The Accunet Mortgage and Realty Show

The Accunet Mortgage and Realty Show 3-21-2021

March 22, 2021 Accunet Mortgage
The Accunet Mortgage and Realty Show
The Accunet Mortgage and Realty Show 3-21-2021
Show Notes Transcript

This week’s Highlights:

  • Some things to note about home sale contingencies
  • Does your credit score really matter?
  • Mortgage Rates for this week



Speaker 1:

The acronym mortgage and Realty show is sponsored by academic mortgage and equal housing lender and MLS ID two five five three six eight, and academic Realty advisors, which is a separate company from, but still affiliated with Acushnet mortgage.

Speaker 2:

Welcome to the[inaudible] mortgage and real to show getting you inside information on buying, selling, and financing your home with expert advice, but accurate mortgage and Realty. And now here's Brian and David records. Hello, good morning. And welcome to the accurate mortgage and Realty show.

Speaker 1:

I'm Brian Wichert, the majority owner of academic mortgage and academic Realty advisors. Along with my son, David who's our chief client experience officer at accurate mortgage. If you've got a question or a comment you can call or text us on the acronym mortgage talk and text line, which is(855) 616-1620. And don't forget, you can also grab a podcast of today's show and our past shows wherever you normally get your podcasts. Hey, David, I saw that you were going to get to this a little later, but you got an email from a real estate agent in Racine and Kenosha that regularly listens to the shell. What was the top of that?

Speaker 3:

Uh, how to bring flexibility to the appraisal contingency because, um, as all the data shows and our stories reveal, we're, it's feels like we're setting the new high watermark, uh, every week that goes by, cause there's a ferocious appetite amongst buyers, uh, and not enough houses for sale.

Speaker 1:

And it turns out that this first story we're going to talk about a first time home buyer. Uh, he's telling me, yeah. You know, um, my two agents, it's a husband and wife team. They listen to your show every week. They're like, Oh, that's must do, must have listening. So thank you for all the real estate agents that tune in to the show on a weekly basis. Um, all right. So this first story about the first-time home buyers, they already have the rock solid guaranteed pre-approval in hand and they wrote a w one offer last week and didn't get it. Okay. They, and by the way, they wrote 10 grand over asking. All right, so now they're looking to buy, uh, in the, in the area is Germantown to Brookfield, including Sussex and Menominee falls in the three 50 to$400,000 range is where they want to end up. So I ran the numbers this morning, David and I went from three 25 to three 80 because they plan on overpaying. So I thought I'll look at listing prices that are lower. And there are in fact, one 88 such homes in those four municipalities, 17 of them already have offers. 11 of them do not, by the way, on the 17 homes with offers. Do you want to take a guess at the median number of days for those 17 homes in that sub-market between the listing price and the accepted offer date?

Speaker 3:

Uh, six calendar days is my guess

Speaker 1:

Seven. So a good guesser. You can, you can go to state fair and be a professional guests are all right. They are. Yeah. Yeah. So, so they're going fast and everybody kind of feels that, right. Um, they were only able to get into one of the two homes that they wanted to look at on Friday. And I talked to the, to the shopper late Friday afternoon is like, okay, we're going to look at these two homes. Turns out. Then I just texted him with a later cause it happens to be somebody who just started to work at Acushnet. Uh, so first time home shopper and a team member and what I think we're seeing by the way the home they went to look at is listed for around three 73, seven. Oh, okay. And I think what we're seeing the general strategy and I've did this even a year ago is you put the house out there on the MLS with the pictures, like on Tuesday or Wednesday as a listing agent. And then you say, but we're not allowing any showings until Friday at noon. It's like putting a jump. Is it, do they call that chum in the water when you got sharks coming? Yeah, I've done that without being in the water. Yeah. But that does make the sharks come right up to the boat. Yeah. And then, uh, and then, Hey, we'll, you can look at the house all the way till, let's say 3:00 PM on Sunday and then make us your offers. And we'll decide by, you know, Sunday at 10:00 PM who the winner is, that's the general technique, the feeding frenzy. So our, our buyers got a text from their agent on Saturday that said this came from the listing agent. Okay. Is it, we have 65 showings scheduled between noon, Friday and Sunday. I've already been contacted by four agents this evening, letting them know they're going to be writing offers, but have not received that yet. And so, by the way, if you're the buyer, you probably going to delay, submitting your offer until Sunday afternoon or closer to the deadline so that you don't give that listing agent AML right. To go, ah, I got a bunch of offers here all over it. Yup. Yup. Yup. All right. So the scenarios that, so this all comes down to how much over the asking price can these people afford to pay. Okay. And so we looked at a couple of scenarios. One is all right, Hey, if it, if, if you offer three 95, so 25 grand over asking if you offer three 95 and it happens, appraisal miraculously comes in at that number. You'll need about 22 grand, um, total money needed to buy cause they want to put 5% down. And your total monthly payment will be 2000, 240, including taxes, private mortgage insurance insurance, the whole schmear. All right. If you want to write an offer at three 95 and then give the seller 10 grand wiggle room. In other words, you say, I'll pay you three 95 and I will go ahead and still buy your house. As long as it appraises for at least 85 payment actually goes down because we can't lend no, no, I'm sorry. Your payment goes up by 80 bucks and your, uh, cash into the close goes up by$2,000 only. Alright. And then the third scenario we looked at is, well, what if you gave them 15 grand, a wiggle room? I will buy your house for three 95. That's listed for three 70 and also go ahead and buy it as long as it appraises out for three 80. Well then your payment is going to be$61 more than if it appraised out at the purchase price and you'd have to bring seven grand more to closing, not that bad compared to not getting the house. Okay. So, and then I, I customize the Rocksaw guaranteed pre-approval uh, so that it says, Hey, you can afford a three 95 home, but it only has to appraise out at three 80. And I'm hoping that the buyer's agent will use that as a, you know, to prove these people are good for it. You know, please take our offer. All right, when we come back, I got this, uh, follow up on this story because they were going to look at another house and I'll tell you the weird thing about that home and listing. When we come back, you're listening to the academic mortgage and Realty show on Wisconsin's radio station. WTMJ

Speaker 2:

Pole buying advice from guys who know it best. This is the accurate mortgage and Realty show with Brian Wicker on WTMJ. So we're talking about the bane of

Speaker 1:

Home shoppers existence, and those of buyer's agents just think about what a bummer it is to be working with a buyer right now, as a real estate agent. You know, you're, you're going to be spending all this time, showing people homes, you're going to write, you know, five offers and not win. Yeah. You know, maybe before you get the offer accepted on the sixth, go around. So you're spending more hours per closed sale, better to be a listing agent, for sure. Um, but, uh, anyway, we just illustrated how, Hey, these folks, we are now, this is kind of a, what is it? The mother of invention necessity necessity is the mother of invention. And so, as I was working with this first time home buyer, I realized, you know what, we got to communicate more clearly. So now, and I think we're going to start doing this and we've got to systematize this David so that the preapproval letter that I gave them said, you can buy a$395,000 home. And then I put in yellow highlighted with an appraisal as low as three 80. So we're explicitly telling you your buyer's agent, the listing agent and the seller, Hey man, you've got$15,000 wiggle room on, on this offer. If you're going to write the offer at three 95. And, and then just by the way, the agent who emailed you was wasn't clear on what we were, how we were executing strategy of giving wiggle room. Go ahead, David.

Speaker 3:

I was just going to say, cause what in your innovation, you know, uh, it's sellers are human beings who I'm sure, you know, these people in a Brookfield are going to be getting these offers and I'm maybe not in their wildest dreams. Did they think they might sell their home for, you know, a high number like they might be getting? And so, you know, I think it's to make them comfortable to be, um, perhaps their response is like, how on God's green earth? Are they going to be able to buy my home for this new high price? But what you've articulated is, you know, here's the wiggle room, uh, you know, here in case we can't quite get all the way up there on the appraised value that's okay. Which is what a seller wants. I think to know, it's like a safety blanket. It's like, we're gonna S we're gonna buy it for this price and we're gonna come, we're gonna try to get close. But in case we can't get there all the way on the appraisal, you know, here's, here's kinda the, it's like an in-between.

Speaker 1:

So what's going to beat the, our buyers is if somebody says, Hey, I'll pay you three 95. And I only needed a mortgage 200,000, okay. They're making such a giant down payment that the seller intuitively knows there's a wiggle room, but what we have to, what people bought homes in all real estate agents know is there is a separate, and this is unique to Wisconsin, by the way, there is a separate appraisal contingency. And that Wisconsin offered a purchase form that says, I will buy your house as long as it appraises for the agreed upon purchase price. Well, well that ain't cutting the mustard in today's market, right? Where people are paying more than the asking price. So then the next option, which is a check box says, Hey, and if it comes in low, I'll give you a copy of the appraisal. And then you, Mr. Seller can lower their price down to the appraisal appraised value. Well, that doesn't appeal to me. So the most appealing thing is the buyer who doesn't check that box and says, basically, I don't care what it appraises for. All right. Yeah. But then you better have a big down payment to go with that. Correct. And so what we're doing is writing this pre-approval letter for this first time buyer with 5% down. Um, so, so that's, that's going to be a challenge for them, what you, the real best thing is to get a gift from a relative, you know, so that you can rate the offer with a larger down payment. That is the best thing you can do. Um, but in terms of the actual appraise appraisal contingency, uh, all you gotta do, uh, real estate agents out there is changed the wording in lines three, 13, and three 15 of the Wisconsin offer to purchase. And of course, check with your sales manager or your company's attorney on this. But all you gotta do is strike the words, agreed upon purchase price and in whatever that minimum appraised value is that you're trying to articulate in Mar in the case of our buyers,$380,000. All right, there's still more to this story. So much richness because they're going to go and look at another property, but that seller had preemptively and proactively, already had their home spec already had a home inspection completed. Let me tell you a little bit more about that. When we come back, you're listening to the acronym, mortgage and Realty show on am six 20. WTMJ

Speaker 2:

Getting you into the home of your dreams. Here's more of the accurate mortgage and real to show with Brian record on new TMJ.

Speaker 1:

So we're talking about making aggressive, uh, offers to purchase in this inventory starved world that we are in, uh, David, what are the three main contingencies on a Wisconsin offer to purchase

Speaker 3:

The inspection contingency, the appraisal contingency and the financing contingency.

Speaker 1:

Right. And I learned a phrase when I visited Australia a couple of years ago, the get outs, those are called to get out, how can I get out of this contract? Well, it doesn't inspect. And so I, Oh, that's another thing that these home buyers are wisely doing. They're saying, Hey, we want a home inspection. Uh, but we'll pay for the first$2,500 of repairs, if any are covered. That's another

Speaker 3:

To learn that on the acronym, mortgage and Realty show that come on. That's, uh, that's in our bag of tricks there at eight

Speaker 1:

That's, right. That's in our bag of tricks and all right, so this other house that we're going to look at, the sellers already had an inspection done. And so they have made it known through their listing that if anybody writes an offer on her house, including an inspection contingency, we will not accept it because we've already had one done here. It is use ours. Wow. I've never seen that before.

Speaker 3:

Well, I was going to say super kudos to the seller and their listing agent to be like, let's, let's discover what might be wrong with your house before we're already, you know, engaged on our way to the wedding day. So,

Speaker 1:

Right. And we've talked about that on the show, but not for a long time, you know, and the longer you've lived in a home, like, okay, if you bought it a year ago, you had an inspection done and you fixed a lot of stuff and now you're going to list it. Okay. I could see going without it, maybe, but if you've owned your home for 10 years and I've done this on both of our homes, by the way, when we sold in 2010, it's been a long time. Yeah. I want to know what's wrong and I want to fix it before I go on the market. I don't want this interruption. It is just weird why you wouldn't do that. But anyway, in this home inspection, the roof is shot, done. The ski, is they all? Yeah. And Hey, you know what? The cool thing is, you're going to read this inspection. It needs a new roof and not going to put it on. So these sellers apparently are just going, yeah, Hey, you know what? Our house needs a new roof. And you know what? I bet they will sell it. It thins the herd. Right. And it also, if, if here's a true fact, if that's buyer says, okay, great, I got the money to fix the roof. Don't tell your lender about it. If you're getting a mortgage.

Speaker 3:

Okay. Yeah. You read my mind. I was like, but if we learn that the roof is shot, we'd be like, fix that before closing, you got to borrow a bag of money called the mortgage, fixed the roof. Before we give you the mortgage.

Speaker 1:

It's right before we go, well, we'll know we're going to fix it after. Um, let's see, is it winter? Nope. Not anymore. It's spring. So there's no reason that it's not like there's a layer of snow on the roof. So you're not going to be able to get by with what we call escrow holdback for post-closing repairs, because it can only be done when it's weather-related. And that's because your lender wants the collateral, the house to be in good and marketable condition. Um, so that if you stop making the payments, we can sell it without having to do any repairs. So, uh, so the buyer who buys that house is going to hope that a, maybe they'll get an appraisal waiver, which happens if you run it through Fannie Mae or Freddie Mac's system, or that the appraiser, that the roof isn't so bad that the appraiser is going to notice. Well, geez, unless it's in the, I should try to find the listing. I hope it's not in the listing remarks. Like yeah, this roof needs replacing. Cause then this, then the appraiser's going to find out. So hopefully it's just in the inspection. Oh, wait, I wonder, I wonder if they posted the inspection on MLS. Oof. So the appraiser might, might be finding out no matter what, um, in this particular case,

Speaker 3:

Which the appraiser, the appraiser does not pretend to be an inspector, but if a material fact is, you know, uh, provided again, w the, the appraisal is how's the marketability, how's the, you know, status of this home. Ah, it's got a shot, rough. It's like, well, then the marketability is less, as you described, when you started telling this story, it's going to thin the herd of buyers who might want to buy this house. And so an appraiser might spit up on this material fact, and even, you know, you disclosed it in your inspection, you know, your pre-listing inspection work.

Speaker 1:

Yep. And, and if the, if the listing agent, you know, attach it as an additional document to the listing, well, then the appraiser's going to look at it for sure. And discover that and probably call it out. Because remember, if it's so bad, like, just like, if it, if an appraiser sees water in the corner of the basement, he's going to call that out and say, um, this is subject to the, buyer's getting an inspection to tell us about, you know, what's that water, same thing. If he sees cupped shingles, you know, on the roof, uh, yeah, this is subject to all right. When we back, I've got a story about a Minnesota customer looking to refi, but he's at the same time buying a home in Florida and didn't understand all the hassle factor that he went through. We'll give you those interesting details right after the news,

Speaker 4:

Don't break the bag to get into a house back to the accurate mortgage and Realty show with Brian Wicker on WTMJ. All right. So, uh, last week we

Speaker 1:

Courted a somewhat seismic change in the mortgage world where our panels at Fannie Mae and Freddie Mac said, we don't want to buy as many loans that are secure, secured by, um, second homes and rental properties. And so we saw this flurry of intermediaries that, you know, the guys we sell the loans to who then service the mortgages on behalf of Fannie Mae and Freddie Mac. They worsen. Some of them really were some the pricing on, uh, investment properties and second homes to the point where basically they said, we're not buying any, uh, we, one of our biggest buyers of mortgages from Akon, it didn't change their pricing at all on S on second homes. Is that still true as at the end of the week? Not yet. And, uh, you know, so, so this next story has to do with a referral of a Minnesota resident, uh, from his financial advisor in the twin cities. And this, the original referral was, Hey, this client of mine needs to refinance his primary house. Well, it turns out and I ended up talking to him Friday afternoon. It turns out that he's also in the process of buying a second home in Florida, but the financial advisor in Minnesota didn't know that we loaned in Florida, that I can, I can lend in Florida. So it's too late in the process for us to help them out. But the comment that he made that was instructive is Brian for crying out loud. I got a couple of million dollars in investments with Bob and I could pay cash for this house in the villages in Florida, I got 800 credit scores. I am, I would never have been more a hassle. I can't believe the amount of paperwork that they're asking of me to buy this little$400,000 home in the villages. So I explained to him, it's not you Dave, because modern mortgage lending is not really about whether you're credit worthy. Oh. And by the way, his other observation was, yeah. When I was going to refi my Minnesota home, you know, my current loan is with new Rez. Well, they wanted me to get an appraisal. I'm like, my house is worth 900,000. I only owed 200. Why the heck? And you already have my mortgage. Why would you need to get an appraisal on my home? Okay. So, so what Dave is the part of the puzzle that he's missing. And I try to gently explain is this isn't about credit worthiness and making sense. This is about manufacturing to the, you know, specifications of those guys called Fannie Mae and Freddie Mac, and, you know, cause new Rez, isn't really your lender. What I send my payments there every month. Yup. Who are they? David?

Speaker 3:

It's the user. Well, yeah, it's the end, uh, end user. It's the end recipient of your monthly mortgage payment. As you like to say, the teachers pension fund of Oslo, Norway, or let's just say the Wisconsin teacher's pension fund who says, Hey, we've got a couple of billion dollars. We need to invest. I know let's buy mortgage backed securities. This is about, as you said, creating investment grade securities, that wall street can turn around and sell. So it's not about, I mean, congratulations, you got a couple mil, 800 credit, lots of equity, but we need to manufacture your mortgage. If this is not make sense, lending, which I think some borrowers want,

Speaker 1:

Think it is overall mistakenly. Think that it is. And so new Rez is simply collecting the monthly payments and passing them along to Fannie Mae who then passes them along to the state teacher's pension fund of Oslo, Norway as new Rez, doesn't have a say in it. It's like, Oh, you want to refinance? That is a brand new mortgage widget. And to give you a brand new mortgage widget, uh, we need to manufacture it again to the same specifications. And guess what the difference is in this gentleman's case, the difference is that he was working when he got his most recent mortgage on his home. So here's my W2. Here's my pay stub. Now he's retired. And so he's going through the pain of taking withdrawals out of his IRA account in order to manufacture income. Yeah.

Speaker 3:

It's much nicer than I, uh, you know, you're gentle and sometimes you just got to bring the hammer. It was just like, look, do you want this awesome interest rate? Then you have to dance according to the rules of Fannie Mae and Freddie Mac, right?

Speaker 1:

You got to dance to that music. Well, the PR, but after I explained this, that this is not about you being credit worthy, Dave, this is about manufacturing to the specifications of Fannie and Freddie. And that means when you're retired. Yes, we have to demonstrate any lender has to demonstrate that you are taking$10,000 out a month out of your IRA. Now, this particular lender in Florida was torturing him worse and verifying all his assets account, all of his asset accounts like 10 of them. So maybe they're going overboard, but too late to switch. Uh, and, um, we're going to hold off on doing his refi until after that closed, after that, uh, refinance closes. All right. Do we have time to do a rate update after this? I'm sure. After this next break. Alright. When we come back, we'll take a look at where rates end of the week. You're listening to the accurate mortgage and Realty show on the biggest stick in the state am six 20 w T M J

Speaker 2:

Important home buying questions and answers you can count on. They say is the accurate mortgage and wielding show with Brian Wicker on WTMJ. Hey, one other little Coda on the Minnesota future refi client of Aconex, who's buying in Florida. That same place,

Speaker 1:

A lender who by this client felt so much better after I explained to him, it's not about you being credit worthy. It's about manufacturing, your loan to the specs of Fannie and Freddie. He's like, Oh God, that makes all the sense in the world. Why, why didn't my lender in Florida? Tell me that because they're not very smart. They were just sitting about the business of annoying you. Uh, anyway, um, uh, the other thing about them all is he had applied with the mortgage company that has the rocket for his Minnesota refinance. So not only was he going to get hosed probably or pay too much in closing costs, um, the lender in Florida is like, what is this inquiry from such and such mortgage? Well, I'm refinancing Dolores my payment. Well, that's no good. Ah, why can't you just show them, you know, like the application and the loan estimate and everything that says, yeah, I'm Lori, my payment. He ended up withdrawing his application because the Florida lender was making such a stink about it, which is absurd in my opinion. Uh, but nonetheless, since we're only like three weeks away or two weeks away from the closing on the Florida home, that's why we said, why don't we just wait until that closes? And then we'll look at refinancing your, your Minnesota property. Hopefully rates stay calm. But yeah, that's another good reason if you know that, Hey, the mortgage lender you're working with happened could handle both properties. You know, that you want to finance, like we're doing. And I got a story about that for a Florida slash Wisconsin guy. But before that, where our rates right now is we?

Speaker 3:

Yeah. So on a purchase, uh, you could borrow$250,000. And if you put 25% down and escrowed for your taxes,[inaudible] could do a zero loan cost option for 3.2, 5%. The APR is 2.2,

Speaker 1:

Wait a minute, three[inaudible]. But for zero loan costs versus no, I want the lowest.

Speaker 3:

We want that trophy rate. Okay. 2.9, 9%. The APR is 3.1, but it would cost you$3,900 in cost in order to it. Yeah. I want her to live there forever.

Speaker 1:

I want the 2.99 bragging rights. And I know again, how long would take to make back the cost of it.

Speaker 3:

Yeah, of course. You put me on the spot with that. Um, I'll let me get back to you,

Speaker 1:

But what about, but

Speaker 3:

I wanted to, I wanted to point out that, um, you know, so we've talked about kind of the consternation in buying a second home and I'm here to tell you, so, so we've, it's in flux and, but we have one lender who's effectively raised the interest rate on a second home purchase by about a half percent and on that too. But on that$250,000, you know, loan, the difference in the payment is, uh, only about 125 bucks. I don't know if I have that right here.

Speaker 1:

Probably not going to slow somebody down if they want that, bring them home.

Speaker 3:

Yeah, exactly. Cause you're buying a second home because you know, I don't know, Florida has nice weather. So, um, I, although it is, uh, a change in changes, you know, maybe scary or uncertain, you still have the opportunity I think, to buy that second home and don't let race necessarily get in the way of that, uh, have your answer. So the difference between two 99 for$3,900 in cost and three and a quarter for zero loan costs, uh, it would take the difference in the payment is$35 a month and it would take you over nine and a half years to make that money back in my Oh,

Speaker 1:

Oh yeah. That's what we show people every day is, Hey, do we want to wait nine and a half years just to get to the break even

Speaker 3:

Point and only event because you pick up the phone and be like, David, I'm finally saving 35 bucks a month. I know you just turned 40, but you know, I'm finally saving 35 bucks a month.

Speaker 1:

Yeah, yeah, yeah, yeah. It's about what about a 15 year fixed, uh, to refi

Speaker 3:

You are, uh, to refi? Yeah. Uh, 2.6, two 5%. And the APR is 2.7. Uh, and that would run you, uh, only$1,800 in costs.

Speaker 1:

Pretty awesome. Okay. So there's there just look high compared to where we were. So rates have ticked up know from their all-time record lows, which we reached the first week in January, but there's still great folks. And you know, there are people that feel like they've missed the refi bus. Um, check it out, you know, a great time to tap all that fresh equity in your home. Right? When we come back, I've got a bridge loan story, uh, for you trying to help, uh, a move up buyer. And then also a double refi story. You're listening to the academic mortgage and Realty show on am six 20, WTMJ

Speaker 5:

Your TMJ W2, 77 CV and WK T I HD to Milwaukee from the annex wealth studio. This

Speaker 2:

Is Newsradio. WTMJ getting you through the home buying process. Welcome back to the act net mortgage and Realty show with Brian Wickers on WTMJ waiting for the break of day 25 or 64 by Chicago. We've at the song is 50 years old now.

Speaker 1:

Well, I'm working. All right. So I'm talking with the customer, this happens a lot. It's like, okay, we're gonna refinance, uh, your primary residence in 51 years old, 51 years old, 1970. All right. At least I'm older than that song. Uh, but yeah, that's kind of crazy, isn't it? And I still like it. Okay. So I'm taking a look at refinancing their, a condo in Waukesha County, which happens to be non warrantable, which means that not eligible for sale to Fannie Mae or Freddie Mac. And that happens oftentimes when you buy new construction and they bought it about a year ago. And the reason why that happens is the project isn't sold out enough to make it safe for Fannie Mae to say, okay, we'll buy a bunch of loans in here. And that's because the developer is still selling units. And so the risk is that, well, what if that developer gets in trouble like happened in 2008 to 2012 and they still have 50 more condos to sell, you know, what are they going to do? David discount, just to get us through, they're going to discount or they're going to, um, put more amenities into it. Well, we're going to include the granite, uh, you know, counter and the totally lift and a gold toilet and all that kind of stuff to make their new units more attractive than the existing ones, thus making it harder for somebody to dispose of their, um, existing condo if they run into financial trouble. Well, anyway, so that means that we're going to do another 10 year arm, uh, for these clients as a refinance on their primary residence, which is the condo. And, uh, but then it's like, Oh, they also own a second home condo in Florida. So, well, why don't we take a look at that? As long as we've got you in for surgery operating, you know? Yeah. And we're taking out your gallbladder, you know, should we take out your appendix to, you know, maybe that's a bad analogy, but where you're having some work done, let's, let's see if we can get a benefit and much to my surprise. Uh, there was a benefit to refinancing the Florida property. It's going to reduce his mandatory monthly payment by a ton like 250 bucks. He still wants to go pay that loan off fast, but having that flexibility is worth real value and the costs are minimal and it's only like a hundred thousand dollar loan down in Florida, but then he calls me up or he emails me and says, Hey, should I pull out another hundred grand on my Florida refi? Cause we just got the appraisal back, which was an exterior only appraisal. Why? Cause we're refinancing a Fannie Mae loan. And so then under the COVID guidelines, we're allowed to get an exterior only appraisal rather than having the appraiser go into the home. Hey, should I pull on another a hundred grand and put it on that 15 year and paid down the balance on the 10 year arm? I said, no, no you shouldn't. And, and the reason is taking cash out, goofs up the pricing Fannie Mae and Freddie Mac have now said, you want the best rate on a loan that's to buy a house. The second best rate is just a simple refinance where we're not lending you any more money in any material way and the third best pricing or otherwise known as the worst is if you're pulling cash out. So there's one reason we don't want to pull a hundred grand cash out. Another reason is now I would have to send the appraiser in there and do an interior inspection because when you pull cash out, you can't get away with an exterior only appraisal. And thirdly, I can show you exactly how much more monthly payment you should make on your Wisconsin home to get the same effect as to what you were trying to accomplish by adding them, assigning financial engineering folks. And, and it's, um, it's what we love to do at Econet mortgage. Um, I don't think we have time to follow up on a story that we started last week. We're helping a move up buyer, uh, who wants to sell their home in Wauwatosa and buy a home in the general Brookfield area without selling. Okay. And so we're looking at various ways to extract as much equity from that home in Wauwatosa as possible

Speaker 3:

Having to move twice, they want to do it in one day.

Speaker 1:

That is correct. Yeah, that, that is yes. One fell swoop. And what's interesting. Um, is we have four sources for bridge loans in folks, a bridge loan is just a, basically a giant home equity line of credit that everybody knows is going to get paid off soon. Okay. And what we have to be mindful of when we're practicing our craft is what are the underwriting or loan approval criteria of their bridge loan lender, right? Not just our criteria on the first home. So it gets a little complex, but luckily we have four different ways to skin that cat I'm in the midst of that diagnosis. And maybe we'll have an update on that, uh, this coming week. All right. So

Speaker 3:

What have we learned on today's show David? Well, what do you want to say? What's the thing that I was going to say it is, it is tight. You are, it is sharp elbows to go see reasonably priced houses out.

Speaker 1:

That's right. I think they call it a flagrant one. I saw some of those on the college basketball team.

Speaker 3:

Oh, okay. The center gave the right,

Speaker 1:

Right elbow to the, uh, uh, defender right in the neck. Yeah. So it is a very difficult market. You need to have the best team working for you with all the tools in the toolkit. We've now made our racks out guaranteed. Pre-approval better than ever. And we'd like to help you become a homeowner interest rates are up a little bit, but they are still nothing short of fantastic. All right. And all you gotta do to get started with either a rock solid guaranteed pre-approval or a no social security number of refi checkup is click on that blue button@econet.com. That's all we've got time for today. You've been listening to the academic mortgage and Realty show on am six 20 WTMJ. The proceeding was a paid program. Advice and opinions expressed during the accurate mortgage and Realty show are solely that of the hosts or guests of academic mortgage and accurate Realty advisors and not WTMJ radio or good karma brands, Milwaukee LLC.