually does. Right. So the expectation of a future rate cut , uh, from the Fed will actually cause mortgage rates to, to go down more than the actual change. So

Speaker 1: 6:25

Yeah. Alright. There you have it. When we come back , um, I've got some interesting, well , I've got Fannie Mae's prediction on where rates are going the rest of the year. And in 2026 we've got some stories of , uh, home buyers and sellers, and then also , uh, a look at the demographics of buyers and sellers. We'll get to that right after this. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2: 6:51

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 1: 7:00

Welcome back and thanks again for tuning in today. I'm Brian Wicker, the elder. That's , uh, Tim Holden , senior Loan Consultant over there. And , uh, Tim, why don't we just touch on the , uh, national Association of Realtors came out with their demographics for home buyers in 2024. And so my , uh, question for you is, which of the following demographics , uh, made up the most the , which was the biggest group of home buyers in 2024? Would it be millennials who were defined as folks between the ages of 26 and 44? Would it be Gen Xers who are aged between 45 and 59, or boomers who are aged 60 to 78? Which one was the biggest cohort of home buyers in 24?

Speaker 3: 7:44

Hmm . You know , uh, I'm gonna take a , a little bit of a gamble 'cause the millennial in me wants to say that first time home buyers would be the biggest segment of people buying houses. AKA millennials most likely. But I'm gonna probably say boomers.

Speaker 1: 8:01

That is correct. Uh, boomers made up a whopping 42% of buyers. According to the National Association of Realtors, millennials were the next largest , uh, segment at 29% of buyers. And then Gen Xers, again, age 45 to 59, comprised 24% of buyers. Gen Zers who are 18 to 25. Uh, they made up just 3% of buyers. There you go. Wow. And a silent generation. So

Speaker 3: 8:29

Leading by a wide margin,

Speaker 1: 8:31

By leading by a wide margin. Yeah . Uh , also, NAR uh, reported that 24% of all buyers were first timers in 2024, down significantly from 23 when it was almost a third at 32%. However, the most recent numbers from NAR for the month of March showed that first time buyers once again made up 32% of buyers. Here's another fun fact. Uh , uh, marital status. Um, what percent do you think , uh, of buyers were married? Do you think it's over or under 50%?

Speaker 3: 9:04

I'll go slightly over 50%.

Speaker 1: 9:07

That's alright . You're, you're on a , you're on a roll. 62%. Okay . Of all buyers, were married couples, what do you think is the next largest demographic regarding marital status and think gender in combination? So, you know, they're not married, so it's single something. Oh . Um, or unmarried. It could be unmarried couples. That's

Speaker 3: 9:24

The other unmarried , uh, female. Second.

Speaker 1: 9:26

Okay. That's right. Single females made up 20% of buyers. 8% were single males. And this surprised me 'cause I think we see this a fair amount. Only 6% were unmarried couples. It seems like we get a lot of unmarried couples. But

Speaker 3: 9:39

Yeah . Personal experience , I get a lot of, you know, either , uh, serious relationships or maybe engaged, you know, a lot of that. Yeah . So that's , uh, wow , that's surprising. It's only 6%. Hmm .

Speaker 1: 9:49

Interesting. Last , uh, a little bit of nugget , uh, here on , uh, what about mortgages since that's the business we're in? Well, 90, not surprisingly, 94% of millennials finance their home purchase with a , a mortgage compared to , uh, 61% for what they're calling younger boomers. So those age, 60 to 69, 60 1% of those younger boomers did get mortgages. 49% of the older boomers, those aged 70 to 78 got mortgages. So that's good for us. Even the boomers need mortgages. Absolutely. And in terms of down payment, the median down payment for millennials was 12%. Gen Xers, 17%. And , uh, for boomers, 33%. 'cause apparently the older you are, the more money you've got to put down theoretically.

Speaker 3: 10:32

Right.

Speaker 1: 10:34

And this won't go ahead.

Speaker 3: 10:35

Well, I think the reason this matters to our listeners, right, is , I mean, I I talk to a lot of more first time home buyers generally in the millennial age range, right? It's like, hey, you got a lot of competition out there. 'cause not only do you have competition from other people in your own, you know, age range and, and maybe socioeconomic bracket, but you have this whole other pool of people called boomers who are maybe looking to downsize, right? Or maybe looking to move closer to the grandkids and all that stuff. So you're, you're competing against a lot of people. And unfortunately the boomers, just as your down payment statistics just flushed out, they probably have more money to put down and can present themselves as stronger buyers to the sellers. Right? So I was just on a call earlier Friday morning with a , uh, <laugh> to your point. It was a , a a not married couple, but looking to buy together. And, you know, I said, Hey, pre-pro you kind of, the easiest part of my job, to be quite honest with you, where I provide, I think my most value and expertise is how do we make you the most attractive offer against all the other people, millennial competing on , and everyone else that is also trying to buy the house that you wanna buy. That's kind of the name of the game in this market. Pre-approving, super easy, super simple. You can get a pre-approval anywhere. Anywhere, right? It's like, that's not why you go with me or why you go with Acue . At the end of the day, it's, you want the house pre-approving a great step in the process doesn't really mean that much at the end of the

Speaker 1: 12:03

Day. What can we do to polish that pre-approval and help you, you know, tweak your offer to get you to the winner circle? Oh , many , so many things.

Speaker 3: 12:12

Yep . So many things . I mean, we can talk about it next segment too. 'cause I can think of at least six or seven things off the top of my head. But

Speaker 1: 12:19

<laugh> alright , well let's come back to that. Uh , I've got a couple of stories of first time buyers looking in that, what I'll call the heavily trafficked area in southeast Wisconsin. Two 50 to three 50 price range. And we will dovetail that with what we can do to help 'em . You are listening to the Accu Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ,

Speaker 2: 12:40

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

Speaker 1: 12:48

Thanks again for hanging out with us and uh, remember you can get a copy of today's show anywhere you normally get your podcast. So , uh, Tim, I , I've had a couple of , uh, buyers last week looking in that heart of the market, you know, like two 50 to maybe as high as three 50 in one of their cases. And , uh, one of the buyers is looking in the ultra hot , uh, Wawa TOA market Mm sure . In that price range. Lots of competition. Yep . And , uh, they had written a couple of weeks ago on a property listed at, I think it was , um, two 40. And they did , we kind of cajoled them up to 2 55, you know, but that's all the higher they wanted to go. Sure . And , uh, did not get it right. Mm-hmm . Uh , so now they, there was a house listed for right around 300 and , uh, it did not sell on the first weekend.

Speaker 3: 13:43

Whoa. Okay.

Speaker 1: 13:44

So that's, so it's like , oh , okay. That is. And

Speaker 3: 13:47

So yeah . That's surprising in and of itself, <laugh>.

Speaker 1: 13:49

Right? Right. So, so they ended up writing an offer then early last week , um, under the asking price. Right. Okay . Because , you know, hey, that's a sign you didn't sell on the first weekend. Yeah. And, and then I, I ended up talking to the buyer's agent at the end of the week and guess what? They did not get the offer. 'cause somebody else came in above that. Well ,

Speaker 3: 14:10

Swooped in. Yeah.

Speaker 1: 14:11

Yep . Somebody else swooped in, but there was also this issue of sagging in the floor, like towards the middle of the house.

Speaker 3: 14:19

Okay.

Speaker 1: 14:19

And it's like, ah , okay. You know, maybe you have a cute remodeled kitchen or whatever, but if you've got a sagging floor

Speaker 3: 14:27

That is structural. Yeah.

Speaker 1: 14:29

Right. And then, you know, the , you gotta pay for the inspections. That's the weird thing about real estate is you as the buyer, end up paying for the inspections to find out, well , what's really going on with that?

Speaker 3: 14:38

You know? Yeah. Is is this actually a problem, <laugh>?

Speaker 1: 14:40

Yeah. Is it gonna keep sagging? Is it gonna fall in or whatever? And and so they, I think wisely decided not to, you know, up their ante Sure . On that particular house, but they're back at it and now they're

Speaker 3: 14:54

Yeah . It's a learning experience. They're , they're learning what it's gonna take. And , uh, you know, to your point with the first property, it's like, I think they will reassess each time a new home comes along of like, okay, well for this particular home, maybe without a sagging floor Right. What are we willing to do and what do we know needs to be done to, to be in contention. Right. Right . So they're , you know , it's learning each time on , alright , you know, what , what do we, what are we willing to do? What's it gonna take to, to get into the winner circle? Yeah.

Speaker 1: 15:24

It iterative process. And the hard part for them is they do have a little bit more than 5% down, but they can't really get to 10% down. Sure . And , uh, you know, so they don't have a lot of flexibility. Yeah . You know, when it comes to offering , uh, some appraisal a gap. Right. Yeah . Because that's speaking of things that, that , uh, home buyers can do. And I've got an interesting statistic to share later in the show on this. You know, we know that in southeastern Wisconsin, a lot of people are paying over the asking price. Yeah. You know , it's about 50% this time of year , uh, seasonally. And , uh, and so then the question is, well, hey, if I'm paying over the asking price, you know, can I then give that seller some assurance that I'll still pay you what I'm offering?

Speaker 3: 16:10

Yeah. Even if the appraisal comes in less than the offer

Speaker 1: 16:14

Price. Right. And so you can name your, how much wiggle room or gap am I willing to absorb as the buyer? Yeah. Well, so in the case of a first time home buyer, the minimum down payment is 3%. Right. So if you're sitting there at, you know, 5% down, well you can offer that extra 2% of wiggle room, you know,

Speaker 3: 16:34

Well, the key is you can offer that 2% of wiggle room without actually having to bring any of your own extra funds to closing. Right ?

Speaker 1: 16:40

Correct.

Speaker 3: 16:41

Because we can absorb that gap on the financing side. They , they technically could offer more than 2% wiggle room. Right . But then we'd have to go in eyes wide open. Right. That, in that worst case scenario, if that appraisal comes in low, but within the gap that you offered, there's more risk that you would have to bring extra money out of pocket to cover the difference as opposed to what we all prefer, which is, Hey, let's cover the gap on the mortgage side of things. 'cause slightly higher monthly payment is way more , uh, you know, doable for most of the tolerable bringing Yeah. Tolerable. Thank you for, than compared to bringing several thousand dollars more of your own money. Yeah .

Speaker 1: 17:17

Five or $10,000 more. And so that's a , that's a misconception that we dispel all the time. Yeah . I was talking with , uh, Jaime Surro , one of our other , um, senior loan consultants, and he was telling me about a buyer he's working with that has 10% down to put mm-hmm <affirmative> . And so there's an example of, wow, okay, if you're looking for a a $300,000 property, you could easily give them $15,000 Yeah . Of appraisal gap, you know, to say, Hey, I'll still buy it even if it comes in $15,000 less than what we agree upon. Right. Um, so that's, that's one of the things that we often do. What's another thing that we do to help strengthen people's offers, Tim, right off the top of your head.

Speaker 3: 17:57

Well, the , the , the easiest one to accomplish is to get them a fully verified rock solid pre-approval. Right. Because if they send us all their income and asset documents, we put a $2,000 lender guarantee behind our pre-approval that says if a seller accepts the offer based on these terms, and if we actually made a mistake in our review and can't get that loan approved in the game plan that we lay out in the pre-approval, then we would pay out a $2,000 guarantee. Uh , they can either structure it, a thousand goes to each party by and seller, or we can say, Hey, we'll send all $2,000 to the seller , uh, as an apology for our mistake. Now the idea is not to pay out on that guarantee No . Or make a mistake. The idea is that we are saying, Hey, this loan is gonna happen. Absolutely. With our full vote of confidence behind it. Shout out to Jaime, by the way, a happy work anniversary on this past Friday. I think he had , uh, 23 years now at Akin

Speaker 1: 18:49

Mortgage. Three years. Yes sir .

Speaker 3: 18:50

So happy anniversary to Jaime.

Speaker 1: 18:52

Alright , when we come back, let's talk about more ways that we help buyers , uh, structure their, their , uh, offers to win. And then also got some really interesting statistics, I think, on what happens when people do offer over the asking price. Do the appraisals come in low? Much of the time. We'll get to that after tuned tuned,

Speaker 3: 19:10

You'll find out.

Speaker 1: 19:11

Yeah , that's right. Right. Now it's time to turn it over to the WTMG Breaking News Center.

Speaker 2: 19:17

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

Speaker 1: 19:24

Welcome back. I'm Brian Wicker, the majority owner of ACU Mortgage and the licensed real estate broker. That's Tim Holdman over there. Senior loan consultant with ACU Mortgage. And we're talking about, hey, what are some of the ways we help , uh, buyers write compelling offers? Another thing we should mention is we will always run a property address. Uh, if the , if the buyer and the buyer's agent give us the opportunity , uh, Hey, I'm gonna write this offer on 1, 2, 3, 4 Main Street. Hey, let's put that through Fannie Mae and Freddie Mac's automated underwriting system to see if we get an appraisal waiver. Yeah . Because that is awesome. Then we, we highlight that on the pre-approval letter and we say for this property, no appraisal is needed. Yeah.

Speaker 3: 20:03

At , at this offer price and this down payment amount we can go in before the offer's even accepted and give the confidence that no appraisal will be needed for loan approval. And then buyers can feel comfortable not writing an appraisal contingency at all. And the offer Right . Which is great, removes all uncertainty in terms of the purchase price, which I think sellers love. Uh , especially. Right.

Speaker 1: 20:24

Another thing we'll try to do is, you know, let's say that there are assets the , uh, buyers don't really intend to use, but that we can document. Yeah. You know, let's say they have a retirement account that you don't really don't wanna touch that, but we can point to it and say, Hey look, there's an extra $25,000 mm-hmm <affirmative> . We can write the pre-approval letter and they can write their offer based on that larger down payment, which looks better to the seller. Oh yeah. And

Speaker 3: 20:47

Uh , again, this is the name of the game. It's like how do we make this most attractive to the sellers? Right. I think a real life thing that sellers , uh, care about , um, in addition to obviously the sale price is how fast are they gonna get that money? AKA how fast can we close? Right. I was texting a personal friend that him and his wife, they have a , a 2-year-old baby girl, they've been kind of thinking about buying for a while now. And every once in a while he'll text me a listing and say, Hey Tim, can you run some quick hypothetical monthly payment numbers for this property? So we were texting back and forth on Thursday and I said, Hey, I'm looking at the listing. I noticed that in the listing remarks it says seller wants to close ASAP all caps, three exclamation points. Right. I'm like, Hey, just know, like we can do a 20 day close. Like we've already gotten him rock solid , pre-approved, super strong, you know, their first time home buyers , no other property to sell. I said, in addition to a , a healthy offer price, if you guys are really serious about beating other off other offers, write a very aggressive close date. Right? Yeah. Consult with your trusted loan advisor, Tim, to make sure that it's doable. But if you're given the green light to do that, that's an easy no cost way to make your offer more appealing. 'cause if the seller gets that offer and says, oh my goodness, we can close on May 20th or whatever, it's like if the , uh, everything else being equal, if that's compared to a June 15th close from someone else. Right. It's , they're gonna like it . I'm gonna , I'm gonna get my money three weeks early,

Speaker 1: 22:17

Can give you a leg up. Yep . So speaking , you know , so a lot of times we're saying people have to offer over asking , so I actually ran the numbers for all the home buyers that we helped in 2024 and 2025. And , uh, 45% of our buyers over that period of time paid over asking , uh, 28% paid less than the asking price and 27% paid exactly at the asking price. Which of

Speaker 3: 22:40

Bill , I'll just say as a , as a caveat too , a part of that 27% that paid exactly at the asking price probably has a lot of for sale by owners looped into that could , unless you could

Speaker 1: 22:49

Excluded that

Speaker 3: 22:49

From the data. Right. Because in a for sale by owner, it's like both parties generally agree on the purchase price almost ahead of writing the contract. So Sure.

Speaker 1: 22:59

So of those 45% of our buyers who paid over the asking price, Tim, my question for you is, what percentage of those folks do you think then had their appraisals come in at less than the agreed upon sales price? Do you think it was 10% came in low, 20% or 30%,

Speaker 3: 23:16

10% or less?

Speaker 1: 23:18

It's , the answer is 10%. Oh ,

Speaker 3: 23:20

Okay. Alright . <laugh> .

Speaker 1: 23:21

So only one. So even when you're paying over the asking price, only one outta 10 times did the appraisal come in under that? Those

Speaker 3: 23:29

Are, those are good odds . Yeah.

Speaker 1: 23:31

And in fact , uh, 48% of those who paid over the asking saw the appraised values come back higher

Speaker 3: 23:40

Yeah .

Speaker 1: 23:40

Still than the agreed upon price. And so one of the ,

Speaker 3: 23:44

Which isn't even necessary, but it's, you know, it's nice. Yeah . <laugh>.

Speaker 1: 23:47

So what do you think , um, you know, what , what is the, why is it that so few appraisals come in low?

Speaker 3: 23:55

Well, I don't know , uh, if an appraiser would ever admit this publicly, but we know that when an appraiser goes out to conduct an appraisal on a purchase transaction, they have a copy of the purchase contract in hand. So they know what buyer and seller have already agreed on as a value

Speaker 1: 24:12

AKA first price , which is the best indicator of value.

Speaker 3: 24:14

Yeah, exactly. What is someone willing to pay for this place? Right. And then it's the appraiser's job to find the data in the market to support that value Right. Through, through comparable sales. So I think because they already have the target up on the wall, you know, they're trying to hit that target. Right. And I would be interested, it's like, okay, if , and I've had, to your 0.1 out of 10, I've had just a few , uh, customers in the last two years where they've written offers above list and the appraisal came in low, I think in almost all those cases. The appraisal still, it came in low to the purchase price, but it still came in above the original list price.

Speaker 1: 24:50

Oh, okay. Okay. Right . Yeah . So it's like , I didn't look at that, but yes.

Speaker 3: 24:53

Yeah, it's like if it came in low, it probably still came in higher than what the original ask was for the property. And it's, it's one out of 10. And so aside from what it does to your monthly payment for all potential home buyers out there, and we can do that math for you , don't be afraid to offer above list 'cause it's not as scary as maybe you think it is going in. That's

Speaker 1: 25:14

Right. Alright , when we come back, let's , uh, keep talking about some , uh, buyers that we've helped recently. You are listening to the Accu Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 25:26

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

Speaker 1: 25:35

Thanks again for tuning in today. Uh, Tim, we were talking , uh, right before the last break about, you know, a friend of yours who , uh, was gonna write an offer on a property where they wanted to close as a P but that's not always what sellers want. What do you , you got a different story on the other end of the spectrum.

Speaker 3: 25:54

Complete other end of the spectrum. Sometimes sellers want to be able to stay in their home for a lot longer, but still kind of get it , uh, you know, locked in that they're gonna sell it to somebody. Right? Sure. So I have a customer , uh, him and his wife have been looking in a specific area Menominee Falls for, for quite a while now. And they happened upon some homeowners that they knew through personal connections that were thinking about selling. So they said, Hey, you know what, before you put it on the market, let's just work something out here. You know, you save some , uh, sale proceeds on , uh, realtor commissions and we can get the house that we want and we can customize the deal to whatever Mr. And Mrs. Seller prefer in terms of the timing. So the seller said, sounds great. Love to sell you my home. I wanna stay there until September 7th, 2025. Whoa . Like, okay, no problem. Right. My , uh, buyers currently own a home that they do plan to sell, but to make their offer more attractive. 'cause even though it's a for sale by owner, I think there were actually a couple other parties that were still interested in this place, ironically enough. So he said, Tim, we we really wanna make our offer , uh, not contingent on the sale of our current home, at least in terms of the loan commitment. Right? Sure. 'cause they, they , they smartly wrote a 30 day loan commitment or financing contingency deadline into the contract, which all that means is that me as the lender, I'm gonna give them a loan commitment letter, which they will give to the seller on or before that 30 day deadline that says, I'm committed to buy your place. That deadline is at the end of May and then there's gonna be this three month gap where everyone's just waiting around for the actual closing to take place. Sure . So I said, Hey, we can do this, but here's the smartest way to do it. I actually shared my screen with him . We looked at two scenarios and I said, scenario one is the way we're gonna line up your initial loan disclosures for the purpose of getting a clean loan commitment without a home sale contingency. We lined it up to 5% down, which is the minimum required down payment for a non repeat home buyer . Yeah. Repeat home buyer , uh, single family primary residence obviously. And I said, Hey, this is what we're gonna show on paper for the loan disclosures and this is what we're gonna line up for the approval and for a loan commitment. And then after we deliver that loan commitment, I know Mr. And Mrs. Customer of mine , I know you're gonna go out and list your home. They're gonna list it probably early June, and it's a hot market. Their sale price is in like the meat of the most competitive price range. So a lot of people are probably gonna wanna buy their house. And I said, if you can get someone to buy your home on or before September 7th, we can easily pivot to the second scenario I showed him, which is, Hey, after we deliver loan commitment, you, you can not do 5% down If you've got your previous home sold on or before September 7th, you can do a much higher down payment , uh, obviously lower monthly payment as a result. You know, a couple different factors. I showed him and he said, yeah, that sounds great. I'm delivering the contract as I wrote it, which the sellers will appreciate. And then we have plenty of time to pivot to a whole new game plan, essentially. Yeah. If we have someone to buy our home, and they're probably gonna get someone to even close on their home maybe sometime in August, and then get post-closing occupancy Oh good. So they can, they can have their home sale completely wrapped up, money's in the bank, but then they have a place to live still until they turn around and , and buy the new home on September 7th. So this is a really key, I think part of our guidance, Brian , that we offer is not only like, how do we help you craft the most competitive deal, but then we show you what the future is gonna look like and we give you those options on day one. Right. Where it's like we're really kind of game planning for two different scenarios simultaneously. Well,

Speaker 1: 29:39

And what I like about, you know, the way you're thinking along with this customer is it would be great not to line it up so that they're selling their home on the day that they're buying the new one. So I really like the idea of some post-closing occupancy for them to make it smooth. Um, yeah. So you gotta, you know, the key is customize . You gotta , you gotta know what the seller wants. Sometimes they wanna close slow, sometimes they wanna close fast. And hey, can you figure out a way to make that , uh, happen? Right. Um, uh, when we come back , uh, I do have , uh, Fannie Mae's , uh, latest prognostications on where they think interest rates are growing. And so by the way, you're , it's too long of a fuse to lock in the rate for these clients that you're just talking

Speaker 3: 30:24

About. We did , we did talk about that too. I said these, and we showed rates with no points. 'cause I said, Hey, you know, Mr. Customer, the , the conversation about choosing to pay points or not in , in relative to the rate you get, we'll have that conversation in July. 'cause frankly, it doesn't make sense to even look at locking in rates now until we get into at least 60 days or less Within closing, then we'll actually probably have another meeting <laugh> where I'll show him all the different options and based on what rates are at at that time, he can choose if he wants to, you know , pay points or not. And

Speaker 1: 30:56

Maybe they'll have their accepted offer by then . Exactly. All right . Well, let's take a look at , uh, where the big folks at Fannie Mae, Freddie Mac think , uh, interest rates and home sales are going. Uh , maybe time for one more story after this. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 31:11

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

Speaker 1: 31:20

Welcome back and thanks again for hanging out with us today. Hey, Tim, one of the , uh, news things that I saw late last week was from CNBC , uh, reporting out on the Mortgage bankers association's latest , uh, weekly application numbers, which did show that applications to buy a home were down 4%, you know, for the week .

Speaker 3: 31:39

Na , nationally by the way.

Speaker 1: 31:40

Nationally. Nationally, that's right. Yeah.

Speaker 3: 31:42

But number means nothing for , uh, <laugh> for our listeners. But anyways , that Yeah , it's , it's fun . It's fun. Yeah.

Speaker 1: 31:49

The spin on it was, you know, ho home buyers are getting nervous or, you know, sure . About , about the economy,

Speaker 3: 31:55

Tariffs and economy. Yeah.

Speaker 1: 31:57

Whatever. But , um, in , in the meantime, you know, of course everybody thinks it's a lot about interest rates, which you know, are a factor but not as big. Uh , yeah . Certainly factor when it comes to the real world, probably mm-hmm <affirmative> . Well, Fannie Mae, the biggest thing there is in mortgage lending came out with their April , um, uh, housing forecast. And so the good news is that , uh, and by the way, we said at the top of the show that a 30 year fixed rate , uh, with 25% equity in all the right stuff is at around 6.875 with an a PR of 6.9 right now . And so Fannie's latest forecast is they think that the 30 year fixed rate will be down to 6.2 by the end of , uh, this year . Right . 2025 . Yeah. And they had previously predicted 6.3 <laugh> , and I should also mention, you can get a 6.625 mortgage rate right now with 25% down and all the other Right. Stuff. And that would have an a PR 6.74 'cause you'd be paying about one point , uh, 1% of loan balance to get that.

Speaker 3: 32:56

What's funny about these housing forecasts from Fannie Mae Bryan is that they have the, the boldness to archive all of their past forecasts, which is kind of a fun exercise. We've had some , uh, newer academic employees do this recently where we said, Hey, go find the August of 2024 archived forecast and then go look at that and tell us what they were predicting the 30 year fixed rate to be as of Q2 of 2025 AKA right

Speaker 1: 33:24

Now. Okay . Yeah ,

Speaker 3: 33:24

Yeah , yeah . So do you , do you wanna take a guess? 'cause I got the, I got the data.

Speaker 1: 33:27

Oh, you have it. I'm back in August

Speaker 3: 33:30

Last year . Yeah . What ?

Speaker 1: 33:31

I'm under six.

Speaker 3: 33:33

Okay . You're very close. They were predicting a 6.1% rate by right now. And you know, obviously as of the current forecast that they just released for April, and in Q1 , uh, of 2025, the average 30 year fixed rate was 6.8%. So literally, you know, three quarters of a percent higher than what they were forecasting last year. So this is proof to all the listeners that nobody, I don't care if you're Warren Buffett or Jimmy Buffett, you do not know where rates are going. Nobody does. Not even Fannie Mae because their forecasts are hilariously wrong

Speaker 1: 34:06

Routinely. Uh , yeah. Off. Yeah . And , uh, and it's been that way for a little while. Um, by the way, with all their fallibility , uh, baked in there, they're thinking that rates will be down to 6% by the end of 2026. Um, they have home sales , uh, going up by 2% , um, this year compared to 2024 and then up another 6.6% mm-hmm <affirmative> . In , uh, 2026. Hey, so that's all great theoretical , uh, information. I mean,

Speaker 3: 34:34

Low sixes would be lovely. I would not , uh, I would not turn that down. Yeah . If, if they were right on their forecasts

Speaker 1: 34:39

<laugh>, we hope that they are. Right. Yeah . Yes . So , uh, you know, it all comes down to you, you or your loved one, and coming up with that game plan that's gonna help you , uh, get into the winner circle. And that's something that we love to do. Um mm-hmm <affirmative> . Help people strategize for how to make their offer the best possible offer that it can be. Uh , you know, can we, can we get an appraisal waiver? Can we help you understand, you know, that the, the, the in dollars and cents, what does it mean to pay $15,000 over asking exactly , or $25,000 over asking what does that mean to your monthly payment or your, and or your money out of pocket ? Mm-hmm <affirmative> . Because that's what it all comes down to. Yeah.

Speaker 3: 35:21

We can't make the decision for you on if you want to buy a house or not. That decision is entirely up to you. But if you are thinking about making that decision and would like more information to maybe help guide the decision, that's where we can step in. And then through showing you those numbers of what, what the monthly payment would look like. Maybe it's not as scary as you thought, and then maybe that's the thing to get you off the fence and decide this is the year we're gonna do it, and then we can really help you the rest of the way from there. If you make the decision of it is the time we want to go buy a house, we'll help you the rest of the way.

Speaker 1: 35:53

There you go. Well, that's all the time we have for today's show. Thanks for joining us. You've been listening to the AC Mortgage and Realty Show on the biggest stick in the state AM six 20 WTMJ. 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.