The Accunet Mortgage and Realty Show
The Accunet Mortgage and Realty Show
The Accunet Mortgage & Realty Show 9-1-24
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: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 Brian and David Wickers.
Speaker 1:Welcome to the Accu Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with Kinnan Realty Advisors and the majority owner of Nette Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. And I'm here again today along with my son David Wicker, who is one of ED'S senior loan consultants, and also our Chief Client Experience Officer. His individual NMLS ID number is 3 2 8 8 4 7. If you've got a question or a comment, you can call or text us on the WTMJ talker text line, which is 8 5 5 6 1 6 1 6 20. So, David, we got week number two under our belt after the new world of real estate , uh, commission divvying up under the settlement between the National Association of Realtors and a bunch of plaintiffs in a class action lawsuit. I read
Speaker 3:That the guy Zer , who was one of the people who sued, he's opening a flat fee brokerage account , a brokerage firm
Speaker 1:Oh, flat fee brokerage firm. So ,
Speaker 3:Ironically,
Speaker 1:And , and so just to remind everybody once again, what changed back on August 17th is that , um, now if you are a buyer out there looking for a home , uh, you have to sign a buyer's agency agreement. Yeah . If you want to use a buyer's agent to negotiate on your behalf Yeah. And to help you find a home. And in that agreement, you have to stipulate how much you're willing to pay your buyer'ss agent. The big question mark is are you going to get any help from the seller, right. To help pay your buyer's agent, which in the past was a slam dunk. It was assumed because in the old world, which has been around for decades, the listing broker would agree via the multiple listing service and tell all the public publish
Speaker 3:Published publicly pub
Speaker 1:Yeah. Published pub . Yeah. Published publicly and say, Hey, we, the listing broker are willing to pay X percent to any other broker who brings us a buyer. And so it appeared for decades, you know, that the buyer wasn't paying any , paying anything for their , uh, buyer's agency services. Yeah . Uh , because it was kind of baked into the listing commission. Well, so now, under the new settlement, let's put, let's put on the other hat and say you're a seller. Yeah . And you go, Hey, I'm gonna sell my house. Now. Well, that listing broker can still come to you and say, Hey , uh, just as an example, I'll list your home for 5% a commission and tell you what , um, we'll offer a 2% co-broke fee to any other broker who brings us a buyer. Yeah. And that is still possible. In fact, you had a situation , uh, this last week Yeah . Where that was the case, correct?
Speaker 3:Well, absolutely. And as a buyer, you don't know that until you are engaged about a specific property. The old world you described, it was templated. You might say that that existed for, for my client, they wrote an offer on a home where probably when they first saw it, they didn't know if there was gonna be any help from the seller for buyer's agent compensation from
Speaker 1:The seller or the seller's listing agent. Right.
Speaker 3:And turned out that the seller was offering a 2% compensation. And when they, when their buyer's agent then called to inquire not just about the listing, but terms that the seller would consider or was offering their buyer's agent then executed in addition to the contract itself. Hey, by the way, if your seller and the listing agent, please remit X percent from your listing fee to me as the buyer's agent broker, and we'll do up this contract.
Speaker 1:So the bottom line in your case is the buyer's not gonna have to come out of pocket with any commission to pay their buyer's agent. Well , is that true?
Speaker 3:Or as I like to walk everybody through, and whose money is it that the seller receives to then pay? Correct . Their listing agent, the buyer's agent pay off their mortgage. Maybe it's like, well, it's the mortgage money and my down payments. So, yeah .
Speaker 1:So you are paying it, but it's not a line item. It's baked into the purchase price, right ? In your case, yes . It's not a line item on the well closing statement like points or an appraisal fee,
Speaker 3:Which that begs the question. And for this particular client, they didn't have to walk down this path, but it was like, would they have wanted the home at this price if there was no buyer's ? Right? No buyer's agent compensation from the listing side, the answer's probably, but it's now an element of the conversation, both on the lending side and on the real estate side, more than it's ever been pretty much on purpose. That was a key . That was the point , key element of the settlement.
Speaker 1:They want more negotiation. So again, when you go to list your house, you can still agree with the listing agent, Hey, I want you to offer , uh, X percent to any cooperating brokers who bring us a buyer. A question then becomes, well, what happens if that broker or agent brings the buyer? Am I still paying the full 5% that I agree to, or am I gonna get some kind of a discount? Now, I, I heard from another , uh, agent, a smaller brokerage , uh, something different that one of the large brokerages is doing in the new world. We'll cover that when we come back and also do a little review of , uh, home sales . Uh , from July, you are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ
Speaker 2: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:Welcome back and thanks for hanging out with us , uh, this morning. Uh , David, we're talking about the new world of real estate brokerage commissions,
Speaker 3:Commissions and conversations is really what it is, right? It's it's not only , uh, it's bringing to the forefront an element that was benign. Yeah.
Speaker 1:Yeah . A long time kind of assumed conveniently. Yes. And , uh, and , and so you had the example in our first segment of a , uh, seller who had agreed with their listing agent to have that listing agent offer a 2% , um, buyer's agency co-broke Yeah . As it's called. So we're just assuming we don't know what the, what the listing percentage was that they're gonna charge the seller, but let's just assume for the sake of our discussion, it was 5% total. And they said total. And they're saying, Hey, you know what, if somebody else brings us a buyer, we'll pay that broker 2%. Mm-Hmm. <affirmative> . And , and we, the listing agent will keep three. Um, the other alternative, and I heard this from a broker, 'cause right now what buyer's agents have to do is before they write an offer, they have to contact the listing broker. They're probably doing this at the time of arranging the showing. Yeah . And say, Hey, what's the story on any help the seller, either you as the agent or the seller themselves, are willing to give to help the buyer pay their buyer's agency commission? Yes . Do you have a comment?
Speaker 3:I was just gonna say again, what matters most to the seller, speed to closing slow closing is, you know, what other terms does the seller most interested in other
Speaker 1:Than the net price after any assistance on a buyer's agency commission? So, so the other alternative , uh, for a seller is to say, Hey, you know what, let's let the free market tell us, you know, what's what, relative to this buyer agency thing. And they could just say, you know what, I, I want a listing contract for 3.6%, and then there's a , a new spot
Speaker 3:With nothing specific about me, the seller, or my listing broker or listing broker . Broker. Right. Kicking in.
Speaker 1:So, so then, and, and I , I , I heard through the grapevine that one of the larger brokerages is taking that route. And then what they're basically telling buyers is, Hey, on that new line, 544 on the Wisconsin off offered a purchase, you fill in, you know, what do you want the seller to pay in terms of a buyer's agency commission? And you can write it in as a percentage or a dollar amount. Yeah. You know, do you want me to kick in 2%? Do you want me to kick in 2.4? Do you want me to kick in three? And then it's just like,
Speaker 3:Well ,
Speaker 1:It's a term mathematical calculation, right? It's, well,
Speaker 3:Right. It's about price. All the, all the old tr old elements, price con financing, contingency inspection, appraisal and appraisal , uh, sale of home contingency. And now there's a new one online , 5 44 like you said, which is the most transparent. Thank you. Yeah .
Speaker 1:Yeah. The most transparent way to go about it . Because hey, now you're, you're gonna take your offer price and you're gonna subtract out whatever you're being asked to kick in. Mm-Hmm. <affirmative>. Now, you know, from a, from a convenience standpoint, you can just say, Hey, you know what? I wanna offer 2%. 'cause I want to have the most buyers able to buy my house. I'm thinking as the seller now. Mm-Hmm. <affirmative>. So I'm just gonna tell my listing agent, yeah, let's go ahead and offer 2% for a coal brokerage fee. And I'm baking that into my asking price, right ? Because I want the most buyers to be eligible. 'cause frankly, folks, you know, 2% on a $400,000 home, that's eight grand . You know? And that is like a new thing for buyers to think about. So my prediction, I don't have any stats on this yet, is that there is gonna be assistance in most cases , uh, provided either by the listing broker or by the seller themselves to help the buyer pay their buyer's agency fee. Uh , so I think there's gonna be some level assistance because buyers don't have a lot of extra money. You know, maybe they do in the million dollar and up price range. Yeah . Right . But I think for normal people, I can't afford that. We have seen some instances, not many so far, where the , um, buyer has signed a buyer's agency agreement to pay 2.4%, and the seller's only offering two mm-Hmm. <affirmative> . And so our buyer is having to come up with a difference of 0.4%, which on my same $400,000 , uh, example, would be about $1,600. Yeah . So it's a new wrinkle , uh, that I don't think a lot of buyers. What have your conversations with buyers
Speaker 3:Been like ? Well, with buyers has been like, and how are you going to compensate your agent to help you? And a lot of that, it's an open-ended question because I think a good practitioner of mortgage is mindful of if you want that house bad enough, but the seller's not pitching in, is there a way that we can design the mortgage where you can still get the house?
Speaker 1:Yeah. Yeah. Well , I've been asked, and I'm sure you have too , can I finance that? Uh , you know, probably my , my well , and the answer is, well, you just make a lower down payment. Well , yeah . That's gonna impact, you know, whether you pay PMI or whether you, well ,
Speaker 3:Yes. But let's say, is it possible
Speaker 1:In most
Speaker 3:Cases. In many cases.
Speaker 1:In many cases, right. But it has consequences. Alright, when we come back, let's do a little , uh, recap on , uh, what the housing market was like for the most recent stats we have. You are listening to the Academic Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ,
Speaker 2:Getting you into the home of your dreams. Here's more of the ACU Mortgage and Realty Show with Brian Weer on WTMJ.
Speaker 1:Welcome back and thanks again for joining us , uh, this morning. So David , um, in July , uh, there were 1,782 single family detached homes and condos that changed hands with the help of a member of a National Association of Realtors. That's of course, according to the multiple listing service. And that happened to be 57 more than what sold in July of 2023. Mm-Hmm. <affirmative> . So a touch more , it's a 3.3% on a percentage basis. Here's , uh, you know, a number. I know you're gonna react to the median price, the median sales price of in July. This is in the five county metro Milwaukee area. 366,250 bucks . An increase of 11%, or holy cow, $36,000 more than the median price of July and July of 2023.
Speaker 3:Nah , Brian , I'm just gonna wait for home values to come back to reality.
Speaker 1:Yeah. Yeah. Still waiting . How's that working out for
Speaker 3:You ? Yeah, you were waiting last year. You are gonna keep wound , keep on waiting.
Speaker 1:Yep . So that's, that's kind of a , uh, that's , that's a big number.
Speaker 3:Go ahead. It's a huge number. Well, and I just, again, and we talked about this last week and I feel like it's gonna become a theme, but the bifurcation in markets that are saturated with listings versus markets that are not in southeastern Wisconsin, we don't have tracked building of new homes. Right. And compare that to Florida or Texas, like the amount of inventory that might be available to you in those markets is a whole other story compared to our own backyard. And so, reading something online, well, I feel like we're gonna have some juicy, dumb headlines that we can take a stick to over the next couple months because national headlines are gonna be like, Hmm , slump this increase in inventory that it's like, doesn't matter.
Speaker 1:Yeah. What is it in the neighborhood and the price, price range where you are shopping for a home, you know, right now? Yes. Um , the good news is that listings exceeded sales in July by about 300 units. There were 2084 , uh, homes and condos listed for sale. So that means supply is growing. That's a good thing. If you're a buyer, go ahead. You gotta cut . Yeah,
Speaker 3:No, it is grow , which is good, but like, let's not growing does not automatically mean balanced. And so it's less imbalanced. But that doesn't mean we have arrived at balanced.
Speaker 1:I would agree with that. Uh, a couple of other bits of interesting, I'm gonna call it good news for buyers, cash buyers made up 23% of transactions in July, and that's down, it was 25% in July of 2023. So a little less, you know, cashy. Okay . But that's still a big chunk. Yes. Right. One out of four ish. And then , uh, here was, here's the best number I've got for buyers. Uh , and it's kind of a double-edged sword. Air quotes, only 56% of buyers still paid over asking in July. And the only reason that looks good in comparison is that a year earlier it was 64%, almost two thirds. So that's quite a drop. And uh, I , you know, now it's still more than half, but it's less heated. You gotta comment on that <laugh> .
Speaker 3:Well, so here, this was on my mind before we got started today. Do you remember the summer of 2021? No. Rates were low. No, no, no. Oh yeah. Rates were low. And the amount of competition, man, it felt like buyers were drunk. Sailors bidding on homes because everyone felt flush. 'cause rates were incredible.
Speaker 1:2.875 or three and a half or
Speaker 3:Whatever. Well , exactly. Okay. Turns out all of those people who paid Oh my $40,000 over the list PR 50,000, turns out all those people were Right.
Speaker 1:Yeah.
Speaker 3:And paying whatever that price was. They've had nothing but appreciation since those wild times. Summer of 21, it occurs to me that as interest rates continue to cooperate, as Chair Powell arrives at, we did it, we conquered inflation,
Speaker 1:It's time to start cutting rates. Well,
Speaker 3:I feel like a repeat of the summer of 21 could be upon us Hmm . As buyers come back .
Speaker 1:Okay. It's a demand increases with rates coming down. Well,
Speaker 3:And all those people probably are , they're probably making more money, you know, now at their job than they were last year, two years ago, three years ago as well. And if you've been on the sidelines, those hungry buyers are gonna come back. And the competitive nature in our own backyard again could return. So why wouldn't you wanna get in now? It's a , it's about to be fall time . It's about to be winter time . And everybody in the wicked families only ever bought a home when there's in the winter , the snow on the ground. Yeah. <laugh> . That's the time to get at it while everyone's hunkered down for Christmas.
Speaker 1:Yeah. If you can find a home that you wanna buy. Right. Right. 'cause inventory is more restricted. Hey , one other quick nugget. Uh , only 38% of people buyers paid $10,000 or more over asking in July. And that compares with 47% a year earlier. So we're seeing a little bit cooling. I mean, it's still not cool. It's not as ,
Speaker 3:Instead of a hundred , instead of 109 degrees outside, it's 104. Alright.
Speaker 1:When don't we come back? David's got a condo story Yeah . To share with us. But right now it's time to turn it over to the WTMJ Breaking News Center.
Speaker 2: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:Welcome back to the Anette Mortgage and Realty Show. I am David the taller, younger, more handsome wicker. That's Brian the wiser over there. Dad. I, I've been doing this for quite a while. Such that clients that I helped years and years ago are now themselves moving on to their next chapter of life and home ownership. Okay. I got a call this past week of someone who I had helped, like probably six years ago, buy a condo. He was a young guy in his mid twenties by himself and didn't need much space or preferred the life that condo living provided.
Speaker 1:Sure . Just slammed the door and leave. No lawn mowing. Exactly . No weed pulling, no painting.
Speaker 3:And so he , he reached out because he's onto that next chapter for himself, but not for I guess the traditional reasons of like, you know, now I've got a significant other and a dog and a baby and a , you know, I really want to get that Home Depot credit card or whatever it might be. Okay .
Speaker 1:Okay .
Speaker 3:For him, he is thirsting to move to his next house,
Speaker 1:To a single family , detach
Speaker 3:To a single family home. Mostly because of his fellow neighbors in the condo association that he's a part of.
Speaker 1:Okay. Yes. Because when you buy a condo,
Speaker 3:You're joining a family.
Speaker 1:Yeah. You're joining a club that's hard to quit.
Speaker 3:And , and as he stated it to me, I'm tired of everyone not having the money to chip in to do the repairs that are needed to keep the condo up to code or at least in Yeah . Good and marketable condition.
Speaker 1:Well, 'cause remember there there's two things. If a condo is really well run Yes. They're anticipating those lumpy expenses, right . Roof. Yeah. You don't have to buy a new roof every year, but you have to buy it every 20 or 25 years. So
Speaker 3:Let's say it another way, it really shouldn't sneak up on you. You correct. You are like, the roof went on in 2005 and the guy told me it's good for 20 years.
Speaker 1:So we should , we should be socking away money every month and every year so that when it comes due And that's what a condo reserve study would do. Yeah. Right. You hire a professional oftentimes . Yeah . Tell us engineers. Yeah. And, and you ask them, Hey, for in exchange for money, can you please forecast out when we're gonna have to pay these lumpy expenses? Yes. And tell us year by year what we have to do with our association dues to make sure we've got the money. 'cause if you don't do that, then you have this thing called special assessments. Yes. And that's what I think your customer is talking about. Indeed. Is, Hey, we have to do X project , gutters, roof, windows, driveway, you name it. And so we need everybody to chip in five grand.
Speaker 3:In that example, they've raised maybe a quarter of the money needed for the big projects that need to get done on this
Speaker 1:Through a special assessment or , yes . Okay.
Speaker 3:So there's, there's two elements to this, right. The , the status of his soon to be old condo does not impact the approval of him purchasing a new single family home. If his income can swing two payments, if he still has the condo at the time he's buying the new house. Okay . And he's got the cash
Speaker 1:For for down payment.
Speaker 3:Yeah . For at , yeah . Uh , 5% down payment. 'cause he's a repeat buyer. Yep .
Speaker 1:Not no longer a first time buyer.
Speaker 3:He can get into his new house. I am still in the middle of, you know, hey, he's got some variable income. You know, how much of that can I use and how much, what's the maximum I can improve him for, for the new house?
Speaker 1:But does he wanna hold onto the condo?
Speaker 3:Well, no. Ultimately he's interested in getting out and so that was the second part of our conversation. I said it is likely to be that any buyer who is seeking financing to purchase this, your now old condo won't be successful in lining up that financing. Yeah . Or will have difficulty because it kind of , it sounds like you just said, yeah, we need to do some majorish repairs or upgrades.
Speaker 1:Yeah. So this,
Speaker 3:And we're not done yet.
Speaker 1:This comes into the Yeah. Category of, alright , so hey, you list your home for sale.
Speaker 3:Well, and do you wanna have , do you wanna have, even if I could approve you for the new house, you could have two mortgage payments for a long time for 2, 3, 4 months until you finally offload. Well, and
Speaker 1:The condo, I think you gotta do an assessment. He has to, if if I , if I were him, I would sell the condo.
Speaker 3:And he's got see a ton of equity tied up in this condo too. Right? Oh , 'cause he bought it years ago. Yeah . We've helped him refinance and he's had some nice property's gone up . Appreciation.
Speaker 1:Yeah . But, you know, let's, hey, why don't we try selling that thing just to make sure it can be sold. And yes, it's gonna be inconvenient to be between homes, but you know, unless you can help 'em assess how saleable the condo is in its current condition. 'cause you what a mortgage lender's gonna do. You know, now maybe somebody's gonna pay cash. What, what do you that's , think , think it's worth, what do you think he's gonna sell for
Speaker 3:Maybe 200 .
Speaker 1:Oh, so maybe it'll be a cash buyer. But if a person needs a mortgage, then the mortgage lender's gonna be nosy and start to ask about certain things like deferred maintenance.
Speaker 3:I want to talk about that too. 'cause there's layers of inquiry Right. From the mortgage underwriting department about your condo. Alright ,
Speaker 1:Let's talk about that a little bit when we come back. You're listening to the Ette Mortgage and Realty Show on AM six 20 WTMJ.
Speaker 2:Important home buying questions and answers you can count on. This is the Anette Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome
Speaker 1:Back to the Accident Mortgage and Realty Show. We're talking condominiums here. The last segment, and we're gonna keep talking about it a little bit, David, you wanna regale us with the three levels of scrutiny that , uh, we can come under if, if a buyer is, if a buyer is purchasing a condo and getting financing, you've
Speaker 3:Got the full review, which is gimme everything, gimme the bylaws, gimme the budget, give me the insurance, and please fill out this questionnaire regarding the current management health, safety soundness of the structures and you know, how, how the HOA board is , uh, conducting what needs to get done on behalf of all the homeowners.
Speaker 1:And that happens when there's less than a 10% down payment on a conventional loan. Correct.
Speaker 3:Primary residence. Yeah. Primary
Speaker 1:Residence. Okay.
Speaker 3:The second level is a limited review, which does not investigate budget, bylaws, all that jazz. But we still have to have at least two items, which is your, in the insurance, the master insurance. Hey, if the roof gets ripped off of the whole condo structure, is your insurance policy good enough in the eyes of Fannie and Freddie
Speaker 1:To replace,
Speaker 3:To replace the, we're
Speaker 1:Looking for replacement. Right .
Speaker 3:Right. And the second element is still a short questionnaire regarding safety soundness of the structure itself. Again, this is all from the terrible Florida condo collapse that has led to, in my personal opinion , uh, reasonable scrutiny about how the group of people in a condo association are maintaining the structure. The third lightest touch is, I'm just gonna call it Fannie Mae has a type in the name of the, the association and we'll tell you if it's all good and Jason Hanson
Speaker 1:And how long it's good for.
Speaker 3:Right. And how long it's good for our fellow managing owner, Jason Hansen, the Oracle of operations can go look. Oh, the A BC Condo Association does, does Fannie Mae give them a looks good in the software and then you only need the insurance.
Speaker 1:Okay. And that's to get approval. And that's because some lender at some point in time gathered all the other information Right. And submitted it. And I don't really know how old or stale that information can be, but , uh, you know, it's , go
Speaker 3:Ahead. A a as we have said, any time we've talked about condos and condo financing in general, that's just us on the mortgage side. You as the buyer, you care. 'cause even if Yeah . How
Speaker 1:Much do
Speaker 3:You care? Yeah. Right . How much do you care is the buyer ? Oh , David, thanks for, you know, approving the condo. Guess what? We really didn't anticipate the $10,000 special assessment that was coming down the pike for the new roof for everybody like you as the buyer, you, I can't care more than you care. Sometimes I care more than you care,
Speaker 1:But Yeah. But
Speaker 3:It's your cash. If the association really isn't being run to the professional level that it should
Speaker 1:And , and sometimes things are outside , um, you know, the condo owner's control, for example, I'm aware of a condo , uh, project where , uh, in 2022, a lot of , um, hail, there was a big hailstorm that came through Oh sure . In 2022 in Waukesha County. And a lot of buildings were damaged. And, and so just now in 2024, some of those claims are getting settled. So while a big claim like that on a condo building is outstanding, it turns out you can't go to the regular insurance market. And so I know somebody who owns one of these units and each one of the unit owners got the pony up 10 grand who
Speaker 3:For the privilege
Speaker 1:To in order because regular insurance for the condo building Yeah . Was not available. They had to go to the excess and specialty market, which is stick 'em up rates. And so until that claim is settled Yeah, you're kind of Oh my gosh. At the mercy of, because you don't wanna go uninsured as an association. That's right .
Speaker 3:Well, if any of the condo owners has , uh, any basically flavor of mortgage on their financing , financing, all of those mortgage holders are gonna be like, there needs to be insured because if it burns to the ground, your mortgage holder wants there to be a new structure built.
Speaker 1:That's right. You know what's interesting? I don't know if they check after, you know, we always check on that when we're giving somebody a new mortgage. Yeah. I wonder if mortgage servicers continuously check on the , uh, insurance that the HOA is carrying. I don't think they do. I think that's the only, I think that only gets checked at the time you're getting a new mortgage. Right. So theoretically
Speaker 3:If they're not, then they're gonna
Speaker 1:Yeah. So roofs, insurance, condos, insurability, your , you know, current owner who wants to get out. Yeah. Because
Speaker 3:Well, 'cause it's a whole right. You, he himself could pony up for the special assessment. Right.
Speaker 1:But not for everybody else's unit, but
Speaker 3:Neighbors. Right. Meredith next door can't, won't or something. Them and, and her, your fellow condo owner's participation impacts the value. Like, 'cause what if , what if he has to sell to a cash buyer for less than what the true market value be because it's not been managed well.
Speaker 1:Yeah. Yeah. Because well , alright , so keep us posted on that. Yeah. Um, I got a call from a past customer asking about , uh, assumable mortgages on behalf of her daughter trying to buy a place in Colorado. Let's talk about that and whatever else you've got when we come back, you are listening to the Academic Mortgage and Realty Show on AM six 20, WT MJ
Speaker 2:Find a place to call home without the headache. This is the ACU at Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Thanks again for hanging out with us this morning. Uh, David, as I mentioned , uh, I got a call from a client whose daughter is looking to buy her first home in Colorado and somehow got on the trail of , uh, assumable mortgages. And so that was the nature of the what about Assumable mortgages, which is like, whoa, I gotta dust off my, my Gutenberg Bible to look at that. And it turns out, you know, regular Fannie Mae 30 or fixed rate loans are not assumable. And the only kinds of loans that are are FHA VA and USDA . Those are direct government guarantees. And in doing just a touch of research on this , um, you don't have to be a veteran to assume a VA loan. I didn't know that. Yeah. Okay. Anybody can assume a loan. Yeah, you Yeah, I'm not kidding. Okay. But , um, so, so the talk track was, well, you know, the issue with an assumable mortgage is okay, it has a mortgage balance. Say that the mortgage balance is two 50. If, if the person wants to sell their home for $500,000 <laugh>, you gotta come up, come up with a difference with the other two 50 .
Speaker 3:Either or , or borrow.
Speaker 1:Oh , well exactly. I was gonna say either in the form of down payment or in the form of a second mortgage, which is gonna have a higher rate, I'm gonna say in the eights at least. Yeah . And is gonna spoil the fund at the lower rate on the assumable mortgage. The good news, if she ends up assuming a VA loan, is that there's no monthly mortgage insurance on a VA loan. And it occurs to me the downside of assuming an FHA mortgage is there's gonna be monthly FHA mortgage insurance, which is gonna be at least the equivalent of a half a percent. And, and again, the real big issue is the gap in down payment that you gotta come up with. But maybe, maybe , um,
Speaker 3:It melts my mind that you can assume a VA loan without being a veteran.
Speaker 1:Yeah. I guess it's a benefit to the veteran that they can offer the assumption to some new buyer. So we'll let you know how that
Speaker 3:Turns out. The , the other element. So , um, the reason why is this is a hot topic on the social media and so timing is also the element you must mind. But when
Speaker 1:You're buying
Speaker 3:A house, when you are buying, because the next time that the servicer does an assumption fast will be the first time.
Speaker 1:Oh really? It takes a while .
Speaker 3:It ain't quick. Okay . And a seller would need to have the patience, but the
Speaker 1:Seller is the one offering the assumability or they're marketing it. When I googled it , there were actually lists of assumable. These are the homes that are listed for sale that have assumable market .
Speaker 3:But like imagine that that's how unprepared is your home to be listed for sale. If you need to use that
Speaker 1:As a marketing tool.
Speaker 3:As a marketing tool. Yeah.
Speaker 1:I'm just throwing it out there 'cause it's the first time I I heard about it. Let , let's just turn the page and say Yeah . Hey, this week , uh, coming week on Friday, we get the , uh, job situation report. So we'll know the new unemployment number and the number of new jobs created. That's gonna go a long way toward influencing the Fed on how much they cut rates. Right now, the um , uh, fed funds futures market predicts there's a 70% chance that the Federal Reserve will cut their short term overnight rate by one quarter of 1% when they meet on the 17th and 18th of September. Remember folks that is already baked in to today's mortgage rates. Yeah. No need for the Fed to act. It's like it already happened. And so , uh, but yet, you know, that'll be a number that comes out and could influence which way , uh, rates go right now on a 30 year fixed rate , uh, with 25% down and like a $274,000 loan amount , uh, low over at a could deliver an a PR of 6.5%. That's pretty good considering we were at 7.5% somewhere near the beginning of summer. Yeah. So we've come down quite a bit also opening up the , uh, the , uh, opportunity for a lot of folks to refi
Speaker 3:My , uh, for clients who have pur purchased previously. The double whammy is when we can lower your rate by a little bit and either eliminate or lower any PMI as well.
Speaker 1:Ah, another benefit. Yeah . So right now rates are pretty good. They are predicted to continue to inch downward, but no need to wait to get back in the market if you're looking to buy. No . And certainly it , you know, some people are like, well , I, your rates are coming down. I'm gonna wait to refi every month. You put that off, you're foregoing that month's savings. Yes. So let's see if we can put together a no or a low cost refi plan for you . All you gotta do is click on the blue button and you'll find that blue button@accunet.com. Thanks for tuning in to today's show. You've been listening to the anette Mortgage and Realty Show on AM six 20 WTMJ.
Speaker 4:The proceeding was a paid program. Advice and opinions expressed during the Accu Net Mortgage and Realty Show are solely that of the host or guests of Acuate Mortgage and ANet Realty Advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.