Speaker 1: 0:00

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

Speaker 2: 0:20

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

Speaker 3: 0:35

Good morning and welcome to the Anette Mortgage and Realty Show. My name is David Wicker. I am the president and managing owner of Acumen Mortgage. My individual NMLS ID is 3 2 8 8 4 7. Joined today by the one and only Tim Holdman. Good morning, Tim.

Speaker 4: 0:52

Good morning David. Uh , happy to be here. My individual NMLS ID number is 1 5 9 3 1 4 6. Uh, Brian is traveling today, so we got Young Gunn's Mortgage here this morning, so excited to to chat.

Speaker 3: 1:06

We've got stories on my list of things that , uh, I wanna cover today. Obviously the jobs report on Friday , um, I I had a conversation about a bridge loan Yeah . Which was all encompassing with this particular client last week. Uh , wanna talk about credit score increase , um, tools , how do it tools ?

Speaker 4: 1:26

Yeah .

Speaker 3: 1:27

Uh , and some topics about student loans and some homeowners insurance, you know , and whatever else

Speaker 4: 1:32

Comes up .

Speaker 3: 1:32

Real life stuff. Yeah. Uh, let's begin with, what was the headline leader for last week, which was the jobs report. Seven 30 on Friday morning. We got the report for the month of January that congratulations to all of us. We generated 143,000 new jobs, boom. In the month of January. This was slightly below the forecast of one 70, to which I'm always like, well, doesn't that just mean that the forecasting isn't actually all that good at the forecasting piece? But that's a separate conversation. 1 43 that is strong. You know, his historically it

Speaker 4: 2:12

For January. Yeah,

Speaker 3: 2:14

Absolutely. And , uh, more so the December jobs report, which was reported obviously in the early part of January, received a revision, a bump for anybody who didn't have this tattooed to their eyelids. <laugh> , we generated 250, we allegedly created in the month of December, 2020 4, 250 6,000 new jobs as

Speaker 4: 2:39

Was reported in

Speaker 3: 2:40

January, as was reported. Then the Bureau of Labor Statistics went back to their spreadsheets and was like, wait, wait, wait. Actually not 2 56. 3 0 7. Yeah . And which as I think I have said in previous shows, is awesome. Mm-hmm <affirmative> . It is a good thing for all of us and everyone, when people have jobs , get jobs, keep jobs, and, and making money. Yeah . 70% of the American economy is you and me and all of our listeners getting out there and spending money. Yeah . And when people have jobs, they spend money . You

Speaker 4: 3:11

Gotta , you , although you gotta make money to spend money. Exactly.

Speaker 3: 3:13

Someti . Anyway, so what that means for interest rates is the bond market. It , um, if you just went in , uh, went into a coma on Monday, last Monday, and then woke up on Friday. On

Speaker 4: 3:28

Friday afternoon,

Speaker 3: 3:29

Yeah . You're basically flat. There was some up, there was some down. Yeah. In between on , on Friday, the bond market was like, wow, great. All these jobs got made. But that means that the fight against inflation goes on. Right. 'cause when people have jobs, they spend money. Yep . And that can or will drive up the cost of a scarce set of goods. Right. Um, and just to run my joke back, Tim, how many phone calls did you then get on mid Friday being like, oh man, we didn't conquer inflation on Friday. I called off the house hunt. Yeah .

Speaker 4: 4:05

So far Zero. Zero. Yeah.

Speaker 3: 4:07

Because people buy houses for real life reasons. Correct. The , the , i I have a short example and story. Okay. I got a text and call this week from a young couple who I had spoken to a year ago and they had deferred their house hunt, you know, didn't really have, they wanted to do it, but they didn't have a compelling, like they

Speaker 4: 4:34

Didn't want it bad

Speaker 3: 4:35

Enough thing. Do you wanna guess the impetus of the call that I got then this past week? Uh ,

Speaker 4: 4:41

Baby on the way You got it. Yay .

Speaker 3: 4:43

Come late. Summer Junior is on his way. There it is. And so they perhaps in our first conversation last year, rates were part of that conversation. Yeah. You know what was not part of my conversation this week with them. Rates. Rates. Yeah. Because as is the story, or , and perhaps as I joked , um, hey client, I'm pretty sure your wife would like to not bring your newborn home to this small apartment. Mm-hmm

Speaker 4: 5:17

<affirmative>. I have

Speaker 3: 5:17

Some with noisy neighbors.

Speaker 4: 5:18

I have some customers that I pre-approved maybe a month and a half ago. They have two kids in a third one on the way. Who , and they're renting an apartment right

Speaker 3: 5:27

Now. That's the zone defenses they

Speaker 4: 5:29

Say at that point. Yeah . And Right. Yeah. Kudos to any parents out there who , uh, intentionally choose to be outnumbered by their children. <laugh> , uh, and again is, you know, we had some conversations about rates more focused on affordability. Right . It's like, Hey, this is where the monthly payment would be. Yeah. 'cause it is important to have a

Speaker 3: 5:46

Goal mind , not as a speed bump, but just as a analysis. Not

Speaker 4: 5:48

Just going eyes wide open. Yeah. But they went out and got after it and , and smartly started looking in winter when there's maybe not quite as many home shoppers.

Speaker 3: 5:57

Wait, but it still is. You mean like

Speaker 4: 5:59

Yeah, but they, well, they got an accepted offer last week. Oh , oh, oh , oh , oh , oh . And they are beyond excited because the real life change of being able to raise three kids in a house Yes. With a yard and multiple bedrooms and all the things that come with home ownership far outweighed whatever the bad vibes are around rates. Yep . 'cause we're gonna get 'em into the house and then, you know , uh, hopefully there will be opportunities to refinance in the future anyways.

Speaker 3: 6:28

You got it. Alright. When we come back, I want to get to , uh, some of the stories that I had outlined as we began beginning with a bridge loan story on a client I spoke to on Thursday and Friday. We will cover that after this break. You are listening to the Acuate Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2: 6:50

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

Speaker 3: 6:59

Welcome back to the ACU Net Mortgage and Realty Show. I'm David, that's Tim over there. Good morning, Tim. I took a call this week from a new client referred by their real estate agent, who is trying to do the classic puzzle of, I have my old house, help me get to my new house. Right. How

Speaker 4: 7:20

Do I do that?

Speaker 3: 7:21

One of the words that the internet feeds to people when they're trying to solve that puzzle is bridge loan. Yes. Bridge, B-R-I-D-G-E, which doing what we do is really just a placeholder for the more generic help me get from where I am to where I want to be.

Speaker 4: 7:42

Exactly. Right. So much like we, you know, we , if we're playing mortgage terminology, bingo, <laugh> , you know, bridge loan is a word that a customer will call in and think that they need , need to say that word. And, and , and a lot of times it's , it's

Speaker 3: 7:59

Helpful. It's helpful. It's ,

Speaker 4: 8:00

Uh , yeah. But it's like, what are you really trying to accomplish? When you say the word bridge loan and it's simply this, you are trying to find money from somewhere to use as a down payment for your new home purchase. Yes . Knowing that at some point in the relatively near future, you will get a windfall of cash. Yes . When you sell your current home. That's really philosophically when someone says, I need a bridge loan, that's what they're saying. They're saying, help me come up with the smartest down payment game plan for my new home purchase. Keep it in mind that I have a home that I'm going to sell.

Speaker 3: 8:35

So my client, as they shared the story of their life with me, had bought their current home soon to be old home 12 years ago.

Speaker 4: 8:45

Nice.

Speaker 3: 8:46

Okay. And they have had an enormous amount of home value appreciation Absolutely. In those 12 years. Yeah. But hey, guess what? Now it's time to go someplace else. Right. They're actually looking at a house that's in my old neighborhood.

Speaker 4: 9:01

Hey, nice. Which

Speaker 3: 9:02

Is super random. They sent me the address. I was like, I know where that is. Yeah.

Speaker 4: 9:05

I've , I've walked past

Speaker 3: 9:06

That . I've walked those streets I've played in that park. So they have that incredible equity in their home. Yeah.

Speaker 4: 9:16

But it's trapped in

Speaker 3: 9:17

There . But it's trapped. It's like an ATM but you don't have the pin code to walk up and pull all the money out of your house. Yeah.

Speaker 4: 9:24

You gotta break the ATM <laugh>.

Speaker 3: 9:26

So let's, let's just use some generic numbers. They think that their home is now worth , um, $300,000. Sure. They have two mortgages important to our story. Two mortgages, a first mortgage current balance, 60 and a second mortgage on a home equity line of credit that is also at $60,000. Got . So they owe one 20 on a $300,000 house. Again, just to say it plainly. And they're thinking of themselves, that $180,000 that's stuck in my house. Yeah . That would be really useful if I could get at it. That

Speaker 4: 9:57

Would , that would be incredible. Yeah.

Speaker 3: 10:00

They had been consulting with another lender who had reached for the bridge loan tool, right . In their toolkit mm-hmm <affirmative> . As I kept unpacking what was possible or kind of, it's almost what the client already had set up in their life mm-hmm <affirmative> . It became plain to me that they didn't need a new loan to access the equity in their home. No. They just needed to increase the limit on the second lien home equity line of credit. Yeah .

Speaker 4: 10:39

On their existing, on the

Speaker 3: 10:41

Existing debt line of credit. Again, a a line of credit, it's just like an American Express on your house.

Speaker 4: 10:47

Yeah , exactly. And why is this a better execution of that game plan, David, to your customers, as opposed to going out and opening up a bridge loan, which would actually, in essence replace their existing line of credit? 'cause a bridge loan is a second mortgage, first

Speaker 3: 11:01

Of all, it, i , it is an efficient way for them to not spend $2,000 boom. Because when you create a new mortgage, a new bridge loan,

Speaker 4: 11:11

There's origination

Speaker 3: 11:12

Costs for that . That costs money. Yeah. And so they on Thursday, walked in to the branch of who was holding their home equity line . I was like, hi, can you increase my limit from 60,000 to $160,000? Yeah . And by the end of the day on Friday, the answer was uhhuh.

Speaker 4: 11:34

Well, yeah. 'cause of course they're gonna wanna do that. They already have a mortgage open and they can do a really little bit of quick research to figure out like, wow, that home is worth $300,000 now. Oh yeah. You got the equity in there to borrow more against this line of credit. Sure. We'll lend you this money.

Speaker 3: 11:50

Exactly. And, and better yet, the holder of their home equity line of credit was able to do a computer appraisal. Yep . Just type in the address 1, 2, 3 Main street and the computer was like, to your point mm-hmm <affirmative> . Yeah. Yeah. Yeah. This house is definitely worth no problem . A number sufficient for us to lend you more mm-hmm <affirmative>. And so our client, our new client suddenly has this increased limit that they can draw on

Speaker 4: 12:20

Whenever they want.

Speaker 3: 12:20

So, so, and I don't wanna walk past this, but I , let me say it now as we conclude this segment and we'll revisit in the next segment in , is perfectly permissible for a client to take borrowed funds from an old house. Mm-hmm <affirmative> . Turn around and use that as the down payment on the new house. He is , if that feels like you're stealing from Peter to pay Paul maybe a little bit. Yeah . But at least it's a securitized against , uh, some real collateral called your old house.

Speaker 4: 12:51

And that's the key. You can't go out to your friendly neighborhood loan shark and get a loan for a hundred K and use that as a down payment. 'cause that is not secured borrowed funds. Yes.

Speaker 3: 13:01

So let's, I I just want to tackle this a little bit more. There's more meat on this bone for sure. Uh , after this break, you are listening to the ANet Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2: 13:12

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

Speaker 3: 13:20

Thanks for hanging out with us here on big football game Sunday. Oh, yeah.

Speaker 4: 13:27

Go,

Speaker 3: 13:28

Go. Kansas City team and Philadelphia team.

Speaker 4: 13:31

The Taylor Swift versus the Eagles.

Speaker 3: 13:34

All right . Yes. Versus the , uh, Bradley Coopers

Speaker 4: 13:37

<laugh>. Oh , there

Speaker 3: 13:38

You go. He's he Cheers for Philly. Sure. Uh, I'll just be cheering for the commercials. There you go. So we were discussing in the previous segment, Hey, help me get from my old house to my new house. The buzzword that many clients use or the internet kind of wax them across the head with is bridge loan. Mm-hmm <affirmative> . Okay. Again, what that means is help, I have equity trapped in my old house, and I would really like to be able to use that as the down payment for some or all of my new house. Right . For my client. I advised them and they went and increased the limit that is on the loan that already exists on their home equity line of credit on their soon to be old house. Yep . Thus giving them access to go yank that money out of the house mm-hmm <affirmative> . And turn around and use that as the down payment Right . On the new house. And that was my, as we concluded on the last segment, that is perfectly permissible to borrow from a or against an asset. Yeah. You could do the same with a , uh, life insurance policy for cash value. And you can do the same on a home equity line on a property. You can take that money and use that as the down payment on the new house.

Speaker 4: 14:55

And here, so I get this question a lot from my customers, David, I'm sure you do as well. It's like, well, I'm going, I , I don't , I'm not trying to hold onto this old home , home, I'm going to sell it mm-hmm <affirmative> . And in a perfect world , uh, I would love to sell my home on or before the day that I buy my new home so that I can have all of the proceeds and throw all that into the down payment for the new home. And yes, I agree that would be the perfect scenario, but here's why it's very prudent and wise to set up some type of bridge loan esque scenario. It's because from the seller's perspective, you're not gonna be a desirable offer if you go in saying, yep , I'm gonna buy your house, but I'm gonna sell my house first and that's the only way I'm gonna do this. Sellers don't want to hear that because I mean, think about it. And from their perspective now they're reliant on this whole other transaction going off without a hitch before they can sell their home. And that's just another layer of uncertainty that like, they don't know how that other transaction's gonna go.

Speaker 3: 15:57

The metaphor that I have begun to use is I will date you just as soon as I break up with my soon to be ex-girlfriend. Yeah. Yeah. Your new girlfriend did not want to hear that.

Speaker 4: 16:08

It's like, I promise I'm gonna break up with her three weeks soon , three weeks from now. At

Speaker 3: 16:12

Least before.

Speaker 4: 16:13

Yeah. Yeah. But it hasn't happened yet. So it's

Speaker 3: 16:15

Like your new girlfriend says, I will consider other people. Yeah.

Speaker 4: 16:18

Right. So like, this is about this, there's a two sides to this coin, which is like, how do we get you the down payment Yep . For the new home, but simultaneously, and in this market, I think this is even the most important part, is how do we make your offer the most attractive that it can be to the seller of, of your dream home that you're trying to buy? That is the priority. Yes. Right. So the, the the , the pre-approval or the way we can say, yes, you can buy this new home and it is not dependent or contingent is the buzzword. Mm-hmm <affirmative> . Is not dependent on selling your current home first. You're more than welcome to go try to go out and sell it, but at least we have this other plan that we

Speaker 3: 16:58

Yeah . If privately you can line it up, great. But you don't want

Speaker 4: 17:02

To , you don't wanna put that in the contract. Yeah .

Speaker 3: 17:04

Well, no. 'cause as we said, a seller will say, let me consider anybody else mm-hmm <affirmative>. You that might be available to you if you're the only one bidding on that house.

Speaker 4: 17:13

Right. If you're bidding on a house that's been in the market for four months and there's no other offers, then like, yeah, you can probably get away with that. But that's not the majority of the situations we're seeing right now. I had some other customers where they had the equity in their current home where they could have executed a bridge loan. But the thing that comes with that is that we have to use a placeholder monthly payment for that new bridge loan balance. And a lot of times with a home equity loan, it's an interest only payment, but that's still gonna be a,

Speaker 3: 17:42

It's something

Speaker 4: 17:43

Several hundred dollars a month sort of , um, liability, you know, that we have to include in the , uh, calculations. So I've had some customers over the past few months where we've actually pointed to other sources of funds for that down payment ahead of getting their home sale proceeds from their old home. Uh, one of the examples that you already mentioned is if you have a whole life , uh, policy that has a , has a cash value, yeah. A lot of times you can borrow against that cash value and then just put the money back, you know, after you do sell your current

Speaker 3: 18:14

Home. The other one is , uh, gift Of course.

Speaker 4: 18:16

Yeah. Gift from family member, which that's the , uh, you know , uh, blink twice, you know, gift , uh, your win twice where it's like, yeah. You might gift that money back to your relative after you sell your

Speaker 3: 18:27

Home . Well, yeah. What I say is , um, whatever you decide to do after you've bought the new home and sold your old home Yeah . Is no longer any of my goodness.

Speaker 4: 18:36

Um, something else if, if a customer has an appetite for it , uh, a lot of times if you're sitting on an IRA, you are allowed to draw that money out. And if you put the money back within 60 days, it is viewed as a non-event essentially. As always,

Speaker 3: 18:50

Please consult with your tax professional.

Speaker 4: 18:52

Absolutely. And yeah, your your financial advisor who manages that account for you. But bottom line is there's,

Speaker 3: 18:57

There are ways to do it . Well , we just, a client comes to us with the word and we say, here are the seven ways that I can translate the word. Yeah. That you just brought to me. Bridge

Speaker 4: 19:07

Loan . Right. And everyone's situation is different. This isn't a one size fits all solution, but bottom line is, it's like if you come to us with that goal, that's kind of all we need to maybe dive deeper with an analysis to figure out. Alright . What's the best game plan for you?

Speaker 3: 19:23

Alright . After the news here, Tim and I are gonna flip a coin. If we're gonna talk about either insurance or we're gonna talk about student loans.

Speaker 4: 19:32

Okay.

Speaker 3: 19:33

Uh , after this break right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2: 19:41

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

Speaker 4: 19:49

Back to the ACU Mortgage and Realty Show. My name is Tim, joined with El pte , David Wicker. Um, David, I want to talk about a topic that I think is relevant to a lot of our home buyers, especially first time home buyers, which is student loans.

Speaker 3: 20:05

Yeah, yeah. Yeah.

Speaker 4: 20:06

So a lot of us out there are sitting on some pile of debt that we incurred to get our higher education,

Speaker 3: 20:14

Get that education. For

Speaker 4: 20:15

Me, it's for a degree that is completely the opposite of the industry that I have called home for the last , uh, you know , decade, 10 plus years. Yeah. Anyways , um, those people are now at the point where they're same,

Speaker 3: 20:28

By

Speaker 4: 20:28

The way, several Yeah, sure. Several years into their job and they're like, yeah, I want to go buy a house, but I have this student debt. Is that gonna inhibit or affect my ability to get a mortgage? The answer is maybe , uh,

Speaker 3: 20:41

<laugh>, it depends.

Speaker 4: 20:42

But what we've come across several, several times over the last couple months is how we have to treat deferred student loans. Right. Because if you're making a monthly payment, it's basically treated like any other kind of debt where , uh, like a car loan or a credit card payment, for example. Yep . Whatever that monthly debt is, it sort of counts against the financial blood pressure calculation that we do call the debt to income calculation. Uh, where all the monthly payments of those debts, plus the house payment cannot exceed generally 45% of your gross monthly income.

Speaker 3: 21:13

50,

Speaker 4: 21:14

But Sure. 50 for some folks. So for , uh, deferred student,

Speaker 3: 21:18

Whatever the software says Yeah. Is the answer. There

Speaker 4: 21:20

You go. For deferred student loans, their real life payment is zero, but we cannot use zero. 'cause Fannie and Freddie have , uh, indicated that it's like, well, we gotta use something 'cause that

Speaker 3: 21:33

It's not gonna be zero for forever.

Speaker 4: 21:34

Right. That debt is not going away theoretically. So , uh, a lot of times we can use either 1% of the balance or even a half of 1% of the balance as sort of the placeholder monthly payment. Mm-hmm <affirmative> . Mm-hmm <affirmative>. But on credit reports recently we've seen that the , uh, lending institution that holds the student debt is showing an end date for the deferment period. Zero

Speaker 3: 21:59

For now. Not for forever.

Speaker 4: 22:01

Yeah . Deferment ending March 31st, 2025, for example. So underwriters are perking up their ears a little bit to that, where they're like, well, okay, this deferment is gonna end maybe before you even make your first mortgage payment. Yep . Right. So we're not just gonna let you use 1% or half of 1%. We need to figure out what that monthly payment is expected to be after the deferment period ends. And , and that's where we're relying on the help of our customers , uh, to gather the documentation that proves what that monthly payment will be. And it, it , the documentation does exist. They , they've either gotten a letter or they can go online to the Well,

Speaker 3: 22:40

'cause it's about to end. It's like, Hey, it's early February mm-hmm <affirmative> . And you just said in this example, if it's in writing on your credit report end of March mm-hmm <affirmative> . You are definitely in possession of some kind of communication. Right. Hey, this is coming up for you and you're gonna have to start remitting some kind of monthly payment on your student loan.

Speaker 4: 22:57

So it's usually as simple as going online to, you know, navient.com or whoever holds your student loan, Nelnet , Nelnet , moa . And basically just saying, okay, I'm gonna go here. I'm gonna find this statement that says this is what your anticipated monthly payments will be. And a lot of times that's helpful 'cause that monthly payment might even be less than 1% of the balance or the placeholder or Yeah. Less than the placeholder that we otherwise would have to use. And that actually would allow you to qualify for more mortgage if you want to or choose to.

Speaker 3: 23:28

Sometimes the way that I described that is blank is not an acceptable number for underwriting. Yeah . We have to have something. Right. It either needs to be a placeholder or whatever we can get in writing Yeah . Based upon it's about to arrive , uh, at the , at the end of March in your example.

Speaker 4: 23:49

Yes. Or even if it's just a notice saying that the deferment period's gonna be extended out to a future date, that's also acceptable. But bottom line is, to your point, we can't just tell the mortgage underwriter. Yeah, no, it's, it's zero. It's like, well no, it's not gonna be zero. Not for forever. Forever. Yeah. So , uh, the risk measurement of mortgage underwriters is such that they tend to think in worst case scenarios. So they need to get in front of that with student loans and say, okay, well what is the monthly payment expected to be this?

Speaker 3: 24:21

Uh , it also reminds me that part of the artistry of mortgage lending as well, particularly if we have a couple or two, two borrowers. Yeah. If one has a laundry list of student loans and the other person does not, we can take a look if Well do you, 'cause mortgage lending is, it's like basketball. You only gotta win by one. Mm-hmm <affirmative>. Yeah . And so if putting this loan in only the name of one of you, but not both of you, allows us to basically, I don't wanna say ignore, but it's just the student loans of the person who's not on the loan. That's kind of not in factor the scope. Yeah. Yeah . Of, of getting to the yes or no black or white.

Speaker 4: 25:05

I , I have a married couple literally this week that I intentionally did that on. They're buying a house together and doctors

Speaker 3: 25:11

Is a classic example. Yeah . Like, yeah. I work at Milwaukee Tool and my wife just graduated from the medical college. It's like, well maybe we just qualify you based upon your job at Milwaukee Tool. Yeah . And congratulations, you guys will figure it out for your medical career. Absolutely. But that might not be worth including

Speaker 4: 25:30

Yeah. Getting into it to get Yeah.

Speaker 3: 25:32

What's

Speaker 4: 25:32

The easiest way towards approval? Yeah . A lot of the art of mortgage lending is, you know, there's a couple ways we could probably get it done. What's the easiest and smooth way

Speaker 3: 25:41

For what's the hard way?

Speaker 4: 25:42

Yeah. No

Speaker 3: 25:42

One's gonna pick that the easy way. Uh , okay. When we come back, I, I just wanna talk about some homeowners insurance. 'cause I had a great conversation this week with a insurance pro and it opened my eyes to a couple things. You are listening to the Acuate Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 26:01

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

Speaker 3: 26:11

For hanging out with us on the ACU Net Mortgage and Realty Show. I'm David, that's Tim over there. Hello. Tim. I continue to have excellent conversations with insurance professionals because it is part and parcel of owning a home. Yeah . Because when you have this giant thing, you want to protect it and being smart about how you protect it is smart. Yeah. So I had a coffee on Friday morning with an insurance pro and what I shared and I I , I think this is gonna become almost part of my routine with a customer. The, the sequence that I have observed as a client reaches out to their real estate agent, Hey, I would like to go see this house at 1 2 3 Main Street. They reach out to me and say, Hey, we're consi . We're gonna go see this house on Sunday afternoon right around kickoff. 'cause no one else will be at this house. Smart. You know, Hey, what would the monthly payment be? How much money would we need to bring to closing? Yeah . And then the third element that I have seen a number of clients do is they call their insurance agent to be like, Hey, we are considering either going to or writing an offer on 1 2 3 Main Street. What would my insurance options be for this home based upon any data that you can get from the listing or the Lexi Nexus mm-hmm <affirmative> . That insurance agents use Yeah . For property data information. And I was thinking as, as that kind of dawned on me, I was like, duh, like this , why

Speaker 4: 27:52

Don't , why doesn't everyone do this? If this was

Speaker 3: 27:54

Brian Oh yeah . Or David, or not to speak of myself in the third person, but, or you, I I think about, okay, if I go buy a house in 2025 or 2026, this is a, a deal. This, I think insurance has been a default Yeah . For a long time. Like, oh, I, I will get that. I , yeah . I will eventually wrangle that.

Speaker 4: 28:17

So often it's like the last thing that customers get me before the clear to close. 'cause it's like you're juggling a million different things, you know, and it's like you got, okay , uh, oh, I now I decide I want to , to buy the house, I gotta make an offer. Oh, I got an accepted offer. Great. Okay. Next thing is the home inspection. Gotta find a home inspector. Go through that report.

Speaker 3: 28:39

What schools are my kids gonna need to go to? Oh yeah. I gotta , before we move in,

Speaker 4: 28:42

I gotta hire movers. I gotta , yeah. I mean, there's a million things, right? So it's, I think very prudent and wise to like, have those conversations. And a lot of people have a go-to insurance agent. Other people are, are

Speaker 3: 28:55

More people need a go-to, as I say, what is the cell phone number of the person you will call mm-hmm <affirmative> . After the tree falls on your house. Oh yeah . Because if the answer to that is an 800 number Yeah. I don't think we've quantified that's

Speaker 4: 29:10

Next level adulting is if you do have like a go-to insurance guy. Yes . Shout out to Matt Austin at Goose Head Insurance, who's , who's my insurance guy. There you go . But like, truly, it's like, and you know, not only is coverage important in figuring out what coverage you do or don't want, also it helps you figure out a , a closer to accurate number on what is the premium for this insurance policy gonna be Because ,

Speaker 3: 29:32

And and what is the premium on this house that I am considering based upon all the things that we know about this

Speaker 4: 29:37

House. That's your monthly payment. Uh , is the insurance premium gonna gonna be 500 or $5,000 a year or something in between? Exactly. Right .

Speaker 3: 29:46

And as I , um, noted in my coffee on Friday, I, the, the best way to approach homeowners insurance in my opinion is just ask your homeowner's insurance agent, what do you have on your house? Yeah. True . And then you say, give me some of that please. Yeah. Because I don't think any of us, you know, novice , uh, uh, uh, uh, regular people. Yeah. We don't understand . Could claim that we know how to do insurance better than the actual insurance person.

Speaker 4: 30:23

I would be terrified if someone were saying that and believed it because it's like, it's like asking my mechanic, it's like, what kind of car do you drive? What's the year, the make and the model that's ,

Speaker 3: 30:32

I got my oil changed . I was like, gimme whatever you put in your car. Yeah. Because I don't know anything. And you do. So I would like what you have. Yeah.

Speaker 4: 30:42

Uh , when we get back for our last segment, David, I want to pivot and talk about credit scores. 'cause we've recently launched a new tool at Acuate Yes . World HQ that can help our customers improve their credit scores ahead of when they actually wanna take out the mortgage, which can save people some real money. So we'll talk about that in our last segment. You are listening to the Aate Mortgage and Realty Show. AM six 20 WTMJ.

Speaker 2: 31:07

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

Speaker 4: 31:17

Alright , we're back with the Acuate Mortgage and Realty Show. David , uh, for this last segment, I would like to talk about credit scores. Yes. Uh, because it is one of the three big legs of the stool for qualifying for mortgage, as we like to say. The other being debt to income ratio, the third being assets for down payment and credit score. For most, not all customers, but for most credit scores , it does have a bearing on the rate and amount of closing costs you need to pay for the mortgage because logically , uh, if credit score is an indicator of your responsibility of paying back debt

Speaker 3: 31:52

On

Speaker 4: 31:52

Time. On time, thank you. The , the higher your credit score is, the more of a responsible borrower you are deemed to be in the eyes of the mortgage world. Right. So when we accessed credit , uh, we checked to see if someone even has a credit score. Ironically, our shout out to our producer, Isaac , uh, he said that, you know, he was proudly did not even have a credit score until recently because he just hadn't opened up any loans. Yeah. Uh , so

Speaker 3: 32:16

That's a flex. Ironically,

Speaker 4: 32:17

No score at all. Yeah. You need to have debt and, and show that you responsibly pay it back on time to even generate a credit score. But for most folks, when we check credit, everyone has three credit scores from the lovely bureaus over at Equifax, Experian, and TransUnion. And , uh, we get to use the middle of those three scores as the one that we qualify our customers on. Now here's the interesting new development , uh, through the vendor that we use to access credit. We automatically get a simulation for our customers on how they could easily and quickly boost their credit scores.

Speaker 3: 32:55

Here's where you are on the left side, on the right side, here's where you could be,

Speaker 4: 32:58

Here's where you could be. And here is the step-by-step things that you could do to get those higher

Speaker 3: 33:05

Credit scores . It's like diet advice for your credit score. Chicken and rice baby.

Speaker 4: 33:08

Yeah. And it , this is again, one of the many tools that we have at our disposable where we're not every customer of ours will need or want to take advantage of this, but I love connecting with customers. The , the earlier in the process the better. Frankly, if you're even six months away from even going on Zillow, I would still love to talk to you. Yes. 'cause if we are in the process of formulating that game plan, if you thought you had 800 credit and you have 600 credit, okay, I want to know that as soon as possible because likely we can map out a game plan. There's a path over the next couple months to get your score up to some higher level and, you know, again, set up well

Speaker 3: 33:50

And the , and the, the goal being you will get a lower rate and lower closing costs the higher we can get your credit score. Yeah . So it's like, it's like asking a customer, do you wanna pay less and the answer's gonna be mm-hmm

Speaker 4: 34:03

<affirmative> . Or , or like to, I mean, let's say, let's say it takes you a total of two hours of your life to do whatever these things are . Yeah. That's a little bit of an inconvenience and maybe you don't wanna spend the two hours to do that. But if you put it in terms of savings, let's say you can get a quarter percent lower rate due to, you know, the credit score increases. And let's say that saves you $60 a month every single month on your mortgage payment. Yep . Oh, wow. Uh , you just saved over the course of a year, $300. Right.

Speaker 3: 34:36

7 20, 7 20,

Speaker 4: 34:37

Thank you. And you spent two hours of time, that is a really good return on your time. Yeah . You're not, you're gonna make save more money that way than working two hours at your job Yes. For the week. So when you put it in mind like that, it , it , I think it's worth it If we recommend it after we do our analysis that you take those steps.

Speaker 3: 34:56

I want to , and as you noted, let's do that before you are pregnant with an accepted offer. Yeah . Because as you're on the hunt, you're only maybe spinning one or two plates. Right. When you get the accepted offer, suddenly you are spinning 11 plates as we noted. You're not gonna time , where are my time ? My kids gonna go to school movers, we energies bill, all that. So when we can get better when we're not under the gun. Yeah . That is better.

Speaker 4: 35:23

Absolutely. Yeah. If you're, if you have an accepted offer, the opportunity has pretty much passed for you to make any meaningful , uh, positive changes to your credit score

Speaker 3: 35:33

Or it slides down the list. Well ,

Speaker 4: 35:35

Right . Sometimes because it's like we're closing in 28 days, we don't really have time for this anymore. You kind of have to dance with the girl that you brought Yeah . At , at that point.

Speaker 3: 35:44

Indeed. The spring home buying season is here. Yep .

Speaker 4: 35:50

It's gonna be wild. Uh,

Speaker 3: 35:51

And if you want to be moving into your new home in March, April, April or May, you gotta get going right now. The academic mortgage team is ready to help put that game plan together. Uh, and we've been doing so for 25 plus years, by the way. Coming up on 26. Uh , shout out to dad. I went and looked. Uh, the Academic Mortgage and Realty show has been on the air for 15 years. Nice. At this point. The first one with one Eric Bilad back on Valentine's Day 2010. Uh, we've got the show notes right here , uh, and we'll keep , uh, marching along, helping home buyers get into their next place. Uh , all you gotta do to get started is click on that blue button@acuate.com. Tim, thanks for hanging out. Always. You have been listening to the Acuate Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 1: 36:44

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