ReFreshing Real Estate Deep Dive - Lending - Full Circle Podcast with The Christi Reece Group

We sit down with Spencer Marsh, a local Mortgage Loan Originator with Highlands Mortgage to better understand how the lending industry contributes to the success of a real estate transaction. 

In this episode, you'll learn about the role of a lender, the importance of an agent & lender relationship, common misconceptions and much more! 

The Full Circle Podcast - compelling interviews and incredible tales from Colorado's Western Slope. If you prefer watching your podcasts, head over to our YouTube page, christireecegroup, to watch this and all of our other episodes! 

The Christi Reece Group provides ReFreshing Real Estate services in Grand Junction, Fruita, Palisade and surrounding areas of Mesa County. Contact us at marketing@christireece.com, 970-589-7700, or visit us at our offices at 1601 Riverfront Dr, Suite 103 in Grand Junction, CO.

Transcript

Christi 0:05

The Full Circle Podcast. Compelling interviews and incredible tales from Colorado's Western Slope, from the mountains to the desert. Christy Reese and her team hear from the movers, shakers, and characters of the Grand Valley and surrounding mountain towns that make the Western Slope the place we all love. You'll learn, you'll laugh, you'll love with the Full Circle.

SPEAKER_01 0:24

Joining me is Spencer Marsh with Primary Residential Mortgage. Spencer, thanks for being here. Quick question to start you off. How long have you been in the lending space and what got you into it?

SPEAKER_02 0:34

Yeah, absolutely. Great to be here, Ian. About 24, going on 25 years now. Got in with some friends, actually talked me into it, and it's been, you know, a great ride ever since. So yeah, that's um it just has flown by. So I didn't necessarily aspire to be a mortgage loan originator, um, but it happened and and um I joined a good group and it was it was a lot of fun, and it is still fun. So yeah, yeah. Awesome.

SPEAKER_01 1:08

Well, we're gonna dive into some questions to really kind of understand uh what you as a lender do and and and what industry and what your industry kind of does for the world of real estate. So um when looking at what a a lender really actually does versus what people may assume, um, most people may think of a lender as somebody who just hands over the money, but the reality is closer to kind of a like a project manager or who orchestrates underwriting and appraisal and title and insurance. Um so tell us a little bit, what's the biggest misconception that buyers have about pre-approval versus pre-qualified and why that difference actually matters?

SPEAKER_02 1:47

Yeah, that's a good question. I I almost wish, I almost wished that pre-qualification really wasn't used in in any sort of mortgage terms. Um a pre-qualification is where we usually just have um the initial phone call or conversation with a potential buyer, and it's just a very basic rundown of what they may uh qualify for or approve for, looking at their budgets. Um we don't we usually pull a soft credit poll. Um we don't view or review income documentation, asset documentation. It's just that first initial welcome phone call kind of a thing to learn about their goals. So a pre-qualification definitely shouldn't ever be used to get somebody to go out, meet with a realtor, and start looking at homes for sure. A pre-approval, on the other hand, though, is where an originator should at that point gather up all the documentation that they can, all the income documentation, all the asset documentation, review, do a hard credit poll, and make sure that individual qualifies for the particular loan that they're that they're looking for. A pre-approval is what we give to an individual to um go out with their realtor and make an offer on a home. So as a realtor, you know, hopefully they look for something that says pre-approval, not pre-qualification. Uh hopefully a buyer um goes out understanding that they've given that documentation and it's been scrutinized by a licensed loan originator. So that's the those are the two main differences, um, and they are big differences.

SPEAKER_01 3:32

Yeah, the I I guess the idea for what is basically so that somebody doesn't get their their hopes up or or a seller doesn't get you know uh excited about somebody coming to view their home. And and in turn, it turns out they actually won't ever be able to afford that home right now, or it's not something that's in their budget to even start with. And so then that's a somebody who's looked at the home that's not even gonna be able to put an offer on the table.

SPEAKER_02 3:55

It's a huge disservice to the buyer, it's a huge disservice to the seller. Buyers run the risk of losing their earnest money. Yeah, it's a it's a bad deal. It's a bad deal.

SPEAKER_01 4:05

Um so going down on that a little bit further, so uh when we talk about loans and this the ability to actually then go look at homes, where do you find that most loans run start to run into trouble? Um and and how do you try to prevent that before it becomes a problem at the closing table?

SPEAKER_02 4:21

Well, luckily most loans don't run into trouble. Um if they did, I think we would all not be in this business. Uh but where buyers can get tripped up is if um uh their uh loan originator doesn't perform a proper pre-approval, doesn't um scrutinize that documentation and really have an understanding of the particular loan program guidelines, uh for one. Um there are things that can happen during the process that are unforeseen, things that uh pop up on a on a property issue. Um but but generally speaking, the way you get in front of any potential issue that could pop up is being ahead of the game. So loans go through several several steps. You had mentioned that earlier, where you know a loan originator is much like a project manager. We're we're managing each step of that process from the beginning pre-approval to the to the closing table, right? And there's many steps in between there, and we're managing that. Getting those steps out of the way early on and catching potential problems, that's that's the best way to do it. Um that's yeah, in a nutshell, that's that is how we can catch things, and it's it's much easier to find things early and tell a buyer and a seller that this can't work out really early in the process than the day before closing, right?

SPEAKER_01 5:55

Right. Um so some may know this or some may not, but there's obviously three different, I guess, popular types of ways you can acquire a mortgage through a mortgage broker, um, a banker, or a credit union. Um and so I kind of want to talk about picking one of those and why one may be more better for your situation, why one may be work better for your situation than another. Um, so I think oftentimes buyers pick a lender based on a name they recognize or a rate that they saw advertised uh without really realizing that there's options that operate completely differently. So um when a buyer is shopping for lenders, what should they actually be comparing um beyond just the rate that they see advertised?

SPEAKER_02 6:41

Yeah, there are a couple of things that I would um tell a buyer to review and compare just be in in addition to the interest rate, and that would be some looking at fees. A lot of times uh somebody might see an online uh advertisement for an interest rate that's lower than the going market rate, uh, and only to find out later that there's later in the process that there are a lot of fees being charged. So comparing rate, su for sure, absolutely, but comparing fees associated with that rate. And then also uh a lot of people are doing this lately, which is great to see. It wasn't always this way, but customer service. You you really need to compare what type of um communication are you getting? What how how do you feel when you interview these lenders? It's much like an individual interviewing uh real estate agents. You have to be comfortable with them, you have to see what kind of customer service they they they offer. Can do they answer the phone when you call them? Uh do they respond to your emails or your or your texts? So customer service, fees, um uh interest rates for sure. As it pertains to products, generally speaking, most uh competitive, relevant lenders in today's day and age have pretty much the same product. So you're not gonna really find too many different products between lenders. For sure there are some, that's that's true. But really it's it's more so now how do we differentiate ourselves from each other? And that's usually customer service, rates, and fees.

SPEAKER_01 8:21

So PRMI, or primary residential mortgage incorporated, is a mortgage banker, is that correct? Right. So um how does that compare to a traditional bank or a credit union, and what does it mean for the buyer's experience? How does how does that differ?

SPEAKER_02 8:37

As it well, as it pertains to the mortgage loan originator, such as myself, our duty uh between a mortgage bank, a mortgage broker, and a what I call a depository institution, a bank or a credit union, our duties are the same across the board. So uh a buyer isn't going to necessarily get a different experience from the individual L O, a good individual LO in any of those entities that you just mentioned. As a licensed individual, it is our duty and obligation to act in the best interest of the buyer, right? We're the licensed individual. And so that licensed individual is supposed to act and and conduct themselves in a way whether they uh a way that is is beneficial to their buyer, right? Whether they work as a mortgage banker, a mortgage broker, or a depository institution. The difference is I would say, for example, a depository institution like a bank or or a credit union, such as say US Bank or Bank of America, when you walk into one of those places, a branch of one of those, you'll see you can go to the teller and manage your checking and savings account. You can go over here and get a car loan, you can go over here and get a mortgage loan. These these are depository institutions that happen to do mortgages. Whereas a mortgage banker such as myself and a mortgage broker, that's all we do. We only do mortgages and we better be good at it. Or we could go out of business. Whereas a depository institution, they make money in in many ways. I'm not saying that they're that you you might get a bad mortgage from them. That's not that's not true at all. They can do a very good job at it. However, with a banker and and a and a broker, a mortgage banker and a and a broker, we have to be good at it.

SPEAKER_01 10:34

That that is the business that you work in. It's all we do. Um so let's talk about an agent-lender relationship. Um you know, you hear a lot of times your first step, and it can flip or flop, but your first steps meet with an agent and then they'll get you connected with a lender, or meet with a lender who will then partner you with an agent. And because those two steps fall pretty closely right in line with each other. You gotta have one to kind of start with the other. Um, so why does it matter to a buyer whether their agent and a lender have a great relationship? Um, and what can a local lender like yourself do that an out-of-state lender or online lender can't?

SPEAKER_02 11:15

I would I I would say look at it, look at it like this uh from a buyer's persp perspective. You walk into a building, you're on the first floor, and on the second floor is the closing room, the closing table. And the goal of buying a home is always to get to the closing table because that's where the keys are. They're gonna give you the keys to your house. You want to get to that. You've got your team there on the first floor: the buyer, the lender, and the agent. The buyer always gets to take the elevator. They get to step in the elevator, push number two, start climbing up. Well, the uh lender and the realtor, we've got to take the stairs. Each one of those stairs that we climb is a step in the process, and we we do it together. The agent and the lender should do it together and communicate as we as we go up the stairs, right? The buyer knows that we're in the stairwell. They don't see the stairs, but they know we're climbing. They know that we've got to get up there, but they don't know how many stairs there are, and they don't know the condition with which the stairs are. All they know is that they're supposed to walk out of that elevator, step out of the elevator, and we're supposed to step out of the stairwell, and all three of us walk into that closing room together. The sky opens up, champagne and confetti fall from the heavens, and everybody lives happily ever after. And that is how almost every purchase transaction goes. Um but that the teamwork of the agent and the lender climbing those stairs, going through those steps, from appraisal to title to processing to underwriting, uh I think is um it's it's definitely I I don't know if it's a lost art, but it if it if it is not the priority of an agent and the lender to work in conjunction to get to that closing table, that room with the keys, uh they're really missing out. And the and the buyer's really missing out in that in that teamwork. So the relationship should be one of open communication. The agent should be able to call their lender and say, Hey, I need you to come out to the house with me and take a look at this and see if it'll go with a government loan or not. Uh and to that kind of answers your your second question. What can an online lender not do that a local lender can? Well, the online lender can't be here, can't meet with the buyer in person to person, can't shake hands, can't meet on an emergency uh meeting with with an with an agent and say, okay, how do we get over this particular hurdle, something unforeseen?

SPEAKER_01 13:54

Right.

SPEAKER_02 13:54

That's why that's why working as a team, communicating as a team, and and meeting as a team to get to that finish line, that closing table, uh, that's the difference between a successful closing and one that's rocky that may not even close.

SPEAKER_01 14:10

And the difference between a surface level relationship and a and a personal relationship. I mean, I think it's fair to say that a lot of times you you you become so communicative with your lender and your agent that they are just then a part of that story. And if that relationship's not there, it it doesn't do much for that experience or the next experience that you have going forward. Right.

SPEAKER_02 14:32

Yeah, I I'm I've heard horror stories where a first-time home buyer had such a bad experience that they wished, A, they wish they'd never had bought a home ever. And they certainly at that at that moment don't want to ever buy another home again, which is really tragic. Right.

SPEAKER_01 14:46

Yeah, and it and it hurts the relationship and the job that the lender and the agent go through to get the buyer to the closing table.

SPEAKER_02 14:53

Yeah, oh yeah, absolutely.

SPEAKER_01 14:56

Um so now let's kind of dig into the um various loan programs. Um and so most buyers know about kind of the big four conventional, FHA, VA, USDA, um in vague terms. But let's kind of dig into what all those are for, who they're maybe more specific to, um, and then some of those lesser-known programs or or local incentive programs or or opportunities that may not be so advertised. So um let's start with conventional FHA, VA, and USDA. Can you break down who uh which one each of those is really designed for, and then how you see them get used most?

SPEAKER_02 15:34

Well, I would say the conventional FHA and USDA loans can be for multiple different types of buyers. Really the only specialty one is the VA, where it it um in some instances can can be a spouse, but it's always it typically always is is designed for a veteran or active duty, but but somebody in the in the military, right? So the other ones can be used for first-time home buyers, uh, they can be used for repeat buyers. Uh if you were to uh uh put um uh a few points of interest on that, FHA a lot of times will tick typically be a little more lenient on credit scores. They'll typically be a little more a little more lenient on a person's uh debt-to-income ratios, for example. So you may have a little bit better buying power. Um the USDA uh is uh is is a great uh tool for somebody who doesn't have a down payment. However, they're a little more strict on on debt to income and they have to be in a rural area. Uh so it's not that they are necessarily black and white. This you have to you have to fall within this box. That's not really the case. It's just a matter of uh speaking with a local qualified uh lender that can go through, you qualify for all of these options, which one seems to suit your your goals, right? So really only you only the VA loan is really guided towards a particular individual. The other ones can be used um for multiple different types of folks.

SPEAKER_01 17:12

Okay. And so for um, you know, let's say I just with my experience, there's certain homes that will go FHA versus conven conventional or vice versa, they won't go FHA, so you have to go conventional.

SPEAKER_02 17:25

The condition of the property, yeah.

SPEAKER_01 17:26

Right. I would say speak to that and kind of what determines whether it can be FHA eligible or not.

SPEAKER_02 17:32

FHA comes out and says, hey, we we we can be concerned for anything that is health and safety related with the condition of a home. So conventional is a little more lenient on that. Uh USDA usually follows the same guidelines as FHA. So if a if a home uh certainly if a home is in disrepair, it probably won't go FHA or USDA. And depending on how bad of a disrepair it is, it may not even go conventional, it could be cash only, right? So generally speaking, VA, USDA, the government agencies, uh uh Ginny Mae is who controls FHA, VA, and USDA, that agency has a specific set of guidelines for the condition of the property. If if the if the home is pretty rough, it may not go with those government-style loans. Uh conventional is a little more lenient. Yeah. And and this is where we as lenders we rely on the on the agent to kind of know a little bit about that. We certainly don't expect the a real estate agent to know all the ins and outs of a uh of the mortgage guidelines. However, if they're getting ready to list a property, it is appropriate for an agent to know can I accept an offer from a buyer that that is bringing an FHA loan. So going back to the relationship with an agent and their lender, that's super important to be able to call us up and say, hey, come take a look at this house. Uh FHA is really particular with peeling paint, for example. If there's peeling paint on the soffit, and and and we can go out and and and help maybe help and take a look at it and say, ah, this this should go, this should go FHA. We'll be okay. Or we look at it and say, oh, it's got two layers of shingles. FHA is uh not cool with that. We we can we can say that. So yeah, for for sure, a a buyer can be very confused about why they can't make an offer on a home, depending on the condition of it. And so, yeah, setting those expectations and managing uh that early on really can help the the buyer's experience as they go because they they'll the goal they'll fall in love with a home only to not be able to make an offer on it because they didn't realize, oh, my loan doesn't work for that.

SPEAKER_01 19:44

You're right.

SPEAKER_02 19:45

Yeah.

SPEAKER_01 19:45

And you know, a lot of times too, I think at least from what what we can experience uh or have experience, the sellers will then take that advice from the lender or their agent that says, you know, hey, this home is not FHA you know eligible, and maybe take the time to do those repairs ahead of time versus waiting for an offer that says, hey, we actually want the you know house repainted or the you know soffit to be fixed or whatever it may be. And so they can do those repairs out in advance instead of waiting for an offer that maybe requires that, or or they can't submit an offer because of those various things, right?

SPEAKER_02 20:18

Well, yeah, absolutely. Um look at it this way if if a seller can and has the means to offer their home to a bigger pool of buyers with with more lending options versus cash only, right you know, if if if I if if I have a home that I can take all of these loans, or I've got a home that can only take people with cash, I mean, right? Right. Yeah, totally.

SPEAKER_01 20:44

Um so let's talk about some of the local and state down payment assistant programs that are available. So let's talk Mesa County specifically. Um let's break down or kind of go through some local and state uh down payment assistant programs that that you're familiar with and that are available right now uh for most buyers who maybe don't even know that those exist.

SPEAKER_02 21:03

Yeah. No, that's a that's a great question. And there there are um there are a couple for sure. Colorado as a state has has a couple. Um you may obviously you would have heard of uh CHAFA and CHAC is another one, and these are down payment assistance programs offered by the state, so it doesn't have to be just Mesa County, these can be in all the entire state of Colorado. And those are the most popular, uh primarily because, well, they're the biggest, and they and they are um they they always have funds they are a lender, so they have funds available to offer to to to buyers. The the um the city uh offerings or the or the the the more local down payment assistance programs, for example, Housing Resources has one uh here in Mesa County, um uh the local Grand Junction uh um uh real estate association has some money to give towards towards closing costs. Those are based off of a budget that that that they have and sometimes they have money and sometimes they they don't. So it's a matter of again working with your uh lender to f to find out if if those funds are available which then means that that CHAFA CHAC for example they're they're the ones that are are used mostly by individuals that need help with the down payment assistance and and they don't they're not just for down payment assistance though they have other redeeming qualities not just for down payment assistance but those are the primary ones that that we use and and seem to be the ones that serve the buyers the best programs that you're familiar with that that are available you know for teachers, first responders um healthcare workers stuff like that? Yeah each lender uh has a different style of of loan for those professionals some call it homes for heroes some work uh special deals with with veterans so you really just need to call your local lender and find out but yes the to answer your question there are programs out there there are there are doctor loans that help um um somebody just getting out of medical school and they haven't really even they haven't even started their career yet they've been offered a job but it's they haven't started there yet there are loans for them um the government has uh some some loans they're they're far and few between these days it used to be very prevalent called the Good Neighbor Next Door where home specific homes in certain areas of a town would be offered to a professional in uh a first responder teacher uh police officer uh etc that that would give them a discount on the price of the home so yeah there are programs out there they they all have their pros and cons definitely speak with your local lender to to go over what those are and and what they entail yeah um so let's kind of myth bust some miscon misconceptions or you know fear-based hesitations that are maybe popular or that you run into quite a bit so um I think the common one that um you know a lot of people find themselves saying is I need 20% down to buy a house.

SPEAKER_01 24:35

What is your you know what do you have to say to that or or what what would you tell someone who who comes to you and says I don't have 20%?

SPEAKER_02 24:43

Well I I mean I right off the bat I would say you don't need 20%. Disagree you don't need it if that's the misconception that's out there that people are are learning or or hearing or regurgitating one to another it I did it no you don't need it. There are so many other pro there are so many programs out there with as little as zero down to 3% to 5% to 10% 15% many, many options. So yeah I've heard that misconception before and it's unfortunate but you definitely do not need 20%.

SPEAKER_01 25:13

Let's say our next one is my credit score is not good enough. So what scores actually qualify for what programs and what's the floor?

SPEAKER_02 25:20

Man I hear that one all the time that's a good it is interesting that the online uh like the free credit reporting companies that are online that help a person monitor their credit they they are good they're they're actually really good and I and I admonish individuals to to sign up with one of those but it is very interesting that the that that model and that score that's being pulled is is not as accurate as what a true score is and so a lot of times people will look at that free credit reporting agency score and say well I I can't get a loan I've I've googled what it takes to get into this particular loan and my score is not good enough. No maybe you need to call your again call your local lender and find out if your score is not good enough because there are programs where you don't even need a credit score there are programs that are into the low 500s depending on the situation. You know credit scores go somewhere between high threes to mid 800s right which is quite a spread. There are programs that go down into the 500s there are again there are programs that you don't even need a credit score.

SPEAKER_01 26:32

There's only one that I know of but the the point is don't just go off of what you see your score on your credit card bill and then say oh I can't buy home I've I've resolved myself to the fact that I'm going to rent forever so a lot of times people will say rate shopping hurts your credit talk about like the 14 to 45 day window for mortgage inquiries and and how that works.

SPEAKER_02 26:58

So if you if you have uh a couple of different mortgage lenders pull your credit through it within 45 days it's through um the FICO scoring system which is what we're using right now. Advantage is uh is a is a credit scoring system that's becoming more and more popular. They're a little different I think they're more like the 15 days but if you have your if you have your credit checked multiple times within those 45 days it only counts as one inquiry against against you. But also a more a hard mortgage hit does not negatively affect your credit score like it like a credit card hit does. So again telling people look don't don't worry so much about that. If you are worried about it have the lender do a soft credit pool. But make sure that you're talking to a lender and looking at your options whether it be through a soft credit pool to start and then a hard credit pool to then start shopping interest rates is totally appropriate. It's not very common for a buyer to have more than two or three of us pull their credit it really isn't by that time they've they've found somebody that they gel with they they've got good fees they've got a competitive interest rate and they usually stick with them so it's not really it's not really common to go much more than that.

SPEAKER_01 28:18

Therefore don't sweat it right um let's say another one is you know I I've inquired a lot of debt whether student loans car payment whatever it may be so I need to pay off that debt before before I'm able to buy um talk about how debt to income is actually calculated and and why paying off all your debt before buying could actually back backfire on you.

SPEAKER_02 28:43

Well I would never tell anybody not to pay off their debt right however some folks will get it in their mind that they have to have it all paid off and fast forward years later they don't have it paid off and they've they're still renting, throwing their money away and and that again is another tragedy. So get with an intelligent smart qualified local lender and actually go through your accounts and see which ones they recommend that you pay off to your point if you pay off too much and you don't have any debt anymore your your scores start to go away so you're right you do want to have some payment history for the credit scoring program. So what I recommend is again getting with your local lender and saying these are the debts A, do I need to pay any of them off? You might be surprised you don't you may not need to pay any of them off your debt to income ratios which I'll answer that question here in just a second but you may not need to pay anything off. B the lend your lender can look go through them and say okay pay these off and it may boost your score and get you into the next interest rate better interest rate bracket or it may approve you for the next loan program. Maybe you approve approve for one program but if your score goes up another 20 points by paying off this loan your score may go up higher and now you approve for two options get with your lender go over that don't be afraid to have your credit polled and go through a budgeting process and a and a and a process with which to figure out what loans you should pay off. The way we look at debt to income ratios is we we take into consideration all of the payments that are on your credit report plus the house payment. We don't take into consideration what you pay for groceries typically what you pay in fuel or or insurance typically so uh we we we want to talk to you about that and make sure that we put you into a program taking all that into consideration put you in advise of a program that that meets your your budget right but that debt to income ratio is all of your outgoing payments versus the income that we can use to qualify and that ratio depending on what program you you are you're trying to get into or or a program that that that we uh recommend has certain guidelines and we we need to fall within those guidelines of debt versus income. And is there a standard you know ratio of debt to income that you that you guys look for or try to fall between in order to to make that advice well there's there's there's two things that that that uh dictate that number one it's as a fiduciary we want to make sure that somebody isn't house poor so yeah if if you Google it I think they say you you really don't want to be over 42 43 percent uh debts versus your income right going to going your income going to the debts however there could be some other circumstances that that would allow you to be comfortable going above that so um we want to we want to look we want to look at all of that number one so yes we always recommend that they get something that they can that not only can they afford on paper but but they can feel comfortable and and and take that week weekend vacation and not be house poor. So we look at all we look at all that and we try that we try our best usually a buyer will come back and say well I the the home that I really love is about 2000 more than I thought and the payment's going to go up a touch and I'm just outside of that do I still qualify? Yeah you do on paper you do absolutely are you are you comfortable with that right what what uh how can we help you with your budget on that and that's what we try to do. So yeah it's super important definitely and there the the really only black and white ratios you get into where you you really can't even get a loan is when you when you when you exceed a certain amount of your income where you you know 50 to 60 percent of it's going towards the house payment and all your other the new house payment and all your other debts that starts to get that starts to get rough for most loan programs. There are some programs that don't look at it as tight as others such as VA for example but but FHA conventional USDA they some of them can get pretty strict on that on that threshold.

SPEAKER_01 33:20

And let let's talk a little bit about um you know paying down a points or paying down points on your loan versus um you know saving that money and waiting to refinance later that's a conversation that has come up I think maybe more frequently now that interest rates are a little higher and I say higher for people that were bought in COVID and have 3% interest rates but um talk to the point of you know when does it make sense to to buy down a rate or to pay down rates or pay towards points for your rate versus just holding off and refinancing later.

SPEAKER_02 33:52

You know there's no there isn't any black and white answer to that. And if an if a loan officer tells you that there is this this is a hard fast you should buy down this interest rate you should do a a temporary buy down or a permanent buy down I would caution you to maybe get a second opinion and what I mean by that is this it depends is my answer to you. How long are you going to be in the property? Is it a a short-term stepping stone type of a property could you potentially be transferred with your job you may not want to spend all of your money out of pocket to buy the interest rate down if you don't think it's going to if you're you're not gonna have that loan very long if the rates do come down and that's a big if they've they've been meaning to come down for the last you know two and a half three years and they haven't so hindsight always 2020 right but they're based off of all of those questions all of those particular scenarios my counsel to my buyers is let's take all of that data all of the answers to those questions let's see what we can buy it down to how much that costs and how much does that save you monthly not only on your monthly payment but also on the compound interest over five years over seven years does it make sense right and sometimes they will say you know what I would just rather keep that five to seven thousand dollars in my pocket for a rainy day or this is my forever home I'm not leaving uh I don't expect the rates to ever come down in my lifetime maybe they're of an age where it doesn't make sense and they don't want they don't buy it down at all. So there isn't a hard and fast you should do this. It just depends and again it's it's difficult to do that over the phone with a or or over email with an online lender. Right.

SPEAKER_01 35:50

Yeah my last kind of final thing for you here is uh if you could put one sentence on a billboard for every first time buyer in this market what would it say?

SPEAKER_02 36:03

Don't give up don't give up uh the dream of home ownership it may it may seem daunting I you'd have to look it up I'm but I I think it's accurate. I think the uh lowest percentage of home buyers right now are the young millennials and the what is it the Gen Zm they are the the lowest percentage of of individuals buying homes it could be for many reasons but I suspect some of those reasons might be the fear of the interest rate the fear of the monthly payment and the fear of of ca of the home prices increasing. Don't give up our industry changes so fast. What was available what was not available six months ago might be available now. Interest rates change daily up and down uh homes come on the market daily what what wasn't there yesterday the home that is could be could be your dream home or could at least check most of the boxes could be there today. Don't give up keep working with a savvy lender and a and a savvy local realtor of course make sure you have that team that can climb those stairs for you meet you at that closing table you know with the champagne and the the confetti but but don't give up don't give up that dream of home ownership because it'll happen. It'll happen.

SPEAKER_01 37:38

And I think the idea too is that you know even if home ownership is is not you know in the cards for you next weekend or next month or three months from now establishing that relationship with the lender and the agent so that they know what your situation is, they know where you want to go they know what you want to do you know how you want to end up so that when the market changes and when that house that wasn't there yesterday or last week comes on the market they can say hey I've been working with you we've got you know there's a house available now it suits your budget let's get back in touch with that lender let's do the you know let's yep let's go through the steps and what what you thought was going to take two years is now going to happen within the next couple months and and you're you're under contract.

SPEAKER_02 38:19

But you know I've had first time home buyers several that it's it's taken two years it's taken two years for them to settle on a location a price a an interest rate uh uh they they did need to do some credit repair they did need to pay off a few things they they did need to get in a better position financially uh with their income so yeah it may take two years and that's okay but just don't give up it it it it will it will happen and like you just said the timing may not be right today but it could very well be right tomorrow yeah well Spencer thank you for your time your your knowledge and expertise on this um on this topic if audience and clients and whatnot want to reach out to you and either learn more or have questions for you um how can they get in touch with you and absolutely no they can um they can reach me i'm I'm on the web right so um under primary residential mortgage Spencer Marsh uh my cell phone um 970-2704086 call me text me anytime if I can't get back to you right then or if I can't answer your phone call right then I'll get back with you really quick so yeah feel free to that's that's what I do.

SPEAKER_01 39:33

Awesome well thank you for your time if you also have any questions as well you can always reach out to the Christy Reese group and get uh with an agent who can also pair you uh with Spencer or another local lender like we've mentioned so uh give us a call at 970 589 7700.

Christi 39:49

Spencer thank you for your timing yeah absolutely it was a pleasure thanks for listening this is Christy Reese signing out from the Full Circle Podcast