The Accunet Mortgage and Realty Show 12-26-2021

Episode Transcript

Speaker 1 (00:00):
The ANet mortgage and Realty show is sponsored by AADE
mortgage in equal housing lenderand MLS ID 2 5 5, 360 8 and ANet
Realty advisors, which is aseparate company from, but still
affiliated with acuate mortgage.

Speaker 2 (00:14):
Welcome to the ANet mortgage and Realty show.
Getting you inside informationon buying, selling an financing,
your home with expert advicefrom ANet mortgage and Realty.
And now here's Brian and DavidWicker,

Speaker 1 (00:31):
And a good morning here on the last Sunday of
November.
Welcome to the Acura mortgageand Realty show on Brian Wicker,
the president and owner of amortgage and ANet Realty advisor
.
Along with my son, David, who isADE mortgages, cheap client
experience.
Officer, if you have a questionor a comment you can call or
text us on the beloved ADEmortgage talk and text line,

(00:53):
which is 8 5 5 6 1 6 1 6 20.
Good morning, David.

Speaker 3 (00:58):
Good morning, dad.

Speaker 1 (00:59):
Would you like to, uh , tell the world, uh, what
happened with Fannie Mae andFred max, uh, maximum amount
this last week?
Yeah,

Speaker 3 (01:07):
So, uh, every year the federal housing finance
agency, uh, around Thanksgivingtime, it's like an early
Christmas present to mortgagefolks like us.
Uh, they come out and they say,Hey, you know what we've done in
the analysis of homeappreciation, uh, for this past
year and by doing so, we now aregoing to raise the conforming

(01:32):
loan limit from what it was in2022, a new number in 2021.
So in 2020 that loan amount was$510,400.
You could borrow and enjoy the,as you've described it, the ever
loving arms of the 30 year fixedrate mortgage, thanks to Fannie
Mae and Freddie Mac.
They have now raised that loanlimit to drummer please$548,250,

(01:58):
nearly five 50.
Uh, for most I'm gonna say senseas tracks.
If you're in a super high costarea like Hawaii or downtown
Manhattan, it can be higher thanthat, but for the other 99% of
the country, nearly five 50.
Uh, and as you point outbasically what that means is you
can buy a house for$560,000 andput 3% down.

(02:19):
If you're a first time homebuyer, which is, uh, amazing

Speaker 1 (02:22):
Border line.
Amazing.
So, um,$548,250.
So that's 38,000, almost$38,000higher than it was last year.
And that's takes effect Januaryone.
Yeah, we, we will have thathigher, uh, Fannie Mae, Fred Mac
loan amount available next week.
Uh, sometime we don't know theexact date.

(02:44):
And so a couple of examples of,you know, how this comes into
play.
I've got two customers, um, onewhere I'm helping'em buy a
second home in Florida and thatdoesn't impact that transaction,
but in getting ready to close,we have to verify that the
people are still making theirpayments on their existing

(03:06):
mortgages.
So on his loan in Wisconsin, hehas like a$588,000 balance, but
he also has a home equity lineof credit with a lot of room on
it.
So I email and said, you know,we can drop your rate from three
and half percent on that jumbo30 year fixed rate loan that you
have.

(03:27):
And we can lower that down to2.875 at the new$548,000.
And guess what?
We can just shove, or we, we cantake money from your home equity
line of credit mm-hmm and, you know, use
that to help you pay down that40 grand.
Okay.
Wow.
To get down to that.
So there, if, if you're in thefive hundreds, you know, um,

(03:49):
this is an opportunity by theway, that was gonna change his
payment$850 a month, eight 50.
Wow.
And so for a person he'srecently retire, um, and, and I
wanna roll this into a, asimilar topic of talking to
people.
I have four clients right now intheir fifties, late fifties or
early sixties, that I've had tohave the reminder conversation

(04:13):
about how cheap money is yeah.
Uh, this last week, how, how lowcost it is and why you should
embrace that.
But the bottom line is, and hewas really impressed by the way,
the fellow who I'm helping in.
Florida's like, wow, you areeither one heck of a salesman to
figure this out.
Or, but I'm really impressed.
And it's just like, well, no, Imean, thank you for the

(04:34):
compliment.
But you know, if you're in thisbusiness of helping people save
money or buy home, you should benoticing those things like,
right.
Hey, you could be in thisserious money on your other
property, cuz you're so closeand now you're even closer.
So we're gonna take care of thatnext week for him.
Um, we'll see, you know, eitherright before he buys his house

(04:57):
in Florida on December 7th orright after, but we'll get

Speaker 3 (05:02):
The super or what is interesting is it's nice that
this home, uh, limit maximum is,is going up.
Uh, they said, uh, the FHA houseprice index, which I think is
one of your favorites, uh,basically home values have
increased seven and a halfpercent.
That's their nationwideanalysis.
I think, um, the hard truththough is like, that's almost

(05:25):
not even keeping up, I thinkwith how hot home sales and home
values have been at leastthrough 2020.
It's nice that, you know, youcan borrow a little bit more
because uh, home values aregoing up.
You know, this doesn't solvethough.
The inventory problem that stillpersists.
Yeah,

Speaker 1 (05:46):
No it does.
So, and, and the other thing tonote is that in any of the, uh,
four states that we lendWisconsin, Illinois, Minnesota,
and Florida, there are no superhigh cost areas.
So oh 548,002 50 is the limit inthe four states in which we do
business.
There you go.
All right, when we come back,let's sell, I got a couple more

(06:07):
stories about, you know, people,high net worth customers, high
income, high net worth, latefifties or sixties.
And I got one, uh, who has,let's say a$500,000 ish balance.
And they reached out to us tosay, Hey, can you lower my rate?
The answer was yes.
And then they came back andsaid, oh, by the way, we want to
pay that down to 400,000 beforewe brief.

(06:27):
I let's talk about that.
When we come back, you'relistening to the, a mortgage and
Realty show on am, six 20 WT,MJ,

Speaker 2 (06:37):
Home buying advice from the guys who know it best.
This is the, a mortgage andRealty show with Brian Wicker on
WTMJ

Speaker 1 (06:47):
All right, we're back.
And we were talking about howFannie Mae Fred Mac have
increased their maximum loanlimit, uh, from$510,400 up
almost$38,000 to 548,250 bucks.
And the reason why that's coolis because you get the best rate
on Fannie Mae Freddie Mac money,because it's the most efficient

(07:08):
mortgage market in the world.
And anything above that isjumble.
So I had already had in processsome repeat customers, um, and I
have em locked in at the oldFannie Mae, Fred MC limited of
500, 10,200, uh,$400 rather.
And they're gonna have to bringin like 50 grand to get from
jumbo down to conforming.

(07:28):
And, uh, and so I reached out tothem yesterday, as I was
thinking about this and said,you know, we may be able to do
some maneuvering next week and,uh, increase your loan amount.
Although it could involve asmall amount of hassle and they
replied and said, no, we kindalike the idea of a smaller loan
balance.

(07:48):
And so I said, okay, that, sothat was one response because
there was gonna be some effortlike we might have had to have
canceled that loan and re uponand redo the e-sign, which
wasn't that big a deal.
But anyway, so they're happypaying down their loan amount,
but in a different situation, aclient had inquired about, Hey,

(08:09):
can we do better on our mortgagerate?
And we had locked them in preCOVID on a refi.
So like, let's say March of lastyear at the ridiculous high
sounding right now of 3.3, seven, five on about a$500,000
balance.
And so now, you know, we canoffer'em because of their high
equity and high credit scores.

(08:31):
I think it was 2.75 with no loancosts out of new 30 year fixed
rate refi.
Wow.
And, um, and the person emailedand said, well, yeah, but we
kinda wanna pay it down to400,000 before we refi from 500
down to 400, cuz apparently theyjust had an extra, a hundred
grand, you know, and theirchecking account.
Cause they're high net worthhigh income people.

(08:53):
Yeah.
And so I emailed back verypolitely and said, we're happy
to do that.
However, you may want to have aquick chat with your financial
advisor for sure.
Because you know, whatever thata hundred grand you're taking,
you know, to pay down thebalance, ask him if he might
possibly, or she be able to thathundred grand over the next 30

(09:16):
years or yeah, 20 or 10 andpossibly be able to be 2.75.
And I started to write thesentence even a half witted
financial advisor should be ableto do that.
But I changed that to say, evena below average financial
advisor should be able to be2.75 investing your money over

(09:37):
the next decade or two or three.
This is called managing yourmoney, like a bank.
Yeah, yeah, yeah.
The, the, the way that JP Morganchase makes 9 billion every
three months is by borrowingmoney from you.
And I that's called deposits.
And so they, you know, 0.1 onour checking accounts and you

(09:58):
know, maybe 1% on a five yearCD, they borrow the money and
then turn around and they investit.
Yep.
Well, what does a bank'sinvestments look like?
They're called loans.
So they're lending out the money.
They're making three and aquarter three and a half on
those loans.
They're borrowing at one or lessand they're making that spread.
That's how you become super.
But you were saying, David, youthink that people are just what,

(10:20):
how you

Speaker 3 (10:21):
Describe it?
Well, when it comes to money,uh, I, I think, uh, control, uh,
it's funny how conversationsabout money.
Aren't about finance.
They're mostly about emotion.
And I would say people feel incontrol if you know, cuz they
can pay their mortgage down.
You know, that's something thatis within their power.

Speaker 1 (10:41):
And I have a hundred thousand sitting in my money
market account.
I don't know what to do with it.
I'm afraid to invest it in themarket cuz we're at all time
record highs.

Speaker 3 (10:50):
Well, and I don't have control over that.
I have control over.
I'm gonna pay down my loan.
You know, it's when you have ahundred thousand dollars burn in
a hole in your pocket, youliterally have infinity choices.
Mm-hmm and, andpaying down your loan is one,
but should be compared toliterally any other choice you
can make with that money.

Speaker 1 (11:09):
All right.
So when we come back, let's talkabout another client who I
talked to just this past week,$880,000 balance.
Should he take a 10 year arm at2.875, which should save him 152
bucks a month?
Or should he take a 30 yearthick rate at exactly the same
radi as now that would only savehim 33 bucks a month.

(11:31):
We'll talk about thatconversation.
When we come back, you'relistening to the academic
mortgage and Realty show on thebiggest stick in the state and
am six 20 w T MJ

Speaker 2 (11:43):
Getting you into the home of your dreams.
Here's more of the mortgage andRealty show with Brian.
We on WTMJ

Speaker 1 (11:52):
All right.
So we're, we're having aconversation about, I guess,
refinancing choices and benefitsof various strategies.
So, um, when you're in businessfor 21 years, you're lucky and
you have people that like youand well actually that's cuz you
do a good job for'em.
And uh, so I had anothercustomer call who, who we put

(12:13):
into a 10 year arm.
So that's a 30 year fixed rateloan, uh, where the initial
interest rate is fixed for 10years.
And he currently has a 3.1, twofive rate on that.
But when you've got a balance ofeight 80, you know, it doesn't
take much of an interest ratemovement.
Mm-hmm to save alot of money in payment, right.
So, you know, he emails to melast week, Hey, what do you got

(12:34):
from me now that rates are superall time record lows.
And I said, well, I've got a2.8, seven, five, so a tiny
quarter percent reduction inrate on a new 10 year arm.
So it's called that the new dono harm, right?
I'm not making your situationany worse.
Right.
And that would lower his payment152 bucks a month with count

(12:56):
zero loan costs.
Or I said, I got a 3.1, two,five.
So the same rate you get now ata 30 year fixed that only saves
you 33 bucks a month.
And so, um, he asked me, oh,what do you think I should do?
And I said, well, I can onlytell you what I did, which is
about two years ago when ratesdropped, I used to always have a

(13:19):
adjustable rate mortgage.
Right?
Yeah.
And when rates at that time gotdown to a three and a half, I
think it was on a jumble 30 yearfixed.
I said, you know what, I'm gonnaeliminate interest rate risk for
the rest of my natural life.
And I switched, even though I'mgiven up something in the
interest rate and the payment Iswitched over to a 30 year fixed
.
And he said, well, I don't know,but I really like that tenure.

(13:42):
I said, well, answer me this,Mr.
Good customer, how long are yougoing to be staying in the
house?
And he says, well, till theytake me out, you know, till
Crosy funeral homes come andpicks me up, right.
Or as long as I can, I love thisplace.
And, and by the way, I think Iwanna pay it off within the 10
years.

(14:02):
Ugh.
I'm like, wait a minute.
Why?
And this just goes back to whatwe were talking about.
People, you know, America, maybeit's Midwesterners, uh, they
wanna have their house paid off

Speaker 3 (14:15):
Grandchildren of, uh, people who live through the
great depression.
Uh, somebody smart once told meit's just a long legacy of, of
being afraid of debt or feelingin control again, to go back to
what we said

Speaker 1 (14:27):
Before.
So, right.
So we had the conversationabout, Hey, let's talk, talk to
your financial advisor.
Let's let's, let's go theopposite way.
And let's lock in that$880,000at 3.1, two five.
And then I'm suggesting you havea conversation with your
financial advisor about neverpaying a nickel extra.

(14:49):
Yeah.
And just letting that 3.1, twofive ride for, for three
decades, cuz I, I can tell youthis, every single 80 year old
client that I've dealt with inthe last year and there have
been a few, some in theirseventies as well, they're no
longer concerned about payingoff their mortgage.
When you get to your seventiesand eighties, you are concerned

(15:09):
about one thing have havingenough money to live through
your life and not run out ofassets so that you can go on
vacation when COVID is over.
So it's about liquidity andhaving money cuz that, you know,
you can borrow$500,000 right now, um, for like just over two
grand a month.

(15:30):
And that is super are cheap.
So getting rid of that$2,000 amonth payment is not the enemy,
uh, it to most people or, youknow, if you think about it
having that$500,000 war chest,right, that'll take care of way
more problems or, or things thatcome up or give you a lot more
options.
Especially if you're earningmore, then the interest rate on

(15:53):
your mortgage, which is gettingeasier and easier to do.
Sometimes I joke with thesepeople and say, well, Bob, not
his real name.
If I could give you zero, wouldyou still want to pay it off if
I gave you a zero pro?
Oh yeah, I think I would.
It's like, okay then you'reofficially insane.
okay.
I, but, but you know, we'reclose 3.1, two five, isn't zero.

(16:16):
But you basically around thecorner, it it's really close to
free.
All right.
So those are our stories.
Obviously we have an opinion.
If you wanna pay off your loanfaster, great.
We have excellent 15 year fixedrate, 20 year fixed rate.
That'll help you.
That's sometimes a goodcompromise for the debt averse
is okay.
The won't do it all in a bigchunk.
Let's just help you do it overtime.

Speaker 2 (16:40):
Don't break the bank to get into a house back to the
ACU mortgage and Realty showwith Brian Wicker on WTMJ

Speaker 1 (16:49):
All right on Brian, that's David over there, the
younger, more handsome wick anduh, wanted to talk about, uh,
transaction that we weredescribing at the end of last
week's show up in Minneapolis.
So imagine, you know, that's anice town and David, you went to
school up there.
Yeah.
So we're talking about helpingpeople buy a home.

(17:09):
Um, oh, up, I'm gonna say in theupper 800,000 and, and uh, so
it's kind of like that area, uh,by collect Tibo coffee in
Milwaukee, you know, uh, youknow, kind of the upper east
side, let's say sure, sure,sure.
Or over by UWM.
So 90 year old, a hundred yearold homes, some well cared for

(17:31):
this one's well cared for, butneeded some updates.
So, um, the story is that we hadfour appraisers turn down this
appraisal assignment.
Uh, we found out roughly and youknow, and there's, well, it
turns out, I learned by talkingwith our appraisal management
company that is in charge ofgetting us local appraisers in

(17:54):
places like Minneapolis.
And they, the appraisers werecalling this property complex,
cuz it's like 2,500 square feetinexpensive.
And she said, that's a code wordfor I'm a normal human.
So I'm lazy.
And I would rather do two,$300,000 homes and make twice as
much as doing one larger home.
That's gonna take me more time.
And I'm only gonna get paid thesame just by the way, way to

(18:16):
solve that.
Mr.
Appraiser would be to chargemore for the bigger homes.
Uh, but anyway, so we're, we getappraiser number five takes the
assignment and he, he inspectsit on November 9th, which
happens to be a Monday week,goes by I on the, uh, 16th we
call and say, Hey, when are wegonna get that appraisal?
Cause usually it takes a week.

(18:36):
He says, oh man, this is reallycomplex.
And uh, in other words, Ihaven't gotten to it yet.
And so he says, but I'll have itto you on Friday.
So we get the appraisal in aweek ago, Friday on the 20th of
November, the only problem isthat the financing contingency
was the 23rd.
In other words, this past Mondayand in Minnesota, uh, the

(18:58):
contract does not have separatefinancing and appraisal
contingencies.
It just has financing.
And, but the issue on a jumbleloan like this is, Hey, the bank
is lending their own money.
They're just not gonnanecessarily take what the
appraiser says is the value.
Although in this case, theappraiser comes back with a
value that is tens of thousandsof dollars, like more than 50

(19:22):
grand higher than the acceptedoffer price.
Oh wow.
On top of that, I look at theappraisal report and what we're
always looking at is lenders ishow did the appraiser have to
adjust each of the closedcomparable sales to make it
similar to our subject propertyin which we'd like to lend?
And the answer here is the guygave us six comparables of the

(19:42):
first three.
He didn't have to adjust any oneof'em more than like 3%, which
is great, which is insanely Hmm.
Uh, rock solid.
Yeah.
And on the other three, youdidn't have to adjust it any
more than 15%.
And the rule of thumb is no morethan 25% in order to have a
valid count.

(20:02):
So I'm looking at this thingover the weekend and on Monday,
I'm talking to our clients theday that financing contingency
is due.
I said, gosh, this looks like areally strong appraisal plus
it's way over the asking price.
You know, one option is we cangive you a commitment letter, a
loan commitment letter, that'ssubject to final approval of the
appraisal by the jumbo investor.

(20:24):
Yeah.
And he goes, okay, let's dothat.
Uh, and, and well, by the way,the other thing is, even though
this was a jumble loan, theappraisal got run through the
Fannie Mae automatedunderwriting, collateral
underwriter is called, in otherwords, artificial intelligence
applied to thera report and onFannie Mae's scale of one to

(20:45):
five, where one is the bestleast risky and five is the, it
had a two.
And anything, by the way, under2.4 is Bulletproof.
If we were doing a Fannie maloan, which we're not.
Right.
All right.
Yeah.
So, so we give the seller thecommitment letter subject to the
jumble investor's approval,sends it to the seller and the

(21:08):
seller comes back and says, notacceptable.
Hmm.
This is now on Tuesday.
And I'm like, what do you mean?
Not acceptable?
Well, I open up the cuz itwould've been perfectly
acceptable in Wisconsin.
The buyer would've taken all therisk there.
It's like, Hey great.
I gave you commitment.
Letter is subject to something.
But that risk is on me.
The buyer turns out Minnesota,they have a special sentence in

(21:29):
their offer to purchase contractthat says for a loan commitment
to be valid, it must explicitlystate that the appraiser has
obtained an appraisal that'sacceptable to the lender.
Oh, well we were saying theopposite.
Yeah, right.
We were saying, no, we're notacceptable yet.
All right.
There's more to this store andthat gets better.
So stay tuned.

(21:50):
You're listening to the accident, mortgage and Realty show on
Wisconsin's radio station am six20 WT MJ,

Speaker 2 (21:59):
Important home buying questions and answers you can
count on.
This is the acuate mortgage andRealty show with Brian Wicker on
WTMJ.

Speaker 1 (22:11):
All right.
So we're talking about aMinneapolis, uh, purchase
transaction where we're tryingto provide ju financing and the
appraisal of all things comes inway higher, like more than 50
grand higher than what theaccepted offer price is.
And so we think we're cruisingtowards the finish line here,
but it's still subject toapproval by the jumble investor
appraisal department.
We give'em that, uh, report lastFriday, uh, Monday goes by.

(22:34):
We don't hear anything.
I think Tuesday morning now itis last Tuesday morning.
I almost fell outta my chair.
We get an email that says theappraisal is unacceptable.
What?
Yeah.
And please have that crazyappraiser say some words that

(22:55):
justifies why he thinks thishouse is like worth 60 grand
more, uh, than what the peopleagreed to pay for.
And by the way, was it listedfor high?
Well, here are the facts.
It was li for just under whatthe appraiser's opinion of value
was back in the summer.
Then they dropped the priceonce.

(23:16):
Nope.
They dropped it again twicebefore getting the accepted
offer from our clients inOctober.
Huh?
So at first, everybody who hearsthis question from the jumble
investor thinks they're crazy.
What do they care?
The appraisals high.
But then if you think about it,what they're really saying is if
it's really worth what you'resaying, Mr.

(23:36):
Appraiser, why didn't it sellthis summer when it was listed
for that price or in betweenthat original asking price and
the final accepted offer?
You know, in other words, wejust question your judgment, Mr.
Appraiser, Ooh, that's gonna goreally well.
correct.
So I'm now nervous, right?

(23:57):
Because like, what is, how isthis gonna turn out?
What, you know, what can theappraisers say?
Cuz most appraisers are reallyopinionated.
Well that's cuz of what they doevery day, they give an opinion
of value.
Yeah.
And so I'm anticipating theguy's gonna come back and say, I
don't know, but it's worth whatI'm saying.
It is the way higher number.
And so I start asking jumbleinvestor number one, who's

(24:19):
appraisal department is kind ofbehind the curtain, like the
wizard of Oz, like, Hey, whathappens if the guy says, I don't
know, it just is what it is.
Yeah.
So we start to come up with asecond plan Tuesday afternoon.
We, and this is kind of a valueof accident, mortgages business
model.
We're an independent mortgagebanker.

(24:39):
And so we usually have more thanone outlet for any given
product.
So we did have a second tojumble 30 year fixed investor
whose pricing wasn't as goodwhen we started this journey in,
uh, the end of October, but hadkind of caught up with where
this first one was.
Wow.
I can offer the same rate.
Um, so we CA pick up the phone,Hey, we need to favor, can you

(25:00):
get this loan underwritten likereally quick?
Oh, by the way, I should havementioned the financing
contingency did get extended aweek until this coming Monday.
Otherwise known as tomorrow,1130.
Yes.
We hurriedly put the dealtogether.
We send it over there on Tuesdayafternoon at like literally four
o'clock.
And before jumbo investor,number one, still hasn't gotten

(25:20):
back to us about what to do fromthe appraiser's comment, which
turned out to be hecka final.
I can just tell you myindependent opinion is way
higher than what these suckerssold it for.
Yeah.
And just buy as an aside, it'snot worth what the appraiser
said.
It's worth, it's worth what thepeople are buying it for because

(25:41):
to jumble investor number one'spoint, if it was worth this
fantastically higher number, itwould to have sold for that
much.
Right.
And I was asking the buyer toexplain, and their answer was,
this place is a little out ofdate.
It's kind of dark, it's got darkwoodwork.
You know, people in this pricerange, if you're spending in the
upper eight hundreds or 900thousands in, in the Minneapolis

(26:02):
market, you want the place to beawesome.
Right.
You know, cause you probablydon't have another 50 or a
hundred grand to put into itwhen you're buying in that price
range.
These people happen to have thatmoney.
So in reality folks, the it'sworth exactly what these people
are paying for.
It, not what the appraiser'sopinion was.
It's just one of these weirdcircumstances, but our backup
plan paid off and I had twobackup plans, by the way.

(26:26):
Remember I said, David, that itgot a, a rock solid
indisputable, two rating fromFannie Mae's system.
For sure.
My backup plan was that insteadof lending, my backup to the
backup plan was, Hey, if wecouldn't get number two jumbo
investor to bite, we could do,what's called a piggyback.
I could have given him a FannieMae loan for 500, 10,000 and

(26:47):
then a simultaneous home equityline of credit for the rest,
$186,000, uh, to lend him tosave 700 a thousand with two
loans instead of one.
And why did I know I could dothat because I already had the
indisputable rating, uh, forFannie Mae financing, but it
turns out God bless our secondjumbo investor.

(27:09):
They came through with us onFriday morning with an approval
on this loan, clean as awhistle.
So wow.
We will be delivering thatcommitment letter tomorrow.
Uh, and we'll be closing onFriday, December four.
Good to have back.
But that if you, if those peoplehad gone to the bank where to
jumble investor, number one,they still wouldn't know whether

(27:31):
they were closing because whenyou go directly to the bank, you
have one choice, their money orno, it's a binary choice with
independent mortgage banker likeACU.
We try to have more than oneoption for every type of loan
that we offer.
And in this case, that turnedout to be super valuable to this
really nice young couple who isbuying a home in Minneapolis.

(27:53):
Sorry, when we come back, I'vegot a poopy story about a septic
system on a purchase.
And then we'll also talk abouthow fabulous rates are.
You're listening to the academortgage and Realty show on am
six 20 WT, MJ

Speaker 2 (28:11):
Find a place to call home without the headache.
This is the acade mortgage inRealty show with Brian Wicker on
WTMJ

Speaker 1 (28:20):
By the way, next week will be the first Sunday of
December.
At that time, we'll have areasonably good idea of the
strength of the November, uh,home buying market and the five
county Milwaukee area.
Anyway, any bets you think it'sstill strong?
Do you?
Yeah, agree.
Oh yeah.
And we'll have the jobs reporttoo, uh, from Friday as well on
the fourth.
So that'll be an interestingeconomic indicator.

(28:42):
Oh, there you go.
All right.
So, um, got an email from a, uh,home buyer who said, Hey, I, I
didn't go with you guys, but I'mwondering if he can help me, uh,
by the lender that I decided togo with once is requiring that
we get the failed septic systemon our new home, uh, repaired

(29:02):
within 90 days of closing.
Can, is that, would you guys dothe same thing or, or would you
give us more time?
And so I had a couple questionsback for him and he is very
nice.
I said, well, is this yourprimary residence?
Yep.
Hmm.
I said, well, I think what Iwould do if I were you, you
know, cuz apparently the septicsystem is still functioning, but

(29:23):
mm-hmm, you know,it could die any minute, I
guess.
So.
Well the best thing is to, tomake the seller fix it before
you close.
Yeah.
Well the objection was, well,he's already contracted with an
excavator, but of course 90 daysfrom now is February.
So the ground's gonna be frozenby then, you know?

(29:44):
So it, you know, I, frankly Ididn't really want to get
involved in this situation, youknow, because it's a hassle
nobody likes to do or what iscalled an escrow holdback where
you say, oh, there's a problemwith your property.
Uh, but you know what, we'll letyou fix it after closing, as
long as we set aside money thatwould normally go to the seller
to make that fix.

(30:05):
And usually it's 120% or 150% ofthe quoted contract.
You.
Yes, David,

Speaker 3 (30:11):
I was gonna say, you know, I don't know how busy
excavators are here at the endof fall time, but like don't you
think they'll probably be likeready to put in a new system cuz
they don't wanna wait untilFebruary cuz they're just gonna
be sitting on their hands,waiting for the ground of thaw.
You'd think there'd be peopleready to help.
I, I I'm, I don't know what the,uh, what the market availability
is of excavators, but it wouldseem like, I think you could get

(30:33):
this done right now if youreally wanted to.

Speaker 1 (30:36):
Maybe I, I'm not sure either, although construction
continues to be, uh, brisk.
And so maybe if you're anexcavator you're busy trying to
get stuff done before the grounddoes freeze, you know?
Right.
But nonetheless, uh, you know,my comment was, I think 90, 90
days is about as good as you'regonna get, you know, because
this is your primary residence.

(30:57):
And if it fails during that 90days, what are you gonna do?
Correct.
A hotel or something or havebring a porta potty in, you
know, a Portage on or something.
So, you know, that is thetrouble.
Uh, and, and sometimes you don'tget those reports until pretty
close to closing.
I gotta look and see what thetiming is in the contract.

(31:18):
I think it's like 10 days beforeclosing and it's the seller who
gets the report for both a wellon a septic.
So that does give you verylittle time.
I think it's actually within 30days of closing.
Well, what if they waited until,you know, a week before closing
to find out, oh yeah, the septicsystem is pooped out, so to
speak, uh, you know, that's aproblem.
So, so just, you know, you'realways better off getting stuff

(31:41):
fixed.
Cuz I remember having one on, uh, second home where the septic
system needed to be replaced.
And then the issue became theyhad negotiated for repair of the
landscaping.
And so while they got the septicin, it was the 3000 or$4,000 of
landscaping repair that we hadalso ES escrow for that ended up

(32:02):
going beyond the six months thatwe got approved for the
post-closing work.
And then that's just, it's a bighassle, um, you know, for
everybody cuz then the sellergains the right to force it to
happen, blah blah, blah.
All right.
So, um, interest rate wise ratesare fabulous.
The Freddy Mac, a weekly surveyfor Thanksgiving, all rates are

(32:24):
at their record low anymore.
They went from 2.70 on a 30 yearfixed all the way up to 2.720 uh
that's if you were willing topay seven tenths of a point to
get it.
And we suspect that's on apurchase transaction because, uh
, effective on Tuesday for loansbeing purchased by Fannie Mae
and Freddie Mac, they areimposing a rate hike.

(32:48):
Uh, and by the way, I read anarticle that says, yep, we're,
we're not gonna rescind that.
We're sticking with that becauseFannie and Freddie are afraid of
more for, um, COVID pandemiceconomic fallout, which I'm
still not buying because I thinkif people who are in forbearance
end up having to sell theirhomes in this market, I think
they're gonna be able to fetchenough to pay off their

(33:10):
mortgages for sure's my thoughtfor yeah.
Um, so rates are fantasticallylow, which is still leaves the
door wide to open for, um,refinancing, uh, you know, it's
all about the size of your loan,right?
David, if you've got a$400,000loan, it doesn't take that much
of a rate decrease to get thepayment savings you're looking

(33:32):
for.
Mm-hmm maybe it'sonly a half a percent truck, but
if your loan balance is 75,000,it takes a lot bigger rate drop
to make a refi worthwhile.
So luckily if you wanna find outhow much you can save, um, on a
refinance, we have live [e-mail].
You can look at your rate andclosing costs and get a payment,

(33:53):
uh, just by clicking on the [e-mail] and also a
great place to get started withyour rock salad, guaranteed pre
approval to buy.
Uh, most people take off the,um, uh, month of December, but
that's a great time to do yourhomework and get in position to
become a home buyer.
As soon as the new year's guycomes, which is not that far

(34:14):
away like a month before theyear.
And sorry, you've been listeningto the academic mortgage and
Realty show on am six 20 WTMJ.
The proceeding was a paidprogram.
Advice and opinions expressedduring the ANet mortgage and
Realty show are solely that ofthe host for guests of ACU
mortgage and a Realty advisorsand not WTMJ radio or good karma

(34:35):
brands, Milwaukee LLC.