Mortgage Rates, Market Myths, and Why 60% of Buyers Feel House Poor

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Is the Fed About to Make a Huge Move? How does it effect you as a homebuyer? 

In this eye-opening episode of the Key Factors Podcast – Real Estate AF, host Mark Jones is joined by John Hudson and Brianna Jones to dig deep into the current mortgage climate, financial literacy, and buyer behavior in a volatile market. The trio explores how fear of rejection, lack of trust in lenders, and financial misinformation are keeping 85% of potential homebuyers on the sidelines—even as rates drop.

They break down the true relationship between Fed rate cuts and mortgage rates, challenge the house-poor mindset, and share how tools like LoanBot empower consumers through transparency and options. From the generational wealth gap and 40-year mortgages to the failure of schools to teach basic finance, this episode delivers hard truths and helpful guidance in equal measure.

🧠 Discussion Themes / Talking Points

Fed Rate Cuts vs. Mortgage Rates
Why a Fed cut doesn’t guarantee lower mortgage rates—and how media confuses buyers.

Fear, Trust, and Financial Literacy Gaps
Generational distrust in lenders, fear of rejection, and lack of education are massive hurdles.

LoanBot as a Solution
A tech-driven approach that empowers buyers and gives realtors and LOs a sticky tool to stay top-of-mind.

Expanding Term Lengths & the Case for 40-Year Mortgages
The market may be shifting in term length expectations due to affordability and age.

Buy Now, Not When Everyone Else Does
Encouraging buyers to act before another market frenzy hits.

Guest Info 
📇 John Hudson

Owner & Sr. Mortgage Advisor
🏦 H&M Mortgage Group
📍 San Antonio, TX
📧 [e-mail]

📇 Brianna Jones

Licensed Realtor®
🏡 JBGoodwin REALTORS®
📍 San Antonio, TX
📧 [e-mail]

Mark Jones | Branch Manager | Sr. Loan Officer nmls# 513437
iThink Mortgage 
Founder and Co-Owner of LoanBot & ReviewMyMortgage.com

Support the show

Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.

Episode Transcript

Speaker 1 (00:43):
Thank you, and we're back with another episode of Key
Factors Podcast Real Estate AF,where the AF stands for and
finance, and I'm your host, markJones, and we are now powered
by LoanBot.
We'll tell you about that alittle bit later, but let's get
into it with our guests today.
I've got some folks joining usthat had a pretty solid

(01:04):
intellectual conversation awhile back.
So, by popular demand, firstguest we have John Hudson.
John, how you doing.

Speaker 2 (01:12):
Man, still number one and still on the run.
Amen, that intro should bereigning champions here.

Speaker 1 (01:17):
Yes, that's right.
That's right, and my secondguest is Brianne Jones, no
relation.

Speaker 3 (01:24):
How are you?
I'm good.
How are you?

Speaker 1 (01:26):
Doing well, doing well.
It feels good to be in thestudio with you guys.
It took a while for us to gethere.
Love it, yeah.
So we've got some things totalk about today and I'm going
to allow John to kind of kick usoff on this topic.

Speaker 2 (01:42):
All right.
Well, everybody knows.
The news is out there, right,mortgage rates are coming down.
That's right.
Everybody rushed back out thereand get ready to buy a house.
Now is the time.
But is it?
But is it Right?
And so you know again, you know, every time we chat, it's all
about educating people, yeah, sohow do we make sure that people

(02:03):
are really prepared when theymake that next step?
And so you know, article cameout yesterday that I just
thought was very apropos.
It was perfect timing,considering we all know what's
happening this week, right, yeah, it's fed week, fed's cutting
rates.
That's right, he better.
Well, but does that meanmortgage rates are going to come
down tomorrow?
Good point, we don't, we don'tknow, we don't know.

(02:25):
Ironically enough, you know, ayear ago was when the last time
the Fed had the big 50 basispoint rate cut, mortgage rates
went up.

Speaker 1 (02:34):
Yeah, and everybody was going wait.
That's not right.
I don't get it.
I don't understand, and I thinkit has a lot to do with the
media convincing people that itis directly tied to the Fed rate
and that is just not the case.
If we're looking at what it'sclosely tied to, it would be the
10-year Treasury Right.

Speaker 2 (02:53):
You know, john, you work, but I was just going to
say but that all comes back intothis whole process of OK, I
mean, mortgage rates have comedown, they're in fresh, they're
the lowest they've been in ayear, right, but are they going
to keep going down?
Are people finally getting offthe fence, right?
What's happening?
So, yeah, I mean let's have agood discussion here about that
educational piece of it.

Speaker 1 (03:14):
First I want to ask, brianna, you being on the real
estate side, working your leads?

Speaker 3 (03:45):
Working your leads, contacts, social media, etc.
Are you seeing anyone jumpingoff of what people can afford
and what they think they canafford and they're scared?

Speaker 1 (03:50):
to ask.

Speaker 3 (03:50):
Honestly, they're scared to ask the questions and
a lot of times they're likethey'll ask me and I explain it.
And they're like well, wait,well, how?
And it just goes to show youthat we're not teaching this
even at a elementary,fundamental level of high school
yeah, no, I have to agree withthat um and and a lot of it.

Speaker 1 (04:11):
Um, I don't know what it stemmed from the idea of
being fearful of asking thequestion.
Is it lack of trust?
Is it um fear of being?
Yes, you can actually do this.

Speaker 3 (04:25):
I think it's fear of rejection.
Yeah, like human nature is fearof rejection in general, and
there's a word for it and Ican't remember the actual name.

Speaker 1 (04:32):
Like fear of rejection.

Speaker 3 (04:34):
Yeah.
No but there was it wassomething I was watching the
other day and there is an actualdefinition for it that by
nature, humans don't askquestions because they're afraid
of getting rejected no matterwhat.

Speaker 1 (04:46):
While you guys are talking, I'm going to look that
up it.

Speaker 3 (04:48):
You know, it doesn't matter if it's.
You know, life questions, awork question, something people
are afraid of getting rejected,which is, to me, is wow, because
I was always taught and raisedthat there is no stupid question
right I mean it may soundstupid, but it's not actually
stupid, because you're not goingto learn anything if you don't
ask.

Speaker 2 (05:05):
I agree 100 percent with that.
That's exactly right.
I always tell people that theonly dumb question in the room
is the one you were too afraidto ask Social anxiety maybe
that's not right Need forbelonging, rejection and
sensitivity.

Speaker 1 (05:18):
Well, there's a whole lot of that going on in our
society at the moment.
That's just the honest truth ofit, and I would imagine that
that also correlates or tiesback to anything including
mortgages, buying a home, bigpurchases, change the idea of
change in your life, taking onmore responsibility, the idea of

(05:43):
this next generation that wehave coming up and to term of,
well, it's probably time to buya house or not.
They're not, and it probablyhas to do with they haven't
reached any adversity to be ableto overcome or fail, the fear
of failing.

Speaker 2 (06:03):
Adversity is a big thing, but then on top of that
too and I'm going to throw thisout there because you know, I
bring, I bring stats always,that's right.
So the playbook, and this isfascinating.
Um, so this was from a uhcalled the next gen study.
Basically they they surveyedmillennials and gen zers and
asked them all sorts offinancial literacy questions.
But this was fascinating to tome from the skeptical standpoint

(06:25):
.
34% of women do not trustlenders, or no, I'm sorry, only
34% of women trust lenders.
Only 42% of men trust lenders.
So you've got two thirds thatdon't trust lenders right out of
the gate.
And we're the money guys.
Yes, but by generation this wasfascinating to me only 51 of

(06:48):
millennials trust lenders, right, so only half, yeah, but only
32 of gen z, wow, trust lenders,wow.

Speaker 1 (06:56):
So a massive drop off there which I think I find that
strange, only because let'scorrelate it to lenders were
being compared to car salesmenat a certain point, sure, but
they didn't get thatindoctrination or what have you,
because they hadn't.
That was a while back, you know.

Speaker 2 (07:18):
I mean the big shorts , but on Netflix True.

Speaker 4 (07:21):
Ah, yeah.

Speaker 2 (07:23):
I mean there could be some of that.
I mean it could be passed downfrom millennial parents, true,
true, or it could just go intojust society as a whole of you
know this generation is moretechnology, yep, social media
and everything, because somebodyput something on the internet.

Speaker 1 (07:42):
And which I find that , um, I don't want to say it's
discouraging.
I find it fascinating thatyou've got folks like us that
have been in the business.
We consider I consider myselfan expert, um, I would consider
you an expert.
28 years, yeah, um.
And they would trust someone ontiktok making a silly video

(08:03):
that's maybe been in thebusiness for a year, maybe over,
somebody that knows whatthey're doing, can actually help
them but, most importantly,knows how to talk to them to
help them.
And I think that that is one ofthe issues with the newer loan
officers, newer realtors to thebusiness they don't know how to
communicate properly in regardsto helping them accomplish that

(08:27):
goal, yeah, does that make senseyeah.

Speaker 2 (08:29):
I think it totally does.
And then I think it also leadsinto that, from an industry
standpoint, we're really stillnot doing a good enough job.
I mean we, like you know, as awhole are not doing a good
enough job of outreach.
Yeah, even from the financialliteracy side that you know that
that Brie was talking about, Imean it's true, it's true.

Speaker 1 (08:48):
I mean, we try to do things like podcasts, like this,
to relate to them, because weknow that they're more than
likely not going to watch thenews, but they will watch social
media, they will watch YouTube,um, but you try and throw an
educational class in person.

Speaker 3 (09:04):
Nobody shows up.

Speaker 1 (09:06):
Where are these people?
And is it because of the socialanxiety?
Is it because of the fear offailure, fear of rejection?
Who knows?

Speaker 3 (09:17):
Yeah, I don't know.
I mean, when I've talked aboutdoing it, I get a lot of initial
interest.
But I also think part of it isokay you talk about doing it,
you have to put somethingtogether within the next few
weeks or that interest just diesoff Absolutely, because this
culture now is very instantgratification.
If you don't do it right, thenand there it's on to the next

(09:39):
thing They'll go find somethingelse.

Speaker 1 (09:41):
It's almost like you put a video out.
Hey, I've got an educationalclass.
It's only six seconds.
That's about as much of abandwidth as they can take.
But back to our topic of therates.
I mean we can go into thisarticle here.
Let's see here.

(10:02):
So John brought us a fantasticarticle from the housing wire
and this is a something thatanyone can subscribe to.
I think you don't have to be amortgage professional email
address.
I think it's nine bucks a month, something like that.
Yeah, Um, but this gives prettysolid information without a
bias of of politics, anythinglike that.

(10:23):
It's just educational inessence.
So this is a homebuyer strainsby cost, confused about mortgage
market.
60% expect to feel house pooronce they close.
Before we go any further, let'stalk about that.
Before we go any further, let'stalk about that.

(10:44):
60% have the perception thatthey are going to be house poor
day one.
I got my keys.
I already can't afford it.
Yeah, Think about that concept.
Yeah, but I think in order toeven feel that, they've got to

(11:07):
take the step to do it.
So the idea and I don't want tosay that that's false, but
that's a weird statistic to putout knowing that, hey, at least
they moved forward because theyclosed.

Speaker 2 (11:13):
Right.
So you know, and I think someof that too is, and it was it
was fascinating to me because II even had this step.
Let's see here oh man, it wasnuts, but it was.
Oh yeah, Like 60%, 60% of homeshoppers spent more time
shopping for clothes than theydid for a mortgage.
Wow, so where I'm going withthat is, people aren't getting

(11:36):
all their options.
Right, you know, now's a greattime for a soft plug, but you
know, that's exactly right.
But, but you know people, ifthey're not shopping, so they're
only being told what their rateand their paint, what one rate,
what one payment would be, andthat's the oh, that's, that's
all right, that's all there is,Okay, we're done.
And then they go go to find ahouse.

(11:56):
Um, so again it's I.
People aren't seeing all theiroptions.
There's tons of avenues for foraffordability.
Yeah, you know, I know we'vetalked about the down payment
stuff a lot, but you knowthere's a call it what it is
there's a lot of lenders thatdiscourage people from down
payment assistance because thoseloans don't pay money.
That's right.
And so you know that familythat saved up $16,000, well,

(12:20):
they spent it all getting intheir house and now they have a
dollar left.

Speaker 1 (12:22):
Yeah, yeah, that's so true, so it's people aren't
getting all their options iswhere I'm going, and it also
goes back to the idea of why arethey not getting their options?
Because they're choosing theguy on TikTok that's only been
in the business for a year,doesn't truly know what all the
options are In addition todoesn't know how to articulate

(12:44):
it, or or, uh, I'm going to say,sell it to the customer,
because essentially that's whatyou're doing, whether whether um
, in my opinion, you should beselling the best option for that
borrow Um.
And how do we sell it?
By giving more information, byeducating.

(13:05):
It's not.
My coach has a saying and it'slike sales is basically
educating someone on a productthat they didn't know that they
needed and showing the value ofthat product.
Pretty simple, yeah, you knowgood way of putting it, yeah.
So to this article.
John, I don't know if you cansee from there, but you're

(13:26):
probably way better reader thanI.
I can make that.

Speaker 2 (13:31):
Ironically enough, it was right in front of me.
I'd have trouble seeing it, butfrom the beginning, no problem.

Speaker 1 (13:36):
Go for it.

Speaker 2 (13:36):
Yeah, so, yeah, so, obviously right, I mean.
So.
It says mortgage rates remainbelow the 50-year average, which
is awesome because mortgagerates are continuing to move,
trend lower as of today.
But check this out.
So they did a survey of 1,000buyers and if you scroll down
just a little bit more, becausethis was a chart, keep going
down, keep going down.

(13:57):
There's a chart, this one righthere, yep, and this was
fascinating to me.
So think of all themisconceptions.
Again, that's out there andagain consumers have just been
sold on.
Oh well, mortgage rates are atall-time high.
Well, a year ago and look atthat only 15% of consumers did

(14:19):
not put buying a house on hold.

Speaker 1 (14:23):
That is a.
I'm happy to see that it'struly because what that means is
the rest of them.
They're still waiting.
Yeah, they're still open tobuying a home.

Speaker 2 (14:35):
I see that, as there's a tremendous amount of
pent-up demand.
Absolutely, yeah, I have toagree with that.
A quarter of them spent, youknow, put their buying a house
on hold by more than 25%, andunfortunately, the reality,
though, is that, okay, themarket has shifted.

Speaker 3 (14:51):
Yeah absolutely the market's shifted yeah 1,000%.

Speaker 2 (14:54):
So we've gone from just seller's market.
Now we're a buyer's marketagain.
There's more inventory that'sout there.
Homes are staying on the marketlonger, so consumers have the
ability to go and negotiate more, and so the sooner we can get
people off the fence, the better.

Speaker 1 (15:10):
That's right, that's right.

Speaker 2 (15:11):
But, but yeah.
So this was the big thing inthat.
That article that really stoodout to me was man, I mean, you
had 85% of people delay buying ahouse because their perception
was that mortgage rates were toohigh that's right, when in
reality they really weren'tRight, you know, it just wasn't.
They weren't 4%.

Speaker 1 (15:27):
Well, in addition and now I'm going to plug what we
created and have launched whathas a lender, a realtor, in the
past given their borrower in wayof a tool that they can utilize
to educate themselves on theconcept of?
Are rates too high?
Well, let's look at thesedifferent options that maybe

(15:51):
make your payment lower, ormaybe help you with the down
payment that allows you to keepthe money you saved up as
reserves to help out for thenext six months, eight months,
while rates trickle back down.
And LoanBot, essentially, isthat tool.
It allows the consumer to putin their criteria.

(16:13):
It puts the realtor and loanofficer front facing and allows
them to go through actual,viable programs.
We're talking from QM to non-QM,to off-the-wall portfolios.
We've added them in there.
And the idea is, all of thesepeople that you show here I mean

(16:33):
we're talking, 85% of them arestill on the fence, but what are
they doing?
They've got their realtorcomapp, their Zillow app I can't
think of anything else off thetop and being dripped on with
all of these email campaignsfrom realtors, email campaigns
from lenders, but there'snothing that they can interact

(16:55):
with.
And then you have us lenders,realtors, that want to keep
these folks in our pipeline.
But how do we do that?
Hey, happy birthday.
I'm calling to awkwardly figureout a way to get you on the
phone to dig and see if you'restill actually interested in
buying International donut day?

Speaker 2 (17:13):
Am I still?

Speaker 1 (17:14):
your guy type concept .
You know, it made it awkwardfor us to keep these folks in
our pipeline, um, eager to buy,and you as the lender and or
realtor, the one that they'reactually going to use.

Speaker 2 (17:30):
Well, so go to that skepticism, skepticism,
skepticism piece, right, I mean,it's a.
Why do we like shopping onAmazon?
It's easy Well it's easy butwe're empowered, oh two good,
right?

Speaker 1 (17:41):
Yes, I mean, if I want it, I can click it.

Speaker 3 (17:45):
If I don't want it, I can keep keep doing the same.

Speaker 2 (17:47):
Yeah, so you know.
That's where a tool likeloanbot comes into play, because
it does empower the consumer tohave their that ability to go
and play around on their time ontheir own time and on their own
day and that's always been.
You know, one of my big beefsis most originators out there.
Only give a consumer likehere's your loan.

Speaker 1 (18:04):
Yeah, that's your only option.
Yeah, it's like what Matter offact, good example of that.
I had a branch in Brownsvilleseveral years back and getting
to know these loan officers astheir leader, educating them,
finding out what it is thatthey're currently doing, to see
if I can inject any kind ofvalue into their process, into
their product knowledge,marketing, all that good stuff.

(18:27):
And it took me a minute.
But as I look back, after theyclosed several loans, let's say
six months later, I go hey guys,you're only selling FHA loans.
I'm not upset by that, right,yeah, but was that really the
best option for the borrower atthat time?
And it and it blew this lightbulb up, thinking okay, wow, so

(18:51):
the newer to the business loanofficers and I'm not saying all
of you out there, but, um, ingeneral newer to the business
loan officers tend to learn oneor two programs, get really good
at them and that's what theysell, they know, yeah, yeah
sorry, how many people do yousee out there advertised?

Speaker 2 (19:06):
I'm a VA expert.

Speaker 1 (19:08):
Everybody and their mother.
That's exactly right.
That's right, Especially theones that go.
I'm a VA expert and I careabout the veteran, but I don't
offer tech support Right what?

Speaker 2 (19:20):
Check this out.
92% of buyers don't know whatthe minimum down payment is on a
conventional loan.

Speaker 1 (19:27):
That's a large statistic that's way too large,
for you know.

Speaker 2 (19:32):
So that goes right back to the point right, when a
tool like LoanBot comes intoplay is let the borrower play.
That's right.
I mean, if this is how they'regoing to learn, because they're
not showing up for the homebuyer class.
No, they're not.

Speaker 1 (19:47):
If this is how they're going to learn because
they're not showing up for thehome buyer class, this is how
they're going to learn thenwe've got to provide them with
the tools.
That's right.
And if you put out aneducational video, no matter how
great the content is, you'regonna get about six seconds.
Yeah, that's it.
You know.
And it's like buy a house, okay, that's it.
Yeah, I mean, what else do wehave time for these days?
You know, um, and, and that'sit's.
I don't want to say it's sad.
I think it may be a cyclicalthing.
I don't know when this hashappened like this, this pent up

(20:12):
buyer's market.
I'm sure there was a point intime and I'm sure we got out of
it and now we're back in it dueto things that have taken place.
You know, taken place, you know.
But how do we continue to growthe educational stance on that?
Other than tools classes, whatare some other things that maybe

(20:34):
realtors, lenders out there,could be incorporating into
their practice?

Speaker 2 (20:39):
I don't know if this may sound goofy or whatnot, but
I'd really like to get more intohigh schools.
Yeah, and just doing.
They're not buying a house withtheir head no, but.

Speaker 1 (20:51):
Basic financial literacy.
What you're doing, john.
In that I love that, by the way, you're planting a seed.
Yeah, you're planting thatinitial seed that maybe their
parents are renting.
Maybe they're not that initialseed that maybe their parents
are renting, maybe they're not,but I know many friends that do

(21:11):
not have financial literacyconversations with their parents
growing up Right, why, I don'tknow, I had them with my parents
.
Matter of fact, like I tell youguys, I was the one that filled
out my FAFSA, or my parentsFAFSA, for me, and I think I was
17 and dad was like here's thetax returns, get what you can
get.

Speaker 2 (21:31):
I'm like okay, I'm like damn, y'all made a good
body.

Speaker 3 (21:33):
I remember writing writing checks at the HEB when I
was all cool and had my firstchecking account.
I still write checks.

Speaker 1 (21:37):
My first one was that what was it?
It was before Credit Human SanAntonio, federal Bank.
credit human san antonio federalsack, sack, you yep, um, but
yeah, that, that idea of havingthose conversations inside the
home.
Some are having them and somearen't, and I think the majority
aren't why?
Well, you look at stats on howmany people think that they're

(21:59):
financially sound.
It's, it's astonishing how manypeople do not think that
they're financially sound.
So why would you think that youshould start teaching your kid
this, or even fill them in onwhat's going on in your finances
as a parent?

Speaker 2 (22:13):
Yeah, it's uh, um, there's.
There's a term that I've seenused the K shaped economy, right
so, where it basically alongthe lines of richer getting
richer, poor getting poorer,right, where it's moving in a K?
Um.
So if you take that concept andjust think about this so this
was homeownership rates from thelast survey of consumer finance

(22:33):
for white families 74%homeownership rate, hispanic
families 49%, black families 44%so now you couple that right
with household net wealth andthere's a clear giant gap
between homeowners versusrenters and just follow that
line.
Yeah, you know, so it's like.

(22:54):
It's like that old uh, thatbook for economics.
You know, these, these things,all these things correlate
Absolutely, um.
And then I saw a crazy stat theother day, and I can't remember
the exact thing right off thetop of my head, but it was like
more than a third of all carloans now are seven years.

Speaker 1 (23:10):
I mean because our, our beer budget and our
mentality of what we want istotally skewed because of the
finance piece and being able tostretch it out.
Right Gosh, I was putting inmortgage programs this whole
last week to catch up on on thenew enterprise account that we
have and I I'm entering in40-year mortgages.

(23:32):
I'm like what in the hell isgoing on?

Speaker 3 (23:37):
they do, I don't offer them um yet, and I say yet
because that may be the new 30them, um, yet, and I say yet
because that may be the new 30,sad to say, but it just might.
But if it, you know, in aconsumer's eye it makes it more
affordable because it stretchesout the loan, lowers the payment
.
But again, that's where thatthat education comes in.
And you have to sit there andgo hey, yeah, it looks good on

(23:59):
paper, but look at what you'repaying in interest right, yeah
well, but at least house isappreciating asset versus the
car.

Speaker 2 (24:05):
That's very true.

Speaker 3 (24:06):
That's very true.
You drive the car off the lot,you lose 10 grand right there.

Speaker 2 (24:10):
If not more, yeah, but, but but the.
So that's not really reallyscared me right now, and all
these things correlate, and thenyou also play into scale of you
know, so many of the socialills that we have in our country
.
I really don't think it boilsdown between r's and d's, I
think it's haves versushave-nots, yeah, and so the if

(24:32):
we can get home ownership ratesup across the board for
everybody, then it's not goingto happen today, it's not
happening tomorrow, but ageneration from now we'll start
to see that pendulum kind ofcome back into the center.

Speaker 1 (24:46):
So I've got two and I just thought of them now and I
made sure to write them down soI don't forget the idea of, and
your point of, the white Americais ahead of the rest, and I
don't think it has anything todo with we have more money than

(25:07):
you.
It's the idea of they knewabout things that the other
black Mexican, I can say thatwere either an understanding,
unwilling to tell their children, et cetera to pass down.
One that comes to mind is lifeinsurance.

(25:27):
Huge, it wasn't that blackAmerica, mexican America, et
cetera, could not afford lifeinsurance.
That's not what it was.
Life insurance is cheap as $10 amonth, so it wasn't
affordability, it was aknowledge education, something
that was, they felt, nuanced orsomething that was out of reach,

(25:49):
or now, that's not for us.
When have you even had aconversation about this?
Because, guess what, the whiteAmerica who knew about this and
were willing to, and maybe,maybe they didn't talk to their
children, but I guarantee you,when that parent passed away and
that life insurance kicked inand that child who is now maybe

(26:12):
an adult, hopefully, isinheriting this money, they went
oh, wow, I think I'm going totell my kids about this.
This is one of those staplethings that we need to have in
life moving forward, and that'swhat started the chain of are
they wealthy or are they justeducated in that sense to be set

(26:32):
up for when the time comes?
It doesn't affect and turn atragedy into something greater
that is passed down Right Ifthat makes sense?

Speaker 2 (26:42):
No, it does.
I mean the biggest tool orpotential enemy that we all have
is time, right, and I mean it'sthe law of compounding.
Yeah, I mean, you know, I don'tcare how often you could put a
chart in front of somebody andthey actually start doing it,
but you know, 50 bucks a monthwhen you're 18 is a hell of a

(27:02):
lot better than a thousanddollars a month when you're 30.
That's right, as crazy as thatsounds.
Yeah, because it's just, it'sthe law of compounding and so
again.
So yeah, I mean that outreachto the younger generation is so
important.
So how do you get in front ofthem?
I think it's got to be somesort of you know, institutional
financial literacy.

Speaker 1 (27:22):
Yeah, yeah, the second point that I wrote down
here was we were talking about40 year mortgages and I seeing
them when they first startedtalking about it several years
back, because they've beenaround for a while.
But it's only your non QM, it'sonly your specific boutique
type programs that offer them,and the reason why I say it may

(27:46):
become a standard.
Even who knows Fannie Mae,freddie Mac, may start adopting
it.
If you look at the age at whichhome buyers are starting their
journey, it has increased.
It absolutely has increased.
If you look at the time thatpeople are staying in their
homes, that too has increased.
It absolutely has increased.
If you look at the time thatpeople are staying in their

(28:07):
homes, that too has increased.
So, going towards that route,is that something that maybe
we're shifting to because ofeverything else that is shifting
?
That way we're living longer.
Yeah, I mean, it kind of goeshand in hand.
Now I'm not promoting them, butlogically I'm thinking it might

(28:29):
not be a bad deal, especiallyif we educate on killing the
principal, especially educate onamortization and how that works
.

Speaker 2 (28:41):
Right, it's been the traditional 30 year.
30-year mortgage is is anamazing tool, right?
I mean, I mean if, as long asit's responsible I should say
the responsible 30-year mortgage, you know something, something
that's not going to leavesomebody completely house poor,
um, is an amazing tool becauseto a degree it is a forced
savings over time, correct?

(29:02):
Yep, um.
So I think the 40 year mortgagecould satisfy that.
If it's, if it's the only meansto get somebody into a house
today, to at least get themstarted on that journey, sure,
because, yeah, it's.
I mean, you're right.
I mean if, if you have so manypeople putting off making huge
financial decisions because ofcomplexity or fear or anything

(29:23):
else, well, then again it's onlydelaying that.
And now you have the averageage of first-time buyers 37.

Speaker 3 (29:28):
Right, yeah, that's all that stuff.
I blew my mind.

Speaker 2 (29:31):
I mean, I was 23 when I bought my first house, yeah,
I mean so right out of the gate,right?
I mean you compare that andthat's somebody with halfway
through getting a mortgage paidoff versus somebody not.
Yeah, and and the this notionthat, oh well, you know, we're
just going to rent for the restof our lives.
You know, I put this out.
My question to people is well,who's going to take care of you

(29:53):
when you're older and retired?
That's right.
I mean, there are, you know,reverse mortgage products, cash
out along those lines.
You know when, when, when thehouse is paid off, and now
that's the only means ofaccessing funds for the rest of
your life and you can say thatRight.
So I mean that's, it's the, thehousing responsible.
Housing is an amazing financialtool when used properly and and

(30:18):
the and the means to get themthere.
Absolutely Right.

Speaker 4 (30:20):
So definitely your mortgage.

Speaker 2 (30:21):
I mean again, you know it.
It looks weird because it'sstill newer, but if that becomes
the only means of a 25-year-oldstarting, then by all means I'm
in.

Speaker 1 (30:37):
I'd like to know and maybe this is just inherent,
maybe you know this when did the30-year mortgage become
available?

Speaker 2 (30:47):
oh so, couldn't tell you the us, couldn't tell you
the year right off the top of myhead, but I'm gonna say it was
around the time whenmortgage-backed securities um
first started crash.

Speaker 1 (30:57):
Wow, so look at that.
It's been around for a minute.

Speaker 2 (31:00):
1930, the fha, yeah um the first 15 and 20 years,
yep, yep, yep, yeah.

Speaker 1 (31:08):
And then in the 40s, 40s boom, it was okay, night
late 1940 night.
Uh, the 30-year fixed mortgagebecame a common, largely through
the fha and va.
So 1940s is when they startedhaving the conversation and it
wasn't like this.
It was like how do we get moreof these people into homes?

(31:33):
Well, it's everything'sunaffordable.
Let's extend it to 30 year.
Well, that became the standardfor now.
What?
Almost a hundred years.

Speaker 2 (31:44):
Yeah, yeah, that's crazy, I mean but, but, but it's
yeah.
But that 100 years, yeah, yeah,that's crazy, I mean but but
but yeah, but that's true andthat's a great number.
I mean, like the us really is,uh, separates itself from the
rest of the globe because of the30-year fixed rate mortgage,
absolutely, yeah, I mean, I mean, you know what has made america
so wealthy?
I still lead it to the 30-yearfixed rate mortgage.

Speaker 1 (32:03):
Yeah, I have to agree , because that was the thing,
the catalyst that allowed allthose people and still, to this
day, allows people to get into ahome.
Matter of fact, on all of myprimary residents, I've never
had less than a 30-year mortgageOn our investments.
We'd do 15, we'd do seven-yearterms, stuff like that.

(32:23):
But it was pretty cool to havean investment property at 15
year mortgage and pay it off inseven years, because we're
taking the money from them andus and throwing it at it and you
go whoa building Well that wasfast, you know, but I think we
mindset wise-wise have adifferent and a skewed concept

(32:47):
of our primary residence, ourhome.
Maybe it's they're wanting tomake money off of it because
they saw what took place in 2020.
I don't know, because of allthe shows that you see on the,
the house, yes, um, what is theother one?
Find this, all of those showsthat hgtv has had that makes

(33:14):
buying a home glamorous and sosimple that maybe they think
differently than we do aboutyour home.
Yeah, this is my home.
I'm not trying to make money onit.
It's nice if I make money inthe end, but my idea is I'm
going to live here, right, I'mgoing to have memories here.

(33:34):
All of the things.
Yeah, I don't know what, what,what that comes to in regards to
that, what do you?
What?

Speaker 2 (33:41):
do you see on that?

Speaker 3 (33:45):
I mean great example my house.
When I bought it, gosh, fouryears ago, I bought it for me, I
didn't buy it for anybody else.
I just, you know I live alone,me and the dogs.
But I walked into that houseand I was like I got to have
this house and I bought it rightbefore things started to shift,
so I've way overpaid for it.

(34:06):
I will sit here and tell youthe Tom black and blue Like that
was not my smartest decision.
But at the same time, like I satthere and I was like I'm not
looking to make money off ofthis.
I, this is my home, this iswhere you know I'm going to have
memories here.
I mean it's not my forever home.
And sure I mean either I mightsell it later, I might hang onto
it, I don't know.
But I did not walk into itlooking to go oh, my God, I'm

(34:30):
going to buy this house and turnaround and sell it in a couple
of years for money.
Um, and it's it's interestingcause I, you know I've had in
the last three or four years.
I've had four or five sets ofclients buy on the high side and
then in less than two or threeyears they're like wait a minute
.
I don't like this house.
We experienced it recently.

(34:51):
Or I don't like this house orwhatnot, and I want to move.
But because they bought high,they still have this expectation
and unfortunately, that's wherethat education comes in.
I need to make money off it.
I need to make money off it.

Speaker 1 (35:09):
I'm like not going to happen.
And lucky.
Luckily, in that case scenariothe borrower did qualify by
continuing to keep their homeand allowing someone else to
build that equity until it wastime that they could either
continue to hold it or sell it.

Speaker 3 (35:18):
That's the beauty of having again all these options
and showing your clients optionsrather than just getting a flat
out no, you can't do it untilyou sell your other house,
because I've had it now three orfour times where I've been able
to.
Okay, we don't like our house,we want to move.
I find them a new house.
I'm still able to have themkeep their old house, you know,
either rent it out or something,but still get into a house that

(35:40):
they actually like, that theyactually enjoy.
That's right, because there'snothing worse than living in a
house you are not happy that'sright or with neighbors you
don't like.

Speaker 1 (35:48):
That's right.

Speaker 3 (35:49):
Any of it.
So I mean that.
That goes back to why are wenot giving people more options?
Yeah, because they're out there.
Yeah, I mean it happened when Ibought my house.
I had a lender that I'd workedwith for years Tell me hey,

(36:10):
actually you don't qualify andthe only way you do is if you
bring $50,000 down payment.
And I was like, and I turnedaround and I called another
lender that was just helping meon a deal and I was like hey,
this is what's going on.
He's like watch this.
Within two weeks, he had itturned around, completely
flipped the script.
We went with an FHA versusconventional and I walked away
taking money home and the reasonbeing is the original lender

(36:31):
that you worked with.

Speaker 1 (36:32):
I'd go as far as to say he wasn't familiar or
comfortable with an FHA loan,because, if not, why does he not
offer that as one of them?
A lot of people think well,you're an educated borrower,
you've got money, let's gostraight conventional.

Speaker 3 (36:48):
Yeah.

Speaker 1 (36:48):
Well, in many cases, let's say, borrower has the 20%
to put down, 10%, 5% to put down, but they've got a 680 credit
score.
So you may get whacked on theinterest rate by going with a
conventional in addition to themortgage insurance Right your
mortgage insurance, right yourmortgage insurance on an fha
loan that you're probably goingto keep for max of four or five

(37:09):
years before you refinance orhave the opportunity to
refinance, is only 0.55.

Speaker 2 (37:14):
Yeah the whole oh, but there's lifetime.
Mi on that oh, who cares?

Speaker 1 (37:19):
yeah, but you're not going to keep it for your
lifetime right, yeah, right, andagain the education on it too
like that's right, that's right.
Pause right there.
If you're not going to keep itfor your lifetime, yeah, and
again, the education on it too.
That's right, that's right.
Pause right there.
If you're still sending outpre-approval letters and praying
your realtor, send you the nextlead.
You're already behind.

Speaker 4 (37:36):
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(37:58):
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(38:21):
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Speaker 1 (38:30):
And we're back.
Thanks for taking a quick 60seconds to educate yourself on
what LoanBot is.
But back to this topic.
We were talking about 40-yearmortgages being maybe the new
norm.
It's not now, um, but could itprogressively become?
I don't know, maybe Um, butthen the idea of, like we talked

(38:52):
about a bit ago, the 60% thinkthat they're going to be house
poor at closing and I don't knowlet's go back to that because I
don't know, if it was theythink that they're going to be
house poor or they are housepoor.

Speaker 2 (39:03):
No, they feel that way.
They feel that they are goingto be house.

Speaker 1 (39:05):
So 60% expect to feel house poor.
So it's, it's this fear ofchange, fear of upgrading what
you're doing.
It's not an actual because andthat makes sense a little bit
more so, because I'm going waita minute, so you're going to
close and you're're poor.

(39:26):
What is that lender doing?
They didn't educate you enoughon all the things that are on
your credit report, that areoutside of your credit report,
etc.
But let's talk about what, what?
What is poor?
What is house poor?

Speaker 2 (39:40):
in.
In my eyes right, I mean housepoor is if you were absolutely
like devastated to write thatcheck every month meaning okay,
I just paid my mortgage, how amI going to pay for food and
Netflix and just how am I goingto live now that I've made that

(40:00):
payment?
Yes, um, and, and I, and Ibelieve that, then this is
what's wrong with going to, like, you know, the red fins or the
zillows or the realtorcoms, orbecause they give these mortgage
payment calculators oh,bankrate, that's a great one
that are that are awful.
They don't give consumersreal-time data, um, so they're

(40:24):
not seeing what a true mortgagepayment might be.
So they're hooked on this ideaof this house.
And then they get in.
Oh well, now they're seeing thereal payment and now they're
scrambling.
Yeah, so that house, poor thing.
I mean that's pretty scary, Iagree, and it could easily put
somebody that's not disciplinedinto a debt spiral, which, okay,

(40:44):
well, oh, I know, I'll just puteverything on my credit card
and then it compiles, yes, andcompounds and compounds, yeah I
mean.
So you know it's, it's one ofthose things, right.
So where you know.
I just come back to when, whenyou're, when you're preparing to
go out and take that next stepand move from from renting to

(41:04):
building something for yourselfin the future, you've got to
actually sit down and have areal conversation with a
mortgage professional licensedmortgage professional or
multiple but get real options sothat way you understand what
your, what your real paymentsare going to be, and so that way
you can start thinking earlieron in the process of oh you know

(41:26):
what okay, well, maybe threehundred thousand dollar mortgage
is is where.
That's where my comfort factoris going to be you're not the
top of your budget.

Speaker 3 (41:34):
Where, like where are you most comfortable?
Correct and I think it.

Speaker 2 (41:38):
Oh no I was just gonna say I mean, I mean, how
many times have have you takenpeople out to go see a house and
they fall in love with it?

Speaker 3 (41:45):
It's the most expensive one.
And then they see the paymentand they're like, well, we
weren't comfortable with thisand I'm like this is why we have
this conversation and why myfirst conversation, before I
even go take anybody, is.
Here are a couple of mortgagebrokers I've worked with.
Call all three of them.
Have a physical conversationfirst.
We cannot go look at houses andfall in love until you know

(42:07):
where you feel safest, at whatis comfortable for your
lifestyle and the lifestyle youlive now and what you want to
continue to live.

Speaker 1 (42:15):
Yeah, you know, and I've got two things to talk
about in this topic, the firstone being lenders are not doing
enough listening in that upfrontconversation.
So I'm going to come back tothat and to your point me as a
lender.
I should, or need to, do a goodjob of knowing which realtor

(42:40):
I'm working with and after timeyou'll start to understand the
traits and how they work, etc.
But in many situations I'llhave a good conversation with
that borrower, get all theinformation, provide the options
, show the options and then letthem know.
I'm only going to tell yourrealtor that you're qualified

(43:01):
for X amount.
Why is that?
Well, because every once in awhile, after the searching for a
week gets frustrating, they'regoing to plop you one that's a
little bit over the price rangethat we gave and you're going to
bite on it.
Why?
Because it's higher in pricerange.
Typically, when you move up inprice range, the houses get
nicer.
That's just kind of how itworks.

(43:23):
And until you're ready to dothat, I will put that in your
hands, meaning that you'requalified for 300,000 in my mind
, what we see here.
But we're going to tell them250 because that's where your
payment comfort is, you and Iknow that you are qualified for
300.
When you're ready, if you'renot finding anything under 250,

(43:44):
by all means you've got all theability and power to say I am
qualified for 300.
Let's bump it up.
Mark will confirm.
Absolutely.
But I'm not going to be theperson that gives them the top
of the rung, because that's whatthey're going to show them is
the top of the rung.
It's easier to sell a house atthe top of their budget.
It really is Right.
Yeah, it's easier to sell ahouse at the top of their budget

(44:05):
.

Speaker 2 (44:05):
It really is Right, yeah, well, you know you touched
on something and I just want to.
I want to hammer out why it'sso important that lender and
realtor relationship.
Because you know, in today'sworld, right, payment is driven
more by rate versus sales price.
That's right, that's right.
And so when you have a goodconnection between the loan

(44:29):
officer you're working with andthe realtor and they're together
, then negotiating strategiesalso come into play.
Correct?
Because let's say and we'lljust use that number, right, so
let's say it is a $300,000 house.
Well, the initial thought wouldbe well, I want to go in and I
want to offer them $290,000.
Well, why?

(44:50):
Because we want to get a deal.
It's already just a humannature I want to pay less than
what they're selling it for.
But if I went in there and said, okay, well, why don't we do
this?
We're going to give full ask at300 and get 10 grand in seller
concessions and use that to buydown the interest rate, either
permanently or temporary.

(45:10):
Right To help with thataffordability factor.
And again, that's one of thosethings that I don't think is
talked about enough either onthe, you know, even on the
realtor side.
I agree.
It's like, hey, let's go.
Let's not just go in there andget the best deal right, the
lowest price, let's go in thereand get the most concessions,
because that is where a consumerin today's world gets a lot

(45:31):
more bang for their buck.

Speaker 1 (45:32):
That's correct.
That's correct, in addition tothe idea of educating them on
how long do you plan on stayingin this home?
Okay, 10 years, great Chancesare.
You're probably not, but that'sokay.
We're going to start with 10years as a basis for all of the
options, all of therecommendations that I'm going
to be giving you.

(45:53):
Why is it more important tohave that money in closing cost?
Well, you'll be able to keepmore in your pocket for the oh
shit moments.
You'll be able to buy down arate a little bit maybe if the
payment comfort is trying to getto where you want it to be.
But if you're talking 10 years,that means at year six, you're

(46:14):
building a little bit of equity.
That means that you have theopportunity to refinance and get
that payment lowered.
But I'm using that as the markof this is what we're basing
everything on, ourrecommendations on.
There's no need to sell inthose instances.
It's recommendations based onwhat you just told me is your

(46:36):
goal and your implied outcome.

Speaker 2 (46:39):
Yeah, so it's funny.
More stats two thirds of thoseconsumers don't understand
points or how they work.
Wow, and that goes back to wow.
It's because they're not beinggiven options, Damn it, that's
correct.
People need to see door numberone, door number two, door
number three, door number four,door number five.

Speaker 1 (46:56):
Yeah, Choose your own adventure In addition to this
is why I think this is the bestone for you.

Speaker 2 (47:01):
Right, yeah, this is the best one for you, right,
yeah, here, here's myrecommendation, but here's your
pick, that's right.
Um, you know, so it's.
You know again, right.
So with the house poor thing,let's identify the comfort
factor and then kind of workbackwards and then identify the
payment and you knowinterestingly enough, you know
it's once there's thatunderstanding between the lender
and the borrower and all that'swell communicated to the

(47:23):
realtor, now more options openup and I can give a couple
examples of where you know thebest way for the consumer to get
the most bang for their buck,that they were comfortable in
the payment range they werecomfortable with, was actually
identifying properties a littlebit further out of town, in USDA
areas.
That's right.
And in both cases we tookborrowers from having to have

(47:47):
money.
You know, basically pay cash atclosing.
But in both cases we actuallygot them their earnest money
back at closing.
That's right, because again,now they got houses with lower
tax payment payments andnegotiated seller concessions,
and so they got 100% financingand got their earnest money back
.
I mean that's the best idea,but it boiled down to what's the
payment you're comfortable with?
Okay, now communicate that tothe realtor and then you know

(48:11):
now, all's now in your court.

Speaker 1 (48:13):
John, you mentioned USDA and I want to ask you a
question that I don't know ifit's accurate or not.
It's just something that I feel, based on what I'm seeing.
I used to do a ton of USDA.
Then there was a certain pointin time where I didn't do any
USDA.
Now I'm back to doing andoffering USDA as an option and I

(48:33):
have a feeling that us, asmortgage professionals, steered
away from USDA, even though itwas the best option for the
borrower.
Because realtors continue todemand.
We need a fast closing.

Speaker 2 (48:45):
Yes, I mean, yeah, I would agree with that.

Speaker 4 (48:49):
I mean, it's the same reason why I mean you know,
there was a period where peoplegot away from even VA loans or
FHA loans or anything else likethat, right?

Speaker 2 (48:57):
So, but there's definitely a resurgence in that,
and I do think it boils down tosome of the affordability
factor.
I mean, more people are lookingat, you know, just I mean the
growth of San Antonio where canI get the most bang for my buck?
Okay, it might be in Lavernia,or, you know, you know head.
I mean, shoot, there's evenpockets, like in spring branch,
of USDA, that's right, wherethere's some great homes being

(49:18):
built, yeah so, but but it is,you know, folks looking for
where do they get the most bangfor their buck?
And yeah, maybe the USDA.
Maybe that's why we're seeingthe resurgence in it.
That's true, you know.
And along those lines too, youknow, the quote, unquote,
affordable product that some ofthe big mega builders are
building.

Speaker 1 (49:37):
It's not really very attractive, right, and so Can
you dive into that briefly,because the folks out there they
think, oh builder, they're justsaying that because they're
outside lenders.

Speaker 2 (49:57):
No, no, not at all, I mean it's.
It's, you know, if there'sthere's product out there for
you know, one hundred and eightythousand dollars.
You know, all in that Lookslike it's a couple of containers
stacked on top of each other,but could take that 180 000 and
at the same neck.
You know, go out into the neckof the woods and get five acres
in a really nice manufacturedhouse.
Right breach, please.
Yes, I mean, we lovemanufacturing homes too.
This is not.
These are not cousin eddie'stenement on wheels parked in the

(50:18):
driveway, not anymore.
I mean, we did one.
Uh gosh, I mean it was a coupleyears ago, the biggest one ever
saw, but it was like half amillion dollars.

Speaker 1 (50:26):
I financed one six months ago for $600,000.
Yeah, On the land Right, Doublewide deck all the way around
retired, let's go.

Speaker 2 (50:36):
And it was a better product than what a mega builder
has.
And guess what?
There's land and establishedtrees, right.

Speaker 1 (50:47):
Not stacked right next to your, exactly your
neighbor.

Speaker 2 (50:48):
So, in addition, the taxes which go hand in hand with
your payment are going to belower right out there, you know
so, so, yes, so we're definitelyseeing a resurgence in usda and
for for folks that don't knowthat are watching this, I mean
ask your lender, get on LoanBotand learn more about what the
USDA mortgage is, because youknow.
Second to a VA mortgage, theUSDA might be just the next best

(51:16):
affordable loan product.

Speaker 1 (51:17):
That's right as a matter of fact if you fit in the
box.
As a matter of fact, I wouldsay if you're not a veteran, the
USDA is the most affordable.
Absolutely Zero down.
You've got lower mortgageinsurance on it.
Even though you're financing100% of the property, it's still
a lower payment because you'vegot a mortgage insurance.
That's half the amount.
Another beautiful piece to itand we don't mean this to be a

(51:40):
USDA education session, but ithasn't been talked about you can
finance up to the appraisedvalue, plus a little bit more.
Yeah.

Speaker 2 (51:50):
You know, yes, you can, absolutely you know.

Speaker 1 (51:52):
These are things that people don't even know.
Loan officers don't even know,because somebody went.
I'd like to look at the USDA.
They went hey manager, what'sthis USDA?
Oh, yeah, yeah.
Yeah, that's a 45 day close.
Well, nevermind, yeah.

Speaker 2 (52:05):
Right and well, and you and you tie this back to you
know house poor.
Well, we're getting borrowersin an affordable payment, with
them not having to bring moneyout of closing.
That's right.
And and you know the thiseconomy is scary.
I mean people.
People have had their, their,their butts kicked over the last
three years.
Right, so I mean the dollarsthey do hang on to are worth
less than they were three yearsago, right, so they want to hang

(52:28):
on to as much as they possiblycan.
So if we give people thoseoptions, then you know what?
Now they're feeling lessworried about being house poor.
That's right.
That's right.

Speaker 1 (52:37):
What are your thoughts on this topic?
Do you work with a lot of folksthat are more payment conscious
than, let's say, trying to findthe perfect home?

Speaker 3 (52:52):
Yes, does that make sense?
Yes, I mean the one I justclosed a couple weeks ago.
The payment was the biggestissue, rather than price of the
home.
I mean, don't get me wrong,location for them was a big
factor, but that payment wasvery, that was a big topic.
And you know, we looked at acouple of houses and we'd run

(53:14):
the numbers and if the paymentwas over it, they just
immediately shut down becausethey just knew where they were
at financially, you know, to beable to make it work yeah, not
financially, you know to be ableto make it work.
And especially, again, theywere ones that we were able to
still get them into a home thatthey liked more than their
current one, while keeping theirother one and, you know,

(53:35):
renting it out, which is greatfor them.
But we still had to factor thatin that.
Okay, there's still twomortgages.
We got to be really consciousabout this payment.
But I do.
I get a lot of people.
I had a conversation withsomebody yesterday, a great
conversation they're looking to.
She wanted to rent and I waslike, okay, this is what you're
paying in rent, I can find youthat, I can find you that and

(53:58):
you could build some equity justby buying you know it's yeah
it's a starter home, but youknow it's a small family, you
don't.
What you were dumping in rent isyeah, I tell people and I'm,
I'm straight up, I'm like look,that's a waste, You're paying
somebody else's mortgage, You'remaking somebody else rich.

Speaker 1 (54:16):
That is what I like about you is you are, just like
me, very honest and and umunfearful of um how they're
going to feel.
Why?
Because it is the truth.

Speaker 3 (54:27):
It's something that they need to hear, and when it
comes to something like this,it's you know it's one of the
largest financial decisionsyou'll ever make in your life.
You don't want somebody that'sgoing to sugarcoat things, you
don't?
You want to know exactly whatit is, from point A to point B,
and I will tell you that's areally bad idea.
But, hey, I can tell you.
You don't have to listen to me,but I'm going to tell you
straight up that don't do it.

Speaker 1 (54:49):
Just remember where you heard it.
Absolutely, I get it.
I get it.

Speaker 3 (54:55):
It's definitely been interesting, over the last, I
would say, six to eight monthsof the conversations I've had,
how they've shifted more to okaypayment.
You know, I don't maybe thisisn't the perfect, perfect house
, but the payment is what I canafford or what I'm comfortable
with, sure sure?

Speaker 1 (55:13):
well, I want to.
I want to circle this backaround to our original topic.

Speaker 2 (55:18):
Unless you've got something there, well, I was
just going to say right.
So just more fun data, morestats.
52% of buyers feel overwhelmedwith financial information and
over 50% have delayed importantfinancial decisions due to
complexity.
So you know, and on top of notgetting their options, nothing's

(55:39):
being simplified for themeither, right, right, so they're
being talked to, not talkedwith.

Speaker 1 (55:47):
Ah, that's a great way to put it.
Yes, I like that.
And the idea of is the lender,realtor talking to them, because
they have not learned tounderstand what the borrower is
giving them, relate to it, tofind that commonality, that it
would make more sense if youutilize what they just said or

(56:10):
what they've experienced to getyour point across.

Speaker 2 (56:13):
Right and you touched on that before the break which
is people not listening enoughcorrect to what the consumer is
saying?
Yeah, right that that thatinitial application interview,
because you know for the most,you know for all the most, you
know for all intensive purposes.
It is very easy for people justto go on onto an app and fill
in information, but there's notenough follow-up conversation to

(56:34):
really, okay, now we have yourapplication, let's review it
together.
That's right, and this is whereyou could pick up.
Or, as an originator, right,this is where you pick up.
You know what's in between allthe lines.

Speaker 1 (56:46):
Yeah, it may not be what they said.
It could be how they said it inmany cases.
Um so, yeah, I want to circleback to what we started this
conversation with to get someopinions on this, and it was the
idea of the fed more thanlikely will be cutting interest
rates.
What will that mean initially?

(57:08):
What could it mean for the nearfuture, like right after it
happens, and are you alreadyseeing some sentiment of buying
or getting back in the market?
We know that there's 85% stillon the fence, yes.
Do you think that that will beenough to spark the interest

(57:32):
which then sparks moreconversations, more
opportunities for us to educate?

Speaker 2 (57:37):
Yes, yes, yes, and, yes, okay, and and where?
Where I'm going with thatdefinitely not ADD.

Speaker 1 (57:43):
I don't know how you boom, boom, boom.
Yeah, it's, it's, it's.

Speaker 2 (57:46):
uh, no, I've just I've found a way to channel the
8,600 thoughts running throughmy mind.
I still have like five tabsopen.
I've crashed windows more timesbecause 84 tabs are open on one
thing.
So, yes, the Fed is going tocut rates tomorrow.
I mean 96% odds, I mean it'sgoing to happen.

(58:10):
And while what the Fed doeswhen they cut rates, they're
cutting the overnight lendingrates that banks charge to each
other.
That's right.
While it doesn't directly impactmortgages, what the Fed says
following their decision, ifthey're saying that, hey, the
economy really is slowing down,that could push more people in

(58:33):
or more investors, I should sayand these are insurance firms,
these are hedge funds, these aregovernments buying into, buy
mortgage backed securities,which raises the price, which
brings the yield or the interestrate down.
So it doesn't directly meanmean that rates are going to
come down, but it could directlymean mean that rates are going

(58:55):
to come down.
But it could asterisk mark,though, the last time that the
fed made a big rate cut decisionand they cut rates 50 basis
points, literally a year ago.
That's right.
We were at really look, I meanwe were.
We were at one year lows, right, pretty much right where we're
at today.
Fed cut rates by 50 basispoints.
Rates shot up.

Speaker 1 (59:12):
Mortgage rates shot up and everyone, everybody, the
masses were going.
Very few were like well, lookover here, but the fed cut rates
.

Speaker 2 (59:24):
No, why did your mortgage rates go up?
you're trying to screw me, it'slike no, exactly what was told
that's not how it works, and andthe reason that happened was
because the bond market said no,there's still a lot of
inflation out there and that isimpacting and and so if you're,
if you're, if the fed is cuttingrates in a high inflation

(59:46):
period, you're I mean, it'sbasically devaluing the future
investment of that, of that bond.
Yep, so they're saying we don'twant it.
So, and if they don't want it,how do you get people to buy it?
You lower the price and youraise the yield.
So that could happen.
I don't believe that that'sgoing to happen tomorrow,
because you've seen a lot of um,you know the job labor reports

(01:00:07):
coming out and being like man,there's not as many jobs have
been created as as what they'vebeen saying.
And I tell you what there's alot of openings lately.
There's a lot of openings.
A lot of the jobs that havebeen created, right, are, are,
are part-time, right, thesearen't full-time positions.
And so it's.
The economy overall is weakerand I believe that the economy

(01:00:28):
will continue.
My hot sports opinion here yeah, I believe the economy will
continue to get weakened.
Why?
Because man, the consumer, isgetting tapped out in many cases
.
Yeah, Right.
You know we're hitting spendinglimits.
We're taking seven-year carloans now, that's right.
So less consumer spending meansthat slower economy, which
means that mortgage rates willcome down.

(01:00:49):
Ironically enough, retail salescame out this morning hotter
than expected.
Yeah, like, how is thishappening?
I don't know if it's all thebuy now, pay later, burritos or
what, but more money spent, yeah, but at some point the tab is
going to come due.
And when will that happen?
Now I don't want to get toodown this rabbit hole or rumor

(01:01:12):
mill, but there was an articlethis morning that I did see that
mentioned that the odds haveincreased of the Federal Reserve
beginning to buymortgage-backed securities again
.
Oh man, that sounds beautiful.
So what happened the last timethe Fed was buying a bunch of
mortgage-backed securities?

Speaker 1 (01:01:30):
What did happen?

Speaker 2 (01:01:32):
Didn't turn out well well, well, we saw mortgage
rates come down to.
Oh, yes, yes, yes, yes we'retalking historic, yeah, yeah.

Speaker 1 (01:01:39):
What is the concept of the mechanism?

Speaker 2 (01:01:41):
absolutely, not wait a minute not, why were they
buying they?

Speaker 1 (01:01:44):
were buying because there was a global pandemic.

Speaker 2 (01:01:47):
That was absolutely like thrashing the global
economy.

Speaker 1 (01:01:50):
But yes, but uh well, what they're doing is they're
throwing their hat in the ring.
Yes, yeah.

Speaker 2 (01:01:54):
Essentially you know Trump wants lower rates.
I mean he wants, you know, Imean you hear him all the time.
Trump wants lower, lowermortgage rates and you know, as
he's maneuvering and gettingmore people on his corner at the
federal reserve board, thatcould happen and if it does does
we will see mortgage rates comedown right now.
But on the, the big but ismortgage rates come down?

(01:02:17):
So we know what happened on thelending side, what happened on
the real estate side.

Speaker 3 (01:02:22):
last time mortgage rates were at super low rates
ran around my head, cut off thattoo, that too you had an influx
of buyers come to the marketand flood the market.
Yeah, at once and we went downto less than I think it was like
three weeks of inventory we'resitting at.
I want to say what I sawyesterday or last night was
almost 7.1 months of inventoryhere locally between Austin and

(01:02:46):
San Antonio, but I mean everylisting I had during that.
I had 10, 15 offers.
I was having 10, 15, 20showings a day.

Speaker 1 (01:02:56):
Over the sales price.

Speaker 3 (01:02:58):
Over the sales price.
I mean, I don't think we closedone that didn't go at least 50
to 60 over.

Speaker 1 (01:03:03):
That's right.

Speaker 3 (01:03:05):
No, uh, inspection, no, nothing.
They were just like throwingcash at it.
But at you know, I at the sametime people were just scrambling
for whatever and were buyinghouses that they didn't even
love because they just neededsomething or felt like they had
to buy something because it wasthat whole also thing of well,
everybody else is doing it.
Folks listening in my in-frame.

Speaker 1 (01:03:26):
This is the one thing that I actually disagree with
Donald Trump on.
I appreciate the sentiment, Iappreciate him being aggressive
towards it, but logically,economically, if rates were to

(01:03:46):
drop too fast, too soon, wewould have and there's not a
soul that could argue with meabout this, because I've seen
people posting and my responseis are you sure you want that to
happen?
Slow down.
Do you know what will happen ifthat takes place?
We will have exactly whatyou're talking about, but I

(01:04:06):
think it will be worse.
Oh yeah, I really do, and andit's because of the 85 that's
still- sitting there, sittingand waiting.

Speaker 3 (01:04:14):
That's correct, and I'd rather, like you said, see
it go slow.
And not only that, but again itgoes back to you get this panic
buy.
And that's the last thing Iwant are for people to panic buy
things that in a year's timethey absolutely, absolutely
regret.
Yeah, because then again itmakes my job way harder when

(01:04:35):
they call and they're like wedon't like this and I'm like oh,
you sold us this thing we don'tlike.
Yeah.
And I'm like, well, I asked youfour times did you really want
to do this?
Yeah, yeah, yeah.
And then a year later it's thatbuyer's remorse and I'm like,
well, I well I can't exactlysell it for what you bought it
for.
That's right, that's right.

(01:04:55):
You know that I don't want to.
You know my job is to get yousomething that you're happy with
and that you love, but I also,at the same time, have to sit
there and go.
Is this the right decision foryou?
And I don't want to put you ina position that, like again,
where I get a phone call in ayear or two that you're not
happy, and then me personallyand this is just me personally I
feel like I didn't do my job.
Then, if you're not happy in ayear or two, that rides on me

(01:05:17):
like that sits very heavy on me,that, okay, where did I go
wrong?
How did I not either educateyou enough or explain this
enough for you to understandthat if in a year or two's time,
this isn't what you want, Ihaven't done my job?

Speaker 1 (01:05:30):
That's right.
That's right, and I candefinitely see how that can
impact you as a realtor, havingthose phone calls.
It's only been a year, it'sonly been two years.
What did I miss?
Yeah, exactly what did I misshere?
But at the same time, we alsohave to keep in mind people are
human.

Speaker 3 (01:05:44):
Yeah, people are human and I get that.

Speaker 2 (01:05:48):
Yeah, so I don't want people buying toilet paper off
the shelves.
And that's what was happeningwith houses Exactly right, I'm
not fighting for toilet paperagain.
But I'm with you, right, and soit needs to be a controlled deal
.
I mean, if you drop them toofast, then you create a mess

(01:06:08):
again, and all we're doing atthat point is, in the next time,
we does normalize again.
Yeah, now there's even fewerhomes on the market, correct,
right?
So now you're trapping futuregenerations, and here goes that
K again, yeah, and so thestruggle is going to continue to
be real.
What I would advise people todo again, right out of that 85%

(01:06:32):
that are waiting today don'twait for rates to get to 3%,
right.

Speaker 3 (01:06:35):
Now the I can always refinance.

Speaker 2 (01:06:37):
Right, I mean if, but .
But you know, find somethingthat you know if you could
afford it today, man, awesome.

Speaker 1 (01:06:55):
You're set.
I totally agree.
And and my comment about theDonald Trump concept and what
he's doing I may not agree withit as a whole, but at the same
time, I'm only me with what Iknow.
Uh, it could be another art ofthe deal, to be honest.
It could be another.
I'm going to yeah, to get here.

Speaker 2 (01:07:06):
Well right, so you, you got to think too.
I mean his, he's got the tariffthing Correct.
So how can I offset potentialdownside from the tariff thing?
Oh, I know, I can make mortgagerates down and drill, baby
drill, get gas prices down.
I can offset the expense thatthe tariffs are going to have.
So it's way bigger than whatwe're talking about here, for

(01:07:28):
sure, for sure, but this issomething we happen to be
subject matter experts on.
So I For sure, for sure, but,but this is something we happen
to be subject matter experts on.

Speaker 1 (01:07:34):
I just need people to be aware that this is what
could happen, and the moral ofthe story here is don't wait to
buy, buy then wait.
Yes, you know well, guys, Ithink that was a pretty good
discussion on a lot of quicktopics, that many folks out
there the 85% is probably goingwell.

(01:07:55):
What kind of advice should Ihave?
What would a mortgage lendertell me?
What would a real estate agenttell me?
Because I'm seeing the news andit sounds like rates are going
to come down and I think nowthey've got a pretty good
understanding of, at the end ofthe day, you buy what is

(01:08:16):
comfortable for you.
Make sure that you work withsomeone that is listening and
taking in what you're.
You're asked questions tolisten.
Doesn't ask questions um to togo through the motions, because
that lender, that realtor shouldbe using what you've given them
in their recommendations.
And overall, we can only educateyou so much.

(01:08:39):
We can only lead you to thewater so many times at a certain
point.
We're not going to hold yourhead down to make you drink.
You know, because, like an oldsaying, that I have some will,
some won't.
So what?
Someone's waiting.

Speaker 2 (01:08:54):
Yeah.

Speaker 1 (01:08:55):
And that's that.
You guys have anything else toadd?

Speaker 2 (01:08:58):
Yeah, I would just add again.
I mean, just the numbers don'tlie.
The statistics are out thereand they're real.
And one thing that no one candeny is the mere fact that
household net wealth forhomeowners in this country
hovers around 400,000 today, andthe household net wealth for
homeowners in this countryhovers around 400,000 today, and
the household net wealth of arenter hovers around 10,000.
Yeah, and it didn't happenovernight, but it started

(01:09:19):
somewhere where that renterbecame an owner and then things
grew and so, just to piggybackoff what you said, I mean you
know this is how we fix futuregenerations and set them up for
for a better place, a betterseat at the table, if you will.
And it all starts withdiscovering your options working
with the lender that's going tolisten and can provide options.

(01:09:40):
Working with a realtorprofessional that's going to
again listen, communicate withthe lender and make sure that it
really is a team throughout thetransaction.

Speaker 1 (01:09:47):
That's right.
That's right.
I like that.

Speaker 3 (01:09:51):
Ask questions, Don't be afraid.
Like I said earlier, there isno stupid question.
The only question that's stupidis the one you don't ask.
If you don't know something,don't be afraid to ask.
It's not rejection asking aquestion and getting an answer
you don't like.
It's just a fact.

Speaker 1 (01:10:06):
That's very true and actually, to add to that, there
is so much readily availabletechnology.
You've got ChatGPT, openai, grok, all of these things that can
verify what you're trying tofind.
But keep in mind that thosethings are still only as good as

(01:10:27):
the information that youprovided, the prompt that you
give, the insight that you'retrying to get out of that.
Please remember tocross-reference that with a
professional, and it is okay toquestion that professional,
because in many instances, let'ssay, you've got a situation
where you read this, thelender's telling you that it's

(01:10:50):
okay to say, hey, here's thearticle that I read, lender, can
you please explain this to me?
Or can you that it's okay tosay, hey, here's the article
that I read, lender, can youplease explain this to me?
Or can you please break thisdown Confirm, deny, et cetera
that lender, I don't care whoyou are, you better be ready and
willing and able to explainthat to them.
Why?
Cause that's our fiduciaryresponsibility, right Period.
Um, guys, I want to thank youfor joining me back in this new

(01:11:13):
studio Feels good, absolutelyLove it, great job.
Yeah, and those of you out therelistening, as always promised,
I will continue to bring youexperts and professionals that
are willing to share theirinsight without a filter, so
that it can possibly help you onthe next chapter of your life.
But, with that being said,we'll catch you on the next one

(01:11:38):
Peace.
If you're still sending outpre-approval letters and praying
, your realtor, send you thenext lead.
You're already behind.

Speaker 4 (01:11:47):
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