November 5, 2024 • 18 mins
Unlock the potential of your home equity with our eye-opening conversation featuring Nathan Lindley from Gold Star Mortgage. Nathan shares his expert insights on innovative Equity Sharing Loans, a groundbreaking option for homeowners seeking alternatives to traditional refinancing. This financial tool allows homeowners to partner with investors by sharing a portion of future home equity, offering a flexible solution that doesn't involve monthly payments. While this option opens new doors, Nathan wisely advises caution, likening these loans to a sharp tool that must be handled with care to avoid unintended consequences. Whether you're a young homeowner or facing urgent financial pressures, understanding the intricacies of this option is crucial.
As we navigate the complexities of managing rising mortgage payments, Nathan and I underscore the importance of contacting lenders early to explore available options, such as refinancing or HELOCs. We introduce a promising new financial product that could serve as a lifeline for those struggling to keep their homes, especially when a high credit score is out of reach. While its current form poses challenges, it offers a temporary reprieve for those looking to stay put for a while longer. Join us as we discuss the potential and pitfalls of these evolving financial products, and why staying informed is your best asset in this dynamic landscape. Don’t miss the chance to learn from Nathan’s insights and ensure you’re equipped with the knowledge to make sound financial decisions.
To contact Nathan Lindley:
email: lindleyloanteam@goldstarfinancial.com
phone: 727.452.9868
https://www.instagram.com/thelindleyloanteam/
https://www.facebook.com/TheLindleyLoanTeam
Sarah Thress
614-893-5885
First Time Home Buyer course: https://sarahthress.graphy.com/
Instagram https://www.instagram.com/sarah_thress_realtor/
Facebook https://www.facebook.com/SarahThressRealtor/
https://www.youtube.com/@LIFEINCOLUMBUS
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Sarah (00:03):
Hi, welcome to this week's episode of Come to Find
Out.
This week we have NathanLindley of Gold Star Mortgage
and if you are a regularlistener, you will know that he
has been on here a few times andhopefully you've listened to
those episodes, because heshares so much knowledge.
It's insane to me.
Every time that we get off thecall, I'm just like, oh my gosh,
(00:26):
like I learned something new.
So, nathan, again thank you somuch for taking time out of your
day to join us.
Nathan (00:32):
My pleasure.
Again, thank you for having us.
We truly appreciate theopportunity and to help you and
your clients and anybody who'slistening that you know with
whatever the topics are, we'rethrilled to be a part of it.
Sarah (00:44):
Yeah, well, thank you, I appreciate that.
So Nathan and I recently weretalking and he had mentioned a
brand new product that just kindof came out it's called Equity
Sharing Loans and I was likewhat in the world is that?
And would you mind coming onand explaining it to me and
(01:06):
everyone that is listening whatthat is, because this may be
something that is a really goodoption for someone listening?
Great.
Nathan (01:16):
So equity sharing loans, this is a brand new product and
you know, a lot of times withbrand new products, you know,
what's happening is that thenon-qualified mortgage market is
trying to fill a niche.
(01:37):
They're trying to fill a needthat's out there that's not
being met by definitely not by,you know, conventional mortgages
Fannie, freddie, fha, va andpossibly not even being met by
the non-qualified mortgagecommunity, you know.
So these equity sharing loansdefinitely fit right into that
(01:57):
category and these I've used theanalogy before that you know
mortgages, different types ofmortgages.
They're a financial tool andyou know, when you go into a
woodworking shop, differenttools are of different
sharpnesses and the very, verysharp tools are very dangerous.
(02:19):
Doesn't mean that theyinherently are wrong, it just
means that they have thepotential for danger versus.
You know, you walk in andthere's a rubber mallet OK,
that's probably a pretty benigntool, you know, and it's less
likely to be able to hurtyourself with it.
So that's kind of the scopethat I want to bring this into
(02:41):
understanding.
So equity sharing loans are atype of refinance.
You don't use them forpurchases.
They are a type of refinanceand typically they are used as a
cash out refinance.
So if you're in a situationwhere you need to draw equity
from your house and you're notable to get a loan for whatever
(03:04):
reason.
It could be credit score, itcould be debt to income ratio,
it could be any number of thingsthis is an alternative that is
out there, and what this type ofloan does is these investors
want a reward.
You know they want morecompensation for they're giving
(03:28):
you a loan when others wouldn't.
So the way that they do that,rather than just jacking up the
interest rate, they you sign anagreement that gives equity to
the lender in the future.
So you establish what the basevalue is of the property right
now and you say if I sell thisin the future, you're going to
(03:53):
get X percentage of the newequity in the house from now to
them.
There's several differentlenders, there's several
different options here, but theother thing that's about this
loan is that there's no payment.
Hmm, so that's kind of theinteresting thing on this.
(04:16):
Now, if you think about this,this kind of sounds like another
type of mortgage, yeah, or thereverse mortgage, reverse
mortgages you get a loan, itaccrues interest over time and
you pay the lender back.
Interest Doesn't matter whatthe appreciation is, just the
interest.
But you have to be over 62 anda half.
(04:38):
You have to be a senior citizento qualify for a reverse
mortgage.
If you're 40, you can't qualifyfor a reverse mortgage.
This is that type of loan inthe sense that it's a negative
amortization but instead ofcounting interest going forward,
they're going to take a sliceof your equity.
(04:59):
It's probably not going to be asmall slice.
You got to keep that in mind.
You know this is a sharp tool.
This is a brand new tool.
Usually, when new loans come out, they're not consumer friendly
to begin with, like they want toget some test cases out there.
(05:20):
They want to see what type ofreturn they're getting.
You know and we're definitelyin that phase right now of you
know this product is new.
They're going out, they'regetting some test cases with
these.
They're finding out, you know,how they're performing, how the
investor is doing.
You know on it, are they makingmoney on these?
Some of them require you to sellfairly quickly, like within a
(05:42):
year, two years or three years.
You know, depending what yourscenario is, that might be a
scary scenario where you'rebeing forced to sell it based on
a short window.
Others have much longer andthere's a couple that don't have
any time window.
They'll say you know out towhenever.
But it is a new product and itis something that can be done,
(06:06):
but it's probably not your firstline of like.
Ok, this is what I want to do.
For the first thing, if you cando a cash out refinance, if you
can do a home equity line ofcredit, you're probably going to
get a much better rate ofreturn.
You're going to get much betteroptions.
You know it's not going to costyou nearly as much, but what if
you don't qualify for those?
You know this product would begood to use instead of a
(06:31):
distressed sale, meaning if youroption is I got to sell my
house in the next 60 daysbecause of whatever reason.
Maybe this is the stop gap thatkeeps you from having to sell
your house in the next 60 days.
This is at that level of loanright now.
This is an emergency reaction.
(06:53):
I've got to deal with this veryquickly.
I can't afford payments.
I can't get a loan because Ilost my job.
Whatever crazy thing is goingon in your life that you're in
this situation Again.
Talk to a professional loanofficer, see if you've got other
options.
But this might be.
You know, the option that keepsyou from having to sell your
(07:16):
house is a distressed emergencysale.
Sarah (07:19):
You know, in that type of situation, yeah Well, and I
think that makes such greatsense and I love that you
actually answered a questionbefore I even asked it, which is
awesome.
I think you do such a great jobat that, because it's like
you're reading my mind, but Ilove that you pointed out that
you know, obviously, look at,like the traditional ways of you
(07:42):
know borrowing from your home,like you know cash out,
refinance or he, you know helock, or you know home equity
line of credit.
You know whatever you want tosay.
You know you've got all theseother options, but there are a
lot of people that unfortunatelyhave found themselves in this
situation and again, it's notbecause we have some crazy you
(08:02):
know market stuff like we hadback in 06, 08, you know
whatever like it's not nothinglike that, but unfortunately,
with the rate as as homes likethe what am I trying to say?
So the homes that areappreciating so quickly now
because of everything thathappened during, like COVID and
all of that stuff, it then madeall of our property taxes go up
(08:25):
and then, with all of the thingsyou know around the country and
inflation insurance went up,things like that.
So a lot of times, what I'mfinding personally and I'd love
to hear what you're kind ofseeing with this.
But what I'm finding is thatpeople, now that you know it's
increased, you know, by a fewhundred dollars a month, you
(08:46):
know, and sometimes more thanthat people are like crap, I
can't afford my house anymore.
And so then, you know, thenthey go into like freak out mode
and you know, if they I've youknow, I've done a previous
episode where I said, hey, ifyou find yourself in that
situation, call your lenderbefore you ever miss a payment,
(09:07):
Always call them first and justfind out what are your options.
And maybe you don't have theoption of doing a HELOC.
Know, talking with you aboutthis new thing would be helpful
for them.
But you know, unfortunately Ithink we are going to see more
of that.
As you know, inflation thankGod, you know it's starting to
(09:29):
come down a little bit, but youknow, with the property taxes
and all that stuff, it's alreadyaffecting people.
So, you know, I love that youpointed that out.
So, basically, are you sayingthat if someone you know let's
just say they, you know didn'tcall their lender because they
thought, oh, it's just thismonth, I'm going to make up for
it, I'm going to work someovertime.
I'm, you know we always haveour best of intentions, and so
(09:50):
you know I'll catch back up nextmonth.
And then you know.
So now they've already missed apayment.
So now, like you know,refinancing may not be an option
.
You know HELOC may not be anoption.
Would this still be an optionfor them if they've already made
that, instead of doing a shortsale, which ultimately just
means that you're selling it forthe least amount of money?
(10:12):
You're making zero dollars offof it, by the way, money you're
making $0 off of it, by the way,you know.
So it's really a horrible thing, other than it keeps that off
of your credit, because a shortsale is going to fall off your
credit much faster than aforeclosure or a bankruptcy.
So, yeah, so I'd love for youto just kind of talk about that.
Nathan (10:33):
Yeah.
So you know, this product, theresearch that I've done, you
know, and full disclosure, Ihave not done one of these yet.
It is that new of a product andanybody who's come to me in
these situations.
I have found another solutionfor them without going to this.
So you know.
(10:54):
But I've done a lot of researchon them and they do pull credit
, you know.
So if you're, if you destroyyour credit and you get down
into, you know, 560 or lower,you're going to, you're going to
close this door too, you know.
But this product does notrequire a high credit score.
You know you don't have to be727, 4800 to do this product
(11:19):
either.
So you know it's definitelysomething you want to address
sooner than later in the in afinancial free falling situation
.
I think that it is a good stopgap of you know, not, it's
definitely better than a shortsale.
You know it's definitely betterthan a short sale.
You know it's definitely betterthan a even, even if it's not a
(11:42):
short sale, even if it's just adistressed sale.
You know, if your house isworth 500, you owe 250, you know
.
But the only cash offer you canget to close in the next three
days is, you know, open door atat 350.
Yeah, you're leaving a lot onthe table there.
You know of what you shouldhave been able to walk away with
(12:02):
.
You know, and we find peoplelike that that are in that
position of like, hey, my houseis worth a whole lot of equity,
but I can't you can't buy breadwith equity.
Yeah, you know.
And if you've had somefinancial distress, then you
know, even a payment, even for asmaller loan, can get hard, and
especially if the taxes havegone on, especially if the
(12:23):
insurance has gone up.
You know considerably on that.
So you know, we definitely seethose situations and this is
definitely one of those toolsthat can be used sooner than
later.
You know the way that I talkabout it.
You might be like well, is thispredatory lending?
I'm not going to put it in thatcategory.
I think, as a brand new product, that it is probably less
(12:48):
consumer friendly now than it'sgoing to be in five years.
You know, I think this product,if it becomes mainstream, if it
performs well enough, if you'llsee lenders opening up and
offering more and more optionsand options, and you might see
that this product turns intosomething that becomes more
commonplace, and the morecommonplace it becomes, the more
(13:08):
it's got to be able to competeagainst the HELOC and the HELON
options and things like that.
But right now, today, it's notmeant to be consumer-friendly in
that sense it's meant to beconsumer friendly in that sense
it's meant to be, you know, anoption close to last resort or
close to no explanation, nodocumentation, no, you know, no
(13:30):
questions asked type ofsituation.
So I don't think that that's.
I don't think that that's afair way to look at it.
You know, you have to look atit as it's a sharp tool.
If you misuse it it's going tobe damaging.
But if you read the fine line,if you talk to a professional,
if you look at your options, ifyou, you know, then you know,
(13:54):
use the tool.
I think it's probably best.
In a situation where you'restopgapping, meaning you know,
okay, I'm going to have to sellthis house, I can't, I cannot
continue to live here Whetherbut I.
But let's say, you know, mykid's a sophomore in high school
and I just want to, I just wantto make it through the next two
years.
Get them through high school,get them through this house.
(14:15):
You know, I want to stay inthis house through that
timeframe, but then I'm going tosell it, you know, as soon as
they're done with school.
This might be a golden goosefor you of okay here's.
You can stay in the house nopayment, sell it in three years
you know.
Uh, you know, and you're goingto give up, you know again,
(14:37):
versus a distress sale today,that's probably a way better
option for you, regardless ofeven if you give up all of your
equity between now and then.
Yeah, you know, that's not whatthe I mean, it's not going to
be that.
But even if you did, if you'rein that situation, you'd
probably be willing to do that.
Right, you know.
You know if you lost your job,but you've got to hold on to
(14:57):
this house for the next twoyears and you don't know how
it's going to get from point Ato point B.
You know this is this, might bethat option.
So that's the way that this hasto be framed, you know, and
that you have to look into this.
But you do have to.
You do have to start exploringthis and triggering it before
you're in financial ruin.
You know, before you've missedall your payments, before you.
You know you've got 90 daylights on your credit report.
(15:19):
You know if you wait till that,this isn't going to help you at
that point either.
Sarah (15:25):
Yeah, yeah.
That's such a good point, causethat's what I always try and
tell people.
You know, at the first likesign of an issue, have that
conversation.
Even if you have theconversation with your lender
and then everything works outand all the stars align and you
don't even have to like use, youknow you don't have to do the
HELOC, you don't have torefinance, you don't have to.
You know, like refinance if itmakes sense, but if it doesn't,
(15:47):
and it's not even gonna save youany money and it's not gonna do
anything for you, then don't doit, you know.
But at least you've got, youknow, your insurance just
(16:09):
doubled and you can't seem tofind, you know someone to get
you a lower interest.
You know lower insurancepayment, you know anything like
that.
You know, definitely reach outto your lender, have that
conversation.
If you're not liking what yourlender is saying, it's okay, you
can talk to another one.
You can call me again.
Nathan will walk you throughall of your options.
Nathan (16:31):
I'll be honest with you, If nothing else you know, even
if you don't like my answer, Iwill be honest with you.
Sarah (16:37):
Yes, yes, which is what you want in a really good lender
with you.
Yes, yes, which is what youwant in a really good lender?
Don't you know, like when youask your your friend, if I, if I
look good in this dress, youwant them to lie.
But whenever you're callingyour lender and you're asking
for all of your options, you donot want to lie.
Nathan (16:54):
Or a lender that doesn't know the other options.
You know, you know.
Omission of of of ignorance,other options you know, you know
omission of of of ignorance.
Sarah (17:04):
It's not a lie, but it's.
It's still not helpful.
Yes, exactly, exactly.
Well, thank you so much.
I really appreciate you comingon, taking time out of your busy
day and talking about this verynew product.
I think that you know I'llprobably end up having you come
back on later on, you know,after this has been around for a
little while, so that you cankind of give on.
You know, after this has beenaround for a little while, so
that you can kind of give evenmore insight into it, after
(17:25):
either you've used it or it'sbecome more mainstream and you
know you learn something newabout it.
Because, as we all know, whenthings come out there's all
these glitches and then, once wework through the glitches, then
it becomes, you know, eitherthis amazing product or it goes
away forever because theglitches can't be fixed.
So I love it.
Nathan (17:45):
Absolutely, absolutely.
Sarah (17:46):
Yeah Well, thank you so much.
I appreciate it and thank youto everyone listening.
Please make sure that you leavea review, because feedback is a
gift and I love those gifts.
Please make sure that you aresharing this with others,
(18:07):
because that is the greatestcompliment that you can give
Nathan and myself.
Also, make sure that you'refollowing along so that you
never miss another episode.
So, thanks so much, and we'llsee you next time on Come to
Find Out.
Hi, welcome to this week's episode of Come to Find
Out.
This week we have NathanLindley of Gold Star Mortgage
and if you are a regularlistener, you will know that he
has been on here a few times andhopefully you've listened to
those episodes, because heshares so much knowledge.
It's insane to me.
Every time that we get off thecall, I'm just like, oh my gosh,
(00:26):
like I learned something new.
So, nathan, again thank you somuch for taking time out of your
day to join us.
Nathan (00:32):
My pleasure.
Again, thank you for having us.
We truly appreciate theopportunity and to help you and
your clients and anybody who'slistening that you know with
whatever the topics are, we'rethrilled to be a part of it.
Sarah (00:44):
Yeah, well, thank you, I appreciate that.
So Nathan and I recently weretalking and he had mentioned a
brand new product that just kindof came out it's called Equity
Sharing Loans and I was likewhat in the world is that?
And would you mind coming onand explaining it to me and
(01:06):
everyone that is listening whatthat is, because this may be
something that is a really goodoption for someone listening?
Great.
Nathan (01:16):
So equity sharing loans, this is a brand new product and
you know, a lot of times withbrand new products, you know,
what's happening is that thenon-qualified mortgage market is
trying to fill a niche.
(01:37):
They're trying to fill a needthat's out there that's not
being met by definitely not by,you know, conventional mortgages
Fannie, freddie, fha, va andpossibly not even being met by
the non-qualified mortgagecommunity, you know.
So these equity sharing loansdefinitely fit right into that
(01:57):
category and these I've used theanalogy before that you know
mortgages, different types ofmortgages.
They're a financial tool andyou know, when you go into a
woodworking shop, differenttools are of different
sharpnesses and the very, verysharp tools are very dangerous.
(02:19):
Doesn't mean that theyinherently are wrong, it just
means that they have thepotential for danger versus.
You know, you walk in andthere's a rubber mallet OK,
that's probably a pretty benigntool, you know, and it's less
likely to be able to hurtyourself with it.
So that's kind of the scopethat I want to bring this into
(02:41):
understanding.
So equity sharing loans are atype of refinance.
You don't use them forpurchases.
They are a type of refinanceand typically they are used as a
cash out refinance.
So if you're in a situationwhere you need to draw equity
from your house and you're notable to get a loan for whatever
(03:04):
reason.
It could be credit score, itcould be debt to income ratio,
it could be any number of thingsthis is an alternative that is
out there, and what this type ofloan does is these investors
want a reward.
You know they want morecompensation for they're giving
(03:28):
you a loan when others wouldn't.
So the way that they do that,rather than just jacking up the
interest rate, they you sign anagreement that gives equity to
the lender in the future.
So you establish what the basevalue is of the property right
now and you say if I sell thisin the future, you're going to
(03:53):
get X percentage of the newequity in the house from now to
them.
There's several differentlenders, there's several
different options here, but theother thing that's about this
loan is that there's no payment.
Hmm, so that's kind of theinteresting thing on this.
(04:16):
Now, if you think about this,this kind of sounds like another
type of mortgage, yeah, or thereverse mortgage, reverse
mortgages you get a loan, itaccrues interest over time and
you pay the lender back.
Interest Doesn't matter whatthe appreciation is, just the
interest.
But you have to be over 62 anda half.
(04:38):
You have to be a senior citizento qualify for a reverse
mortgage.
If you're 40, you can't qualifyfor a reverse mortgage.
This is that type of loan inthe sense that it's a negative
amortization but instead ofcounting interest going forward,
they're going to take a sliceof your equity.
(04:59):
It's probably not going to be asmall slice.
You got to keep that in mind.
You know this is a sharp tool.
This is a brand new tool.
Usually, when new loans come out, they're not consumer friendly
to begin with, like they want toget some test cases out there.
(05:20):
They want to see what type ofreturn they're getting.
You know and we're definitelyin that phase right now of you
know this product is new.
They're going out, they'regetting some test cases with
these.
They're finding out, you know,how they're performing, how the
investor is doing.
You know on it, are they makingmoney on these?
Some of them require you to sellfairly quickly, like within a
(05:42):
year, two years or three years.
You know, depending what yourscenario is, that might be a
scary scenario where you'rebeing forced to sell it based on
a short window.
Others have much longer andthere's a couple that don't have
any time window.
They'll say you know out towhenever.
But it is a new product and itis something that can be done,
(06:06):
but it's probably not your firstline of like.
Ok, this is what I want to do.
For the first thing, if you cando a cash out refinance, if you
can do a home equity line ofcredit, you're probably going to
get a much better rate ofreturn.
You're going to get much betteroptions.
You know it's not going to costyou nearly as much, but what if
you don't qualify for those?
You know this product would begood to use instead of a
(06:31):
distressed sale, meaning if youroption is I got to sell my
house in the next 60 daysbecause of whatever reason.
Maybe this is the stop gap thatkeeps you from having to sell
your house in the next 60 days.
This is at that level of loanright now.
This is an emergency reaction.
(06:53):
I've got to deal with this veryquickly.
I can't afford payments.
I can't get a loan because Ilost my job.
Whatever crazy thing is goingon in your life that you're in
this situation Again.
Talk to a professional loanofficer, see if you've got other
options.
But this might be.
You know, the option that keepsyou from having to sell your
(07:16):
house is a distressed emergencysale.
Sarah (07:19):
You know, in that type of situation, yeah Well, and I
think that makes such greatsense and I love that you
actually answered a questionbefore I even asked it, which is
awesome.
I think you do such a great jobat that, because it's like
you're reading my mind, but Ilove that you pointed out that
you know, obviously, look at,like the traditional ways of you
(07:42):
know borrowing from your home,like you know cash out,
refinance or he, you know helock, or you know home equity
line of credit.
You know whatever you want tosay.
You know you've got all theseother options, but there are a
lot of people that unfortunatelyhave found themselves in this
situation and again, it's notbecause we have some crazy you
(08:02):
know market stuff like we hadback in 06, 08, you know
whatever like it's not nothinglike that, but unfortunately,
with the rate as as homes likethe what am I trying to say?
So the homes that areappreciating so quickly now
because of everything thathappened during, like COVID and
all of that stuff, it then madeall of our property taxes go up
(08:25):
and then, with all of the thingsyou know around the country and
inflation insurance went up,things like that.
So a lot of times, what I'mfinding personally and I'd love
to hear what you're kind ofseeing with this.
But what I'm finding is thatpeople, now that you know it's
increased, you know, by a fewhundred dollars a month, you
(08:46):
know, and sometimes more thanthat people are like crap, I
can't afford my house anymore.
And so then, you know, thenthey go into like freak out mode
and you know, if they I've youknow, I've done a previous
episode where I said, hey, ifyou find yourself in that
situation, call your lenderbefore you ever miss a payment,
(09:07):
Always call them first and justfind out what are your options.
And maybe you don't have theoption of doing a HELOC.
Know, talking with you aboutthis new thing would be helpful
for them.
But you know, unfortunately Ithink we are going to see more
of that.
As you know, inflation thankGod, you know it's starting to
(09:29):
come down a little bit, but youknow, with the property taxes
and all that stuff, it's alreadyaffecting people.
So, you know, I love that youpointed that out.
So, basically, are you sayingthat if someone you know let's
just say they, you know didn'tcall their lender because they
thought, oh, it's just thismonth, I'm going to make up for
it, I'm going to work someovertime.
I'm, you know we always haveour best of intentions, and so
(09:50):
you know I'll catch back up nextmonth.
And then you know.
So now they've already missed apayment.
So now, like you know,refinancing may not be an option
.
You know HELOC may not be anoption.
Would this still be an optionfor them if they've already made
that, instead of doing a shortsale, which ultimately just
means that you're selling it forthe least amount of money?
(10:12):
You're making zero dollars offof it, by the way, money you're
making $0 off of it, by the way,you know.
So it's really a horrible thing, other than it keeps that off
of your credit, because a shortsale is going to fall off your
credit much faster than aforeclosure or a bankruptcy.
So, yeah, so I'd love for youto just kind of talk about that.
Nathan (10:33):
Yeah.
So you know, this product, theresearch that I've done, you
know, and full disclosure, Ihave not done one of these yet.
It is that new of a product andanybody who's come to me in
these situations.
I have found another solutionfor them without going to this.
So you know.
(10:54):
But I've done a lot of researchon them and they do pull credit
, you know.
So if you're, if you destroyyour credit and you get down
into, you know, 560 or lower,you're going to, you're going to
close this door too, you know.
But this product does notrequire a high credit score.
You know you don't have to be727, 4800 to do this product
(11:19):
either.
So you know it's definitelysomething you want to address
sooner than later in the in afinancial free falling situation
.
I think that it is a good stopgap of you know, not, it's
definitely better than a shortsale.
You know it's definitely betterthan a short sale.
You know it's definitely betterthan a even, even if it's not a
(11:42):
short sale, even if it's just adistressed sale.
You know, if your house isworth 500, you owe 250, you know
.
But the only cash offer you canget to close in the next three
days is, you know, open door atat 350.
Yeah, you're leaving a lot onthe table there.
You know of what you shouldhave been able to walk away with
(12:02):
.
You know, and we find peoplelike that that are in that
position of like, hey, my houseis worth a whole lot of equity,
but I can't you can't buy breadwith equity.
Yeah, you know.
And if you've had somefinancial distress, then you
know, even a payment, even for asmaller loan, can get hard, and
especially if the taxes havegone on, especially if the
(12:23):
insurance has gone up.
You know considerably on that.
So you know, we definitely seethose situations and this is
definitely one of those toolsthat can be used sooner than
later.
You know the way that I talkabout it.
You might be like well, is thispredatory lending?
I'm not going to put it in thatcategory.
I think, as a brand new product, that it is probably less
(12:48):
consumer friendly now than it'sgoing to be in five years.
You know, I think this product,if it becomes mainstream, if it
performs well enough, if you'llsee lenders opening up and
offering more and more optionsand options, and you might see
that this product turns intosomething that becomes more
commonplace, and the morecommonplace it becomes, the more
(13:08):
it's got to be able to competeagainst the HELOC and the HELON
options and things like that.
But right now, today, it's notmeant to be consumer-friendly in
that sense it's meant to beconsumer friendly in that sense
it's meant to be, you know, anoption close to last resort or
close to no explanation, nodocumentation, no, you know, no
(13:30):
questions asked type ofsituation.
So I don't think that that's.
I don't think that that's afair way to look at it.
You know, you have to look atit as it's a sharp tool.
If you misuse it it's going tobe damaging.
But if you read the fine line,if you talk to a professional,
if you look at your options, ifyou, you know, then you know,
(13:54):
use the tool.
I think it's probably best.
In a situation where you'restopgapping, meaning you know,
okay, I'm going to have to sellthis house, I can't, I cannot
continue to live here Whetherbut I.
But let's say, you know, mykid's a sophomore in high school
and I just want to, I just wantto make it through the next two
years.
Get them through high school,get them through this house.
(14:15):
You know, I want to stay inthis house through that
timeframe, but then I'm going tosell it, you know, as soon as
they're done with school.
This might be a golden goosefor you of okay here's.
You can stay in the house nopayment, sell it in three years
you know.
Uh, you know, and you're goingto give up, you know again,
(14:37):
versus a distress sale today,that's probably a way better
option for you, regardless ofeven if you give up all of your
equity between now and then.
Yeah, you know, that's not whatthe I mean, it's not going to
be that.
But even if you did, if you'rein that situation, you'd
probably be willing to do that.
Right, you know.
You know if you lost your job,but you've got to hold on to
(14:57):
this house for the next twoyears and you don't know how
it's going to get from point Ato point B.
You know this is this, might bethat option.
So that's the way that this hasto be framed, you know, and
that you have to look into this.
But you do have to.
You do have to start exploringthis and triggering it before
you're in financial ruin.
You know, before you've missedall your payments, before you.
You know you've got 90 daylights on your credit report.
(15:19):
You know if you wait till that,this isn't going to help you at
that point either.
Sarah (15:25):
Yeah, yeah.
That's such a good point, causethat's what I always try and
tell people.
You know, at the first likesign of an issue, have that
conversation.
Even if you have theconversation with your lender
and then everything works outand all the stars align and you
don't even have to like use, youknow you don't have to do the
HELOC, you don't have torefinance, you don't have to.
You know, like refinance if itmakes sense, but if it doesn't,
(15:47):
and it's not even gonna save youany money and it's not gonna do
anything for you, then don't doit, you know.
But at least you've got, youknow, your insurance just
(16:09):
doubled and you can't seem tofind, you know someone to get
you a lower interest.
You know lower insurancepayment, you know anything like
that.
You know, definitely reach outto your lender, have that
conversation.
If you're not liking what yourlender is saying, it's okay, you
can talk to another one.
You can call me again.
Nathan will walk you throughall of your options.
Nathan (16:31):
I'll be honest with you, If nothing else you know, even
if you don't like my answer, Iwill be honest with you.
Sarah (16:37):
Yes, yes, which is what you want in a really good lender
with you.
Yes, yes, which is what youwant in a really good lender?
Don't you know, like when youask your your friend, if I, if I
look good in this dress, youwant them to lie.
But whenever you're callingyour lender and you're asking
for all of your options, you donot want to lie.
Nathan (16:54):
Or a lender that doesn't know the other options.
You know, you know.
Omission of of of ignorance,other options you know, you know
omission of of of ignorance.
Sarah (17:04):
It's not a lie, but it's.
It's still not helpful.
Yes, exactly, exactly.
Well, thank you so much.
I really appreciate you comingon, taking time out of your busy
day and talking about this verynew product.
I think that you know I'llprobably end up having you come
back on later on, you know,after this has been around for a
little while, so that you cankind of give on.
You know, after this has beenaround for a little while, so
that you can kind of give evenmore insight into it, after
(17:25):
either you've used it or it'sbecome more mainstream and you
know you learn something newabout it.
Because, as we all know, whenthings come out there's all
these glitches and then, once wework through the glitches, then
it becomes, you know, eitherthis amazing product or it goes
away forever because theglitches can't be fixed.
So I love it.
Nathan (17:45):
Absolutely, absolutely.
Sarah (17:46):
Yeah Well, thank you so much.
I appreciate it and thank youto everyone listening.
Please make sure that you leavea review, because feedback is a
gift and I love those gifts.
Please make sure that you aresharing this with others,
(18:07):
because that is the greatestcompliment that you can give
Nathan and myself.
Also, make sure that you'refollowing along so that you
never miss another episode.
So, thanks so much, and we'llsee you next time on Come to
Find Out.
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