The Accunet Mortgage and Realty Show 3-2-25

Episode Transcript

Speaker 1 (00:00):
The following program. The ENT , mortgage and
Realty Show is paid for in fullby ENT mortgage, LLC and equal
housing lender consumeraccess.org number 2 5 5 3 6 8.
The advice and opinionsexpressed during the Academic
Mortgage and Realty Show aresolely that at the hosts and
guests of ENT mortgage, LLC,and not WTMJ or Good Karma
Brands.

Speaker 2 (00:20):
Welcome to the Accu Net Mortgage and Realty Show,
getting you inside informationon buying, selling, and
financing your home with expertadvice from Accu Net Mortgage
and Realty. And now here'sBrian and David Wickers.

Speaker 1 (00:34):
Welcome to the Accu Mortgage and Realty Show. I'm
Brian Wicker, licensed realestate broker with NT Realty
Advisors, and also the majorityowner of Acuate Mortgage, where
my NMLS license ID number is 25 9 6 1 0 here today, along
with my son David Wicker, who'spresident of NT Mortgage, and
his individual NMLS ID numberis 3 2 8 8 4 7. So David , uh,

(00:56):
it was a good week for mortgageinterest rates. Uh, how come?

Speaker 3 (01:02):
Well , a good couple. Yeah. Good week. Good
couple days. Good little runhere. I was looking at the
chart. You know, it's all aboutcomparison, right? Dad rates
are as low as when it was earlyDecember.

Speaker 1 (01:15):
Right?

Speaker 3 (01:16):
So, I mean, which is, it's nice. We'd rather,
we'd rather have a nice little, uh, dip in rates rather than
continue to slip away from us.
But like, you know, it's, it'srelief. It's not a rally.

Speaker 1 (01:30):
Okay. Uh , on rates . And , and , uh, do you think
it was more the stock marketgetting clobbered that helped ,
uh, mortgage interest rates or,or the inflation number that
came out on Friday? What , whatwas the , uh, what are you
reading to be the , uh,requisite cause of our well
improvement in mortgage

Speaker 3 (01:46):
Rates? Let's just, let's just say it was stocks.
Okay. That that money isleaving equities and is
probably trying to gosomewhere. If you are cashing
out your stocks, be , uh,mortgage investments, which is
what we create, what Fannie andFreddy create is the ability to

(02:07):
invest in buy the monthlypayment that we all make on our
mortgages. That is a placewhere people can park money. So
it would Right. If you takefrom your stock Yep . Money and
you put it into mortgages, thatwill drive mortgage rates
lower. 'cause it's, as isalways the case supply and
demand when there's more peopleknocking on the door to buy

(02:28):
mortgages that rise , the

Speaker 1 (02:30):
Price down the rate.
Yeah. Yeah .

Speaker 3 (02:32):
Uh , but, but my answer as always is I have no
idea. I have no idea.

Speaker 1 (02:36):
Yeah . We don't really know. We just kind of
make, make up things to fillin. Uh, but hey, it's, it's
welcome news for anybody who'sout there shopping. Now what
about that inflation numberthat we got on Friday? The
Fed's preferred measure ofinflation?

Speaker 3 (02:49):
Yes. Uh , so Friday was core PCE, the personal
consumption, expenditure andcore is the cool kid way of
saying, excluding food andenergy, which I always think to
myself, well, I need thosethings to live my

Speaker 1 (03:07):
And life need energy to live. Yes . Why would we
exclude those? But ,

Speaker 3 (03:09):
Uh , unless I'm just walking to the watering hole
and only drinking awa . But ,uh, core is how the Fed prefers
to look at inflation month overmonth. The forecast was 0.3 .
Guess what came in right at 0.3? Uh, annual year over year .
Core PCE forecast was 2.6. Camein right at 2.6. So markets on

(03:33):
Friday, I would say much to myrelief, did not give back All
that we gained Monday throughThursday, mostly flat-ish on
Friday as numbers. But, but I ,I don't want anyone to think
that we are conqueringinflation. We're kind of just
treading water. 'cause if wereally were conquering

(03:55):
inflation, interest rates wouldbe coming down a lot quicker.

Speaker 1 (04:02):
And so, just to remind everybody, you know,
inflation is the enemy ofinterest rates. And so we're
wanting and watching for thatannualized inflation rate to
come down closer to 2%, whichis the federal reserve's
target. It's kind of stuck hereat about 2.6. And so if we see
that start to ease, or therewere also some indications in

(04:22):
economic reports. Uh, last weekI think , uh, consumer
confidence was down a littlebit. Also, I read that the
weekly , um, new unemploymentapplications was up a little
bit. Uh, that comes out onThursday. So it's like, oh ,
maybe the economy is weakeninga little bit here. That is also
helpful to interest rates. Um ,I was gonna say , and then

(04:44):
don't forget this comingFriday, we have the all
important monthly jobs reportthat comes out and , uh, new
job creation, you're gonna saysomething.

Speaker 3 (04:53):
What is , uh, frightening almost about that ,
uh, consumer confidence surveyis because the American economy
is made up of 70% of us, or 70%of the American economy is all
of us going out there andspending money. How we feel
about the economy then drivesand dictates how the economy

(05:17):
actually is, which really isthe chicken and then the egg.

Speaker 1 (05:22):
Hey , by the way, just to say where we ended the
week on a $250,000 30 yearfixed rate mortgage , uh, with
25% down , um, we could offer6.75. Haven't been able to say
that, like you said, since thebeginning of , uh, December or
the early part of December andthe a PR and that would be just
, uh, 6.78. So that's a niceimprovement. And I , I think

(05:45):
we've seen a little bit ofuptick in , um, refinancing
too. I talked to somebody whoseloan we closed in the
summertime when rates werehigher at 7.625. And we're
gonna be able to get him into a6.875. There you go. Uh , refi
with no cost and that's gonnasave him a hundred bucks a

(06:05):
month, which is

Speaker 3 (06:07):
Worth doing for sure . That's the easiest hundred
bucks he's gonna save all year.
A hundred bucks.

Speaker 1 (06:10):
That's right. Yeah .
And also we're gonna go fromescrowing , uh, taxes and
insurance to not escrowing fortaxes insurance. Alright, David
, uh, when we come back, Ithink you've got a story about
somebody looking to buy. We'llcover that. You are listening
to the Academic Mortgage andRealty Show on AM six 20 WTMJ

Speaker 2 (06:31):
Home buying advice from the guys who know it best.
This is the ACU Net Mortgageand Realty Show with Brian
Wicker on WTMJ. Welcome

Speaker 1 (06:40):
Back and thanks for hanging out with us today. I'm
Brian Wicker, the elder. That'sDavid Wicker, the younger over
there and , uh, taller,smarter, more handsome as well.
Hey, so , um, David, I've, I'vegot some , uh, the latest
numbers. Uh, the realtors cameout with pending home sale
numbers for , uh, January. Andthen I also have , uh, Zillow's

(07:01):
latest numbers. They, they, for, they have the temerity to
actually forecast where theythink home values are going.
And I've got those latestnumbers , uh, coming up later
in the show. But, you know,that's all theoretical. You
wanna share with us a storyabout , uh, somebody who's
making it real and got anaccepted offer this last week,
right?

Speaker 3 (07:17):
They, they did, and this is one of those stories
where I think they weren'texpecting , uh, that they would
be house hunting . It almostcaught them by surprise. You
know , they are in, they're intheir current home. It's
probably perfectly lovely. Ithink they've had some business

(07:37):
success, some career success.
Okay . And so I'm sure that hasled to be like, well, maybe I,
maybe we should get more house.
Different house. Yeah . Uh ,that whatever that next
neighborhood is. So late onTuesday, their real estate
agent got us connected becausethey had been out to visit a

(07:59):
home and were keen to write anoffer and the topic for our
listeners that I covered. Sothis client qualified seven
ways to Sunday that great downpayment, great income will be
smooth all the way through.
They'll have the pleasure ofuploading any number of PDFs,

(08:23):
but , uh, they'll , they'll getus eventually all the PDFs that
we need. The , the topic thatwas on top of their mind was,
well, David, I don't need toand won't write the offer
contingent on the sale of oursoon to be old home. But I've
got a lot of equity in thathome now. 'cause we've owned it

(08:46):
for, I think it was like sevenyears.

Speaker 1 (08:48):
Okay, so a lot of equity in the old home,

Speaker 3 (08:51):
Right? I would like, or can you help me game plan
after I buy the new house andthen months from now, you know,
let's, let's say Memorial Day,I have then sold my old house
and I've got, you know, let'ssay $200,000 of proceeds from

(09:12):
the sale of that home. Can youhelp me apply that to pay down
what I then owe on the newhouse?

Speaker 1 (09:23):
I have an answer for that. The answer is of , of
course, we can course butanswer as long as we don't .
Well, as long as we give you aFannie Mae Freddie Mac style
loan, which means a loan amountof under a hundred, $806,500.
Yes. That's the key, right?

Speaker 3 (09:41):
Correct. And, and so, right. The answer is yes.
Just so long as you're notjumbo, jumbo does not, you can
apply a large principlereduction on any , um,

Speaker 1 (09:54):
Mortgage. You like

Speaker 3 (09:55):
Him loan , right? On any note that acuate creates to
lend you the money. Um, thereare some limitations to that
and I don't want to drag usinto those weeds necessarily,
but, but this stat is a commontheme. We have a lot of repeat
clients who are like, Hey, I'mnot gonna have access to the
equity in my old home on, youknow, at the nanosecond I'm

(10:18):
buying the new house. But whenI get those proceeds, can you
help me wield those funds?
Maybe paid on the balance, someor not?

Speaker 1 (10:29):
And let's, let's be clear it's paid on the balance
and enjoy a lower paymentwithout refinancing. That's
what we're talking about.
That's called recasting or reamortizing the loan after you
make a major , uh, principalpayment. And I believe that
costs $250 to do that, butthat's typically way less than
the cost of refi. Now, did youalso cover with this , uh,

(10:51):
person the possibility of doinga piggyback? Yes . Meaning,
hey, we'll give you a firstmortgage and at the same time
we'll give you a home equityline of credit. Um, and then
the idea would be after yousell your old home, you just
pay down the home equity lineof credit , uh, to zero. Still
keep it open. Well ,

Speaker 3 (11:09):
Exactly. And this is all about, let's begin with the
end in mind. When all the dusthas settled from this journey
to the new home, my client,they were purchasing about an
$800,000 house when all thedust was settled. They only
want a $400,000 mortgage on thenew house. Gotcha . On, on, on
the day that they are buying.

(11:30):
'cause they got the acceptedoffer, they're closing in
April, they only have liquidfunds available to them of
about $200,000. So in, in earlyApril, they're like, can you
help me borrow $600,000? Yeah .
Yeah . The answer is yes. Do Iborrow you $600,000 in one loan
or do I borrow you $600,000 intwo bits? $400,000 first

(11:53):
mortgage, $200,000 secondmortgage. Because as you noted,
maybe, hey, I sell my old houseand pay down that second
mortgage to zero.

Speaker 1 (12:03):
Right. But you can keep it open if it's a home
equity line of credit. So, youknow, that's what we're good
at. We're good at , uh, comingup with different ways to get
to the end point that ourclients actually want to get
to. Alright, David , uh, whenwe come back, let's take a look
at , uh, Zillow's latestforecasts for home prices,
because they did dial 'em backa little bit. We'll cover that

(12:25):
right after this. You arelistening to the Accident
Mortgage and Realty Show on AMsix 20 WTMJ,

Speaker 2 (12:31):
Getting you into the home of your dreams. Here's
more of the Accu Mortgage andRealty Show with Brian Wicker
on WT

Speaker 1 (12:39):
Mj. Thanks for , uh, joining us today. I'm Brian
Wicker, majority owner of AccuMortgage and also licensed real
estate broker, and that's DavidWicker over there, the
president of Nette Mortgage. So, uh, David , uh, one of the
other numbers that came outlast, late last week, the
National Association ofRealtors came out with their
pending home sales index forJanuary, and that actually

(13:01):
slumped , um, 4.6% , uh, andall time low. Wow. Last year.
Cyclical low point. It was Okay , blah, blah,
blah. So yeah, so an all timelow for January. That's
interesting. And , um, and itwas , this

Speaker 3 (13:19):
Is nationally.

Speaker 1 (13:20):
Yeah, this was nationally, but it , but it was
also the Midwest , south andwest experienced month over
month losses in transactions ,uh, with the most significant
drop in the south. So it wasonly the northeast that went up
a little bit. So obviously we'dbe in the Midwest Yeah . For
most of our markets. Sonationwide, kind of a , and
depending home sales means whatnumber of homes went under

(13:43):
contract in January, which willportend the actual closed sales
mostly in February. Yeah . Now,you know, that's a national
number. I do not have a localnumber. Uh, but then the other
thing that came up that Ithought was really interesting
last week was Zillows forforecast for home values. And ,

(14:03):
uh, they are now projectingthat a year from January, so in
January, 2026 home values willincrease by just 0.9% on a
nationwide average. Previouslythey were forecasting a 2.9%.
What

Speaker 3 (14:20):
Are you just trying, are you just trying to get me
going by giving a nationalnumber? Well , or do you just
wanna say the,

Speaker 1 (14:26):
I mean, it's a number that people are gonna
read about or have read about.
Um, and the reasoning thatthey're giving for their
reduction is something youmentioned earlier in the show.
Good old supply and demand.
They're noting that newlistings were higher than
expected out of the gate thisyear. So more supply in general
is putting downward pressure onZillow's home value forecast.

(14:48):
And , you know, now good newsis it's still thought to go up.
It doesn't mean it's gonna goup everywhere. In fact, I do
have their forecast for variousmarkets within Wisconsin, but
just a couple of other nuggetsfrom their latest forecast.
They're seeing the same numberof homes selling nationwide at
4.11 million in 2025 as whatsold in 2024. Mm-hmm

(15:13):
. Um, they'realso saying that they expect a
decline near term in sales maybe related to that pending home
sales number that came outbefore the spring home buying
season kicks in. Well,

Speaker 3 (15:26):
The reason why is hard to close if you don't go
under contract first. Exactly .
So that's why they use thatleading indicator.

Speaker 1 (15:34):
Yep . Um, interestingly, they're seeing
rental , uh, costs going up by3.7% nationwide in 2025. That's
for single family rents. Ifyou're in a multi-family, you
know, like an apartmentbuilding, they're forecasting a
3.1% increase in , um, rentalcosts . Couple of other quick
nuggets. 23% of listings Zillowsays reduced their price in

(15:56):
January. That's the largestportion for any January since
2018. Question for you, David,I can't quite replicate that
number, but I did some numbercrunching on about 2000
listings current listings as ofthe end of last week in the
five county Milwaukee metroarea. Do you think our local
number, do you think more than23% or less than 23% of active

(16:19):
listings have cut their price?

Speaker 3 (16:21):
In your, in your statistics, you're taking 2000
listings that might also becurrently under contract?
That's right. Or not undercontract.

Speaker 1 (16:29):
I'm just, I'm looking at under contract
across the ,

Speaker 3 (16:32):
Across the board. So you basically have three
buckets. You are waiting for anoffer , uh, or you're under
contract, or you just cut yourpre Well , uh, I'm gonna say
more than the 20 some percent.
I'm gonna say like 31%. Whoa.

Speaker 1 (16:46):
Okay. You're a little more pessimistic. I I
thought it was gonna be lowerthan the national average.
Right? Yeah . Because we kindof have , um, you know, less
supply in my opinion here.
Yeah. When you look at thenumber of months supply, but
the actual answer is we were at23.8% by my calculation. So
23.8% of single family andcondo listings in the

(17:06):
southeastern Wisconsin havereduced their price. What do
you think your , your ,

Speaker 3 (17:12):
Your scratch here these , but these are the
difficulties of statisticsbecause we're taking, or your
sample is taking listings at amillion and above and , and
putting it into the samecauldron with the $300,000

Speaker 1 (17:28):
Bundle below . I should , one other footnote, I
only looked at Holmes listedfor one 50 to 700,000, so I did
kind of narrow it down to themiddle. Um, one other nugget in
that, you know, price range,the average price reduction.
What do, what do you think theaverage price reduction is?
Dollar

Speaker 3 (17:42):
Amount or percentage?

Speaker 1 (17:43):
Yeah. Dollar. Well , let's go

Speaker 3 (17:44):
With dollar amount .
Uh , $10,000 ,

Speaker 1 (17:48):
$19,850 , you know.
Okay. 'cause some people, I ,some people came out and then
like lowered their price by ahundred grand. You know, that
skews the average up. Um, andon a percentage basis it was
5%. So obviously you have somepeople going out there and
thinking that , um, hey , Ijust came outta the gates too
high. I , you know, obviouslyI'm not getting any action. I

(18:09):
gotta cut my price. So, youknow, the percentage of , uh,
price reduction is always aboutwhere you started. Yep .
Obviously, and maybe peoplewere a little bit too
aggressive. By the way, by mycount , there's about 2,600
active listings out there rightnow. And if you apply the 1200
home sales that we had in Marchof , uh, 2024, that's just a

(18:30):
little over a two month supply.
So I think it's still aseller's market in southeastern
Wisconsin. I do have the Zillowforecast, we'll get to that
later in the show. But rightnow for, for markets within
Wisconsin. But right now it'stime to turn it over to the
WTMJ Breaking News Center.

Speaker 2 (18:48):
Don't break the fact to get into a house. Back to
the ACU Net Mortgage and RealtyShow with Brian Wicker on WTMJ.

Speaker 1 (18:55):
Welcome back and thanks for joining us , uh, to
hear about the latest inmortgage and real estate
trends. David , uh, rightbefore the break I was talking
about , uh, Zillow's latestforecast for home value
increases. And , uh, here aresome of the numbers for , uh,
Wisconsin. 'cause they go downto the , uh, metropolitan
statistical area, which I thinkis very bold and, and , uh,

(19:17):
awesome. So , uh, here'smultiple guess , uh, question
for you. Which of these threemajor cities, the three largest
metropolitan areas inWisconsin, I believe are
Milwaukee, Madison, and GreenBay? Which of those do you
think Zillow predicts we'llhave the greatest home value
increase in 2025?

Speaker 3 (19:37):
I want to say Madison, but Green Bay is
lurking there in thebackground. So , but I'll stick
with Madison as my

Speaker 1 (19:43):
Choice. Oh , you should have gone with your gut.
So they're predicting a 3.3% ,uh, home value increase for
Green Bay , uh, 1.9% forMadison. And , uh, only 1.4%
value increase , uh, for theMilwaukee Metro area. Uh, some
of the other hotter , uh,appreciation markets that
they're Zillow. This is again,Zillow forecasting. What do we

(20:05):
think the change in home valueis gonna be between January of
25 and January of 26? Manitowocleads the list at 4.6 followed
by Marinette at 4.3, Shawano at3.8, and Sheboygan at 3.4. So,
I mean, what they're looking atis supply and demand. Obviously
they're just saying the ,

Speaker 3 (20:24):
The other difficulty in all of this in just like
Madison versus Green Bay, I'm ,I'm pulling this from the sky,
but I'm gonna say the Green Baymedian home values like two 20
and the median Madison homevalue is three 70 .

Speaker 1 (20:42):
Yeah . Mm-hmm

Speaker 3 (20:42):
. And so on a percentage basis, yes,
congratulations to Green Bay,but for Madison buyers, the raw
dollar amount will be moremeaningful. Yeah. Both for
buyers and sellers possibly .
Um, of course you're , and ifyou're in Manitowoc, it's like,
congratulations on your 10%,you know, home , uh, value

(21:04):
upside. You started at one 50.

Speaker 1 (21:07):
No, it's not that low.

Speaker 3 (21:08):
And now you're at 1 65. No , it is up that way .
It's a different threshold formedian . Yeah . Home

Speaker 1 (21:15):
Values, median sales price. So , um, you remember,
there's only two times whereyou really know the value of
your house. You know, one is,hey, you're doing a refinance
and you get an appraiser thatestimates the value of your
home. Yes . But the only timeyou really know is when David

Speaker 3 (21:31):
Is, when you buy and when you sell.

Speaker 1 (21:33):
That's right.

Speaker 3 (21:34):
I start , I've started to call that
Schrodinger's cat's house.
Right. Because Schrodinger'scat, if the cat is in the box,
it is both alive and dead atthe same time. Come on.
Philosophy 1 0 1. Whoa. And sothe house is worth, right? I I
am living in my house. Me,David, right now it is worth
something, but right now it isalso worth zero because no one

(21:57):
is writing me a check. Correct. It is both values at the same
time.

Speaker 1 (22:02):
Wow. That's deeper than I ever

Speaker 3 (22:04):
Expected. Philosophy mortgage.

Speaker 1 (22:06):
Yeah . So , um, David, I got a , a call from
somebody this week who , um,was restarting their home
search . They tried last springand summer didn't succeed,
released their apartment. Nowtheir lease is coming back up ,
uh, in May. So now they'remotivated to get back out
there. And she said , um, thatshe's actually finding more

(22:29):
selection and better quality,which was nice to hear. Okay .
In the areas where she'slooking. So , um, in the course
of our conversation andre-verifying her income, the
good news is that her incomewas under the $102,100 annual
threshold to qualify forWisconsin's special first time

(22:50):
home buyer, 30 year fixed rateloan, which has a below market
rate of like 6.125 right now.
And , uh, but then in thecourse of our conversation, she
started to use the word we, we,when we, when we move in or
when we find that house orwhatever. So what do you think?

Speaker 3 (23:12):
And , and not in a way where it's like you got a
mouse in your pocket. Yeah,yeah . me , me plus my
person.

Speaker 1 (23:18):
Right? So what's, so it turns out she , you know, I
said, you know what? Youmentioned we will there be
someone else living in the homethat you buy? And she said,
yes, my fiance. And so what'sthe issue there, David?

Speaker 3 (23:33):
The rule book for the special Wisconsin home
buyer program that you wereeyeing has a limit on the
amount of income, not just forthe people who are on the
application to borrow themortgage money, but a limit for
all of the people who will beresiding in the home, even if

(23:55):
you are not a borrower. And ,and Right . So for her, it's
her fiance. If it was , uh, uh,client, fiance and grandma
also, you know, moving in intothe other bedroom and she's
drawn Social security and apension, you

Speaker 1 (24:11):
Get to count that.
Yeah. Gotta

Speaker 3 (24:12):
Count that too, even though grandma's not on the
mortgage.

Speaker 1 (24:15):
Yep . So devil is in the details. Now, luckily,
she's also , um, stillunderneath that 100% of area
median income threshold Yes .
Per actual income is, which isgood because then we're gonna
escape any , uh, pricingadjustments that Fannie Mae or
Freddie Mac would otherwiseimpose. Because wouldn't, you
know, since last year , uh, oneof her credit cards reported

(24:38):
her late, and so her creditscore , uh, dropped from like 7
85 down to 7 31. And so thegood news is that's not gonna
affect her loan pricing. Mm-hmm. But it, it will affect the
monthly cost of her PMI privatemortgage insurance. And there's
really just nothing we can doabout that. Alright . Why don't
we come back, David, you've gota divorce related refinance

(24:59):
story. Yeah . We'll cover thatNext. You are listening to the
ENT Mortgage and Realty Show onAM six 20 WTMJ.

Speaker 2 (25:06):
Important home buying questions and answers
you can count on. This is theAccu Mortgage and Realty Show
with Brian Wicker on WTMJ.
Welcome

Speaker 3 (25:16):
Back to the ENT Mortgage and Realty Show. I'm
David, that's Brian over there.
Dad, we like to describe thestart of some people's home
buying journey when they'relooking and they're on the
house hunt and they're startingthat next chapter. Well, we
also , uh, get to help someclients who are then starting a

(25:38):
different next chapter, whichis divorce and what do I do
with this home that we own inour marriage? And so I took a
call from a repeat client who Ihad helped by their home in 20
18 20 19, which okay , feelslike what I say 2018, I'm

(25:59):
saying 1888, but that's just,you know,

Speaker 1 (26:01):
Yeah, yeah. It seems like forever ago.

Speaker 3 (26:04):
So , yes. So they, like many Milwaukee homeowners
have had a tremendous amount ofhome appreciation, and they are
utilizing a mediator to , um,handle their divorce
proceedings. And they havealready agreed upon the equity
payout , uh, for dividing theirmarital assets. And so my

(26:27):
client, wow , smart, smart guyand is thinking to himself,
okay, well, do I want to keepthe house or do I not? And I,
and with divorcing clients, itis pieces of the puzzle and
well, you know what it is, it'stools on the workbench. Okay, I
got 'em all in front of me.
Which one should I use? ShouldI use a combo of these? Should

(26:48):
I use none of these at all? DoI need to go to Menards and get
a whole different tool than theones that are in front of me?

Speaker 1 (26:55):
He laid out . So how much , how much, how much does
she have? Does he, if heretains the home, what, what
have they agreed upon on howmuch money he has to give her
for her equity interest? Uh ,

Speaker 3 (27:04):
Yeah, about $40,000 is the

Speaker 1 (27:06):
Number. Okay.

Speaker 3 (27:08):
And so the question, or that's kind of the bogey,
right? It's like, okay, how doI come up with $40,000 door
number one, you could do cash,you know, instead of dipping
into the bank account calledyour home equity, you could
instead use cash and orretirement to be like, oh, here

(27:31):
is $40,000 instead of pullingit out of the house. What ,

Speaker 1 (27:35):
For goodness sakes, I'm not a tax advisor, but I
know a lot of 'em , I think theworst place to get the money
would be out of a retirementaccount.

Speaker 3 (27:44):
I , I agree, but I'm just declaring these are the
things that are , are

Speaker 1 (27:47):
Possible, but people think I know what people think
about that. It's like, yeah,I'll just, I'll just take money
out of the IRA to a use it for,well , you

Speaker 3 (27:54):
Could do a quadro , a qualified domestic relations
order. You can slice aretirement in half without
enduring the tax bill.

Speaker 1 (28:02):
Okay. But that's, that's one thing if you're
dividing up that, okay , uh,

Speaker 3 (28:08):
Retirement

Speaker 1 (28:09):
Account, but it's another thing to then take
money out of it to

Speaker 3 (28:12):
Agreed but

Speaker 1 (28:13):
Hand to somebody for the equity. But go on,

Speaker 3 (28:15):
The whole point is, Hey, maybe we just leave the
mortgage alone. If you coulddrum up the $40,000 someplace

Speaker 1 (28:22):
Else, okay , so let's call that door number
one,

Speaker 3 (28:24):
Door number one door number two, take out a second
mortgage, leave the firstmortgage in place. You got a
lot of equity. Take out a$40,000 second mortgage and be
like, here you are. The monthlypayment on that second mortgage
wasn't all that appetizing formy client. Uh, but it's
possible. Okay . The otherthing that would be required is

(28:45):
that your soon to be ex wouldneed, 'cause that that implies
that you will both remain onthe first mortgage even though
you're divorced.

Speaker 1 (28:54):
Oh, are they both on the first

Speaker 3 (28:56):
Mortgage? Yes. They are both on the first mortgage.
So you would need to have acooperating ex to be like,
we're gonna leave the firstmortgage alone. I the, i, your,
I will , um, waive yourliability in our marital
settlement agreement of yourresponsibility to pay the
mortgage and the ongoingmaintenance. No , but the
problem is , but if your , ifyour ex says, no way, get me

(29:19):
off the mortgage, then doornumber two's not an option.

Speaker 1 (29:22):
Which is what they would likely do if they had an
attorney because Yeah . Atleast from my experience,
because you know, the , theproblem is even though you have
a court document as Iunderstand it, that says, Hey,
this person isn't responsible.
If there is a foreclosure, Ibelieve that stain and, you
know , or , or evendelinquencies or late

Speaker 3 (29:42):
Payments.

Speaker 1 (29:43):
Yeah . Yeah. Late payments goes against that ,
um, former spouse who decidedto stay on the mortgage .

Speaker 3 (29:49):
But let's look at all the tools. I know, I know
it's a bandsaw, but like, if wedon't want to use it, it's
still available to us. What

Speaker 1 (29:56):
About selling the property?

Speaker 3 (29:58):
Well, so that was door number four. And , uh, you
know , sell it, pay off your ,uh, x or get them their equity
payout and then you walk awaywith the rest and start your
next chapter of life. I , Iwanna touch on that. The third
option, the third door was wecould refinance the entire
mortgage balance and yourequity payout to your ex. The

(30:20):
tough part about that is theygot such a smoking good rate on
their first mortgage.

Speaker 1 (30:25):
Yeah. They'd be trade .

Speaker 3 (30:26):
You must be trading in three a 3% rate for double
that on the whole pile ofmoney. Um, it's

Speaker 1 (30:33):
Possible. Right . So it's time for us to take a ,
our last break. Okay . Uh ,let's, let's find out what this
customer's thinking about doingwhen we come back. You're
listening to the Acade Mortgageand Realty Show on Wisconsin's
radio station AM six 20 WTMJ.

Speaker 2 (30:46):
Find a place to call home without the headache. This
is the Acuate Mortgage andRealty Show with Brian Wicker
on WTMJ.

Speaker 3 (30:54):
Thanks for being with us here on Sunday morning
on the Academic Mortgage andRealty Show. By the way, you
can catch every academicmortgage and realty show
wherever you get your podcasts.
Uh, in case you can't be withus here on Sunday mornings
Live. Dad, I was describing toyou a client , um, just trying
to puzzle solve the divorceelement of okay, I owe my

(31:18):
spouse, my ex, soon to be ex$40,000 to divide our marital
equity. How , where are all theplaces that I could reach for
that $40,000? So , so the lastthing , recap. Yeah, the quick
,

Speaker 1 (31:31):
The last thing we Go ahead.

Speaker 3 (31:32):
Go ahead. .
Uh , one, one was , uh, youcould , uh, cash two second
mortgage, three refinance thewhole first mortgage and four
sell the house. My counsel tothis client was, look, houses
are not, you can always buyanother house and to tether

(31:55):
yourself to a particularproperty, maybe seven months
from now you decide, you knowwhat? I wanna go live in, you
know, Tokyo for two years Hmm .
To just whatever comes next.
Yeah. Boy, it would be nice tohave that house sold and the
lot of money you're gonna makewalking away from having sold
that home to free yourself upto have whatever that next

(32:18):
chapter is, which kinda is morethan mortgage advice, but
mortgages are just a reflectionof real life. And so sometimes
we talk about real life. Uh, somy client, at the end of our
conversation, we reviewed allof these options, was leaning
towards, I'm just gonna sellthe house. He looped back with
me about a week later and said,as I am looking at rental

(32:41):
properties to get me what Iwant, the cost , and this is I
think some of what you alludedto before in , uh, one of the
National Association ofRealtors reports about rents.

Speaker 1 (32:53):
Yeah . It was Zillow, Zillow's reporting ,

Speaker 3 (32:55):
Zillow rents , it's

Speaker 1 (32:56):
Rent prices . Yeah .
Rent .

Speaker 3 (32:57):
Uh , I'd be spending, my client was like,
I'd be spending $1,800 on rent.
Remind me again what it wouldcost to keep the house and do
the equity payout. That answerwould be about $2,000 a month
to do the payout, keep thehouse. So he is not that far
removed from an equivalent tothe cost of rent if he decides

(33:20):
to move on. He doesn't have ananswer yet, but it's as he went
out and got more data about,okay, if I do sell, if I do
rent, what does that cost forhim for what he wants for a
rental property? It's not thatfar removed if he just keeps
the house. The crummy partabout keeping the house though
is all the equity is stillstuck in the house, which is of

(33:41):
no use to you. That's ,

Speaker 1 (33:42):
Yeah . Let's see .
Lots of competing intereststhere. Yes. And sometimes it's
the very practical thing of,Hey, you know what? I know I
might give up my, my awesomerate on my first mortgage, but
maybe refinancing the wholething and taking the cash out.
Which by the way, if you'retaking cash out for a divorce ,
um, and that money gets paiddirectly to your ex-spouse, it

(34:03):
doesn't get priced like a cashout refi. Right. It just gets
priced like a regular refi.
Which is nice because cash outrefinancing is considered
riskier and therefore rates areclosing costs are a little
higher. So, you know, he would,it's all , it's all about the
very practical thing. Hey, whatdo I want for a monthly payment
and where do I wanna live for

Speaker 3 (34:20):
Now , I haven't come up with the right way to call
this, but it's, you know, ourhome shoppers need the rock
solid pre-approval. Our divorceclients need the rock solid
divorce game plan. I gotta comeup with it . Game plan . Right
. Better plan . Right. Becausethat's what it is. It's do I
keep the house? Do I sell it?
And we, I just rattled off likefour and a half ways you can
look at that. It's a puzzle.

Speaker 1 (34:41):
One of the other, I'm working with a , uh, person
who's at toward the end oftheir divorce, but it's kind of
getting out there, would liketo write an offer on a house,
but we can't really approvetheir loan until their divorce
is finalized and their nextcourt date is the end of April.
So in that particular case, thequestion is, you know, can I
get somebody to an accept anoffer? This is the equivalent

(35:04):
of they've already sold theirmarital home. Right. Oh . But
now it's like they would haveto write their offer with a
really long financingcontingency. Yeah . Because we
can't actually give 'em theloan until after they have
their division of maritalproperty settled. Who owes
what, you know, in terms of theliabilities, who gets the car

(35:24):
loan? Who gets the car lease?
We need that approved andsigned off on by the court,
which isn't gonna happen untillate April. So that's an
interesting one. That'sevolving. Alright, well that's
all the time we have fortoday's show. We appreciate you
spending some time with us. Uh,we love what we do and we'd
love to help you or someone youknow, either with a refin

(35:45):
'cause rates are lower thanthey were the lowest they've
been since , uh, earlyDecember. Or to make themselves
the most competitive buyer theycan be in the eyes of that
seller with a rock solidguaranteed pre-approval. All
you gotta do is click on thatblue [e-mail] to get
started. You've been listeningto the Acuate Mortgage and
Realty Show on AM six 20 WTMJ.
The

Speaker 4 (36:05):
Proceeding was a paid program. Advice and
opinions expressed during theAccu Net Mortgage and Realty
Show are solely that of thehost or guests of Acuate
Mortgage and Acuate RealtyAdvisors and not WTMJ Radio or
Good Karma Brands. Milwaukee,LLC.