October 17, 2025 • 42 mins
Think your mortgage rate is carved in stone? We open the black box and show how rates are actually built—by margins, overhead, and secondary market pricing—not just headlines about the Fed. Joining us is veteran loan expert Sean Morrow of Affinity Group Mortgage, who explains why two borrowers with similar profiles can see very different offers and how a hybrid lender model can unlock better pricing and faster closings.
We get tactical about closing costs, separating third-party charges you can’t change from Box A lender fees you absolutely can. Sean unpacks discount points and temporary buydowns with clear, practical math: how to find the breakeven, when a 2-1 buydown helps cash flow, and when the exact same dollars should go toward a permanent rate reduction. We also talk through the realities of underwriting—why sourcing large deposits matters, why missing “blank” bank statement pages still get flagged, and how agency rules from Fannie Mae, Freddie Mac, and Ginnie Mae drive documentation. If you’ve ever wondered why your loan officer keeps asking for one more item, this conversation will save you time and stress.
We dig into income nuance too. Variable pay like shift differentials and overtime looks great on a pay stub but can’t always support a 30-year commitment unless averaged correctly. That’s protection, not paperwork for paperwork’s sake. You’ll hear when builder incentives are a smart, obvious win and when outside financing with tighter margins beats the shiny teaser. We wrap with a smarter way to shop rates without hurting your credit, the questions to ask about compensation and Box A, and how to start with a monthly payment you can live with before choosing your product.
If this helped you see the mortgage process with fresh eyes, follow the show, share it with a friend who’s house hunting, and leave a quick review so more buyers find these insights.
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.
SPEAKER_04 (00:02):
Hi, and welcome to this week's episode of Come to
Find Out.
This week we are joined by SeanMorrow with Affinity Group.
And I just recently met him at acollaborative divorce luncheon.
Because as a lot of you know, Ispecialize in divorce real
estate and also first-time homebuyers.
And Sean and I got to talkinglast week and you know he
(00:24):
brought up a really interestingthing that I had never even
known about interest rates andclosing costs and how those are
all negotiable.
And so I thought, oh my gosh, ifI am, you know, just learning
this, there's so many people outthere that would love to learn
this as well.
So Sean graciously agreed tocome on and record a podcast
episode and uh explain all ofthat because he'll do it way
(00:47):
better than I will.
So Sean, thank you so much forjoining us today.
SPEAKER_01 (00:52):
Thank you, sir.
And I appreciate theopportunity.
And I think I begged him aboutcoming on more than you asked me
to, I think.
But anyway.
SPEAKER_04 (01:01):
No, you're great.
You're great.
I love it.
Um, but yeah, like I said, youknow, when we talked last week,
you just had all of theseamazing things to share.
And I thought, oh my gosh, likeother people need to know this.
So uh I'll let you kind of jumpin and and explain to everyone.
I don't want to take any of yourthunder away.
SPEAKER_01 (01:16):
No, that's okay.
I appreciate it.
You know, and it it's funnybecause um when we a lot of
people they know the themortgage industry, right?
They it's but but what's funnyabout it is it's it's a little
bit different than what mostpeople think.
Interest rates are you knowobviously controlled by you know
the economy, right?
But when we hear about Fedrates, the Fed rate is being
(01:39):
cut, that kind of thing, thathas no immediate direct impact
on the mortgage interest rates.
It has an effect on the market,which then affects our interest
rates.
But before that, I kind ofwanted to explain exactly what
the mortgage industry is.
And uh everybody's like ohrolling their eyes right now,
going, oh my God, this is gonnabe terrible.
(01:59):
But it's hard to like makemortgage funds.
So I'll just try to kind of putit to a relate it to other
businesses.
So if anybody's ever heard ofFannie Mae, Freddie Mack, and
Jenny May, those are the threegovernment service agencies.
They're controlled, they're notrun, but they're overseen by the
government.
And that's where all the moneycomes from, you know, unless
(02:20):
it's a portfolio loan, which isa little bit different.
And if anybody cares about that,I'll explain that.
But for the most part, all themoney comes from those three
entities.
And what happens is that the bigbanks will say, okay, I'm gonna
deliver to you$100 million worthof loans in November, and I want
a better rate than what'shappening on the street.
(02:42):
And then you got a guy thatdelivers a million, he's not
gonna have a uh as as good of arate there because he can't
deliver as much.
What the banks do is they'llthey'll bundle all their
services from all the differentcompanies out there, they'll
they'll put all their they'llgather all those mortgage loans
and then they'll sell it toFannie Mae.
That's why they can offer abetter rate.
But look at it this way themortgage interest rate is like
(03:05):
any other widget that any otherindustry has, okay?
So just like if you produce aball of some sort, you know,
there's a cost to produce it,and then they have a margin,
just like any business.
So view the interest rate aslike the product, and then the
company that's working with you,the originator, has a margin
(03:26):
that he has to work off of,because obviously we're in
business to make money.
Um, but some of those marginsare significantly different than
some of the other ones.
And I'll explain.
So just like any assembly lineyou have, if you have a thousand
workers, you have to pay allthousand of those.
Those margins are going to comea little higher, right?
So, big mortgage banks, if theyhave an opener for a file, when
(03:50):
uh they have a processor, theyhave a closer, they have, you
know, somebody that orders theappraisal, there's somebody to
disclose.
They have five or six peoplethat are in the middle of a
file, which is fine because it'sefficient.
Typically, those margins arehigher, all right?
And so when the margins arehigher, the rates are higher.
Okay.
So what you should be lookingfor as a consumer or as a real
(04:14):
estate agent is someone that hasa little bit more control over
those.
And you know, I'm notnecessarily saying that all
mortgage banks are like this,they're not.
Um, but brokers or hybrid, whichis what affinity group mortgage
is, is we have we can be alender or we can be a broker.
So the reason why that's good isbecause we can go to those big
(04:37):
banks that said to Fannie Mae,hey, I'm gonna deliver you a
hundred or a billion dollarsworth of mortgages in the fourth
quarter of 2025.
We can take advantage of thoserates from Fannie Mae that way.
So I guess the bottom line forme, you know, what I was trying
to get across is that typicallymortgage rates, because there's
(04:59):
a margin, there's no hard cost,or there is a hard cost, but
there's no set hard costs, aretypically negotiable.
And a lot of people don't thinkthat.
So if you've got a realtor or abuyer or a borrower, buyer um
that's thinking they can get abetter rate and they're
currently with a mortgage,they're their mortgage guy, and
the rate's a little bit higherthan what they thought it should
(05:20):
be.
That's the question.
Look, I'm seeing you know, sixand five eighths, and you've got
me at 6.875, you know, can youcan you do anything?
They may be able to or they maynot be able to, but typically
the smaller the companies, theless overhead, the better the
rates are gonna be.
Not always.
You know, Rocket, for instance,you know, that's our big
(05:40):
competition.
Rocket has great rates, but it'san assembly line.
So you don't always know whoyou're gonna get.
So when I say go go for thelowest rate, you also have to
make sure that that company hasthe ability to get things closed
on time.
Because as an agent, you knowthat missing the closing dates
and no-no.
SPEAKER_04 (05:59):
Yes, yeah, no, absolutely.
And um, you know, uh the otherthing to look at is uh, you
know, with some of the thelarger uh companies they may
have, you know, one person thatuh they get they get a bonus
based on, hey, you filled outthe application, cool, here's
(06:20):
your bonus.
And then, you know, and like theperson that that got you to fill
it out gets the bonus.
And then if that person thengets you to move to the next
step, they get a bonus.
If they go to the next step,they get a bonus.
Those people don't always haveyour best interest in mind
because all they're trying to dois make that money.
So you also want to make surethat whenever you're talking
with your lender, you're youknow, you're finding out like,
(06:42):
uh, you know, you can ask, like,how do you get paid?
Do you get paid based on youknow us closing or do you get an
incentive every time I, youknow, click a button for you?
Um because that can also make adifference between feeling like
a number and feeling like aperson that's truly, you know,
trying to buy something andfully supported by someone that
(07:05):
truly cares about yourwell-being versus just checking
a box and having you check a boxso that they get a little bonus.
Um, so you know, I think thoseare those are other big things
to, you know, kind of look atwhenever you're shopping around.
SPEAKER_01 (07:17):
Huge things.
You know, like one one one keyindicator is when I when I first
talk to a client, I will walkthem through the process, but
then I always start with whatpayment are you comfortable
with?
And you know, and I go in this,you know, because our industry
has based everything off ofgross income.
Well, gross income is awesome,but you know, you have taxes,
(07:41):
you have federal, state, local,you have all you know, benefits
come out.
So let's say you make$2,000 aweek.
Well, you might, or you know,you might only bring home a
thousand or you know, somethingclose.
But the banks all do all oftheir qualifying off of their
gross income.
So that's significantlydifferent.
So what I always try to do issay, listen, what what what what
(08:03):
payment are you trulycomfortable with?
And let's go through your budgetto make sure.
Because I do care because Ithink repeat business is
something that's very difficultto get.
But if you really if you'retalking to your originator and
he's not asking you morequestions than telling you how
great he is, then that's aproblem.
You know, yeah, that's someonethat's looking for the
(08:24):
commission and kind of he's theguy that you're talking to at a
party that his eyes arewandering all around about hey,
who's where's my next person I'mgonna go talk to?
You know, you got to have a loanofficer that looks you in the
eye and says, Okay, how can Ihelp you?
And yeah, if you have somebodylike that, then they're probably
looking out for your bestinterest because most of us in
the mortgage industry arecommissioned.
(08:45):
And I would have I'd say thatthe majority of the loan
officers, probably 80% or more,and that is a statistic that
just came into my head.
So, you know, don't quote me onthat, but are probably 100%
commission based.
Now, some of the banks will havesalaries because they do other
things, but um, for the mostpart, mortgage loan officers are
100% commissioned, so they arethey are looking to get as much
(09:08):
business as they can, but thegood ones get that business
because they care about theirpeople and they get referrals
from those people that theyclose.
That's that, but yeah, to yourpoint, if there's an assembly
line and all it's going is okay,this is my job is to order the
credit, and I get you know fivebasis points for doing that.
(09:28):
And then I've got a that it goesto the next person, I order the
appraisal, okay, I get a hundreddollar bonus for that.
And then the processor, if he ifthey pro, you know, it goes down
the line, and that does increasetheir overhead, which then
translates increased margins.
All right.
That's that's how that that'show that kind of works.
SPEAKER_04 (09:48):
Yeah.
Now, um, does that play intoyour closing cost fee?
Because I feel like, you know,some uh some lenders that uh
I've had um, you know, my buyersworking with their closing costs
are significantly less uh thanothers.
Uh so is that another thingthat's negotiable?
SPEAKER_01 (10:06):
Yes.
So everything on a mortgage isnegotiable with the exception of
third-party fees.
So credit report, because we'rewe're we're we deal with the
monopoly right now.
You know, you've got Equifax,Trans, uh, transunion
experience, no other ones.
So they set their prices andthat's it.
All right.
So you have to pay it.
Appraisers, you know, that'susually pretty across the board
(10:28):
because what we've had to go tobecause of the laws back when it
was the mortgage was wild, wildwest and TRID.
You know, we we have to hire uhmanagement companies, um
appraisal management companies.
So they kind of control theprices, all right.
And everybody wants to be, youknow, competitive.
So appraisers don't get out ofhand.
Those are the kinds of coststhat we can't control.
(10:50):
Title Company fees.
It's a third-party fee.
So whatever in central Ohio,it's a little bit different than
some of the other areas becausecentral Ohio is typically the
seller or the seller's agentpicks the title company because
most consumers don't even knowwhat a title company does.
If you were if you were to, youknow, if you were to go down the
street and go, hey, what's atitle company doing?
I don't know.
(11:10):
I have transferred titles.
I mean, you know, it's likeright.
SPEAKER_02 (11:14):
I don't know.
SPEAKER_01 (11:15):
I have no idea.
You know, in fact, if you askhalf the real estate population,
they may not exactly know whatthey are, but that's a trust
company, right?
And what they do is they theyhandle all the money, they're
the ones that move all the moneyaround and make sure
everything's filed.
It's a very important um pieceof the transaction.
But most consumers, althoughentitled to pick a title
company, they they don't.
(11:36):
They just do what the realtorsays or whatever the company is.
Um, and I lost my train ofthought about where I was going
with that.
But close, so some of theclosing costs um are not
negotiable.
However, the lender fees arenegotiable and they can range
from zero money to 2,500 orwhatever.
Just you when when there's alender estimate or on a closing
(11:58):
disclosure, it's box A.
Okay.
Box A is what you want to lookat, and those were all the
lender fees are.
And if the lender fees are seemhigh, they probably are.
Um I wanted to tell talk aboutsomething else along with those
lines.
So closing costs are negotiable,rates are negotiable.
(12:18):
But remember when we weretalking about the margins,
right?
So the margins, you still haveto have a margin.
We can't give the business away,or everybody would be out of
business, right?
So you have to have someprofitability on there.
Well, interest rates, again, youknow, you can buy an interest
rate down by paying points.
Okay, they're called bona fidediscount points, meaning that,
(12:39):
you know, if my margin's sethere, all right, I can deliver
this rate.
But with one point, which is onepercent of the mortgage amount,
not the sales price, but themortgage amount of amount you're
mortgaging, um, can buy yourrate down.
You know, typically a good ruleof thumb, it doesn't really hold
true anymore, but historically,throughout my I've been in the
mortgage business almost 40years now, sadly.
(13:00):
It just makes me old and youknow, no, it just means you
started at like 15.
That's it.
Yeah, 15.
Okay, not exactly, but thankyou.
SPEAKER_04 (13:07):
You were a prodigy.
SPEAKER_01 (13:08):
Yeah, I was.
I was no, hardly.
But so you could buy a ratedown, it used to be one point
would get you about a quarterbetter, okay?
But see, uh and and a lot oftimes the loan officers will try
to talk the borrowers into that.
A lot of areas, that's typical.
You pay a point, your yourtraits are a little bit lower.
But all you have to do is themath.
(13:29):
That's why I love what I dobecause math doesn't lie, it's
all numbers.
Does that point get you enoughlower in an interest rate to
make up the difference of whatyou're bringing to closing
within the first year or two?
If it does, then it might makesense.
But if it doesn't, why put themoney up out front so you don't
need to?
So those closing costs.
(13:49):
So a lot of times I can offerzero lender fees in my in my box
A because I have enough in themargin to cover it.
Does that make sense?
So I will because I want to makesure people come back.
And that's the other thing.
If somebody's short on closingcosts, you know, it's it's
difficult these days, right?
I mean, you know, some peoplehave just mountains of money
(14:10):
sitting there that they can haveput down, but other people, like
normal people, you know, they'restruggling to get three and a
half percent.
Well, okay, if you have threeand a half or three percent, you
can buy at home, but you may nothave a lot for closing costs.
Your lender can help you withthat.
So maybe if they have that, theyhave to meet their margin, but
maybe they go a little abovetheir margin and it doesn't
(14:33):
raise the interest rate too muchor raise the payment too much,
then they'll be able to coverall your closing costs.
So there are certain ways youcan do it.
That's why it's important forthe loan officers to ask as many
questions as you possibly can tounderstand the entire situation
of the borrower.
SPEAKER_04 (14:48):
Yeah.
SPEAKER_01 (14:49):
You think I put everybody to sleep with that?
SPEAKER_04 (14:53):
No, no, I love that because I think that it's um, I
just think it's it's knowledge,you know, knowledge is power.
And I think, you know, noteverybody, you deal with this
all day, every day.
And people that are listeningare not dealing with it all day,
every day.
So I think it's it's nice toknow, you know, because a lot of
times people just think like,well, that's what it is, that's
(15:14):
what I got a penning, okay, youknow, and they think that all
lenders are the same, you know,just like when I, you know, got
into real estate, I thought allbrokerages were the same.
Like, you know, you just don't,you don't know what you don't
know because you're not in itall day, every day.
SPEAKER_01 (15:27):
So it's well, so I think it used to be the person,
the average person would moveabout every seven years.
I think it's gone longer now.
I think it's like the averageperson moves every 10 years.
Well, if you do something onetime every 10 years, you're not
that you don't you can'tremember everything.
You know, so so if you don't dothis on a regular basis, there's
a lot of things you forget,right?
(15:47):
So you have to have somebody youcan trust.
And I'm gonna give a shamelessplug to my company if that's
okay with you.
SPEAKER_04 (15:52):
But you should.
I was gonna ask you because Iknow that you haven't always
been with Affinity.
Um, you know, I know you've uhkind of ventured off, but uh,
you know, kind of came back.
And uh, I'd love for you to kindof explain, you know, why did
Affinity Group uh, you know, getyou back and and what what makes
it different from other lenders?
So yeah, please do yourchannel's plug.
SPEAKER_01 (16:13):
Okay, thanks.
I appreciate that very much.
So Affinity Group Mortgage, Iactually started it in 1996 with
three other people.
Um, and then the gentleman thatowns it now, Stephen Scott, and
uh his partner, Roger Teal, havekind of kept it going since
1996.
Um, and Steve and I haveremained friends, he's a great
guy, so is Roger.
(16:33):
Um, but what they've done, whichI think is very unique, is
they've really kept it toseasoned professionals that have
been in the business 20 years ormore.
And it's kind of a boutique.
So what we've done is we said,okay, you know, we've come a
long way.
And and Steve's like, we wantyou guys to have your own
business.
You know, you you know what kindof database management you need,
(16:56):
you know how to process a file,you've been here.
So I'm going to have you guyscome to the company and you're
on your own profit and loss.
Now, because of the laws, thatwe have to get paid the same on
every loan.
But then what happens is afterall of our expenses, we share in
a in the cost center, right?
So we have control of our costsand our rates.
(17:16):
And I think it's vital that thatyou do because you know
sometimes somebody comes to youand they want a million-dollar
mortgage.
Well, all right, if your marginis typically two and a half or
two and three quarters or threeand a quarter, I've seen I've
seen much as four percent.
You're okay.
That just that you you don'tneed to make$40,000 on a
(17:36):
million-dollar mortgage.
You're not doing it anydifferently than you do a
$100,000 mortgage, right?
So, you know, you got to be ableto go, I'll do that for a point
or less, okay?
Which we which we do because youhave to be competitive, but you
have to have the ability to dothat.
Okay.
Yes.
So, you know, it's like we youknow, we don't need to make
$40,000 on a loan.
(17:56):
That's absurd.
That's back, that's what got usinto this trouble with all of
those B and C lenders way backin the day when they would
charge, they would makeridiculous amounts of money on
every, but it's a that does nothelp the consumer.
That's a negative for theconsumer.
So, you know, the trade lawswere were were enacted to
protect the consumer.
And I think they are.
(18:18):
But at affinity group, we onlytake seasoned veterans that know
and understand the business andknow, again, how to maintain a
margin, a healthy margin, not anabsorbent margin.
But we also want to be verycompetitive because as as more
information is out there on theyou know the web, right?
(18:39):
It's easy for people to lookstuff up.
So um we we want to be able togo ahead and go, okay, for the
sophisticated borrower, they'regonna know what the rates are,
right?
So we just want to be low out ofthe shoot, just right out of the
beginning.
Just here's what our rate is.
This is giving us a healthyprofit, but it's not gouging the
(18:59):
consumer because there's a lotof gouging that's going on out
there, trust me.
And and you don't know becausethey're big names and they've
got you know their names onfootball stadiums and they do
commercials and they do allkinds of stuff, but the rates
are high.
You know, I always I always doit this way.
Um, I've worked for companies inthe past that said, well, you
know, you should be able to sella quarter better on an interest
(19:20):
rate, you know, if you're a goodsalesman.
Well, I don't I'm not asalesman, I'm here to help
people.
And here's the thing so if youhave two blue Honda cords, exact
same specifications, right?
Sitting right next to eachother, same mileage, and one's a
thousand dollars more than theother, well, why are you gonna
buy the one that's a thousanddollars more?
Because you like the salesmanbetter.
I mean, come on, that's youknow, be real.
(19:42):
They're gonna go for the bestdeal as long as it's it's equal,
right?
As long as it's you know, it'sit's it's the same.
So it's important for people toshop.
But what we've done, whataffinity group has been able to
do is we only have two people inthe whole organization that are
even on a salary, so everybodyelse, including the owners, are
100% commissioned, and that hastaken out the individual.
(20:06):
So at Affinity Group, we fundour own loans, uh, with the
exception of obviously the onesthat we broker, but we go to
about 15 different lendingorganizations, so big banks, and
the ones that do the best.
I'm I'm sorry.
You're okay.
The ones that have the bestrates and have the easiest
process are the ones that wesend those loans to, or the ones
(20:28):
that match up with the borrower,you know, as as as best that we
can.
So we can go to those samecompanies that the mortgage
banks are going to and deliverit through our little brokerage
or a little hybrid, you know,mortgage bank brokerage
situation and just do it a lotmore effectively and a lot less
expensive.
SPEAKER_04 (20:47):
Yeah.
Well, and you probably have uhshorter close times too, you
know, because I find that theones that have uh less people,
you know, they've got a well-ledmachine, but it's less people
having to touch it.
You can close uh, you know, aloan in 14 days, 21 days, you
know, something less than the 30and a lot of the bigger, bigger
(21:09):
box banks, or people that havemultiple people that have to
touch it, you know, in thescenario like only this person
does this one thing and only oneperson does this one thing, you
know, it tends to be closer to30 days.
And so right now, while beingcompetitive in the market isn't
really tied to how fast you canclose.
Um, like it was back in 2020 and2021.
(21:33):
Um, you know, if you couldn'tclose in 14 days, like people
didn't want your your offer.
And now it's a little lesscompetitive, but it's also nice
to know, you know, hey, if I'm,you know, going with you, we can
close this in, you know, 21days, 14 days, whatever.
And then that means I get itinto my house faster, which is,
you know, always a good thing.
SPEAKER_01 (21:54):
So well, it's nice if you're in a competitive
situation, which many of us areright now, right?
When they're making an offer ona house and you say, I can close
this in 21 days, and everybodyelse is at 30 or 45.
But to your point, I'm glad yousaid that.
I I felt I feel like I wastyping you that question because
it works perfectly.
So the reason why we can close alot quicker than most is because
(22:14):
most big companies have uhservice level agreements, you
know.
So what they have to do is,okay, a file comes to the desk.
Okay, I bring a file in as amortgage loan officer.
The processor has 24 hours toview it, okay, and to start
working on it.
Well, I don't see I can actuallystart processing it immediately.
Um, and I work with uh I workwith a couple other people
(22:37):
sometimes that will startprocessing it immediately, and
we can turn it into underwritingright away.
Whereas some of the othercompanies, they have so many
people, they have 24 to 48 hoursto look at the file to start
processing it.
Once they start, and that'safter the opener sees it.
So my file goes to the openerfor some companies, and what
they do is they set up the file,then with it, and that has to be
(23:01):
within 24 hours, then it goes toa processor that's 24 to 48
hours from then to start lookingat it and get it ready for
underwriting.
And then underwriting hasanother 24 to 48 hours, but in
the meantime, these guys stillhave to perform functions on
that.
So it could be two weeks beforean underwriter even looks at it.
Whereas if you're you know, ifyou don't have that many people,
(23:23):
I can turn my stuff intounderwriting the same day I take
the loan application and be donein two weeks.
We've we've done it as, and I'mnot advertising this as a
regular thing, but you know,we've we've closed loans in
seven days before.
Um, yeah, everything has to workperfectly.
The borrower had to haveeverything right in place and
went right there, but it can bedone.
(23:44):
And then that's a propertyinspection waiver, meaning it's
an appraisal waiver.
So there's a lot of things inthat, but honestly, it can be
done.
It can't be done by bigcompanies, they just they're
just not equipped to do it.
So, and I'm not bashing the I'mnot on, I'm not here bashing the
big companies because there aresome big companies that are very
good.
Um, but sometimes smaller isbetter.
SPEAKER_04 (24:07):
Yeah.
Yeah, no, I totally agree.
Uh, and to your point, uh, youknow, just because the lender
can close that quickly, it'salso on the borrower because if
they ask you for all of thedocuments, you have to make sure
that you're getting them rightaway to them.
Because any delay that you havein getting them the information
they need is just gonna delaythe lender on being able to
(24:30):
process everything.
Because, you know, we can't justwilly-nilly hand out stuff.
Because again, that's how we gotinto the situation back in like
08-09, where you know, it waslike, oh, you have a pulse,
great, here's$500,000.
Go buy a house, have fun.
SPEAKER_01 (24:44):
That was literally how they did it.
Yeah.
Yeah.
They called it the mirror test.
If you could breathe and therewas, you know, fog on the
mirror, then you got a loan.
Um thank you for saying thatbecause it is 100%.
If you're not working together,if the borrower and the loan
officer aren't working together,it could take forever uh to
close that loan.
Just honestly, it's it's reallykind of it's like, okay, I don't
(25:07):
know how many more times I haveto ask you for, you know, last
year's W-2.
Shouldn't be that hard.
This is where you can get it.
Just get it too, you know.
If you if you're if you're aborrower and your loan officer's
asking you for stubs becausethey really do need it, they're
not doing it just forentertainment, you know, they
just need it because theunderwriter said.
And some people, excuse me, somepeople question why the
(25:29):
underwriters need it.
So, uh can do you mind if Iaddress that real quick?
SPEAKER_04 (25:32):
No, I'd love that because I get asked that
sometimes too.
They're like, well, why do theyneed my last three years of you
know, taxes or why, you know,why do they need this?
Why do they need that?
So, yeah, I think that would begreat.
SPEAKER_01 (25:43):
So remember when I was talking about the government
agencies, Fannie Mae, FreddieMac, and Jenny May, they all
have their own guidelines.
Okay.
So, and and those guys go thebook is like, you know, a
thousand pages.
Like there's all kinds of stufffor every scenario that you can
think of.
And in that, it says how youhave to document certain
situations that come in.
(26:04):
And I'll give you examples, butum, and and if you hear people
say, Hey, I have to run DU or LPon that, and that's desktop
underwriter or loan prospector,um, and Jenny May actually takes
either one, but it's a programwhere you put all the
information in from the borroweruh about the transaction, and
then it spits out, you know, areyou approved eligible?
(26:25):
Um, or you know, and if you'reapproved eligible, then it'll
tell you exactly whatdocumentation we need to use to
document the file.
The reason we do that is becausethen that file can be sold to
Fannie Mae, Freddie Mac, orJenny May.
If you don't meet thoseguidelines, then it can't be.
Okay, and then that's when thisthe mortgage lender starts to
(26:45):
get into trouble.
Because if we fund a loan thatcan't be purchased, and we have
to buy it back, and that getsvery, very expensive.
So what happens is you have tomake sure that everything's in
there and documented, eyes arecrossed, T or I's dotted, T's
crossed.
Um, and and I'll give you aperfect example.
The only time you ever needthree years' tax returns is if
you're um doing a first-timehome buyer program through OFA,
(27:09):
because they require, becausethey want to make sure that you
haven't owned a home in the lastthree years.
That's the criteria forfirst-time homebuying.
A lot of people don't know that.
If you haven't owned a home infive years, you qualify for
first-time home buyer money,which is huge.
Again, you just have to makesure your loan officer knows
what he's talking about, and youknow, when when you're talking
to him.
Um, but for example, forexample, uh, the Patriot Act has
(27:31):
made us document where largesums of money come from.
Okay.
SPEAKER_02 (27:35):
Yeah.
SPEAKER_01 (27:35):
Um, sometimes it seems ridiculous, but when you
look at the reason behind it,you know, because when you know
on 9-11 we were attacked, a lotof the money to finance that
attack came in through realestate transactions and
laundering it and doing, youknow, the they come in, they pay
cash for a house for a building,they refinance it, now that
money's clean.
(27:55):
Okay, so they want to know whereyou got the cash, is it legit?
And if it's not, we can't use itfor that transaction.
So they say, okay, documentwhere that$10,000 deposit came
from a month ago, when typicallyyour deposits are$1,000 to$2,000
uh a week or a month.
Um, they do that so we're we'rethe the consumer is not
(28:17):
laundering money.
I know it sounds ludicrous, butit's really uh for a protection.
It's not, it's not, it's not theconsumer's not being penalized.
We're trying to protect thecountry with that.
So it gets annoying.
Now, one thing that I, you know,that I think is ridiculous if
you have your bank statementsthat says, you know, page 104,
(28:41):
and page four has absolutelynothing on it, we still need it.
No idea why, but we do need it.
So I mean, you know, it is stufflike that that's kind of crazy.
But and then when you send stuffin, there might be something on
the bank statement that theunderwriter is looking at that
says, okay, well, I need to makesure that this isn't an ongoing
monthly charge.
So um, you need to address this.
(29:03):
Well, people get irritated aboutit.
No, it's not, but their job isto make sure that what you put
into the computer, all that datais accurate, and that's what the
underwriters are doing.
So people are like, oh,underwriters.
Well, they have their job is tomake sure that everything that
you're putting in there isaccurate and verified.
So sometimes the stuff that yougive us adds to other questions,
(29:24):
which is where the consumer getsupset.
So it's important to have a loanofficer that when when
somebody's giving you apre-approval letter, a lot of
times they're not looking at theinformation up front.
So make sure your loan officerthat you're working with looks
at all the documentation upfront.
Because I'll give you a perfectexample.
Nurses.
Nurses are the hardest income tofigure out because they have
(29:48):
shift differentials.
So, you know, one nurse may workevery night of every weekend,
right?
Well, she's making a fortune orhe's making a fortune.
Um, and somebody else may work,you know, during the week, but
during the summer.
You know, they don't because nowthey're working all the weekend
shifts.
So how do you do that income?
Well, they may say on theirapplication, I make this amount
of money.
(30:09):
We may see it differentlybecause, you know, because they
may not have made that all year.
So we have to use an income thatis realistic, not what they're
making that particular time ofthe year because it's higher
than what they normally do.
So that's a protection.
Because if we qualify them on anincome that's not maintained
throughout the year, it's goingto be harder for them to make
(30:29):
the payments during the timesthat they're making less.
Does that make sense?
Anyway, no, you're fine.
SPEAKER_04 (30:35):
And I love that you pointed that out because, you
know, a lot of times uh, youknow, I'll be talking to people
and they're like, well, I'mpaying more than that in rent
right now.
You know, what do you mean Ican't get, you know, qualified
or why do I have to show all ofthis additional information?
And, you know, and I always tryand explain that it's the lender
looking out for their bestinterest because, you know, good
(30:56):
lenders uh like you are going tonot be able to sleep at night if
they know that they're justputting people in houses and,
you know, they're not gonna beable to afford it, you know, if
their shift differential goesaway or if any of their overtime
or whatever.
So, you know, I think it isimportant to know that if, you
know, if your lender's askingfor additional things, it's for
your protection.
(31:16):
It's not for anything other thanto make sure that you're gonna
be comfortable, you're actuallygonna be able to pay that
mortgage, you know, year roundand also still be able to live
because none of us want you tobe house poor and you know, just
have you, you know, you can't goout to eat anymore, you can't go
on any trips anymore because allyour money is going to mortgage.
(31:37):
So absolutely, yeah.
To your point, it's you know, ifthey're asking for information,
it's for their own good, it'snot just just for funsies.
SPEAKER_01 (31:46):
Yeah, well, I mean, that's the thing.
So back in the day, you know,like in the early 2000s, you
couldn't have been in thebusiness then, but um I was
because I've been in thebusiness.
I started in the 80s, and I soldreal estate for in 1986, was my
first time I got licensed uh tosell real estate, and that
really wasn't my thing.
I I have the most respect foryou guys, you know, driving
(32:08):
people around and showing housesat all hours of the day and
night.
So thank you for that.
But I that wasn't my cup of tea.
Um I'm more of a numbers guy,but um, you know, it it and I
forgot where I was going withthat, but um back in the early
2000s, you literally had a loanwhere you could do what they
call a three, two, one buy down,okay, and they would buy new
(32:32):
homes.
And this is what happened.
This really made the this tankthe economy.
When you do a three, two, onebuy down, that means that the
interest rate that you have,okay, on a new home is let's
just call it four percent.
All right.
At that time, you would qualifyat four percent, okay?
But then the next year, the ratewould go to five percent, all
(32:54):
right, which is a significantincrease in monthly debt.
Not only did on a new home,because we do taxes uh almost a
year in the rears, when you havea new home, that first year
you're only paying taxes on thelot.
That second year now, the thethe county that you live in has
(33:14):
re-evaluated the the value ofyour home and are you're now
paying taxes on the entire valueof what you purchased.
So that could be a five, fourhundred dollar a month increase
alone in your in your in yourmonthly payment.
So not only did you go up a fullpercentage point in your rate,
but you also went upsignificantly on your taxes.
(33:38):
Well, that threw a lot of peopleout.
You know, if you're on a fixed,if you're on a fixed income,
fixed income being if you have ajob, right?
Let's say you're making$50,000 ayear.
It's great.
Let's just make it easy math.
Let's say it's$60,000 a year,$5,000 a month.
Well, you know, you're bringinghome maybe$3,500 a month out of
that, maybe.
(33:58):
Um if your payment goes up$500,that's over 10% of your take
home.
That's that's significant.
That made a lot of people nolonger be able to afford their
house.
And that's when all theforeclosure started because they
were building everywhere andgetting anybody in that they
could.
You know, we're there was onecompany that, and I'm not gonna
say the name, they would allowus to give uh an investment for
(34:23):
someone to buy an investmentproperty.
We could finance them at ahundred percent.
All they had to do was tell ustheir income and tell us what
their assets were.
That was the only requirement,other than they had to have a
600 credit score or higher.
Okay, that's ridiculous.
I mean, I never did one of thoseloans.
I just couldn't, I couldn't, Icouldn't go to sleep at night,
(34:44):
but it was available and a lotof people used it.
The rates were outrageouslyhigh, and it was greedy on the
bank's part because they knewnobody's gonna be able to do
that.
But that was what led to thewhole meltdown, you know, that
was part of it.
There was a lot of other thingsinvolved, but that was a big
part of it.
SPEAKER_04 (34:59):
Yeah.
Well, and to your point, um, youknow, there are a lot of uh
there are a lot of new builds uhout there that are offering
that, you know, two one buy downand all of that.
And so I always just caution mypeople, just make sure, like ask
what year three through 30 isgonna look like.
And if you can afford that rightnow, then great.
If you like don't get it becauseyou can afford the year one
(35:21):
right now and you're hoping, youknow, that you're gonna get a
promotion and then, you know,all of that.
Like, don't don't base this onhopes and prayers, uh, you know,
and you know, because yeah, ofcourse you could go get a new
job or you could lose your job.
Like, you know, so it's justlike let's make sure that, you
know, you're looking at it fromyear three through 40.
So, you know, I think that thethe buy downs are a great
(35:42):
incentive for people and that'sa great deal for people as long
as you can actually afford theyear three through 40.
SPEAKER_01 (35:49):
So now I'm against some of the changes that were
made because I think it doesn't,it it really doesn't help the
mortgage industry.
It's kind of like some of thepeople that made those changes
weren't in the industry everyday.
But some of them, some of thechanges were good.
So on the buy downs, you have tohave to actually qualify at the
(36:12):
note rate.
Okay.
So you're your the buy downrate, you can't qualify that
anymore.
So if you're at four, five, andsix, you qualify at six, you
can't qualify at four.
So the buy downs are good, uh,particularly if like, well, I
can save some money because nowI'm you know at four percent, I
can save an extra five hundreddollars a month, you know,
(36:33):
because you know my rent, it'sless than my rent for the first
two years.
I can stop stock that moneyaway, and then by year three, I
can still afford it.
I just now have savings.
So there's a lot of reasons touse the two one buy down, yeah.
Um, or any buy down for thatmatter.
But a lot of times with the buydowns, if you were to do the
(36:53):
math, you can use that sameamount of money on the buy down
just to buy your rate downpermanently for the full 30
years because you're basicallyspending about two and a half
points for a two-one buy down, Ithink something like that.
Don't quote me on that, butsomething like that.
And then you can use that moneyif you really want to use it
just to buy the rate downpermanently.
I mean, again, it's all math.
(37:14):
And if your loan officer islooking out for you, he'll give
you the option and say, Well, ifit were me, this is what I would
do.
And send because you're in thissituation, so maybe maybe you
don't start at four, but maybe,and again, these aren't actual
numbers.
I'm just throwing them out forsimple math.
But you know, you may be able todo the same thing and be at
5.125 for 30 years using thesame amount of money as opposed
(37:37):
to four, five, and six.
Does that make sense?
SPEAKER_04 (37:39):
Yep.
SPEAKER_01 (37:40):
So there's a lot of things you can do.
SPEAKER_04 (37:42):
Yeah, exactly.
And that's where I think thatuh, you know, just making sure
that uh anyone that's thinkingabout buying, you know, takes
this to into consideration andyou know, definitely just have
that conversation with yourlender and make sure that you
know that you have all of youroptions and then figure out what
makes the most sense becausewhat makes the most sense for
(38:02):
one person isn't for the nextperson, and that's okay.
Like that's why there's so manyoptions.
SPEAKER_01 (38:06):
Absolutely.
And and and rates are all drivenby, you know, I love it when
somebody's like, Well, what'sthe rate today?
Well, okay, there's about athousand one of my one one of
the loan officers I work with,her name's Amy Lewis, she's
awesome, and she explained itthis way, and I loved it.
Your credit score is well, yourinterest rate's like a
fingerprint because andeverybody's different because
(38:29):
it's down payment, it'sreserves, it's your
debt-to-income ratio, and yourcredit score, and a multitude of
other factors, what what therates are, and they can vary by
a half a percent.
I mean, it's significant.
So somebody says, What's rate?
I go, they think I'm avoidingthe question because I don't
know the answer.
That's not it.
I'm like, okay, well, you I gotabout 15 questions I have to ask
(38:51):
you before I can even give youremotely uh an answer.
But you know, I always try togive somebody a range.
It could be, you know, today itcould be anywhere from 6.375 to
7.375, just depending on whereyou are.
People don't like that answer,but that's the actual fact.
I don't know until I look underthe hood, you know, what's the
engine look like?
I don't know.
I got to see what it looks like.
So that's that's thing.
(39:11):
I did want to say one thingabout builders.
So when when when when thebuilder is offering like uh an
incredible rate, most of thetime, as a loan officer outside
of that lender, uh outside ofthat builder, uh, we can't
compete with it.
And the reason is because thebuilders build a certain amount
into the price of the home tokeep their in-house financing
(39:34):
competitive, like outrageouslycompetitive a lot of times.
It's okay because they don'tgive you, if you go to another
mortgage company, they don'tgive you that money that they
built in for on the sale of thehouse.
They that's just more margin forthem.
So you gotta go, you gotta usetheir financing.
I mean, any good loan officerwill tell you 99% of the time,
(39:56):
you gotta go with them becauseit might be 25 grand that they
give you.
That's significant.
So take advantage of it, youknow.
And most most good loan officerswill advise their clients to do
it that way.
SPEAKER_04 (40:08):
Yeah, I love that.
SPEAKER_01 (40:10):
Yeah, I love that.
SPEAKER_00 (40:11):
It is what it is.
SPEAKER_04 (40:12):
Yeah, yeah.
Well, thank you so much fortaking time out of your day.
I know you're super busy, butum, all of this information was
so great.
And I think, you know, bottomline is just, you know, just
know that everything isnegotiable and you know, ask
your lender.
It's okay to shop around.
Um, you know, if you don't likewhat you're hearing, it's okay
to talk to somebody else.
(40:33):
Um, it's not the same, yeah,it's not the same as whenever
you're shopping for a car andevery car dealership you go to
when they pull your credit, itdings your credit.
You know, you have a shortlittle window of time.
Uh, you know, generally it'sabout 30 to 60 days, depending
uh, you know, on who you ask.
It's about 30 to 60 days thatyou can uh shop around.
(40:54):
And even if every single one ofthem pulled your credit, it's
not gonna ding it because thisis such a large uh purchase that
they assume, you know, thecredit companies assume you're
gonna shop around.
And if people are they want youto.
Yeah.
SPEAKER_00 (41:08):
Yeah.
So they won't ding you.
So yes.
SPEAKER_04 (41:12):
Yeah, I love that.
Well, I will make sure that inthe show notes we have ways for
people to get uh a hold of youand uh learn more about Affinity
Group.
Um that way, you know, anyonethat was listening that's like,
oh my gosh, I have to work withSean.
Um get right in touch with you.
SPEAKER_01 (41:28):
Well, I appreciate that very much, and I appreciate
the opportunity to come here.
I hope I didn't bore everybodyto death.
But again, mortgage is hard tomake exciting.
SPEAKER_04 (41:34):
So there's a lot of things about real estate you
can't make exciting.
The only exciting part isshowing houses and you know the
the sighting and closing.
SPEAKER_00 (41:43):
That's the fun part.
But yeah.
SPEAKER_04 (41:45):
Yes, I love it.
Well, thank you so much, and uhthank you so much for tuning in.
We will see you next time onCome to Find Out.
SPEAKER_00 (41:53):
Thanks.
Hi, and welcome to this week's episode of Come to
Find Out.
This week we are joined by SeanMorrow with Affinity Group.
And I just recently met him at acollaborative divorce luncheon.
Because as a lot of you know, Ispecialize in divorce real
estate and also first-time homebuyers.
And Sean and I got to talkinglast week and you know he
(00:24):
brought up a really interestingthing that I had never even
known about interest rates andclosing costs and how those are
all negotiable.
And so I thought, oh my gosh, ifI am, you know, just learning
this, there's so many people outthere that would love to learn
this as well.
So Sean graciously agreed tocome on and record a podcast
episode and uh explain all ofthat because he'll do it way
(00:47):
better than I will.
So Sean, thank you so much forjoining us today.
SPEAKER_01 (00:52):
Thank you, sir.
And I appreciate theopportunity.
And I think I begged him aboutcoming on more than you asked me
to, I think.
But anyway.
SPEAKER_04 (01:01):
No, you're great.
You're great.
I love it.
Um, but yeah, like I said, youknow, when we talked last week,
you just had all of theseamazing things to share.
And I thought, oh my gosh, likeother people need to know this.
So uh I'll let you kind of jumpin and and explain to everyone.
I don't want to take any of yourthunder away.
SPEAKER_01 (01:16):
No, that's okay.
I appreciate it.
You know, and it it's funnybecause um when we a lot of
people they know the themortgage industry, right?
They it's but but what's funnyabout it is it's it's a little
bit different than what mostpeople think.
Interest rates are you knowobviously controlled by you know
the economy, right?
But when we hear about Fedrates, the Fed rate is being
(01:39):
cut, that kind of thing, thathas no immediate direct impact
on the mortgage interest rates.
It has an effect on the market,which then affects our interest
rates.
But before that, I kind ofwanted to explain exactly what
the mortgage industry is.
And uh everybody's like ohrolling their eyes right now,
going, oh my God, this is gonnabe terrible.
(01:59):
But it's hard to like makemortgage funds.
So I'll just try to kind of putit to a relate it to other
businesses.
So if anybody's ever heard ofFannie Mae, Freddie Mack, and
Jenny May, those are the threegovernment service agencies.
They're controlled, they're notrun, but they're overseen by the
government.
And that's where all the moneycomes from, you know, unless
(02:20):
it's a portfolio loan, which isa little bit different.
And if anybody cares about that,I'll explain that.
But for the most part, all themoney comes from those three
entities.
And what happens is that the bigbanks will say, okay, I'm gonna
deliver to you$100 million worthof loans in November, and I want
a better rate than what'shappening on the street.
(02:42):
And then you got a guy thatdelivers a million, he's not
gonna have a uh as as good of arate there because he can't
deliver as much.
What the banks do is they'llthey'll bundle all their
services from all the differentcompanies out there, they'll
they'll put all their they'llgather all those mortgage loans
and then they'll sell it toFannie Mae.
That's why they can offer abetter rate.
But look at it this way themortgage interest rate is like
(03:05):
any other widget that any otherindustry has, okay?
So just like if you produce aball of some sort, you know,
there's a cost to produce it,and then they have a margin,
just like any business.
So view the interest rate aslike the product, and then the
company that's working with you,the originator, has a margin
(03:26):
that he has to work off of,because obviously we're in
business to make money.
Um, but some of those marginsare significantly different than
some of the other ones.
And I'll explain.
So just like any assembly lineyou have, if you have a thousand
workers, you have to pay allthousand of those.
Those margins are going to comea little higher, right?
So, big mortgage banks, if theyhave an opener for a file, when
(03:50):
uh they have a processor, theyhave a closer, they have, you
know, somebody that orders theappraisal, there's somebody to
disclose.
They have five or six peoplethat are in the middle of a
file, which is fine because it'sefficient.
Typically, those margins arehigher, all right?
And so when the margins arehigher, the rates are higher.
Okay.
So what you should be lookingfor as a consumer or as a real
(04:14):
estate agent is someone that hasa little bit more control over
those.
And you know, I'm notnecessarily saying that all
mortgage banks are like this,they're not.
Um, but brokers or hybrid, whichis what affinity group mortgage
is, is we have we can be alender or we can be a broker.
So the reason why that's good isbecause we can go to those big
(04:37):
banks that said to Fannie Mae,hey, I'm gonna deliver you a
hundred or a billion dollarsworth of mortgages in the fourth
quarter of 2025.
We can take advantage of thoserates from Fannie Mae that way.
So I guess the bottom line forme, you know, what I was trying
to get across is that typicallymortgage rates, because there's
(04:59):
a margin, there's no hard cost,or there is a hard cost, but
there's no set hard costs, aretypically negotiable.
And a lot of people don't thinkthat.
So if you've got a realtor or abuyer or a borrower, buyer um
that's thinking they can get abetter rate and they're
currently with a mortgage,they're their mortgage guy, and
the rate's a little bit higherthan what they thought it should
(05:20):
be.
That's the question.
Look, I'm seeing you know, sixand five eighths, and you've got
me at 6.875, you know, can youcan you do anything?
They may be able to or they maynot be able to, but typically
the smaller the companies, theless overhead, the better the
rates are gonna be.
Not always.
You know, Rocket, for instance,you know, that's our big
(05:40):
competition.
Rocket has great rates, but it'san assembly line.
So you don't always know whoyou're gonna get.
So when I say go go for thelowest rate, you also have to
make sure that that company hasthe ability to get things closed
on time.
Because as an agent, you knowthat missing the closing dates
and no-no.
SPEAKER_04 (05:59):
Yes, yeah, no, absolutely.
And um, you know, uh the otherthing to look at is uh, you
know, with some of the thelarger uh companies they may
have, you know, one person thatuh they get they get a bonus
based on, hey, you filled outthe application, cool, here's
(06:20):
your bonus.
And then, you know, and like theperson that that got you to fill
it out gets the bonus.
And then if that person thengets you to move to the next
step, they get a bonus.
If they go to the next step,they get a bonus.
Those people don't always haveyour best interest in mind
because all they're trying to dois make that money.
So you also want to make surethat whenever you're talking
with your lender, you're youknow, you're finding out like,
(06:42):
uh, you know, you can ask, like,how do you get paid?
Do you get paid based on youknow us closing or do you get an
incentive every time I, youknow, click a button for you?
Um because that can also make adifference between feeling like
a number and feeling like aperson that's truly, you know,
trying to buy something andfully supported by someone that
(07:05):
truly cares about yourwell-being versus just checking
a box and having you check a boxso that they get a little bonus.
Um, so you know, I think thoseare those are other big things
to, you know, kind of look atwhenever you're shopping around.
SPEAKER_01 (07:17):
Huge things.
You know, like one one one keyindicator is when I when I first
talk to a client, I will walkthem through the process, but
then I always start with whatpayment are you comfortable
with?
And you know, and I go in this,you know, because our industry
has based everything off ofgross income.
Well, gross income is awesome,but you know, you have taxes,
(07:41):
you have federal, state, local,you have all you know, benefits
come out.
So let's say you make$2,000 aweek.
Well, you might, or you know,you might only bring home a
thousand or you know, somethingclose.
But the banks all do all oftheir qualifying off of their
gross income.
So that's significantlydifferent.
So what I always try to do issay, listen, what what what what
(08:03):
payment are you trulycomfortable with?
And let's go through your budgetto make sure.
Because I do care because Ithink repeat business is
something that's very difficultto get.
But if you really if you'retalking to your originator and
he's not asking you morequestions than telling you how
great he is, then that's aproblem.
You know, yeah, that's someonethat's looking for the
(08:24):
commission and kind of he's theguy that you're talking to at a
party that his eyes arewandering all around about hey,
who's where's my next person I'mgonna go talk to?
You know, you got to have a loanofficer that looks you in the
eye and says, Okay, how can Ihelp you?
And yeah, if you have somebodylike that, then they're probably
looking out for your bestinterest because most of us in
the mortgage industry arecommissioned.
(08:45):
And I would have I'd say thatthe majority of the loan
officers, probably 80% or more,and that is a statistic that
just came into my head.
So, you know, don't quote me onthat, but are probably 100%
commission based.
Now, some of the banks will havesalaries because they do other
things, but um, for the mostpart, mortgage loan officers are
100% commissioned, so they arethey are looking to get as much
(09:08):
business as they can, but thegood ones get that business
because they care about theirpeople and they get referrals
from those people that theyclose.
That's that, but yeah, to yourpoint, if there's an assembly
line and all it's going is okay,this is my job is to order the
credit, and I get you know fivebasis points for doing that.
(09:28):
And then I've got a that it goesto the next person, I order the
appraisal, okay, I get a hundreddollar bonus for that.
And then the processor, if he ifthey pro, you know, it goes down
the line, and that does increasetheir overhead, which then
translates increased margins.
All right.
That's that's how that that'show that kind of works.
SPEAKER_04 (09:48):
Yeah.
Now, um, does that play intoyour closing cost fee?
Because I feel like, you know,some uh some lenders that uh
I've had um, you know, my buyersworking with their closing costs
are significantly less uh thanothers.
Uh so is that another thingthat's negotiable?
SPEAKER_01 (10:06):
Yes.
So everything on a mortgage isnegotiable with the exception of
third-party fees.
So credit report, because we'rewe're we're we deal with the
monopoly right now.
You know, you've got Equifax,Trans, uh, transunion
experience, no other ones.
So they set their prices andthat's it.
All right.
So you have to pay it.
Appraisers, you know, that'susually pretty across the board
(10:28):
because what we've had to go tobecause of the laws back when it
was the mortgage was wild, wildwest and TRID.
You know, we we have to hire uhmanagement companies, um
appraisal management companies.
So they kind of control theprices, all right.
And everybody wants to be, youknow, competitive.
So appraisers don't get out ofhand.
Those are the kinds of coststhat we can't control.
(10:50):
Title Company fees.
It's a third-party fee.
So whatever in central Ohio,it's a little bit different than
some of the other areas becausecentral Ohio is typically the
seller or the seller's agentpicks the title company because
most consumers don't even knowwhat a title company does.
If you were if you were to, youknow, if you were to go down the
street and go, hey, what's atitle company doing?
I don't know.
(11:10):
I have transferred titles.
I mean, you know, it's likeright.
SPEAKER_02 (11:14):
I don't know.
SPEAKER_01 (11:15):
I have no idea.
You know, in fact, if you askhalf the real estate population,
they may not exactly know whatthey are, but that's a trust
company, right?
And what they do is they theyhandle all the money, they're
the ones that move all the moneyaround and make sure
everything's filed.
It's a very important um pieceof the transaction.
But most consumers, althoughentitled to pick a title
company, they they don't.
(11:36):
They just do what the realtorsays or whatever the company is.
Um, and I lost my train ofthought about where I was going
with that.
But close, so some of theclosing costs um are not
negotiable.
However, the lender fees arenegotiable and they can range
from zero money to 2,500 orwhatever.
Just you when when there's alender estimate or on a closing
(11:58):
disclosure, it's box A.
Okay.
Box A is what you want to lookat, and those were all the
lender fees are.
And if the lender fees are seemhigh, they probably are.
Um I wanted to tell talk aboutsomething else along with those
lines.
So closing costs are negotiable,rates are negotiable.
(12:18):
But remember when we weretalking about the margins,
right?
So the margins, you still haveto have a margin.
We can't give the business away,or everybody would be out of
business, right?
So you have to have someprofitability on there.
Well, interest rates, again, youknow, you can buy an interest
rate down by paying points.
Okay, they're called bona fidediscount points, meaning that,
(12:39):
you know, if my margin's sethere, all right, I can deliver
this rate.
But with one point, which is onepercent of the mortgage amount,
not the sales price, but themortgage amount of amount you're
mortgaging, um, can buy yourrate down.
You know, typically a good ruleof thumb, it doesn't really hold
true anymore, but historically,throughout my I've been in the
mortgage business almost 40years now, sadly.
(13:00):
It just makes me old and youknow, no, it just means you
started at like 15.
That's it.
Yeah, 15.
Okay, not exactly, but thankyou.
SPEAKER_04 (13:07):
You were a prodigy.
SPEAKER_01 (13:08):
Yeah, I was.
I was no, hardly.
But so you could buy a ratedown, it used to be one point
would get you about a quarterbetter, okay?
But see, uh and and a lot oftimes the loan officers will try
to talk the borrowers into that.
A lot of areas, that's typical.
You pay a point, your yourtraits are a little bit lower.
But all you have to do is themath.
(13:29):
That's why I love what I dobecause math doesn't lie, it's
all numbers.
Does that point get you enoughlower in an interest rate to
make up the difference of whatyou're bringing to closing
within the first year or two?
If it does, then it might makesense.
But if it doesn't, why put themoney up out front so you don't
need to?
So those closing costs.
(13:49):
So a lot of times I can offerzero lender fees in my in my box
A because I have enough in themargin to cover it.
Does that make sense?
So I will because I want to makesure people come back.
And that's the other thing.
If somebody's short on closingcosts, you know, it's it's
difficult these days, right?
I mean, you know, some peoplehave just mountains of money
(14:10):
sitting there that they can haveput down, but other people, like
normal people, you know, they'restruggling to get three and a
half percent.
Well, okay, if you have threeand a half or three percent, you
can buy at home, but you may nothave a lot for closing costs.
Your lender can help you withthat.
So maybe if they have that, theyhave to meet their margin, but
maybe they go a little abovetheir margin and it doesn't
(14:33):
raise the interest rate too muchor raise the payment too much,
then they'll be able to coverall your closing costs.
So there are certain ways youcan do it.
That's why it's important forthe loan officers to ask as many
questions as you possibly can tounderstand the entire situation
of the borrower.
SPEAKER_04 (14:48):
Yeah.
SPEAKER_01 (14:49):
You think I put everybody to sleep with that?
SPEAKER_04 (14:53):
No, no, I love that because I think that it's um, I
just think it's it's knowledge,you know, knowledge is power.
And I think, you know, noteverybody, you deal with this
all day, every day.
And people that are listeningare not dealing with it all day,
every day.
So I think it's it's nice toknow, you know, because a lot of
times people just think like,well, that's what it is, that's
(15:14):
what I got a penning, okay, youknow, and they think that all
lenders are the same, you know,just like when I, you know, got
into real estate, I thought allbrokerages were the same.
Like, you know, you just don't,you don't know what you don't
know because you're not in itall day, every day.
SPEAKER_01 (15:27):
So it's well, so I think it used to be the person,
the average person would moveabout every seven years.
I think it's gone longer now.
I think it's like the averageperson moves every 10 years.
Well, if you do something onetime every 10 years, you're not
that you don't you can'tremember everything.
You know, so so if you don't dothis on a regular basis, there's
a lot of things you forget,right?
(15:47):
So you have to have somebody youcan trust.
And I'm gonna give a shamelessplug to my company if that's
okay with you.
SPEAKER_04 (15:52):
But you should.
I was gonna ask you because Iknow that you haven't always
been with Affinity.
Um, you know, I know you've uhkind of ventured off, but uh,
you know, kind of came back.
And uh, I'd love for you to kindof explain, you know, why did
Affinity Group uh, you know, getyou back and and what what makes
it different from other lenders?
So yeah, please do yourchannel's plug.
SPEAKER_01 (16:13):
Okay, thanks.
I appreciate that very much.
So Affinity Group Mortgage, Iactually started it in 1996 with
three other people.
Um, and then the gentleman thatowns it now, Stephen Scott, and
uh his partner, Roger Teal, havekind of kept it going since
1996.
Um, and Steve and I haveremained friends, he's a great
guy, so is Roger.
(16:33):
Um, but what they've done, whichI think is very unique, is
they've really kept it toseasoned professionals that have
been in the business 20 years ormore.
And it's kind of a boutique.
So what we've done is we said,okay, you know, we've come a
long way.
And and Steve's like, we wantyou guys to have your own
business.
You know, you you know what kindof database management you need,
(16:56):
you know how to process a file,you've been here.
So I'm going to have you guyscome to the company and you're
on your own profit and loss.
Now, because of the laws, thatwe have to get paid the same on
every loan.
But then what happens is afterall of our expenses, we share in
a in the cost center, right?
So we have control of our costsand our rates.
(17:16):
And I think it's vital that thatyou do because you know
sometimes somebody comes to youand they want a million-dollar
mortgage.
Well, all right, if your marginis typically two and a half or
two and three quarters or threeand a quarter, I've seen I've
seen much as four percent.
You're okay.
That just that you you don'tneed to make$40,000 on a
(17:36):
million-dollar mortgage.
You're not doing it anydifferently than you do a
$100,000 mortgage, right?
So, you know, you got to be ableto go, I'll do that for a point
or less, okay?
Which we which we do because youhave to be competitive, but you
have to have the ability to dothat.
Okay.
Yes.
So, you know, it's like we youknow, we don't need to make
$40,000 on a loan.
(17:56):
That's absurd.
That's back, that's what got usinto this trouble with all of
those B and C lenders way backin the day when they would
charge, they would makeridiculous amounts of money on
every, but it's a that does nothelp the consumer.
That's a negative for theconsumer.
So, you know, the trade lawswere were were enacted to
protect the consumer.
And I think they are.
(18:18):
But at affinity group, we onlytake seasoned veterans that know
and understand the business andknow, again, how to maintain a
margin, a healthy margin, not anabsorbent margin.
But we also want to be verycompetitive because as as more
information is out there on theyou know the web, right?
(18:39):
It's easy for people to lookstuff up.
So um we we want to be able togo ahead and go, okay, for the
sophisticated borrower, they'regonna know what the rates are,
right?
So we just want to be low out ofthe shoot, just right out of the
beginning.
Just here's what our rate is.
This is giving us a healthyprofit, but it's not gouging the
(18:59):
consumer because there's a lotof gouging that's going on out
there, trust me.
And and you don't know becausethey're big names and they've
got you know their names onfootball stadiums and they do
commercials and they do allkinds of stuff, but the rates
are high.
You know, I always I always doit this way.
Um, I've worked for companies inthe past that said, well, you
know, you should be able to sella quarter better on an interest
(19:20):
rate, you know, if you're a goodsalesman.
Well, I don't I'm not asalesman, I'm here to help
people.
And here's the thing so if youhave two blue Honda cords, exact
same specifications, right?
Sitting right next to eachother, same mileage, and one's a
thousand dollars more than theother, well, why are you gonna
buy the one that's a thousanddollars more?
Because you like the salesmanbetter.
I mean, come on, that's youknow, be real.
(19:42):
They're gonna go for the bestdeal as long as it's it's equal,
right?
As long as it's you know, it'sit's it's the same.
So it's important for people toshop.
But what we've done, whataffinity group has been able to
do is we only have two people inthe whole organization that are
even on a salary, so everybodyelse, including the owners, are
100% commissioned, and that hastaken out the individual.
(20:06):
So at Affinity Group, we fundour own loans, uh, with the
exception of obviously the onesthat we broker, but we go to
about 15 different lendingorganizations, so big banks, and
the ones that do the best.
I'm I'm sorry.
You're okay.
The ones that have the bestrates and have the easiest
process are the ones that wesend those loans to, or the ones
(20:28):
that match up with the borrower,you know, as as as best that we
can.
So we can go to those samecompanies that the mortgage
banks are going to and deliverit through our little brokerage
or a little hybrid, you know,mortgage bank brokerage
situation and just do it a lotmore effectively and a lot less
expensive.
SPEAKER_04 (20:47):
Yeah.
Well, and you probably have uhshorter close times too, you
know, because I find that theones that have uh less people,
you know, they've got a well-ledmachine, but it's less people
having to touch it.
You can close uh, you know, aloan in 14 days, 21 days, you
know, something less than the 30and a lot of the bigger, bigger
(21:09):
box banks, or people that havemultiple people that have to
touch it, you know, in thescenario like only this person
does this one thing and only oneperson does this one thing, you
know, it tends to be closer to30 days.
And so right now, while beingcompetitive in the market isn't
really tied to how fast you canclose.
Um, like it was back in 2020 and2021.
(21:33):
Um, you know, if you couldn'tclose in 14 days, like people
didn't want your your offer.
And now it's a little lesscompetitive, but it's also nice
to know, you know, hey, if I'm,you know, going with you, we can
close this in, you know, 21days, 14 days, whatever.
And then that means I get itinto my house faster, which is,
you know, always a good thing.
SPEAKER_01 (21:54):
So well, it's nice if you're in a competitive
situation, which many of us areright now, right?
When they're making an offer ona house and you say, I can close
this in 21 days, and everybodyelse is at 30 or 45.
But to your point, I'm glad yousaid that.
I I felt I feel like I wastyping you that question because
it works perfectly.
So the reason why we can close alot quicker than most is because
(22:14):
most big companies have uhservice level agreements, you
know.
So what they have to do is,okay, a file comes to the desk.
Okay, I bring a file in as amortgage loan officer.
The processor has 24 hours toview it, okay, and to start
working on it.
Well, I don't see I can actuallystart processing it immediately.
Um, and I work with uh I workwith a couple other people
(22:37):
sometimes that will startprocessing it immediately, and
we can turn it into underwritingright away.
Whereas some of the othercompanies, they have so many
people, they have 24 to 48 hoursto look at the file to start
processing it.
Once they start, and that'safter the opener sees it.
So my file goes to the openerfor some companies, and what
they do is they set up the file,then with it, and that has to be
(23:01):
within 24 hours, then it goes toa processor that's 24 to 48
hours from then to start lookingat it and get it ready for
underwriting.
And then underwriting hasanother 24 to 48 hours, but in
the meantime, these guys stillhave to perform functions on
that.
So it could be two weeks beforean underwriter even looks at it.
Whereas if you're you know, ifyou don't have that many people,
(23:23):
I can turn my stuff intounderwriting the same day I take
the loan application and be donein two weeks.
We've we've done it as, and I'mnot advertising this as a
regular thing, but you know,we've we've closed loans in
seven days before.
Um, yeah, everything has to workperfectly.
The borrower had to haveeverything right in place and
went right there, but it can bedone.
(23:44):
And then that's a propertyinspection waiver, meaning it's
an appraisal waiver.
So there's a lot of things inthat, but honestly, it can be
done.
It can't be done by bigcompanies, they just they're
just not equipped to do it.
So, and I'm not bashing the I'mnot on, I'm not here bashing the
big companies because there aresome big companies that are very
good.
Um, but sometimes smaller isbetter.
SPEAKER_04 (24:07):
Yeah.
Yeah, no, I totally agree.
Uh, and to your point, uh, youknow, just because the lender
can close that quickly, it'salso on the borrower because if
they ask you for all of thedocuments, you have to make sure
that you're getting them rightaway to them.
Because any delay that you havein getting them the information
they need is just gonna delaythe lender on being able to
(24:30):
process everything.
Because, you know, we can't justwilly-nilly hand out stuff.
Because again, that's how we gotinto the situation back in like
08-09, where you know, it waslike, oh, you have a pulse,
great, here's$500,000.
Go buy a house, have fun.
SPEAKER_01 (24:44):
That was literally how they did it.
Yeah.
Yeah.
They called it the mirror test.
If you could breathe and therewas, you know, fog on the
mirror, then you got a loan.
Um thank you for saying thatbecause it is 100%.
If you're not working together,if the borrower and the loan
officer aren't working together,it could take forever uh to
close that loan.
Just honestly, it's it's reallykind of it's like, okay, I don't
(25:07):
know how many more times I haveto ask you for, you know, last
year's W-2.
Shouldn't be that hard.
This is where you can get it.
Just get it too, you know.
If you if you're if you're aborrower and your loan officer's
asking you for stubs becausethey really do need it, they're
not doing it just forentertainment, you know, they
just need it because theunderwriter said.
And some people, excuse me, somepeople question why the
(25:29):
underwriters need it.
So, uh can do you mind if Iaddress that real quick?
SPEAKER_04 (25:32):
No, I'd love that because I get asked that
sometimes too.
They're like, well, why do theyneed my last three years of you
know, taxes or why, you know,why do they need this?
Why do they need that?
So, yeah, I think that would begreat.
SPEAKER_01 (25:43):
So remember when I was talking about the government
agencies, Fannie Mae, FreddieMac, and Jenny May, they all
have their own guidelines.
Okay.
So, and and those guys go thebook is like, you know, a
thousand pages.
Like there's all kinds of stufffor every scenario that you can
think of.
And in that, it says how youhave to document certain
situations that come in.
(26:04):
And I'll give you examples, butum, and and if you hear people
say, Hey, I have to run DU or LPon that, and that's desktop
underwriter or loan prospector,um, and Jenny May actually takes
either one, but it's a programwhere you put all the
information in from the borroweruh about the transaction, and
then it spits out, you know, areyou approved eligible?
(26:25):
Um, or you know, and if you'reapproved eligible, then it'll
tell you exactly whatdocumentation we need to use to
document the file.
The reason we do that is becausethen that file can be sold to
Fannie Mae, Freddie Mac, orJenny May.
If you don't meet thoseguidelines, then it can't be.
Okay, and then that's when thisthe mortgage lender starts to
(26:45):
get into trouble.
Because if we fund a loan thatcan't be purchased, and we have
to buy it back, and that getsvery, very expensive.
So what happens is you have tomake sure that everything's in
there and documented, eyes arecrossed, T or I's dotted, T's
crossed.
Um, and and I'll give you aperfect example.
The only time you ever needthree years' tax returns is if
you're um doing a first-timehome buyer program through OFA,
(27:09):
because they require, becausethey want to make sure that you
haven't owned a home in the lastthree years.
That's the criteria forfirst-time homebuying.
A lot of people don't know that.
If you haven't owned a home infive years, you qualify for
first-time home buyer money,which is huge.
Again, you just have to makesure your loan officer knows
what he's talking about, and youknow, when when you're talking
to him.
Um, but for example, forexample, uh, the Patriot Act has
(27:31):
made us document where largesums of money come from.
Okay.
SPEAKER_02 (27:35):
Yeah.
SPEAKER_01 (27:35):
Um, sometimes it seems ridiculous, but when you
look at the reason behind it,you know, because when you know
on 9-11 we were attacked, a lotof the money to finance that
attack came in through realestate transactions and
laundering it and doing, youknow, the they come in, they pay
cash for a house for a building,they refinance it, now that
money's clean.
(27:55):
Okay, so they want to know whereyou got the cash, is it legit?
And if it's not, we can't use itfor that transaction.
So they say, okay, documentwhere that$10,000 deposit came
from a month ago, when typicallyyour deposits are$1,000 to$2,000
uh a week or a month.
Um, they do that so we're we'rethe the consumer is not
(28:17):
laundering money.
I know it sounds ludicrous, butit's really uh for a protection.
It's not, it's not, it's not theconsumer's not being penalized.
We're trying to protect thecountry with that.
So it gets annoying.
Now, one thing that I, you know,that I think is ridiculous if
you have your bank statementsthat says, you know, page 104,
(28:41):
and page four has absolutelynothing on it, we still need it.
No idea why, but we do need it.
So I mean, you know, it is stufflike that that's kind of crazy.
But and then when you send stuffin, there might be something on
the bank statement that theunderwriter is looking at that
says, okay, well, I need to makesure that this isn't an ongoing
monthly charge.
So um, you need to address this.
(29:03):
Well, people get irritated aboutit.
No, it's not, but their job isto make sure that what you put
into the computer, all that datais accurate, and that's what the
underwriters are doing.
So people are like, oh,underwriters.
Well, they have their job is tomake sure that everything that
you're putting in there isaccurate and verified.
So sometimes the stuff that yougive us adds to other questions,
(29:24):
which is where the consumer getsupset.
So it's important to have a loanofficer that when when
somebody's giving you apre-approval letter, a lot of
times they're not looking at theinformation up front.
So make sure your loan officerthat you're working with looks
at all the documentation upfront.
Because I'll give you a perfectexample.
Nurses.
Nurses are the hardest income tofigure out because they have
(29:48):
shift differentials.
So, you know, one nurse may workevery night of every weekend,
right?
Well, she's making a fortune orhe's making a fortune.
Um, and somebody else may work,you know, during the week, but
during the summer.
You know, they don't because nowthey're working all the weekend
shifts.
So how do you do that income?
Well, they may say on theirapplication, I make this amount
of money.
(30:09):
We may see it differentlybecause, you know, because they
may not have made that all year.
So we have to use an income thatis realistic, not what they're
making that particular time ofthe year because it's higher
than what they normally do.
So that's a protection.
Because if we qualify them on anincome that's not maintained
throughout the year, it's goingto be harder for them to make
(30:29):
the payments during the timesthat they're making less.
Does that make sense?
Anyway, no, you're fine.
SPEAKER_04 (30:35):
And I love that you pointed that out because, you
know, a lot of times uh, youknow, I'll be talking to people
and they're like, well, I'mpaying more than that in rent
right now.
You know, what do you mean Ican't get, you know, qualified
or why do I have to show all ofthis additional information?
And, you know, and I always tryand explain that it's the lender
looking out for their bestinterest because, you know, good
(30:56):
lenders uh like you are going tonot be able to sleep at night if
they know that they're justputting people in houses and,
you know, they're not gonna beable to afford it, you know, if
their shift differential goesaway or if any of their overtime
or whatever.
So, you know, I think it isimportant to know that if, you
know, if your lender's askingfor additional things, it's for
your protection.
(31:16):
It's not for anything other thanto make sure that you're gonna
be comfortable, you're actuallygonna be able to pay that
mortgage, you know, year roundand also still be able to live
because none of us want you tobe house poor and you know, just
have you, you know, you can't goout to eat anymore, you can't go
on any trips anymore because allyour money is going to mortgage.
(31:37):
So absolutely, yeah.
To your point, it's you know, ifthey're asking for information,
it's for their own good, it'snot just just for funsies.
SPEAKER_01 (31:46):
Yeah, well, I mean, that's the thing.
So back in the day, you know,like in the early 2000s, you
couldn't have been in thebusiness then, but um I was
because I've been in thebusiness.
I started in the 80s, and I soldreal estate for in 1986, was my
first time I got licensed uh tosell real estate, and that
really wasn't my thing.
I I have the most respect foryou guys, you know, driving
(32:08):
people around and showing housesat all hours of the day and
night.
So thank you for that.
But I that wasn't my cup of tea.
Um I'm more of a numbers guy,but um, you know, it it and I
forgot where I was going withthat, but um back in the early
2000s, you literally had a loanwhere you could do what they
call a three, two, one buy down,okay, and they would buy new
(32:32):
homes.
And this is what happened.
This really made the this tankthe economy.
When you do a three, two, onebuy down, that means that the
interest rate that you have,okay, on a new home is let's
just call it four percent.
All right.
At that time, you would qualifyat four percent, okay?
But then the next year, the ratewould go to five percent, all
(32:54):
right, which is a significantincrease in monthly debt.
Not only did on a new home,because we do taxes uh almost a
year in the rears, when you havea new home, that first year
you're only paying taxes on thelot.
That second year now, the thethe county that you live in has
(33:14):
re-evaluated the the value ofyour home and are you're now
paying taxes on the entire valueof what you purchased.
So that could be a five, fourhundred dollar a month increase
alone in your in your in yourmonthly payment.
So not only did you go up a fullpercentage point in your rate,
but you also went upsignificantly on your taxes.
(33:38):
Well, that threw a lot of peopleout.
You know, if you're on a fixed,if you're on a fixed income,
fixed income being if you have ajob, right?
Let's say you're making$50,000 ayear.
It's great.
Let's just make it easy math.
Let's say it's$60,000 a year,$5,000 a month.
Well, you know, you're bringinghome maybe$3,500 a month out of
that, maybe.
(33:58):
Um if your payment goes up$500,that's over 10% of your take
home.
That's that's significant.
That made a lot of people nolonger be able to afford their
house.
And that's when all theforeclosure started because they
were building everywhere andgetting anybody in that they
could.
You know, we're there was onecompany that, and I'm not gonna
say the name, they would allowus to give uh an investment for
(34:23):
someone to buy an investmentproperty.
We could finance them at ahundred percent.
All they had to do was tell ustheir income and tell us what
their assets were.
That was the only requirement,other than they had to have a
600 credit score or higher.
Okay, that's ridiculous.
I mean, I never did one of thoseloans.
I just couldn't, I couldn't, Icouldn't go to sleep at night,
(34:44):
but it was available and a lotof people used it.
The rates were outrageouslyhigh, and it was greedy on the
bank's part because they knewnobody's gonna be able to do
that.
But that was what led to thewhole meltdown, you know, that
was part of it.
There was a lot of other thingsinvolved, but that was a big
part of it.
SPEAKER_04 (34:59):
Yeah.
Well, and to your point, um, youknow, there are a lot of uh
there are a lot of new builds uhout there that are offering
that, you know, two one buy downand all of that.
And so I always just caution mypeople, just make sure, like ask
what year three through 30 isgonna look like.
And if you can afford that rightnow, then great.
If you like don't get it becauseyou can afford the year one
(35:21):
right now and you're hoping, youknow, that you're gonna get a
promotion and then, you know,all of that.
Like, don't don't base this onhopes and prayers, uh, you know,
and you know, because yeah, ofcourse you could go get a new
job or you could lose your job.
Like, you know, so it's justlike let's make sure that, you
know, you're looking at it fromyear three through 40.
So, you know, I think that thethe buy downs are a great
(35:42):
incentive for people and that'sa great deal for people as long
as you can actually afford theyear three through 40.
SPEAKER_01 (35:49):
So now I'm against some of the changes that were
made because I think it doesn't,it it really doesn't help the
mortgage industry.
It's kind of like some of thepeople that made those changes
weren't in the industry everyday.
But some of them, some of thechanges were good.
So on the buy downs, you have tohave to actually qualify at the
(36:12):
note rate.
Okay.
So you're your the buy downrate, you can't qualify that
anymore.
So if you're at four, five, andsix, you qualify at six, you
can't qualify at four.
So the buy downs are good, uh,particularly if like, well, I
can save some money because nowI'm you know at four percent, I
can save an extra five hundreddollars a month, you know,
(36:33):
because you know my rent, it'sless than my rent for the first
two years.
I can stop stock that moneyaway, and then by year three, I
can still afford it.
I just now have savings.
So there's a lot of reasons touse the two one buy down, yeah.
Um, or any buy down for thatmatter.
But a lot of times with the buydowns, if you were to do the
(36:53):
math, you can use that sameamount of money on the buy down
just to buy your rate downpermanently for the full 30
years because you're basicallyspending about two and a half
points for a two-one buy down, Ithink something like that.
Don't quote me on that, butsomething like that.
And then you can use that moneyif you really want to use it
just to buy the rate downpermanently.
I mean, again, it's all math.
(37:14):
And if your loan officer islooking out for you, he'll give
you the option and say, Well, ifit were me, this is what I would
do.
And send because you're in thissituation, so maybe maybe you
don't start at four, but maybe,and again, these aren't actual
numbers.
I'm just throwing them out forsimple math.
But you know, you may be able todo the same thing and be at
5.125 for 30 years using thesame amount of money as opposed
(37:37):
to four, five, and six.
Does that make sense?
SPEAKER_04 (37:39):
Yep.
SPEAKER_01 (37:40):
So there's a lot of things you can do.
SPEAKER_04 (37:42):
Yeah, exactly.
And that's where I think thatuh, you know, just making sure
that uh anyone that's thinkingabout buying, you know, takes
this to into consideration andyou know, definitely just have
that conversation with yourlender and make sure that you
know that you have all of youroptions and then figure out what
makes the most sense becausewhat makes the most sense for
(38:02):
one person isn't for the nextperson, and that's okay.
Like that's why there's so manyoptions.
SPEAKER_01 (38:06):
Absolutely.
And and and rates are all drivenby, you know, I love it when
somebody's like, Well, what'sthe rate today?
Well, okay, there's about athousand one of my one one of
the loan officers I work with,her name's Amy Lewis, she's
awesome, and she explained itthis way, and I loved it.
Your credit score is well, yourinterest rate's like a
fingerprint because andeverybody's different because
(38:29):
it's down payment, it'sreserves, it's your
debt-to-income ratio, and yourcredit score, and a multitude of
other factors, what what therates are, and they can vary by
a half a percent.
I mean, it's significant.
So somebody says, What's rate?
I go, they think I'm avoidingthe question because I don't
know the answer.
That's not it.
I'm like, okay, well, you I gotabout 15 questions I have to ask
(38:51):
you before I can even give youremotely uh an answer.
But you know, I always try togive somebody a range.
It could be, you know, today itcould be anywhere from 6.375 to
7.375, just depending on whereyou are.
People don't like that answer,but that's the actual fact.
I don't know until I look underthe hood, you know, what's the
engine look like?
I don't know.
I got to see what it looks like.
So that's that's thing.
(39:11):
I did want to say one thingabout builders.
So when when when when thebuilder is offering like uh an
incredible rate, most of thetime, as a loan officer outside
of that lender, uh outside ofthat builder, uh, we can't
compete with it.
And the reason is because thebuilders build a certain amount
into the price of the home tokeep their in-house financing
(39:34):
competitive, like outrageouslycompetitive a lot of times.
It's okay because they don'tgive you, if you go to another
mortgage company, they don'tgive you that money that they
built in for on the sale of thehouse.
They that's just more margin forthem.
So you gotta go, you gotta usetheir financing.
I mean, any good loan officerwill tell you 99% of the time,
(39:56):
you gotta go with them becauseit might be 25 grand that they
give you.
That's significant.
So take advantage of it, youknow.
And most most good loan officerswill advise their clients to do
it that way.
SPEAKER_04 (40:08):
Yeah, I love that.
SPEAKER_01 (40:10):
Yeah, I love that.
SPEAKER_00 (40:11):
It is what it is.
SPEAKER_04 (40:12):
Yeah, yeah.
Well, thank you so much fortaking time out of your day.
I know you're super busy, butum, all of this information was
so great.
And I think, you know, bottomline is just, you know, just
know that everything isnegotiable and you know, ask
your lender.
It's okay to shop around.
Um, you know, if you don't likewhat you're hearing, it's okay
to talk to somebody else.
(40:33):
Um, it's not the same, yeah,it's not the same as whenever
you're shopping for a car andevery car dealership you go to
when they pull your credit, itdings your credit.
You know, you have a shortlittle window of time.
Uh, you know, generally it'sabout 30 to 60 days, depending
uh, you know, on who you ask.
It's about 30 to 60 days thatyou can uh shop around.
(40:54):
And even if every single one ofthem pulled your credit, it's
not gonna ding it because thisis such a large uh purchase that
they assume, you know, thecredit companies assume you're
gonna shop around.
And if people are they want youto.
Yeah.
SPEAKER_00 (41:08):
Yeah.
So they won't ding you.
So yes.
SPEAKER_04 (41:12):
Yeah, I love that.
Well, I will make sure that inthe show notes we have ways for
people to get uh a hold of youand uh learn more about Affinity
Group.
Um that way, you know, anyonethat was listening that's like,
oh my gosh, I have to work withSean.
Um get right in touch with you.
SPEAKER_01 (41:28):
Well, I appreciate that very much, and I appreciate
the opportunity to come here.
I hope I didn't bore everybodyto death.
But again, mortgage is hard tomake exciting.
SPEAKER_04 (41:34):
So there's a lot of things about real estate you
can't make exciting.
The only exciting part isshowing houses and you know the
the sighting and closing.
SPEAKER_00 (41:43):
That's the fun part.
But yeah.
SPEAKER_04 (41:45):
Yes, I love it.
Well, thank you so much, and uhthank you so much for tuning in.
We will see you next time onCome to Find Out.
SPEAKER_00 (41:53):
Thanks.
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