Ruth Phillips

We're talking about the five keys to home ownership with Ruth Phillips, Community Development Lending Division Manager with Cadence Bank on The Bev Johnson on WDIA Radio.

Episode Transcript

(00:08):
Oh I like it. George Bensonlittle Cruise Control for our jazz lovers and
before that, a four play MaxOman. Yeah Yeah. Welcome in the
w d i A The Beth JohnsonShow on this Wednesday, May seventeenth,
twenty twenty three. Enjoy this fabulousday to day. We are going to

(00:29):
ask the expert today. She isback in the house, Ruth Phillips from
Cadence Bank. Ruth is the CommunityDevelopment Lending Division Manager and we're going to
be talking about the keys to ownership. So when it's your turn to talk,
you know you can hear the numbersto dial five three five nine to

(00:51):
three four two five three five nineto three four two. If you're listening
to us outside the Memphis area,it's one eight hundred five zero three nine
three four two one eight hundred fivezero three nine three four two. We
are getting ready to ask the expertwith Ruth Phillips from Cadence Bank and me

(01:19):
Bev Johnson on the Bev Johnson Showonly on w d i A The Bev

(01:48):
Johnson Show the Heart and Soul ofMemphis for thirty six years and she still
has Memphis talking on w d IA happy seventy fifth birthday, the ten

(02:13):
seventy w d I A. Hi, this is David Porter. You know
Stax music, all of that.None of that would have been possible for
me. We're not a young kidgrowing up in Memphis, Tennessee. And
the support and encouragement I got fromw d IA. I have so much
love and respect for this radio stationand what it's done. But the community
that I love you will forever beour good will and good time station AM

(02:38):
ten seventy w DIA. I loveyou, Thank you Memphis and w d
i A listeners from all over theworld. We couldn't have done it without
you, celebrating seventy five years onyour radio, still serving up goodwill and
good times. Where the hard andsoul of Memphis AM ten seventy w d
i A all over the time,working hard to bring you fdays never sings

(03:15):
off the Pence Moday. Good morning, and welcome back to w d I
A. We are asking the experttoday. Our expert is Ruth Phillips from

(03:39):
Cadence Bank. Ruth is the CommunityDevelopment Lending Division manager of Cadence Bank.
And I and I if you haven'tyou said Cadence Bank well, what happened
to Bank Corps South And they maynot know that, but I let Ruth
tell tell what happened, because Iknow you all know her from Bank Course
South. But let me say goodmorning to you, Ruth Phillips. How

(04:00):
are you today? Good morning vI'm doing just marvelous today. How are
you today? I'm doing well today, I'm doing well. We are going
to talk about the five keys ofhome ownership. But before we do that,
because someone's probably asking and they don'tknow what happened to Bank Corpsal.
Well, we are merged in twentyI forget this is twenty Tory. So

(04:25):
in twenty twenty one we did anacquisition. We purchased Cadence Bank the mortgage
side. In October thirty first oftwenty twenty one, we switched our names
and start closing loans there, andthen we did everything in November of twenty
twenty two, changed the outside ofthe you know that now it says Cadence

(04:46):
instead of Bank Corpsalth. But weare the same great bank. But we've
just come together for one unity.Okay, it's still there, we are
still there, still there, butwe're under a new name. You name
a new face, new face,Stadence Bank. I like it. I
like it too. I like thename Hadence. Yes, I do too
too. Well this day, Ruth, we want to talk about the five

(05:08):
keys of ownership and understanding that.And when we talk about that, and
somebody may say, well, Ruth, well how does a bank get involved
with somebody becoming a homeowner? Wellit is, Well, one thing,
we're local, and so if you'rebanking local and you see a bank on

(05:28):
a brick and mortar on a storecorner or wherever, that gives you an
opportunity to walk into the to thatinstitution and see if they do mortgage loans,
see if they do home loans.And that's what we do at our
branches. We do offer mortgage forfirst time buyers, people who want may
want to refinance. We offer homeequity line of credits investment properties and so

(05:51):
that's what we offer there. Andyou know, you could have multiple properties
like I have investors as well.But that's how we get involved. And
what we do is look at aperson's profile basically to see if they will
be eligible for homeownership. Oh good, good good. So let's begin.

(06:11):
Let's talk about those five keys tohomeownership and starting with one, how do
we start? I like to startfirst with your employment, which that's important.
That is really like the number onekey, okay, And in my
view of homeownership is employment because youhave to have a strong, stable employment

(06:40):
history for the last twenty four months. Okay, So what does that look
like. It looks like that you'vebeen on your job anywhere from twenty four
months or longer. And then somepeople say, well, I change jobs
one year ago. Well, aslong as you don't have a big break

(07:01):
greater than six months in between.And now you're on your job and it's
stable. It is full time.You are making the money per hour that
you're you know that you're set upto make. So you're not just going
in and say, well I havethe ability to work forty hours, but
I only work thirty hours, andthen want us to use forty hours to

(07:24):
qualify you. But you're working yourjob. It's full time, it's working
forty hours, you show up ontime, You've getting great reviews. It's
stable income. And what a stablethat means that I can depend on it.
I know that I can trust youto loan you the money based on
your employment because you've got stable income, which is the ability to repay the

(07:46):
loan bottom line period. A lotof times people ask me, well,
I'm retired, now I get apension, and I may get social security
or disability. Those are stable incomes. They are reoccurring. You have stability
with them because we know that.You know, sometimes your pension is for

(08:09):
a lifetime, and your disability longas it's going to continue for the next
three years, you can use that. And then of course you're social security
it's for a lifetime as well.So those are also you know, people
say why don't work a job.I do have income, but it's one
of those options pension, disability,social security. And then we also have

(08:33):
people who receive child support. Childsupport can be considered as income as long
as it has of history of beingreceived. Now child support doesn't have to
be court ordered with the traditional courts. You can have an agreement just between
me and my spouse that every monthhe's gonna pay me so much money to

(08:56):
take care of our joint, ourchild or children. And then I showed
the history of receiving that money fromhis account every month, so that's we
can use that for child support.Oh, child I didn't know that.
Oh yes, oh yes, thatgood. Long as the child support In
Tennessee, it usually cuts off atthe age of eighteen, so long as

(09:18):
they have at least three years remainingof the child support, we can count
that as income. In Mississippi,child support usually goes to the age of
twenty one. Okay, so longas we have that time remaining for at
least for three years. And yes, ma'am, you can count the child
support. Now you do have toshow up history of receiving it, so

(09:39):
you won't be able to say,well, I got it five months last
year and then you know I didn'tget it for the other seven months.
You won't be able. That's notconsistent, and nor can you know you
think about it, it's not evenstable. Yeah, so if you're only
getting five out of twelve, thenyou know it's not even halfway to the
thing. So it's not stable income. So I would not use that to
help you qualify to buy a housebecause you cannot depend on it. We

(10:03):
only want to use income that youcan depend on every month to receive.
So those are a few things there. And then I have people who are
self employed. Okay, now that'sthat is that a biggie or that will
get a lot of times when you'reself employed, that it's harder to get
alone. No, ma'am. Oh, if you are filing your taxes correctly

(10:28):
and you are showing a profit,then you should be able to use that
income. They average it over twentyfour months, and that income is what
we use to qualify you to buya home. A lot of times when
people are new to being self employed, so maybe you just started in the
middle of the year, so likenow it's about to be June, I'm

(10:50):
gonna go and be self employed.So you won't have two year calendar of
tax returns because you didn't file itin twenty twenty one or now twenty two
taxes, and so you don't havea history of it. So we would
have to wait until you file yourtwenty three returns, twenty four returns and
then be able to buy in twentyfive. You see what I'm saying.

(11:11):
It has to be stable and solidalso with self employment, because sometimes you
know, it's ups and downs andups and downs. So if your income
decreases from year to year and yourself employed and it's greater than twenty percent,
we may have an issue there becausenow what you've got declining income instead
of increasing income. So a selfemployment it does require a little more work

(11:37):
on the lender. But as anemployer, if you say if you're self
employed, so as that person,if you've done your tax returns, you
have a current year to date profitand loss, then you should be okay,
we're just going to base your incomeon what you file with the RS.
So does it matter, Ruth,what as being self employed? Does

(12:00):
it matter how much your income is? Does it matter? Are you all
giving a cap you have to havethis much or well, it's going to
be based on what you're trying toqualify for. Gotcha? Okay, So
if you are expensing the majority ofyour income for expenses when you're self employed,

(12:22):
then what you're netting we average that. So if you're claiming just say
you you earned sixty thousand dollars ayear, but you're writing fifty thousand off,
I'm only going to use that tenthousand divided by twelve to qualify you.
That's going to be your qualified income, not the sixty thousand where you

(12:43):
actually earned. Because you've told theIRS that it costs you fifty thousand dollars
to operate your business. That's whatwas your expense line? Okay, follow
me, I'm following. Okay,good, good, I'm good. So
again recap. The first key isyou need to have a job. You
need to be employed, absolutely,absolutely absolutely, because we're talking you all

(13:07):
about the five keys to home ownershipand if you're thinking about getting a home,
well Miss Ruth Phillips's day is tellingus how you're going to be able
to do that. So that firstkey is you need to be employed,
whether you're working for somebody or selfemployed. Correct, Now, bev say
if I was in school, I'vebeen in nursing school for the last two

(13:28):
years, and I've just started workingfor a local hospital. So guess what,
I don't have a two year workhistory, but I can use my
education as my work history. Sonow I have a two year history because
I've got my transcript showing that I'vebeen in school for the last two years

(13:50):
or four years. I have longit took me to get my nursing degree,
and then now I've just gone towork for a local hospital. I
can use that as your experience.Oh good, absolutely, absolutely. So.
A lot of times people are incollege and then when they get there,
I call it their real job,their real job after graduation. We

(14:11):
use their college time as their experiencefor the two year work history. Okay,
okay, okay, all right.Our next key the elephant in the
room. Credit. So okay,So is this the second key? This
is key number two. Employment isone, and to me, that's the

(14:37):
most It's more important to have stableincome and employment to me than it is
to have a good stable credit becausecredit can be restored and you can restore
your credit anywhere from thirty days,sixty days, ninety days, where you
cannot restore employment history in thirty orsixty days. You've got to have a

(15:01):
history of working. So to me, credit and a lot of people call
me to all the time and say, hey, I've got a whatever credit
score, and I'm like, it'smore than credit. Okay, it's more
than credit because people think if youhave a high score seven hundred to eight
hundred, that I know I'm goingto get the loan exactly exactly, and
that that is the mindset, becausethat's kind of what's put out here in

(15:24):
the atmosphere is that I just havegreat credit, great credit. But in
the meantime, you've got great creditbut you're changing jobs every three weeks.
Every four weeks, you go workthere for a month. I just I
just had a past customer, shehad great credit, didn't it's May.
She's already changed jobs twice this year. Wow, and it's only May.

(15:46):
So you have to get somewhere employmentand get settled so it can be stable.
So credit to me is like theeasiest portion of a mortgage to reconcile.
It's because it doesn't take very longto restore it. All you have
to do is start paying your billson time. So if your credit is

(16:06):
off and your score is not veryhigh, or it's just a fair score
and you want to higher score andyou want to do better in your credit
score, start paying your debt ontime. Start making less purchases with your
credit. Don't run the bills upso high until you get too close to
your high credit, and then you'llsee your score increase. Okay, So

(16:27):
if you do all that, yes, your credit is going great. Remember,
so I'm really good. But however, we're still over here. We
don't work forty hours a week becauseit's available to us, we just don't
go. We aren't, you know, keeping up with I'll change jobs.
Well, I didn't like that job. So we do a lot of you

(16:48):
know, people do a lot ofthat. I didn't like that lady.
That lady been that thirty years,right exactly, We're gonna get somewhere and
go to work, work, thenyou'll be able to you know, move
into homeownership. So to me,the most two important things for sure is
your job stability, because you haveto have the ability to repay the loan

(17:11):
period period a period. That's itis. You have to have the funds
to repay the loan. And thenwe go into your credit. You have
got to have good credit in orderto qualify for a mortgage terrio. But
credit is restorable. Yes, Ihave seen people come in with five seventy

(17:33):
five eighty. I send them toOperation Hope. But I'll bring them next
next week, next next time,next month, I'll bring Operation Hope in.
We'll talk about a little bit deeperinto credit. Then. Yeah,
I've seen them go over there andthey go in with low fives and come
out with sevens good and the sevenhundreds. So it's restorable, yes,
it is. So that's like athree to six month time, but your

(17:56):
employment has to be stable. You'regonna be on a job longer than that
if you've just been jumping around fromjob to job. But if you've been
on your job and you have stableemployment, then that's the most important things.
Now, let's work on your credit. If your credit needs to be
worked on to get it restored towhere we can also say, hey,
she's got a history of repaying herdebt, or she he has one of

(18:19):
repaying debt, then we can putboth of them together and move, you
know, toward homeownership. So thoseare the two to me, the most
important of the five keys. Yes, to me, it is employment and
end credit. Correct. Correct,You have got to have both of those
in order to move into the lastthree keys. Okay, yes, ma'am.

(18:44):
Those are so. So when whenyou're thinking of and I love the
part when you said that your incomethat now we know that even if you're
you're getting child support, that willhelp. And if you have been going
to school, that that you allwill look at that. Okay, you've
been in school, you've graduated,and so that that's going to count as

(19:08):
well. Correct, correct, okay, correct, correct, which you know
I think that's great. But let'sjust think about it. That work.
School has been your job. Thathas been your job. Now you may
not have gotten a paycheck, butit has prepared you to get a paycheck
exactly. So yes, ma'am,they do count that as part of the

(19:30):
of the work history. Good.Good, And even even in some people,
Ruth, we know who go toschool, they even have part time
jobs as well and probably been beendoing that correct, correct, they do,
they have part time jobs, andso we can show that, Yeah,
he's they're great. You've been inschool, you know, you obtained
your degree, and you have apart time job just to keep your credit

(19:52):
flowing. Because a lot of timespeople they have credit while they're in school.
They have debt while they're in school. So we've got to get that
debt paid. So if they usepart time employment to pay the debt and
say a breast with school, ok, it's good. Yeah. We are
talking, ladies and gentlemen the fivekeys of homeownership, and we think that's

(20:14):
important, you know, and Ithink that's important. I believe that if
you want to become a homeowner,you can absolutely you know, and we
know Ruth that everybody doesn't want to. They enjoy living in apartments or whatever,
and pay and that's fine, correct, But for those who want to
have your own home, idiots,nothing like it. I will wholeheartedly agree

(20:37):
with you and always say people askme when when will I be ready for
homeownership? Yeah, when you're ready. It'll be available for you when you're
ready to take on the Because it'sa responsibility, or it's a big responsibility,
it's a big yes, tell meabout it. So it's more than
paying the note. Yeah, itis, because you know you have to

(21:00):
do the upkeep. Yes, ifyou've got to keep your yard up,
you've got to keep street appearance.You know, it's more than just I'm
gonna pay the note. And forpeople who that's all they've done, must
pay the note, they didn't keeptheir yard up, so then they end
up with what those little bills thatthe county comes around or the city comes
around and put because you don't haveyour yard cut so it didn't makes it

(21:22):
hard on them. Or people whodon't keep their houses up, upkeep in
the home. So when they getready to sell their home, they're not
gonna get a good true market valuebecause they haven't kept the upkeep, haven't
kept the house painting it, havingkept anything break, you didn't go ahead
and get it repaired. But sothen you know you're not going to get
full market price on it unless youcan find a contractor who's willing to bring

(21:47):
it up to market and be willingto be paid at the closing table.
A lot of times people say,well, I didn't have the money to
keep it up. Said, okay, that's fine, I understand. I
mean, I'm sitting in a positionwhere I understand upkeep, and I understand
having the money that's required for upkeep. But sometimes you gotta make it a
priority. You gotta make it apriority this time. I'm not going to

(22:11):
go to the saloni get my hairdone. I'm gonna do my hair at
home, and I'm gonna take thatmoney and buy me a bucket of paint
this month. I'm gonna do thatfor a couple of months. And guess
what. There's all sorts of tutorialsout there to show you how to paint,
Yes, how to do fixtures,which I'm a little nervous with electricity,

(22:34):
but how to do plumbing things.Change your washers so you don't have
that constant drip running up your waterbill and ruining your cabinets. So you
know that little washer costs about tencents. You just need to know how
to put it in, and they'vegot all sorts of tutorials to do that.
So homeownership, it's available when you'reready and prepared for it. Somebody

(22:56):
sent me a message yesterday and say, I'm a fan of home ownership.
Yes, should I rent? I'mmoving back to Memphis. Should I rent
or should I own? I said, So, let me get this straight.
You want to rent a property fortwelve consecutive months because you think the
rates are going to decrease in twelvemonths. Who told you that they would.

(23:18):
We don't have a guarantee. Wedon't even have a guarantee for tomorrow.
So I would not rent for twelvemonths thinking that the rates were going
to decrease. We thought they weren'tgoing to increase. But here we are
they have increased. But home ownershipwould it kept all moving, kept on
rolling? Yes, And it's stillrolling out here. We are still I

(23:41):
have people saying, oh, Iput five contracts in last weekend, not
one of them got accepted because therewas twenty more contracts on that one property.
So we're still in a good timein our area, the supply is
low, so you've got to beprepared. So those who are wanting to
buy a house and you think that'swhat you want to move in to tune
in today. Listen, ye makesure your job stability is there. Check

(24:06):
and you know, I'd like tosay, just make sure go back to
look at your W two, lookat your income that you have. Now
ask your employeer, Hey, amI gonna are we still gonna be open
two years from now? M goodpression. Yeah, the stability of the company,
the stability of the job. Andthen of course, like I said,
credit, you can restore your credit, cannot restore your employment history.

(24:30):
You have to start where you areand then add to it. Okay,
yes, ma'am. All right,let's let's hit our third key before we
take a break. Okay, athird key. Your assets? Ah,
what is that money? Money?Money? Okay, it's gonna be our
money. Are you banking with thebanking institution? And if you're not,
you should. You should be openingup a check in or a savings account

(24:56):
M versus, you know, usinganother form where they charge you to get
your money out. If you havedirect deposit, you can send that direct
deposit to a financial institution, alocal bank where you know you don't have
to pay them to make a withdrawal. Now, a lot of these other

(25:18):
institutions that aren't bricking mortar, theirinternet banking, they do offer that,
But when were you're gonna go tothe telemachine and get money from They don't
have brick and mortar. And sowhen you go to the teller machine,
now you got to go ten timesout of the month, and that's five
dollars three to five dollars a pullto get cash out. You've just been
fifty dollars. You could have beensaving that fifty dollars toward your home ownership,

(25:42):
toward putting into the transaction for youto purchase a home. But assets
are very important as well. Althoughif you're a first time home buyer,
there are some downpayment assistance programs availablefor you, but however, you still
have to have money to put intothe transaction. Just to get to the

(26:03):
down payment assistance program, you haveto have your assets in the bank in
season for sixty days. People askme all the time, when I got
to get it out the couch.I gotta get it from the matches out
of the freezer. No ma'am.No, ma'am, no, sir,
no, no no, no nono no no no no no no no
no no. That money needs tobe in a financial institution seasoned. We

(26:27):
need to see that on two monthsbank statements. So you all need to
see that, yes, ma'am,Yes, ma'am. We have to see
it seasoned, because you know,cash is not keen when it comes to
financing. Okay, it's not keen. It's nice to have, but you
know who's going to really keep it? I know I'm back that away from
because people do keep that of mymoney at home. It needs to be

(26:48):
in your financial institution and we needto be able to verify that through a
bank statement. Okay, okay,So savings is very important. I've seen
people take savings and use it likecredit. I've got a history because savings
is volunteer. You're volunteerily putting infifty dollars, one hundred dollars whatever a

(27:11):
month, and then you've got ahistory of doing that for twelve to twenty
four months, and you can supportthat. So now you're picking up two
things. You're getting that as acredit option, and you're using it now
for your assets. So you doneed money to start the process for buying
a home, You've got to haveearnest money. Earnest money takes the house

(27:33):
off the market with the contract thatsays, hey, seller, I have
good intent and I'm going to honorthe intent by putting up this amount of
money for you to take your houseoff the market. Why get my mortgage
together for me to buy your house. That's your earnest money. Then you're
gonna have to have money for ahome inspection. And there's one of my

(27:56):
favorite forms that FHA has. Itsays, for your protection, have a
home inspection. And to me,if you cannot afford to get a home
inspection, you really can't afford tobuy a house. Because just because it
looks good it's been painting. Oh, it's all decorative in everything, that
doesn't mean there's nothing not a littlebook a man behind that paint exactly.

(28:18):
It could be anything. The unit, the plumbing, the electricity, the
HVAC, all of those items couldbe an issue. And unless you're an
expert and all of that, you'renot gonna know. So you need to
have a home inspection. Okay,Then you're gonna need money upfront for an
appraisal. So what I've named aboutwhat thirteen hundred dollars worth of ITA,

(28:40):
So you've got to have some moneysaved up already, just the joint in
the process. Now, some peopleget all of that back at the closing
table if they get a down paymentassistance program. Okay, they may be
able to be eligible to get thatback at the table, but we have
to show that that came out ofyour banking institution, not from your pocket,

(29:02):
and not from the couch, theirfreezer wherever you're keeping your cash at
home, because you can't validate cash. Where did it come from? We
have no idea, right, Sothat's one of the things that with assets,
And so let me cover the bigthing with assets that a lot of
times people struggle is overdrafts. Insufficientfunds. That means that I didn't have

(29:23):
the money in the bank to coverthe check. Now it's the debit card
swipe, so I didn't have it. So they're whacking you about thirty six
dollars for fees every time you dothat. They may cover the swipe and
go ahead and pay it, butthat ten dollar purchase now just cost you

(29:44):
for thirty six dollars thirty six moredollars because you didn't have the ten dollars
in there to pay for it.So my big deal is there is if
opt out, just opt out.So if you opt out and you swipe
your credit card or your check debitcard, if those funds are not available
for use, it will not gothrough and it will not cost you another

(30:06):
thirty six dollars. I'd rather beembarrassed at the counter at a store because
I couldn't buy and I gotta putsomething else back, versus me losing thirty
six more dollars. All right,all right, yeah, so be careful
with that. We look at insufficientfunds as negative credit. That means you

(30:26):
fail to pay attention to your obligationand obligation of what a bank account is
to keep it balanced. Yes,large deposits is another big little deal out
there, going large deposit? Wheredid it come from? Because you're looking
like I'm like, I don't know, I'm looking at you like Ruth.
That should be a good thing.If somebody put in a larger part,

(30:48):
where did it come from? Okay, they want to know the source.
That's why I say, you know, if it's you got the money at
the house, it needs to beseasoned for sixty days. So if you
can't source your large deposit, thosefunds cannot be used into the transaction.
The government says, no, nocash into the transaction unless you can tell

(31:10):
me where it came from, period, Because large deposits, you know,
did you how did you obtain it? That's another thing. How did you
obtain it? So why can't weverify it? Where it? So they
just say, forget it, takeit out of the transaction. And this
question comes up, Well, saya family member, can a family member

(31:32):
give you a large amount of moneyto absolutely? Okay, absolutely your family?
Can we document that through a giftletter? Your family signs the gift
letter, You signed the gift letter, and then the family member can provide
their bank statement showing that withdrawal cameout of there, got you. And

(31:52):
that's where we run into a lotof bumps because sometimes the family Grandmamma say
mmmmm, I don't want them toknow what else is left in my account
exactly. So I usually will callgrandma on the side and say, I
understand your concern. Grandma. Youcan come to the bank, bring it
without you, without your grandchild,and we will put this in your file

(32:13):
and your grandson will not have accessto it. So he's the donor is
not part of the transaction, onlythe barrower. So the donor cannot mean
the borrower cannot come in give methat bank safe from my grandmama. Nope,
it's it's not part of I cangive you anything that you brought in,
but I cannot provide it from yourgrandmother. So that's the way of

(32:34):
protecting the donor as well. Sonow you know we have it for the
transaction, but we're not passing onthe information. Oh I love that.
I love that. I love that. If you've just tuned in this morning,
well this is great information. Weare talking with Miss Ruth Phillips.
She is the Community Development Lending Divisionmanager for Cadence Bank. We are taught

(33:00):
about the five keys of home ownership. We've gotten three, got two more
to go. If you have aquestion or two, we invite you to
call five three five nine three fourtwo five three five nine three four two
or one eight hundred five zero threenine three four two one eight hundred five

(33:24):
zero three nine three four two.If you can't call, you can email
me and RUF I'm got I'm gettingsome email questions and we'll get those.
You can email me Bev Johnson atI heart media dot com. That's Bev
Johnson at I heart media dot comand we'll get your email questions answered.

(33:52):
We're talking about the five Keys ofhomeownership with Ruf Phillips and me Bev John's
on the Bab Johnson Chell on wd I A. We're asking the experts

(34:14):
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(34:37):
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(35:00):
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(35:38):
We are talking about the five keysof home ownership. You're thinking about owning
a home. So fabulous if youare, because we have Miss Ruth Phillips
in the house. She is thecommunity development leading division manager for Cadence Bank
who is sharing good information if youwant to become a home owner. Before

(36:00):
we continue our Keys of home Ownershiproute, I have an email and from
a law listener. They say goodmorning to you, bev and miss Ruth.
He says, explain what it meanswhen a contractor gets paid at the
closing table. Explain what it meanswhen a contractor gets paid at the closing

(36:27):
table. Okay, so if wehave some thanks for sending the email.
First emailer, If your house hassome repairs and you are selling the house,
your contractor has decided he would dothe repairs because the house is sold,
you're under contracts with somebody else tobuy the house, and they're going

(36:50):
to be enough proceeds from the cellof the house for him to be paid
at the closing table when we close. He may agree to do that.
He or she may agree to dothat. So that's what it actually means
to get paid at the closing table. So when you go to close on
your house, you go you goto earth Little so you can close.
One thing she's going to do tocut from the proceeds is a check to

(37:14):
that contractor because you made that writtenagreement that he was going to get paid
for his repairs when you sold ahouse. That's how it worked. So
that's how that worked, yes,ma'am, Yes, ma'am. So again,
when a contract gets paid at theclosing table, that's how it's done.

(37:35):
That's why the contractors getting paid.Correct, that would be and that
would that would be up to theseller. He would say, you know,
hey, um you need just say, they need some bathroom repairs,
some kitchen repairs, some painting,odd end stuff, and it's required for
the bank to give the loan onthe lateral, which the house is now

(38:00):
the collateral for the buyer, Sowhat they would have to do. And
your seller may say, well,I don't have that money to put that
out right now, but I'm goingto get sixty thousand dollars out of the
cell of the house. This billto the contractor's only five thousand. So
you've got a good relationship. Butyour contractor who's probably has a good relationship
referred to him from the realtor.It's all about relationships. And so now

(38:23):
that you want to pay them atthe table, well, I'm going to
close on May thirty first, Socan you get your check on May thirty
first? And most slime contractor willbe yes, we'll get our check from
then. So the contractor will goto Ursa's office pick up his check.
You get your fifty five thousand dollarsfrom the cell of your house, and
everybody's happy. Okay. Our nextemail says, miss Phillips. To get

(38:46):
a loan, do I have totake it? Comes in? This comes
in my girl, Priscilla, DoI have to take a home buyer education
class to get a loan from yourbank? That's a good question. Okay,
that's a very good question. Andthat's that's from Jackie. Okay,

(39:07):
so thanks for emailing, and Jackie, it's going to depend on if you
are trying to get down payment assistance. All of the down payment assistance programs
require home by our education through Priscilla. Okay, not just Priscilla, but

(39:29):
other people offer it. But you'renot great job, great job of doing
it if you are not There aresome portfolio products that require that you have
home by education, but every loandoes not require that you take a home
by education class. I highly recommendit, okay, because you're moving into

(39:52):
a new season of your life thatyou've never been there before, and owning
a home now is huge because now, do you know what an ambatization schedule
is? Do you understand an ascrowaccount? Do you understand some of the
other things that's going to occur afteryou close on the house. What are
you going to do with your taxbill when it comes next year? What

(40:13):
are you going to do with yourinsurance bill when it comes next year?
Those are some in detail things thatthey go through a United Housing. She
talks about putting yourself on a budget. She talks about making sure your contract
is completed and its entirety when youget, you know, find a property
to buy. They go through allof it. Then they go very deep

(40:36):
into your your budget. Yeah,you know, how how are you are
you to your very max of yourtop end of your income? Your ratios?
Are you at the very max?Because remember we talked about this a
little bit last month, is thatlenders qualify you based on your gross income
and we live out of our whatnet income, So we talked about that

(40:59):
too. Priscilla's going to bring allof that to the table. She's going
to give you an example of whatto expect when you do get a contract,
the what to expect from the lender. So it's not required, but
I do highly recommend it. Ido, okay, even for people like
I had. Ladies. I hadowned a home, she's older home for
twenty years, so she had metthrough this process in twenty years, and

(41:22):
so I said, why don't youtake the class. There's some online that
you can take. Just take itonline at your leisure. And she came
back, she's I'm so glad Idid that, because girl, that we
do none of this. Yes,they didn't offer any of this one I
did before. So now she's ina house trying to sell a house,
but she has more understanding of howto do it, what to do and
when she's gonna move on to hermortgage. So yes, I like it.

(41:44):
We're going to our phone lines fivethree, five, nine, three
four two one eight hundred and fivezero three nine three four two high caller.
Hello, Hello, Yes you're onthe air. I have a question.
Okay, you a home and youwant to sell it, but you

(42:06):
don't have the money to do therepairs. Can you negotiate that in your
contract when you sell it? Likethe like the questions she just had about
paying the contract at the end,can you negotiate the repairs, Like if
they want new carprit or the housepainted, you don't have no matter to
do the work, so you canyou negotiate that in the contract and at

(42:29):
the end give the buyer that moneyto do the repairs that they wanted to
do before they purchased a home.So that's my question my answer for that.
Thank you so much for calling.All right, she says, she's
gonna hang up and listen. Thankyou for your call. Go on,
Ruth, Oh, I'm sorry.I'm sorry dint here and say that I
was over here trying to think.Yeah, I highly recommend that you have

(42:52):
a conversation with your real estate agent. Go ahead and bring them into your
presence, and go ahead and letthem know this is I'm sure I'm going
to need carpet, this, this, and this, okay, and a
lot of them will tell you youneed to get this, this and this
done before we put this house onthe market. If you want full value

(43:13):
for your home, if you're lookingfor an investor, and hopefully these people
want full value for their homes sowe can keep homeownership high in our area
and our Memphis area versus being investorowned. But if not, then they'll
let you know that. Yes,ma'am, we're gonna need to do all
these repairs before we put the houseon the market and get them done or

(43:37):
put the house on the market subjectto these repairs being completed before we close.
Now, giving a buyer money forrepairs unless you have an invoice from
a contractor to be paid at closing, a lender will not allow the seller
to give additional funds past the sixpercent. Some loans require three to a

(44:00):
buyer. So I do recommend youhaving that information, reaching out to your
real estate agent and having a discussionwith them. And like I said,
most realtors have a contractor who theyhave a relationship with who would probably be
able to do the repairs and bewilling to get paid at the closing table

(44:22):
once they have a solid contract onthe cell of your house. I hope
that answers her question. Okay,I hope so too. Email question Miss
Phillips. How long does it takeif you've just bought a home a couple
of months ago, how long doesit take to refinance that home? It's

(44:45):
your house. You can refinance thenext day. However, if you are
looking to pull cash out of thehouse, you have to live in it
for twelve consecutive months. You couldgo down to six months, but you
have to have six months reserves ofwhat you are taking out. Outside of
that, you can refinance anytime youget ready, But there is a cost

(45:07):
to refinancing. I would ask youwhy are you refinancing because now you've got
to pay that closing cost all overagain. So I would you know,
I don't recommend it like a monthor two later, but I've had people
come in less than six months andwanted to refinance. Now, if the
rate that you have now drops morethan two percent, then paying closing costs

(45:30):
in long term and twenty four months, it may be worth it for you.
Okay, all right, let's getto our last two keys route of
homeownership. Well, the last thingwe look at is your qualification ratios.
That is, your income versus howmuch did you have. We use a

(45:52):
couple percentages thirty three percent and fortythree percent, So when people are looking
for a house, that you're goingto hear that over and over. Your
top ratio is your house. That'syour housing ratio. That's one of them.
The second one is your personal ratiothat is the house plus all other

(46:13):
reoccurring debts. So if you earnthree thousand dollars a month, and this
is just an example, this isjust an example, if you earn three
thousand dollars a month, your housingratio cannot exceed thirty three percent, which
is nine hundred and ninety dollars.Okay, the forty three percent would be

(46:35):
that three thousand times forty three percent, because I remember you just earned three
thousand dollars a month, so that'sone thousand and two hundred and ninety dollars.
So twelve ninety is the max ofthe forty three and nine ninety was
the difference, correct, So youcan only have three hundred dollars worth the
monthly bills if you want to buya house where the notee nine hundred and

(46:59):
ninety dollars more or less a month. So that's how we look at your
personal That's why we talk about budgetingand Priscilla. I know she talks about
that a whole lot. It's tryingto make sure that you keep your debts,
your monthly obligations low enough to whereyou're not going over thirty three and
forty three, and that gives youa little space. Those ratios give you

(47:22):
a little space so you can livecomfortably and have a note out of your
net income versus how we qualify youout of your gross income. So everybody's
personal and everybody's housing qualification is differentbecause it's based on your income and your
monthly debt. So I advise peoplewhen they're looking for this sit down,

(47:45):
pull out your gross income. It'slike knowing before you go by know what
your thirty three is by taking yourmonthly income and multiplying it by thirty three
percent. Know what your personal qualificationis by taking your gross income and multiplying
it by forty three percent and minusingit by the housing ratio, which was

(48:07):
your thirty three percent. I know, I told you it's a little.
Yeah, Okay, it gets alittle, but you know it's good to
stay on a budget. Get yourselfon a budget now. If you're not
ready for whether it's employment that's holdingyou back, or if it's gotta I
gotta a couple bumps on my credit. Put yourself on a budget, and

(48:27):
then whatever you want your house noteto be, start acting like you're paying
that house note now. So ifyou're renting and your rent is eight hundred
dollars a month, but you knowyou want a house, so you can
kind of imagine it's going to beabout eleven hundred dollars a month, so
you sure put it and pay therent at eight hundred, but put the
other to other three hundred dollars away. So now I'm prepared to pay eleven

(48:51):
hundred dollars when we get to whereI have gotten all my bumps and bruises
done, and now I'm ready tomove forward with home ownership. But those
are our five keys. Love them. They are really alex I said,
people get credit, No, ma'am. You gotta have a job. Yeah,
you got to have a job.It has to be stable to repay
it. Your credit history has tobe workable. It can be restored.

(49:14):
We do need a bank account,and you do need to be able to
manage that account. We look atthe banking as well, and then you
have to have your debt to incomeratio which is going to cover the house
note and then your personal will beall your debts. Those are our five
keys to homeownership. And how canpeople reach you? Ruth Phillips. You
may reach me at nine zero onesix four three one one two one.

(49:37):
That is my cell phone number andI am available from nine am to five.
Sometimes I work out to eight ornine, but call leave a message.
You can email me at Ruth dotPhillips at Cadence Bank dot com.
You can text me, but Iam available. We also have other loan

(49:57):
officers here in the Memphis MSA thatare available. We have a Sheila Middleton,
Oh, I should have got ournumber out, and we have a
Tina Pillow. Tina's on our whiteHaven office and Sheila is at our office
on Poplar and I'll have their numbersthe next time we come next month.
Sounds good and let me give youI have an email some accolades for you,

(50:19):
says. Miss Phillips is very professionalat what she does. She was
our lone advisor when we built ournew home in twenty twenty two and close
with Bankcorps Solve. I advise anyoneto seek her professional services again. Thanks
Miss Phillips, Glenn and Nickelberry.Oh God be the glory. Yes,

(50:40):
right, all right, I ama vessel. I'm just like this.
I'm walking in what I know tobe my calling. And then you know,
people ask me when you're gonna retire, because I said I don't know
yet. Hey, keep on going. As long as the Lord say keep
going, I'm gonna keep home moving. Thank you, Rue Phillips, thanks
for having us, and we'll seeyou next month, next months. From

(51:00):
Caln's Bank, Miss Ruth Phillips,the Community Development Lending Division manager. Good
information. Today when we come back, we're going to talk about second chances
for ex offenders. You want tostay for that right here as we go
to the other side of the BevJohnson Show, only on w d IA,

(51:29):
whether you're in Arkansas, Tennessee,or Mississippi on Facebook, Twitter,
or Instagram. Thank you for listeningto The Bev Johnson Show on w d
IA, Memphis,