The Accunet Mortgage & Realty Show 12-22-24

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 (00:21):
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.
Welcome

Speaker 1 (00:35):
To the Accu Mortgage and Realty Show, pre-Christmas
edition. I'm Brian Wicker,licensed real estate broker
with Kinnan Realty Advisors andthe majority owner of Kint
Mortgage, where my individualNMLS ID number is 2 5 9 6 1 0.
Here again today with my sonDavid, who's president of
Academic Mortgage and hisindividual NMLS ID number is 3

(00:56):
2 8 8 4 7. So , uh, David, lotsof news , uh, this last week,
and let's start out with theFederal Reserve. Yep . Who
announced that they're cuttingtheir rate singular mm-hmm
. By a quarterpercent on Wednesday. And I
think the average person, youknow, walking down the street
with their for think wall ,then mortgage rates must have

(01:17):
gone down. Yes . But may in forsoThe

Speaker 3 (01:20):
Rates got worse.
Mortgage rates.

Speaker 1 (01:23):
Mortgage rates got worse. Yeah. So the exact
opposite. You know, what's upand down , what's up is down,
you know,

Speaker 3 (01:29):
What's left is right. Yeah.

Speaker 1 (01:30):
Not , not what you expect, expect what's hot is
cold . But , uh, remember, whatyou gotta remember, first of
all folks , is the Fed onlycontrols one interest rate,
which is the very short termovernight rate that banks cha
charge each other Yes . Toborrow money. That's called the
Fed funds rate. And they didlower that a quarter. The only
consumer facing interest ratethat that impacts directly is
the prime rate, which is usedto set rates on credit cards

(01:51):
and home equity lines ofcredit. So, good news there is,
that primary rate is now downto 7.5% . And that's a
full percentage lower Yes. Thanwhat it was , um, last, last
summer. Yep . Unless we forget.
It was kind of a three point,was it a three and a quarter or
3.75 for it seemed like forever

Speaker 3 (02:09):
3 7 5 for forever during ,

Speaker 1 (02:11):
During the covid crisis. Well, anyway , um, why
did mortgage rates and otherlong term and short term rates
go up after the Fed saidthey're cutting rates statement
? What's the story? Uh ,

Speaker 3 (02:24):
My, my quick summary would be it's not about what
happened on Wednesday, it's howthey talked about the future.
Aha . And that's what marketscare about. By the time
Wednesday arrived, everybodyknew the cake was baked. Uh ,
by the time one o'clock showedup on Wednesday afternoon, it
was all about what's next.

Speaker 1 (02:43):
Although in , uh, in , uh, chairman Jerome Powell's
press conference following theannouncement, he said it was a
closed call in the quarterpoint cut. Like there was some
debate whether they should doit at all. But you're right, it
was Which,

Speaker 3 (02:55):
Which might be jockeying Yeah . More than
truth.

Speaker 1 (02:59):
Okay. Well, they certainly changed the
expectation. And in fact, at,at , uh, four of the Fed
meetings, and this was one of'em , uh, the 19 participants
in that meeting come out withtheir predictions. They say,
here's where we think we'regonna be going with that
overnight fed funds rate in thenext year or two. Back in
September, they had penciled innot only two more cuts for this

(03:22):
year, which came true, but theyhad also penciled in four rate
cuts for 2025,

Speaker 3 (03:28):
Which if I could translate rate cuts, which was
the prediction when they wereall sitting around the table in
September. Yeah . By sayingfour rate cuts in 2025. That is
the Federal Reserve's way ofsaying, Hey, we want to make
things a little easier for theeconomy to go along. We need to

(03:50):
alleviate the cost of, you know, borrowing borrowing. Yeah .
We need to help.

Speaker 1 (03:56):
Right. We need to Yeah. Make it less restrictive.
Right . Yes . And so whathappened is when it came out
with the DOT plot on Wednesday,they had cut the number of
forecasted interest rate cutsdown to two. And apparently
that was a lot fewer than whatthe market was . 50%. Yeah.
Well, but I don't know what themarket was really expecting.
Nonetheless, the stocks had ahissy fit. Yeah . And in a rare

(04:18):
double whammy, not only did weget stocks get hammered, I
think they were down like morethan 3% that day. Mm-hmm
. Uh , but alsolonger term interest rates went
up. Yes. Um, the , the otherinteresting thing I thought was
that , uh, Powell , uh, duringhis news conference, while he
didn't come right out and saythat the incoming

(04:39):
administration's tariffs werean possible issue relative to
inflation, 'cause if you put atariff on lots of imported
goods, that's gonna make theprices of those goods higher.
Yeah. Which is the definitionof inflation. He did say that
some of the participants intheir forecast took into
account policy potential policychanges. Yeah. I'm pretty sure

(05:00):
that's what he meant. Alright .
So, so the bottom line,remember , uh, is that the Fed
wants inflation to go down to2%

Speaker 3 (05:09):
Currently at three ish.

Speaker 1 (05:11):
Oh yeah. We're gonna get to that in a second, but ,
um, it's proving stickier, youknow, it's kinda like two and a
half to 3%. So we mentionedthat in the news conference.
Like, boy , inflation isappearing to be stickier than
we thought it was gonna be.
Yeah. Uh , and then there othermandate is full infl , uh, full
employment. And he did say, youknow what? We think the job
market is going just fine.

(05:32):
Right. Based on the latest jobsreport, those come out every
first Friday of the month. Sowe don't have a , a labor
problem. Mm-hmm .
We don't have like, lots ofpeople getting laid off, which
would, you know, cause the fedto cut rates. So the only two
things that are gonna helpmortgage rates come back down
are worst job reports. Right.
If we see the unemployment rategoing up Yeah . Or friendlier

(05:55):
inflation reports when we comeback. If, if the, if the Fed ,
um, uh, dot plot and thecomments were the lump of coal
in the proverbial mortgage andhome buying, stocking. Stocking
, yes. We got a inflationreport on Friday that was like
the shiny Christmas present.
We'll talk about that. Andwhere we ended the week and

(06:16):
mortgage rates when we comeback. You're listening to the
Acade Mortgage and Realty Showon AM six 20 WTMJ

Speaker 2 (06:24):
Home buying advice from the guys who know it best.
This is the ACU Mortgage andRealty Show with Brian Wicker
on WTMJ.

Speaker 1 (06:33):
Welcome back and thanks again for tuning into
today's show or downloading thepodcast. The podcast. 'cause
remember, you can get a copy oftoday's show wherever you
normally get your podcast. Yep. Um, so Dave , we were talking
about , uh, the FederalReserves revised , uh, rate cut
predictions

Speaker 3 (06:48):
Not coming to the rescue perhaps in the ways that
markets had hoped Right . Theywould do in 2025.

Speaker 1 (06:55):
Yep . Because basically they're saying the
job market's just fine. And,you know, inflation's kind of
stubborn. So the thing that weneed for mortgage rates to come
down is , uh, better inflationreports and what did we get on
Friday? Indeed , much to oureyes, the consumer , uh,
personal consumptions, oh , didI say that wrong? CPE

Speaker 3 (07:13):
Consumption expenditures reports . Yeah .

Speaker 1 (07:16):
That's it.

Speaker 3 (07:17):
All good.

Speaker 1 (07:18):
Alright. And , uh, that happens to be the , um,
the Fed's favorite measure ofinflation Yep . As opposed to
the consumer price index. Andso we got that report for the
month of November. The markethad been expecting a 0.2% month
to month increase, and it camein at 0.1

Speaker 3 (07:38):
Woo woo . Merry Christmas

Speaker 1 (07:40):
A year over a year.
The market was expectinginflation to log in at 2.5 and
it came in at 2.4. And thenlastly , uh, the , like the ,
what the Fed really likes tolook at is the core CPE index,
which excludes food and energy.
They were thinking, Hey, thatshould be at about 2.9. It came
in at 2.8. So this littlesliver of being, it's

Speaker 3 (08:03):
Like winning a basketball game by one point is
like, yes, it's a win, but italways feels nice when you win
on Tuesday by 15 points.

Speaker 1 (08:11):
But all that matters to us folks in the mortgage
industry or home buyers outthere. Yeah. Is that the
interest rate markets went, ohGod. Finally some good news,
some relief. Okay. And so , uh,that allowed us to end the week
with the following lineup ofrates , uh, which is
mysteriously similar to whereit was a week ago. Uh, we've

(08:33):
got , uh, this is on a $335,000home purchase. That's the
median sales price insoutheastern Wisconsin. So
let's use a $250,000 30 yearfixed rate loan with 25% down
excellent credit and all theother Right. Stuff. And so we
could offer a 6.5 rate David atthe end of

Speaker 3 (08:50):
The week. Come on.
6.49.

Speaker 1 (08:52):
Well, that's right .
What am I thinking? I don't dothat. Yeah , I know you some
everybody else does. Yeah. But, uh, you would've to pay
$4,750 of interest upfrontcalled points mm-hmm
. In order tofetch that rate. And that makes
the annual percentage rate6.6899999999999995%. That's
because what happens in the APR calculation,

Speaker 3 (09:11):
You spread the cost of points over your , over the
entire 30 years. That's

Speaker 1 (09:17):
Right. Which nobody really keeps their mortgages
for 30 years. I think the mostpopular option would be the 6 9
9. Yeah . Rate. Uh, and thatwould only have $250 of points.
And remember though, folks, ohby the way, the A PR 7.01 , uh,
most every other lender on theplanet charges lots of fees.

(09:37):
Underwriting, you know,processing, tax

Speaker 3 (09:40):
Service administration fee

Speaker 1 (09:41):
Administrative.
Typically we see our 900 to$1,500. We don't do that. We
just say, Hey, we'll take careof all that stuff. Yeah .
That's , that's our expense,not yours. And, and then if ,
but if we need a little bitmore money to make our ends
meet, then we just chargepoints. So pretty good deal.
And then at 7.125% soundsterrible.

Speaker 3 (10:00):
Oh , hideous,

Speaker 1 (10:01):
Hideous accu that would not charge any points.
And in fact, we could chip in$600 toward your loan cost ,
bringing those loan cost downto a total of just $865 to get
the job done. And that's if youneed to have an appraisal,
which sometimes we don't needto have an appraisal, by the
way , um, a year ago, the 30year fixed rate was about three

(10:23):
eighths of a percent lower.
That's 0.375 . So $61 paymentdifference between this week
and a year ago.

Speaker 3 (10:31):
Um , in looking at your numbers, one of the ways
ultimately any loan consultantat Acue wants to deliver the,
what's gonna help you sleep atnight. Yeah . Sleep best at
night. Sure. But one of theways that we talk about this
is, so the difference, dad andthe numbers you shared between
paying the points to get thelow rate and maybe in

(10:52):
comparison to 6 9 9, thatpayment difference is $61 a
month. One of the ways that webring this up for clients is
how much are you willing tospend to save $61 a month?
Yeah. And then clients , right?
'cause if you say, well , I'mnot really willing to spend

(11:13):
anything to lower my payment$61 a month. Okay,

Speaker 1 (11:15):
Well then you know what to

Speaker 3 (11:16):
Do. Alright ? Oh, I'm willing to pay , uh, you
know , $5,000 to lower mypayments. Like , okay, well is
that a savvy use of $5,000? Andit's all about what do you get
for your money? That's

Speaker 1 (11:30):
Right. And yeah , what else do you, what else
would you do that money if youweren't spending it to get a
lower repayment ? So we'rereally good at quantifying
people's choices and well,

Speaker 3 (11:38):
It's because as I learned long ago, it ain't just
about the rate. It's what didyou have to spend to get it or
not.

Speaker 1 (11:46):
And part of that is what do you think is gonna
happen in the future withinterest rates later on in the
show? I do have the latest ,uh, forecast from both Fannie
Mae and the NationalAssociation of Realtors as to
home sales and also interestrates. But what are we gonna
talk about when we come back

Speaker 3 (12:03):
To , I wanna talk about some grandparents that I
talked to this week and thereal life reason why they're
getting ready to move. Alright, we'll cover that after this
break. You are listening to theAnette Mortgage and Realty Show
on AM six 20 WTMJ, getting

Speaker 2 (12:19):
You into the home of your dreams. Here's more of the
Accu Net Mortgage and RealtyShow with Brian Wicker on WTMJ.

Speaker 1 (12:26):
Thanks again for joining us. Uh , today. I'm
Brian Wicker , the elder.
That's David Wicker, theyounger. And , uh, David, you
said you have a story, agrandparent related story of
which I'm a cart carryingmember. Um , and thanks for,
for helping me be in that club,David, come on. So , uh, what's
the story?

Speaker 3 (12:43):
So this is a referral. We are actually
helping the son Oh . Close onhis new home next week.

Speaker 1 (12:53):
Okay .

Speaker 3 (12:54):
And I was introduced to him by his real estate agent
, uh, silky smooth , uh, andthen was connected with grandma
and grandpa. Not yet Grandmaand grandpa. Future potential
pending grandma and grandpa byboth the son and the real

(13:14):
estate agent. Nice. Becausethese grandparents currently
live in Illinois. Sun is aboutto close on a new house in
Wisconsin. Okay. And thesefolks are willing to trade in.
Ah , they're not just paying alow interest rate Dad, what
they're , they're they'repaying a 0% interest

Speaker 1 (13:34):
Rate. Oh . Oh . They got the free and clear

Speaker 3 (13:35):
House . They have the free and clear house
because they're willing to movefor a real life reason, which
is going to be not yetgrandkids. Sure. A tale as old
as time. Of course. As I liketo say, no grandparent has ever
said, you know, I could havewatched you grow up. I just
wasn't willing to give up my 3%interest rate to do so. Right,

(13:56):
right. No grandma has ever saidthat. So,

Speaker 1 (13:59):
So why do they , uh, do they want to have a mortgage
on their Wisconsin property oris this some sort of a
temporary financing situation?

Speaker 3 (14:06):
This , uh, is somewhere in between. Okay.
'cause this is both about wheredo they want to arrive, you
know, when all the dust settlesYeah. Financially, but then
also, well, what steps and inwhat sequence can they get
there? So as always, I startthe conversation with like,

(14:27):
well, you know, so theirIllinois house is worth maybe
$500,000. Okay. I said, howmuch house do you want in and
around Milwaukee? Right? Likeif you , if you wanna be able
to host these future grandkids,maybe overnight, how many
bedrooms do you really need inorder to do that? The answer's
probably, you know, maybe aslow as 500, maybe as high as

(14:50):
700. Oh , okay . Depending,which might mean for a time
they will need to carry amortgage , uh, when all the
dust settles on the sale oftheir Illinois home. The
sequence then of course it'sgreat that you want to buy a
$500,000 house in WaukeshaCounty. Okay . Well, do you

(15:13):
want to close on that Wisconsinhome before you've sold your
Illinois house or after?

Speaker 1 (15:20):
I'm gonna guess the answer is before,

Speaker 3 (15:23):
Well, the answer is dunno for the right house.
Right. Uh , as they shared withme, I think they've been
trying, they've been trying tosell their Illinois house or
maybe get it ready to sell forwhat's felt like years. Okay.
You know, maybe theconversation has been going on
for four some years, but nowthey're more serious I think.
'cause their son is actually ina relationship, you know, is on

(15:47):
that path to being a dad andthem grandparents. So maybe it
makes selling Illinois a littlemore real. More real. Yeah .
And as this is true for a lotof clients, right. It's the
what you're willing to , uh,endure, what you're willing to
, uh, consider changes. Whenthere's a specific house that

(16:11):
you're looking at for the wronghouse. You're like, ah , I
don't really want to , youknow, so have the turmoil of uh
, I have

Speaker 1 (16:19):
A very mortgagey question. So Yeah . What are
they gonna do for down paymenton the new house?

Speaker 3 (16:22):
Okay. So if they decide that a house is worth it
before having sold Illinois, wewill need to set up a bridge
loan Uhhuh on the Illinois hometo extract some of that equity
to be used for the down paymenton the Wisconsin house. Okay.

Speaker 1 (16:41):
So they don't have other liquid assets that
they're willing to use.

Speaker 3 (16:44):
Uh, or the bridge loan is a little easier Okay .
As well. Alright . Just forthem in terms of quarterbacking
money. And so we've got theasset part figured out if,
well, if they sell the Illinoishouse, it's really easy. Yeah .
They might not need a mortgage.
Right . They might just need asmall mortgage. Right. So
that's kinda like the easy pathas you've discussed in telling

(17:07):
stories like, well, can youreally go write an offer on a
competitive home in and aroundWaukesha County? Hey,
contingent on my Illinois homebeing sold. No, that's

Speaker 1 (17:17):
Not likely.

Speaker 3 (17:18):
Probably not. Uh , so as we, you know, map out
what's possible, okay. If youfind a house in Wisconsin that
you want to buy before you'vesold Illinois, we'll need to do
a bridge loan on your Illinoishouse, then the conversation
turns to, well, any goodmortgage lender needs to point

(17:41):
at income Yeah . For your newhouse. And that is important to
nail down, particularly whenyou're moving geographically
from

Speaker 1 (17:54):
Yeah . Are these , are these people

Speaker 3 (17:54):
Working in Illinois to Wisconsin? Yeah. Let me get
into that piece of the puzzle.
After this break. You arelistening to the Acuate
Mortgage and Realty Show. Nowit's time to turn it over to
the Breaking News center. Don'tbreak

Speaker 2 (18:09):
The bank to get into a house. Back to the ACU Net
Mortgage and Realty Show withBrian Wicker on WTMJ.

Speaker 3 (18:17):
Welcome back to the Acuate Mortgage and Realty Show
, uh, dad sharing the story ofgrandparents or, you know, in
anticipation of becominggrandparents. Sure . Making the
move from Illinois toWisconsin. So as we began and
summarized, if they want theWisconsin house before the
Illinois home is sold, yes.

(18:37):
They'll need a bridge loan toextract the equity in the old
house to be used as the downpayment on the new house.
Alright . That loan, then whenthe Illinois house is sold,
that bridge loan is retiredhaving with the buyer of the
Illinois becoming the new ownerof the Illinois house. So
naturally then it's like, wellyou're moving from Illinois to

(19:00):
Wisconsin. What job or incomeare we gonna point at? Because
this isn't just moving fromlike, you know, Whitefish Bay
to Waukesha. Correct. Withinthe same Yeah . Commuting,
whatever

Speaker 1 (19:11):
Employment area. So are both of these , uh, future
grandparents working?

Speaker 3 (19:16):
Uh, one is, so the first , uh, part of the income
, uh, plan is easy pension. Oh. You can live anywhere,
anywhere you want. 'cause he'sgetting a pension from a job he
retired from a number of yearsago. Okay . Uh , the , the
other borrower works for anational financial services
company and she can workwherever she wants. Okay. Uh,

(19:41):
because they've lived in thisIllinois house for a quarter
century. Okay. And heremployment situation, she could
work from Timbuktu. And somoving up to Wisconsin is no
deal at all. Nice. Which was arelief. Yeah. Right. You know ,
uh, in terms of game planningfor 'cause do we , if it was

(20:01):
geographically, you know,important, well then it's like
naturally they are , uh, thetool that I would've reached
for might have been creatingIRA retirement.

Speaker 1 (20:14):
That's why I thought you were going for , for this
didn't

Speaker 3 (20:16):
Need it . Didn't need to reach for that tool .
It was on my mind. Right.
Because otherwise, if you knowyou're working at a specific
location

Speaker 1 (20:27):
Yeah. You're a machinist and you have to go
to, you know, work at themachine shop.

Speaker 3 (20:31):
Right. You could, if you got a new job, we could
likely point to that newincome. But that adds a whole
other layer of

Speaker 1 (20:42):
Yeah. You gotta be shopping for a job while you're

Speaker 3 (20:44):
Also shopping job and a house for a house .

Speaker 1 (20:47):
So , so the husband in this case, we don't need his
income or, or he doesn't have ajob

Speaker 3 (20:51):
We do need . So this is the last element of my
story. They have a paid forhouse in Illinois. Right. But
mortgage underwriting, if theynow own the Wisconsin home
while still having not yet soldand still own the Illinois
house, we have to include themonthly carry cost of that

(21:15):
Illinois house.

Speaker 1 (21:16):
Not just the bridge loan , uh, interest expense,
but also the property taxes andinsurance. Which,

Speaker 3 (21:21):
You know, you have a paid for house in your mind.
You're not thinking that that'spart of the formula of like
qualifying for the next house.

Speaker 1 (21:30):
And in Illinois, the Chicago area property taxes are
not low.

Speaker 3 (21:33):
It's these folks, the uh, property tax and
homeowners insurance would be athousand dollars a month.

Speaker 1 (21:42):
I was expecting it to be more. Well,

Speaker 3 (21:44):
But it in their minds Right. Walking down the
street. Yeah . Why would youthink? Right . What do you care
about my old house? It's aboutto be sold and Yeah . Well I
don't have a mortgage.

Speaker 1 (21:54):
We have to assume that you're gonna have that
forever.

Speaker 3 (21:56):
Well, exactly. And so that was , uh, not
eye-opening, but it's just agood mortgage practitioner
knows, you know , like,congratulations, you don't have
a mortgage on your old house.
Right. But I still have to , Ican't ignore the other
expenses. Property taxes andinsurance. And if we use a
bridge loan, the bridge loanthat cost as well. So they're

(22:19):
set, they have a game plan nowwhere if they want to, they can
buy the Wisconsin house beforehaving sold the Illinois house.
Now they just have to find ahouse that's worth it. Worth
it.

Speaker 1 (22:34):
Right. Alright . So yeah. Real life reasons to,

Speaker 3 (22:38):
And and guess what?
If they have to carry a smallmortgage, they are willing to
take on the six point whateverpercent that you shared earlier
in the show, because that'sworth it. Yeah . Right . To be
closer to their grand futuregrandkids.

Speaker 1 (22:54):
Yeah. People , thankfully people , uh, have
real life reasons to makemoves. Yeah. Uh, whether it's ,
uh, I was reading some study, Idon't have it up in front of
me, but, you know, themotivations for people selling
and, and life events is numberone of course. Like , Hey, I
need a bigger house because Ihave more children now. Yes .
Or I need a smaller house'cause I don't have any

(23:17):
children and I want a ranch.
Not a two story . You know. Sothank goodness that there are
not portable mortgages.
. That's true enough.
Somebody asked me about thatthe other day. I'm like, no ,
thank that .

Speaker 3 (23:27):
Is that a European thing?

Speaker 1 (23:28):
Portable mortgage? I don't think so. Okay. I don't
think so. Um, alright. What ?

Speaker 3 (23:33):
So I can't wait to, they're coming up to visit. Oh
, uh, around the holidayseason. I would, it'll be a
coin flip. I bet that they'llfind a house that's worth it
all of a sudden , uh, on theirvisit.

Speaker 1 (23:47):
I stopped by in a closing , uh, on Friday. Let me
just tell you that story whenwe come back. Okay . First time
home buyers. You're listeningto the ACU Mortgage and Realty
Show on Wisconsin's radiostation. AM six 20 WTMJ.

Speaker 2 (24:01):
Important home buying questions and answers
you can count on. This is theAcura Mortgage and Realty Show
with Brian Wicker on WTMJ.

Speaker 1 (24:11):
Welcome back and thanks again for joining us
today. So David, I stopped inon Friday to a closing , uh,
that was happening at our worldheadquarters in Waukesha. First
time home buyers in their midtwenties, so significantly
younger.

Speaker 3 (24:25):
I remember that time. Yeah.

Speaker 1 (24:26):
Then the 38-year-old median , uh, age for first time
home buyers that we reported ona couple weeks ago. Very happy
with their ACU net homefinancing experience. And they
definitely benefited fromgetting their offer accepted in
November. Remember we alwayssay, Hey, there's less
competition in November,December, January.

Speaker 3 (24:48):
We say it because it's true.

Speaker 1 (24:49):
Yeah, because it's true. Uh ,

Speaker 3 (24:51):
We pre please tell me, did they like go shopping
or house hunt like the daybefore Thanksgiving On
Thanksgiving? Like really nocompetition?

Speaker 1 (24:58):
No, I think it was the week before Thanksgiving.
We pre-approved 'em on November15th. They got their accepted
offer on the 20th

Speaker 3 (25:05):
Giddy

Speaker 1 (25:05):
Up. They only looked at four houses and they wrote
one offer. They had to do a ,um, the , the , the seller did
a multiple counter offer .
There was only one othercompeting offer. And , uh, they
did offer 5,000 over asking ,uh, this house was priced in
the upper 200. So about alittle less than 2% over the
asking price is what the 5%amounted to. But all the seller

(25:27):
wanted them to do was , um,move up the closing date to
December 20th instead of earlyJanuary. And , uh, voila, you
know, they got an acceptedoffer.

Speaker 3 (25:38):
This , this is an example, like when you're ready
to win as a buyer, you can, youjust have to be okay with what
does it take. Yeah.

Speaker 1 (25:47):
Now talking to the real estate agent that was
there , their buyer's agent ,he said, yeah, this is much
more swift. So the point ofthis is it is possible, you
know, I'd say that this is morethe exception than the rule. We
only look at four ounces andget your first offer accepted.
But it does happen. I'm gonnasay it's the minority.

Speaker 3 (26:04):
If, if , if getting the accepted offer is like
trying to lose 10 pounds, assoon as you stop fighting
against, you know, thethermodynamics of weight loss,
you'll get there. It was like,if you as a buyer are ready to
do what it takes and listen toyour agent on what will it take
to win on a house, you will doso.

Speaker 1 (26:24):
And , and so they succeeded. They're happy as a
claim . And by the way, theytook a slightly higher interest
rate , uh, that allowed ENT topay for all of their loan
costs. Um, you know, 'causethey're first time buyers, they
don't think they had a lot ofextra money. So that made sense
to them and they could affordthe payment.

Speaker 3 (26:39):
Well , 'cause as we also like to say, sometimes
there's two, two down payments,dad, 'cause it was snowing on,
you know, Thursday and Friday.
Yeah . So not only did they geta new house, they probably had
to go to Menards and get ashovel or a snowblower Sure. To
add to their , uh, things intheir garage

Speaker 1 (26:55):
And Yeah . Be ready.
Um, you know, speaking of beingready and doing your homework
though, that's always a goodidea. Um, and things are
constantly evolving in themortgage lending world. Yeah .
And , um, in terms of variableincome, that's a hot topic. Uh,

(27:16):
I

Speaker 3 (27:16):
Would just call it scrutiny of income. Okay . That
to you living your life, doingyour job, it feels like ba base
pay a salary. But the scrutinyof like, well, you know, this
week you only work these manyhours and the week after that
this many hours, that's gettinga level of attention from

(27:37):
underwriting that you justcan't, as, as a buyer, you
think in your mind, I makethis. Well, an underwriter
might take a more conservativeapproach. They don't based upon
the ebb and flow of your workweek through the year. That's

Speaker 1 (27:52):
Not, that's not a might. They will. Correct.
That's 'cause that's their job.
Yeah . Is to correctlyadjudicate the income. In fact,
you know, I had, I had somebodywho, you know, told me they
made this many dollars perhour. And I said, do you work
40 hours a week? And they saidyes. And then it turned out
they didn't,

Speaker 3 (28:10):
You know , it feels like 40 .

Speaker 1 (28:11):
Right? Yeah . And so variable income is a , um, hot
topic, which can mean, youknow, bonus income overtime .
Uh, you know, we're, we'relooking at getting those
details, which is why folks,you or your loved one who's
going out there and shoppingfor a home, you want the rock
solid , fully verified , uh,preapproval. Yeah. Where we

(28:32):
actually look at your pay stubsand w twos so that we can do
that calculation ahead of time.
Uh, brother-in-law, Tim, youknow, had a, a situation where
the folks were pre-approvedwith another lender. They had
not verified the income. Youknow, we talked about this last
week. Yeah . And then , andthen that whole deal went

(28:54):
sideways. Well,

Speaker 3 (28:55):
Let , let , let's, the real life example could be
a lender who doesn'tinvestigate says, you can buy
this. You go out and get theaccepted offer. And then when
the documentation actuallyhappens, it's like, oh, you
know that house you fell inlove with ? Yeah. And you're
already moved in and you'realready putting the Christmas
tree in this corner. Cancel.
Yeah. Because you, your incomeisn't what you were told it

(29:17):
would be upon analysis.

Speaker 1 (29:19):
Yeah. We didn't do enough , uh, homework. Yeah.
So, so you know, then that we ,we can come up with some other
examples of that. Um, the othertopic that I want to get to
after this next , uh, shortbreak though, is something
that's , um, new-ish and that'swhere you can , um, make
payments, make , can makeinstallment payments. What's,

(29:40):
what's the,

Speaker 3 (29:40):
The buy now pay later, buy now

Speaker 1 (29:42):
Pay later phenomenon. Let us get you up
to speed on how that is cominginto the mortgage situation and
what we can do about it when wecome back. You're listening to
the Acura Mortgage and RealtyShow on AM six 20 WTMJ.

Speaker 2 (29:55):
Find a place to call home without the headache. This
is

Speaker 3 (29:58):
The Acura

Speaker 2 (29:59):
Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1 (30:03):
Thanks again for joining us today. I'm Brian
Wicker, the , uh, elder. Andthat's David Wicker, the
younger over there. Uh, David ,uh, I want to still get to
those updated forecast fromFannie Mae and the National
Association of Realtors here inour last segment. But , uh,
what's the story on these , uh,buy now pay later situations?

Speaker 3 (30:21):
Well, I think home buyers are humored sometimes at
, well, what counts into my mequalifying and what doesn't
count the, what doesn't count.
Cell phone bill don't countthat. And you're thinking , you
know, Hulu. Exactly. Netflix ,um, c car insurance not

(30:41):
included cable utilities.
Utilities, but like, you reallyhave to pay for that stuff. But
Fannie Mae and Freddie Mac arelike, we don't look at that .
We aren't gonna ignore that.
But the newest development ofwhat they are looking at and
caring about is buy now. Paylater , uh, installment loans

(31:02):
like through Klarna or Affirm ,you know, Hey, buy that
Christmas presents and pay forit with just four small
payments of why wouldn't youwanna do that X, Y , Z . Right?
Right. Right. But that level ofscrutiny, right. If we supply a
checking account statement thathas your down payment money to
an underwriter,congratulations. The money's in

(31:24):
there. You've got your downpayment. But can you please
tell me, 'cause this isn't onyour credit report, can you
tell me, I see an outgoing costto affirm for $12 a month.
Please tell us what that is,which will then get added to
your debt to income ratio forqualifying.

Speaker 1 (31:42):
And there's a little bit of a hassle factor in there
because they're not beingreported on their credit report
. So then we also have to haveyou go onto the website and ,
uh, print out some truth andlending information that spells
out what the monthly paymentsare and how long they're gonna
last. So

Speaker 3 (32:00):
Yeah , so the, the , uh, as is always our north
star, what is the smoothest wayto get through underwriting is
let's point at a boringaccount. Yeah . If we can find
one. Right. Don't send in achecking account statement if
there's enough money in thesavings account. There's no

(32:22):
approval at underwriting islike a basketball game. You
only gotta win by one ateverything above that is just
ego. There

Speaker 1 (32:29):
You go. Well, and the other thing we could say is
maybe we should start advisingclients don't buy stuff on the
firm or Yeah . Other pay buynow. Pay later. Smart.

Speaker 3 (32:39):
Just

Speaker 1 (32:40):
Overall in the , in the pre-approval , uh, process.
Alright, so , uh, the FannieMae last week came out with
their latest forecast , uh, andthis was based on where
interest rates were on December11th, just by the way. Mm . And
so did the National Associationof Realtors. Uh , so keeping in
mind that the last two yearshave been like the worst for

(33:00):
existing home sales in 30years, just over 4 million. Uh,
the National Association ofRealtors has says the worst is
over. And so they arepredicting a robust seven to
12% increase in existing homesales in 2025. Hmm . Fannie Mae
came out, they're still at a ,uh, 4.8% increase in overall

(33:20):
home sales , uh, nationwide.
And then they are , uh, sayingthat interest rates are going
to , um, be slightly higherthan their most recent
prediction. They're thinking6.6 , uh, for the first quarter
of 2025, which I don't know ,they , they might revise that
based on these last,

Speaker 3 (33:38):
You know , they might look outside.

Speaker 1 (33:40):
Yeah, yeah. They might look outside and say, you
know what, it is snowing out.
Yeah. Uh , you know, with, withrates more like 6 9 9 right
now, I , I have a feeling theymay come out with a revision,
which then in turn may dampentheir , uh, prediction for
existing home sales maybe . Butsticking with that for just a
second. Um, the , uh, number,if you , if you boil that down

(34:01):
to Southeastern Wisconsin, andif you took the , um, Fannie
Mae's number, that would meanthat we would say 800 more
closed home sales for the wholeyear of 2025. If we have 4.8%
more, which would be nice,we'll take it.

Speaker 3 (34:20):
Yeah.

Speaker 1 (34:21):
Uh ,

Speaker 3 (34:22):
Buyer buyers will take it. Right. To add more
inventory, more sellersinterested in transacting and
moving on with their lives.

Speaker 1 (34:31):
Correct. Uh, one other nugget. The , uh,
national Association ofRealtors came out with their
November , uh, report onexisting home sales, which were
also up, happens to becoincidentally, 4.8% from a
year ago. And, but inventorywas a little less. Now
remember, and we talked aboutthis I think last week compared
to a Redfin number , uh, therealtors are saying that

(34:53):
there's a 3.8 month supplynationwide of homes when you ,
you take inventory divided bynumber of home sales. Yeah.
We're seeing it more like 2.2to 2.4 in our local area . So a
little tighter inventory herethan elsewhere. Year to date .
Uh , in southeastern Wisconsin,you'll recall that , uh, our
listings are up 3.9% on a yearto date basis, and home sales

(35:18):
are up , uh, on a year to datebasis. Mm . 0.8% . So
remember, all real estate islocal. Yes. We know it's
Christmas. We hope you all havea Merry Christmas, but we'll be
back here next week for the inbetween the Pre New Year show.
And in the meantime though, ifwhile you're sitting around the
Christmas , uh, dinner table,you're thinking about , uh,

(35:40):
becoming a homeowner, we'd loveto be part of your team. We
think we're really good at it.
Mm . And we would love to makesure that we take out all the
mystery and eliminate anyunhappy surprises by giving you
one of them their rock solid ,fully verified, guaranteed
pre-approvals that we'd like toissue at Accu . We'll see you
here again next week. You'vebeen listening to the Accu

(36:00):
Mortgage and Realty Show on AMsix 20 WTMJ. The proceeding was
a paid program. Advice andopinions expressed during the
Accu Mortgage and Realty Showare solely that of the host or
guests of academic mortgage andAccu Realty Advisors and not
WTMJ Radio or Good KarmaBrands. Milwaukee, LLC.