Speaker 1: 0:00

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

Speaker 2: 0:21

Welcome to the 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: 0:36

Welcome to the Accu Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with ANet Realty Advisors, and also the majority owner of Anette Mortgage, where my individual N ML s ID number is 2 5 9 6 1 0. And I'm joined again today by my son, David Wicker, who's president of Anette Mortgage, and his NMLS ID number is 3 2 8 8 4 7. Remember, you can get a copy of today's show or any of our previous shows wherever you normally get your broadcast. So no , your podcast. So , uh, David, kind of a , hmm , a newsy week. Uh, we had the , um, personal consumptions expenditure inflation index come out on Friday, which is important because it's the Federal Reserve's preferred measure of inflation. Remember folks, inflation is the enemy of interest rates, and the good old Federal reserve would like inflation to get down to 2% measuring on this core , uh, PCE number, where did it come in , uh, for the month of March, David?

Speaker 3: 1:33

Uh, so the, if you put everything in the basket, 2.5% year over year personal consumption expenditure, if you prefer the more artisanal , uh, measurement, core PCE, which excludes food and energy, which is, I always think to myself, well , but I need those. Yeah . Anyway , uh, core PCE year over year forecast was 2.7, came in at 2.8. The month over month is , uh, what markets pay attention to more forecast was 0.3 , actual was 0.4 . Although dad, I will, I will tell you , uh, in case you didn't know, they don't just do the first decimal, the , uh, it goes to the third decimal. Oh, wow. And , but they round up, if you go to the third decimal, dad , 0.4 sounds so, ugh , it was actually 0.365 , which seems so, so much

Speaker 1: 2:30

Darn , darn, darn , very close to getting rounded down to 0.3 . Well, that's, that's all very wonky. And so what really matters is, you know, how did uh , markets react? The stock market hated it on Friday. Well ,

Speaker 3: 2:41

For whatever this a lesson, as always, if anybody actually knew which way bond markets were going to react to any one piece of data, you would be a gazillionaire. Because let me say this, on Friday, I was expecting the bond market to not like that inflation reading, but instead, for reasons that I am still trying to unearth the bond market was like, eh , it's not that bad. And, and pricing got a little bit better. Not like change the world better, but it's, I'm glad it got better instead of getting worse. How's about that? I

Speaker 1: 3:16

Would agree with that. So , uh, low overhead anette finished the week for a 30 year fixed rate with , uh, 25% down to purchase a primary residence. Uh, uh, with a $250,000 loan amount, you could fetch a 6.75 interest rate. And , uh, that only had an a PR of 6.788. And in case you're wondering, the total dollar amount it would take to fetch that , uh, rate is $1,995. So not bad. That includes an appraisal , uh, which we don't always need. So, hey, we'll take it. It's a victory that's oh , yeah . Lower than where rates were a year ago. And , um, we also got consumer confidence this week. Are you gonna say something else about inflation or mortgage rates?

Speaker 3: 3:59

It's because when Tim and I did the show last week , uh, what I don't, I can't even remember what report it was . Oh, it was the Federal Reserve Open Market Committee. Yeah. Met last week. And as I said to Tim, oh, you know, how many calls I got on Wednesday afternoon, a couple minutes into Chair Powell's, you know , uh, conference , uh, with reporters. Zero. The same was true on early Friday morning when the bond market, some, for some reason, reaction enjoyed. Right. Nobody called, none of my clients called me and was like, David, I'm back in. Yeah , I saw that PCE report and that's what got me back in. It's, so, it's, this is headlines and perhaps they , um, become more and more distant from reality, especially here in southeastern Wisconsin.

Speaker 1: 4:47

By the way, later on , uh, in the show, I do have the latest predictions from the National Association of Realtors and Fannie Mae as to home sales and mortgage rates for the rest of 2025 and 2026. But as you pointed out, real home buyers are like, they're in it to win it now, or they're in it, you know, they're not, most of 'em are not thinking about, oh, where are rates headed from here?

Speaker 3: 5:10

Uh , and I had a client this week, just again, if this is headline world as we like to do to open a lot of our shows, the the other headline , um, bifurcation almost is in the regional differences in what's happening in housing. Oh, you're in the southeast part of America, you're in Florida. That is a whole other dynamic that is, that is Jupiter, that's Neptune, and then over here in southeastern Wisconsin, it remains a seller's market. And so you just have to always be mindful of what headline am I reading and what does it apply to? Yeah. I, I sent you an article from the Wall Street Journal this last week , uh, because as I noted to you in my text, this article is the headline is water is wet because it was comparing New Jersey to Florida. And it's like, well, yeah, it's different depending on where you are.

Speaker 1: 6:06

It's way different that , that's probably as as contrasty as you can go. It's a definitely in most of Florida and definitely southwestern Florida where we have a lot of Wisconsinites hang out , you know, Naples and Fort Myers . It's definitely a buyer's market. There's lots of supply. Homes aren't moving, you know, marketing times are long and you're getting it for under asking that is different. Alright , when we come back, let's talk, follow up on a story that you and Tim had from last week about Yeah . A home buyer who offered $50,000 more than the asking price, which was in the low three hundreds. We'll give you the rest of the story when we come back. You're listening to the Aced Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2: 6:46

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

Speaker 1: 6:55

Welcome back and thanks again for joining us today. I'm Brian Wicker, the elder. That's David Wicker, the younger, taller , more handsome of the wicker men over there. And , uh, so David, thanks to you and Tim for doing the show last week. Sure. Where Tim shared a story about a client who happens also to be the daughter of a , uh, friend of , uh, of mine and a first time home buyer looking to buy in Milwaukee County. And , uh, Tim Holdman , uh, my son-in-law, your brother-in-law was the loan consultant , uh, working with her, although I think you had some contact with her as well, kind of tag team. You

Speaker 3: 7:28

Yes . It's , it's a team effort. Come on. Whatever, whatever it takes to make the magic happen. Right. That's the acuate mortgage way.

Speaker 1: 7:34

That's right. And so she was , uh, looking at a home that was listed in the low three hundreds and , uh, and ended up winning. And how many other offers were there? 10, 11.

Speaker 3: 7:45

Uh, it was a double digit number. I know that for sure.

Speaker 1: 7:49

And, and so because you and Tim were very good at educating her about what all the numbers would mean , um, she offered $50,000 over asking, and on top of that, that was 16% over the asking price, by the way. And , uh, and , and then she put in the offer with the help of her excellent buyer's agent as well, that, Hey, you know what, I'll still buy it at this high price even if it appraises out $50,000 low. Wow. Yes . That's gutsy. And go ahead.

Speaker 3: 8:24

It this, as we know mortgage , uh, masquerades as a numbers business, but really what you're describing is the psychology business. 'cause on that Saturday when I was on the phone with our client and she was prepared to make, I, I enjoy you must be a journalism major back in the day. 'cause you're writing that headline to get this segment started , $50,000 over the list price. Well, but dad, what is the house actually worth? It's worth what the seller says yes to, and the buyer is willing to pay. They just happen to begin at a particular, you know, low point for the bidding war , possibly

Speaker 1: 9:04

Lower number. Right. And then, and then, you know, the way it goes is we try to educate people on, okay, what's the worst thing that could happen here? Yeah . What hap what's the difference in your payment and your money outta your pocket if the appraisal comes back exactly at what you're offering? $50,000 what we're asking Yep . Versus it comes in at the worst possible. That's basically the exercise. And what I'm here to share with our listeners today is, you know, where did it actually turn out? Oh . And the answer to that is that , uh, you know, 'cause then, then the appraiser gets the offer, including the sales price. That's $50,000 over asking. And then the appraiser's job is to find at least three closed comparable sales , uh, for the subject property and say, based on those sales, here's where I think the value is. And, and, and that appraiser came in $22,000 less than the accepted offer price. So in the end , uh, our home buyer client , uh, you know, paid is willingly paying. She hasn't closed yet, but we've got her loan all approved, willingly paid $22,000 , uh, over the appraised value, not 50 22. And , and so that happens to come out to about 6.4% over the appraised value, which, you know what I call that next year's value

Speaker 3: 10:24

<laugh>. Right . Because well, hey, call, call the 10 people who didn't get the accepted offer next year, they'd be willing to take that off your hands, no problem. Right?

Speaker 1: 10:33

Absolutely. Um , so , uh, you know, can I , in , in , go ahead.

Speaker 3: 10:38

So the conversation that we had in the day before she got the accepted offer, as I like to say, because great down payment and you had to be competitive. I said, if I could hide the appraised value from you. No. Now here's what I said. Do you care what a stranger thinks this house is worth someone you'll never meet ? Well,

Speaker 1: 11:00

Not a stranger, but an

Speaker 3: 11:00

It is a stranger. No , an appraiser professional stranger. Yeah . Okay. But do , why do you care what they think? If it's worth it to you, then it , then that's what the value is. And I, I have begun to share with clients in my tongue in cheek way, if I could hide, if I could put a bag over the appraised value and just tell you that it's okay. Yeah .

Speaker 1: 11:23

Is it good

Speaker 3: 11:23

Enough? Is that good enough? Would you go forward with life and just be, be glad? You would never need to know. But

Speaker 1: 11:30

But humans don't operate that way. They , they like , you

Speaker 3: 11:33

Know, no , it was no, but it unlocked for our client that like, you're right, I want this house more than I care what this stranger appraiser thinks that the house is worth. I just want it to come in at a number that allows me to get to the closing table. Yeah.

Speaker 1: 11:49

Well, but there are real life consequences. And , and so the question I think for any buyer is, well, what does this mean if the appraiser, if the appraisal comes in low? And so I happen to have the answer in this particular case, the , um, because what did it do to my cash needed to close? And, and what did it do to my monthly payment? Did I have to bring in $22,000 more because now the appraisal was lower? No, no . This particular client, I think smartly decided she would bring in $1,500 more just so that we would be lending her exactly 90% of the appraised value. 'cause the PMI is a little cheaper if we lend somebody. And her original intention was to put , uh, 15% down. I'm pretty sure we gave her a pre-approval letter 'cause she had the money saying she could make 20% down why that looks better to the seller. Yep . Um, and , and so she just decided , uh, you know, for a little nuanced reason, she was gonna bring $1,500 more to the closing table. Uh, and the bottom line result is that changed her payment. Are you ready? Drum roll. If we had one $7 and 88 cents more per month, you,

Speaker 3: 12:54

You can't call that consequences. You gotta , we gotta call it something so much less than that. I don't, I don't , I , let me get my thesaurus on the break. Get that . But it's not consequences that

Speaker 1: 13:03

When we come back, either you have another story or I know I've got another story . We'll cover those when we come back. You were listening to the Accu Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ, getting

Speaker 2: 13:15

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

Speaker 1: 13:23

Welcome back and thanks again for hanging out with us. Uh , David , uh, I , I've been working this , uh, past week with a , uh, client we started talking to a year ago. This is a retired , uh, pastor and his wife. And they were thinking, okay, you know , uh, they're renting a town home right now. And , uh, turns out they really like it. Uh, and back in the fall , uh, we talked to him . He said, you know what? We're gonna re-up our, our lease. So, you know, we're kind of off the market for another year. Well, lo and behold, he reaches out on Monday of last week and says, oh, you're not gonna believe this. We gotta call from our landlord. And , uh, they have an , they have a cash offer to buy our town home that we're renting, and they wanted to know if we wanted to buy it instead. And so, I

Speaker 3: 14:13

I I can believe that actually. Yeah,

Speaker 1: 14:15

You can believe that.

Speaker 3: 14:16

Okay. Yes .

Speaker 1: 14:17

And, and so, you know, we talked for just a little bit. It's like, well, okay, if you don't buy it, you are gonna be moving at the end of 2025 ,

Speaker 3: 14:28

Because is it

Speaker 1: 14:30

Presumably because the person buying it, I think wanted to ultimately live in it. But, oh , I don't think you can kick somebody out. 'cause they had a signed lease for a year. So unless there's a clause in the lease that says, you know Yeah .

Speaker 3: 14:42

Check the language of your lease contract. Yeah .

Speaker 1: 14:44

Yeah . Yep . So, so one thing is, do you wanna move? And the kinda answer is no. Um, and , and then it kind of turned around to, well, you know, what do we have to do to win this? And they were talking with , uh, the seller or actually the seller's father, and the answer was, well, if you could give us $5,000 more than what this cash offer is, we'll we'd take your offer. 'cause we like you, you're our renters. Yeah. Okay . So apparently there's no emotional connection to the other buyers is what I read between the lines.

Speaker 3: 15:13

I'm sure that they're glad that they got the phone call in the first place. Right? I they , yeah . The seller as opposed

Speaker 1: 15:20

To notice Yeah .

Speaker 3: 15:21

Yeah. The , the owner, the landlord I don't think is obligated to do so, but that good Midwestern spirit is just like, how's it bad ? I call you and see if we can figure this out between us.

Speaker 1: 15:33

That's absolutely right. So , um, so we, we started running the numbers, gathering their information, you know, on income and down payment. I don't think we actually ever even had gotten their credit report before, which was excellent. And lo and behold, we do what we always do, which is put all that information through Fannie Mae and Freddie Mac , um, automated underwriting system. And what do you know? Much to our delight, we get a approval at $5,000 over what the other people were willing to pay cash for. And we don't need an appraisal

Speaker 3: 16:07

Za

Speaker 1: 16:08

Za , which meant that we could give 'em a preapproval letter. And then since there are no realtors involved, we connected them with a , uh, sharp, low cost real estate attorney who drafted up the offer Yeah . For like 350 bucks. Yep . Um , and by the way, they'd been working with a real estate agent to look at other properties. And at first they were thinking like, oh, we're just gonna use the real estate agent, but then the real estate agent was gonna want, you know, a couple of percent. Yeah . And so they quickly came around to, you know what, give us the name of that attorney. Okay . And , uh, so wrote up the offer at $5,000 over with the preapproval letter that said, no appraisal required for this property address at this value. And , uh, their offer got accepted.

Speaker 3: 16:53

Yeah . Come on.

Speaker 1: 16:54

Awesome. And we're able to collect all the information that we needed from their financial advisor. And , uh, we're off , uh, to the races. We're gonna close at the end of April. You have a question or comment there?

Speaker 3: 17:06

We're , uh, I'm always mindful on a town home , were they making a down payment? You know, you got the appraisal waiver. So I would imagine that the down payment was substantial. Where you greater than you get a nice break on a town home or a condo if you make greater than a 25% down payment? Did they get there? Well ,

Speaker 1: 17:29

A couple of things true here. They wanna put 20% down. Okay . But they're first time home buyers and their qualifying income is less than a hundred percent of area median income. Oh . So all , uh, of those potential , um, price hits for being a town. Yeah . Which, although in this case it's not a condo, it's a, they own the dirt underneath the , um, building,

Speaker 3: 17:54

Ah ,

Speaker 1: 17:54

The , the , the unit . So it's, it's called single family attached. It's not a condo

Speaker 3: 17:59

Attached. Yeah. That's the one I was gonna say , do you share a wall

Speaker 1: 18:02

Detached? You share two walls in this particular case. Okay. And it's a little ter than that. Then , you know, it turns out in this particular case that the HOA insures the exterior, even though it's owned by

Speaker 3: 18:14

T were , were they really first time home buyers or did they just recapture that status? 'cause they haven't owned a home in the last three years.

Speaker 1: 18:22

B they captured that status.

Speaker 3: 18:24

I mean , they could have been living in a parsonage, I mean, which

Speaker 1: 18:27

Well, and that, that

Speaker 3: 18:28

Sounds old fashioned .

Speaker 1: 18:29

It might've been the case in their, in their last, but in on their credit report, they had had a mortgage at some point in the past. Oh, okay. But it's been way more than three years. So, so we are on our way, you know, to a , uh, happy closing at the end, end of April.

Speaker 3: 18:45

And as is always the case, and just in my, our brief comment about rates and whatnot , like these are all the ingredients that go into the recipe. Right. And so it's not just, Hey Brian , what rates do you have? It's like, well, I have about seven and a half other ingredients we need to be mindful of. That's a good mortgage practitioner right there.

Speaker 1: 19:03

That's right. Thank you very much. Alright , it's , um, time for our news break and when we come back, let's , uh, take a look at the Fannie Mae and Annie and National Association of Realtors latest forecast, but

Speaker 2: 19:14

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

Speaker 1: 19:22

Welcome back and thanks again for joining us. Uh, for today's show. Uh , David, the , uh, Fannie Mae's Economic Research Department comes out with a monthly forecast every , every month about where they think home sales are gonna end up. What about interest rates, mortgage rates, and then also , uh, home price appreciation. And then wouldn't, you know, the National Association of Realtors also came out with their latest forecast. And , uh, here's what we've got. The National Association of Realtors predicts a 6% increase in the number of homes sold in 2025, and then 11% on top of that for 2026. Oh, what does Fannie Mae think? Well, they're a little less optimistic. 4.4% increase in the number of homes sold for 2025. And , uh, then , uh, another 7% increase in 2026, which by the way, amounts to 4.24 million homes sold nationwide. These are existing homes, only not new construction. And then they're saying, Hey, you know what? And in 2026, there'll be another 300,000 bringing it up to four point , uh, five 4 million. Uh, in terms of interest rates, national Association sees a 6.4% average. When you look at 2025 overall and then going down to 6.1 by the, for 2026, Fannie Mae is a little less optimistic. They say, Hey, we think things are gonna drift down from about 6.8% right now. Remember early in the show we said 6.75 with a 6.78 a PR and a third of year fixed rate currently at Acue . And they see that going down to 6.3 by the end of this year, pretty much in , in line with the , uh, realtors and then drifting down to 6.2 by the end of 2026. I hope they're right. <laugh> . And then in terms of home values, Fannie Mace's a 3.5% value increase in 2025, and then another only a 1.7 increase for 2026 NAR. They have a little different measurement. The median sales price, they think it's gonna go up 3% this year. So pretty much in line with Fannie Mae's home price index prediction, but then the realtors think it's gonna go up another 4% in 2026. Any comments on that? Except it kind of doesn't matter,

Speaker 3: 21:31

You know.

Speaker 1: 21:32

Interesting. At least it's not going up <laugh> in terms of rates .

Speaker 3: 21:36

You shine that turd, Mr. Wicker. Yeah. Uh, as I note to my clients, like as rates come down, what do you, what dynamic do you think that will bring to the market that you are looking at ? If it gets cheaper to borrow money, do you think it's gonna get more competitive or less competitive?

Speaker 1: 21:59

Well, I would say the answer that the realtors , uh, uh, chief Economist put others , it would take a more substantial decrease in rates to, to get more existing homeowners to list their home per sale. The lock in effect as it's called,

Speaker 3: 22:14

We Yes. But even then you're, you're saying it would need to be a one for one , uh, uh, uh, buyer back in the market to seller get ready to , um, list rather when they , when they weren't going to before. You know, I know this sounds , uh, uh, contrarian, but if you're a buyer and you want less competition for the best houses, you want rates to be a little ugly to keep Yeah . Maybe Yeah . Other home shoppers

Speaker 1: 22:44

Less competition. Yeah,

Speaker 3: 22:45

Well, exactly. Uh, because if rates, and as you noted, God willing, if interest rates moderate a little bit, you, you'll just have, instead of having seven other people walking through that open house, you'll have nine people walking through the open house

Speaker 1: 23:01

Probably. Yeah. And you know how many more people will listen. That's all we don't

Speaker 3: 23:06

Know . Well , dad, the other thing too , uh, for our client whose story we were sharing earlier in the show, okay, yeah. You're paying 6% above what the ultimate , uh, appraised value was, which you could just call, oh, that's the 2026 price for the home in Wisconsin because refinancing is cheap.

Speaker 1: 23:27

Yep .

Speaker 3: 23:28

You can , uh, buy the house today and then, you know, what if Fannie Mae and the National Association of Realtors is right and rates do moderate, let's just get you that lower interest rate when it arrives. You're not stuck necessarily. Yeah . No

Speaker 1: 23:45

Refinancing the house is never, never guaranteed. It's never guaranteed guaranteed, never guaranteed. But you know, as long as you have this similar income and keep your good credit and that kind of stuff. Right.

Speaker 3: 23:53

But that's, but that's the ,

Speaker 1: 23:55

It's to be inexpensive.

Speaker 3: 23:56

Well, versus as we note, oftentimes with Florida clients, like it's a different analysis. Um, even I have a client, and I don't think we'll have time for this story, but I have a client buying a home in Chicago proper. Yeah . Oh, well guess what title costs for , uh, Illinois purchase higher , uh, city of Chicago transfer tax on a purchase Higher . Well, but the refinance cost Illinois is pretty cheap. Lower,

Speaker 1: 24:22

Substantially lower. Yeah,

Speaker 3: 24:24

Exactly. And so a good mortgage practitioner will advise you that is, you know, get into the house now. 'cause I think too often people approach a home like it's an investment and really it's con consumption and you get to enjoy living in the house. And then if the Fannie Mae is right and rates moderate, we can grab that for you.

Speaker 1: 24:46

And as we always do, with the retired pasture that we're helping by the for sale by Owner Town Home , I showed him , uh, a 6.625 rate with higher closing costs , a 6.75 in the middle and a 6.875 with lower closing costs . And of course, at first they were attracted to the 6.625, the lower rate. Yeah. And then I pointed out it's gonna take you five years of lower monthly payments. Right . Just to get to break even . Exactly. And they went, oh, okay. And so we ended up going with the middle road 'cause we don't know what rates are gonna do. So we went with the 6.75 in the middle of the road. All right . When we come back, David's got a story to share. You are listening to the Acade Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 25:27

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

Speaker 3: 25:38

Welcome back to the Accu Net Mortgage and Realty Show. I'm David, that's Brian over there. Uh , dad , uh, in working with our clients, I like to note that, you know, just closing on the home is not the end of the story. You continue to live in the home and as opportunity presents itself to refinance, we talk about that. And I connected with a client who had closed on their home a year ago , uh, and to do an annual review because time goes by and let's check in and see what's what they've had. You'll appreciate this. They've had a lot of home appreciation in the last year. Yeah . 'cause they bought in a municipality. There are not enough homes for all the people who wanna live in this Ozaki County , um, municipality. And they've, so they've got, you know, even more equity than when they started. They did a 3% down payment when they bought. They're probably looking at closer to 10% equity. Now, given that appreciation and paying down the loan a little bit,

Speaker 1: 26:41

What does that mean in terms of, of a refinance opportunity going from 3% equity, David to 10?

Speaker 3: 26:46

Well, so the rate , uh, right now they are not in the money for a refinance given the rate that they have. Okay . But it's funny you should say that. I noted to them that the benefit of refinancing might be putting two improvements together into one big improvement, which is can we lower your interest rate, you know, straight up on the refinance And , uh, can we lower the cost of the monthly PMI? Because monthly PMI gets cheaper the more equity you have. And let's say that in in words or in uh, numbers, if you only have 3% equity in your home, the monthly PMI is the most expensive. Yep . If you have 19% equity, gosh darn it , we're not quite there at 20%, but at the 19% equity, that is the cheapest that the monthly PMI could be, the, the interim refinance opportunity might be, ah , you know what, we're not quite all the way there to 20% equity, but can we pair a rate savings plus a monthly PMI savings into something? The number that I gave them, it's, we could save you $2,000 a year if we pair. Oh my goodness . Both of those improvements together. Oh , not yet, but that , that's their strike point as a family when , uh, we get to a rate that makes sense.

Speaker 1: 28:14

Okay. That's interesting. And then, and then you can also do with that, did you already talk about the stealth cash out refinance opportunity with them?

Speaker 3: 28:24

Uh, we hadn't yet. But funny you should note that, because with their , um, they bought in spring of last year, and guess what? The property tax man cometh and said, knock, knock, knock your property taxes are gonna go up a little bit. Yeah. And so because they have an escrow account, that monthly payment gets adjusted here in the spring to make sure that they've got enough money being salted away. So that come Christmas here of 2025, they've got the money sufficient for the now increased property tax bill. And I'm always mindful for clients that nobody enjoys it when their mortgage payment goes up. And as I point out to clients, the principle and interest ain't changing. That is the same. But if the price of poker for your property taxes living in your town goes up, then yes, the monthly payment needs to adjust to reflect setting aside enough money so that you're on track to pay that.

Speaker 1: 29:23

And then what mortgage servicers do is they offer you options as a homeowner. They say, Hey, would you like to make up that deficit in a lump sum all at once or would you like to kind of just have it reflected in an increased , uh, monthly payment that'll get us caught up.

Speaker 3: 29:37

But here's the other , uh, real life element that I think you'll appreciate. My client works for the Department of Veterans Affairs. Oh my . And currently is waiting and experiencing the heartburn of like, well, am I going to be , uh, he , they live in Milwaukee, he's working virtually. Is he about to be , um, instructed that he needs to show up to an office in Chicago or DC you know, five days a week? Oh my. And so that's the thing. That's the real life element that's on their mind. Yes, of course they would like to save money on their mortgage, maybe reduce or eliminate their monthly PMI, but for them they're navigating this , uh, job uncertainty. Yeah. Uncertainty. And what I was glad to be able to share with them was if he was instructed, you gotta show up to an office, they've had some nice home appreciation that they could get out from underneath this home, probably walk away with some proceeds. And that that does not need to be a stress point if they decide to follow the job, if it goes elsewhere in the country. Mm-hmm <affirmative>. Okay . That was the kind of real life news that I was glad to be able to share with them, catching up with them. So , uh, when we come back, I want to tell one other story about a move up buyer and kind of the fun , um, tall ceiling that we were able to put together on. You can buy as much house as you dare. Let's tell that story after this break. You listening to the Acuate Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 31:16

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

Speaker 3: 31:25

Welcome back to this last segment of the Acuate Mortgage and Realty Show. Uh , dad, I connected with a repeat client of mine who I had helped buy her home in 2017, which Oh wow . Feels like I just said I helped her buy the house in 1887. It feels long ago . Yeah . That seems like forever ago. Yeah. She is the daughter of a , um, many time client. And as I always note, if I start doing the loans of my client's children, I will have a , I will have achieved Brian's status. There you go . And they will melt my mind. Yeah . When the time comes. So, 'cause in the , uh, interim years she got married. Okay . And the home that they're living in, Taylor is old as time that they would like more house and they are ready to trade in their , their mortgage. They got a 4% mortgage Oh boy. And like an $1,100 monthly payment, but as is always the case, you'd like a little bit more house. Yeah . And you , or maybe a lot more house or a lot more house. So as we do, we gather all of the facts , uh, I gather her husband's information and their income information, you know, it's been a while . Where are you working? Talk me through your income, because they own this home right now. So the number one thing, and they've got a ton of equity

Speaker 1: 32:49

Of course. Yeah. That's a lot of appreciation. They probably more than doubled their home value, you think. Yes.

Speaker 3: 32:55

Uh, close. But , uh, what they want to confirm is, can I buy my new home uncorrelated to selling my old house? Yeah . And the answer

Speaker 1: 33:06

Yep ,

Speaker 3: 33:06

Go ahead. The the answer was quickly. Absolutely. Not only can you buy your next house untethered to what happens in the timeline with the old house, if you really wanted to, you could buy a new home up to $1 million. Whoa. Because their income and the available liquid funds that they have right now , uh, calculates out that you can have that much house if you so choose. Wanna guess the Well <laugh> , do they want a

Speaker 1: 33:38

Mortgage payment that large

Speaker 3: 33:39

This , they, they don't. But I think a good mortgage lender de declares, as I note, I'm not gonna run out of electrons so I can generate more than one preapproval letter for you. Sure. So here, let's, let's say if you wanna be house poor , you can buy a million dollar home, take that PDF Oh. But you then any individual client or married couple can then decide well , but what's most comfortable? And they're , they're probably gonna be in the more like 600, 700 range.

Speaker 1: 34:16

Oh , that's still a lot of house in southeastern Wisconsin. They're looking to buy

Speaker 3: 34:19

It is a lot of house. But I, if they wanted to as I homes and their prices don't make them equal. A $600,000 ugly house can be more expensive than a $700,000 nicely redone home. Sure. 'cause it's not just about the cost to acquire the home. It might also be, and how much will I have to spend to make this home as nice as I want it to be.

Speaker 1: 34:48

And to your point, you remember in earlier in the show, we were talking about my retired pastors buying the town home Yes . That they were renting. Wouldn't, you know, there was a competing unit. There was a unit exactly like theirs for sale for less money. So they did go to see it with their agent, but it wasn't nearly as nicely redone. Yes. And let's say the difference in price was 30 grand. Right. And it's like, yes , you would spend all of that and more.

Speaker 3: 35:15

Well, and that's

Speaker 1: 35:16

The analysis and , and that's a perfect analysis. 'cause it's literally the same unit, the same floor plan. 'cause it's a town home . It's

Speaker 3: 35:22

Not just the purchase price, it's also, and what might you have to outlay in order to make it what you want? So for my client, a million dollars is a preposterous number, but I think it gives them the flexibility to look at the home, not the new next home. Not just through the lens of what will it cost to get to the closing table, but you know, you're almost doing a backdoor financing of someone else's remodel. If you can buy a , that's exactly what you're doing. If you can buy a home that's nicely redone rather than the cost of cash, if you're buying a home where you need to take it from ugly duckling too . Is that a swan? Is that the metaphor?

Speaker 1: 36:03

Oh , that is, yes. Yes . A beautiful swan. Alright , well that's all the time we have for today's show, folks. We love it . We do At Acuate Mortgage, all of our loan consultants are passionate professionals and we'd love to help you or your loved ones.