February 2, 2025 • 36 mins
Ever wondered if you really need a 20% down payment to buy a home? Join us on the Carolina Contractor Show as we unravel these common myths and explore the world of home buying with our special guest Kyle May from Movement Mortgage. Kyle brings his expertise to the table, shedding light on the current challenges faced by young buyers, such as high interest rates and inflation. You'll gain insight into securing a mortgage loan in today's tough market and discover alternative financing options that could make your homeownership dreams a reality.
In this episode, we break down the misconceptions surrounding home buying and introduce a variety of loan options that cater to different financial situations. From VA and USDA loans that offer low or no down payments to FHA loans that require just 3.5%, there's a pathway for everyone. We also dive into down payment assistance programs like those provided by the North Carolina Housing Assistance, and discuss special loan programs for self-employed individuals. Kyle shares invaluable advice on avoiding private mortgage insurance and making use of family gifts or 401k loans for down payments, opening doors for eager homebuyers.
Are you hesitant about buying a home due to market unpredictability? Get ready to rethink your strategy as we discuss the timing and affordability of purchasing property. With Kyle's guidance, we emphasize the long-term benefits of homeownership over renting and the importance of getting pre-approved, no matter your credit score. This episode is packed with practical advice and encouragement for anyone looking to step into the housing market with confidence. Whether you're a first-time buyer or just curious about current trends, tune in to gain the knowledge you need to make informed decisions and take proactive steps on your home buying journey.
Connect with Kyle at KyleJMay.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Carolina Contractor Show with
your host, general ContractorDonnie Blanchard.
So, donnie, all our shows areon a podcast at the website,
right, so it's kind of like atime machine.
People can go back and listento shows that we've done in the
past.
Speaker 2 (00:17):
Yeah, I actually do that for entertainment sometimes
to think about how much we'vegrown.
And, man, I think I may havebeen smarter than I am now when
we got started.
I was just on fire back in theday, but sound quality, all
that's a lot better these days.
Speaker 1 (00:28):
Yeah.
So I want people to go back toSeptember, late September, you
know why?
Tell me.
Because back then footballseason was getting ready to
start and I asked you a questionat the beginning of a show and
said who's going to be in theSuper Bowl?
And I even wrote mine downbefore I showed the answer and
you said who is going to be inthe Super Bowl?
(00:49):
Eagles Chiefs.
And we both agreed the EaglesChiefs would be in the Super
Bowl and the Eagles Chiefs aregoing to be in the Super Bowl.
And we disagreed on what Ithink you thought the Eagles
were going to win.
Speaker 2 (01:02):
So the Chiefs had so many close games this year Not
going to talk football today butthey had so many close games
that they won by missed fieldgoals this year.
They're not going to get pastthe Eagles like that man.
I don't feel good about theChiefs' chances next week.
Speaker 1 (01:14):
I think the Chiefs were just sandbagging the whole
year.
Kelsey was sandbagging it andthey're just going to, and
somehow Tyreek is going to showup in a Chiefs uniform.
Speaker 3 (01:23):
Listen, they've never went against a running back
like Barkley.
So if he could get over 150yards on the ground.
It's over.
Speaker 1 (01:31):
Well, it's why we play the games.
Me and Donnie have agentleman's bet.
We're doing just braggingrights for it.
We are not doing real money, sowe'll see who wins that game.
That's right.
But you can go to the website,thecarolinacontractorcom, go to
the podcast and go in the timemachine and see that we really
did predict this correctly andwe'll find out who was the true
(01:52):
predictor of the final score, oror at least the winner, if it's
going to be Philly, or or ifit's going to be my chiefs.
Now, you probably heard thatother voice in there.
That's Kyle May.
He's going to be our guest.
We're going to chat in detailwith him in a little bit.
But, as I mentioned the website, go there not only for the
podcast and to see how we're theNostradamus of the world and
prognosticators of football, butyou can also go to our YouTube
(02:17):
page.
We've got links for it there.
You can contact us.
That's all of our social mediais listed right there.
You have a question about yourhouse, the inside, the outside,
maybe you have a question Can Iget a mortgage?
You can click on the Ask theContractor button and those go
to Donnie and he answers them,and we like to do questions on
the show and sometimes we justdo questions in general for an
(02:37):
entire episode of the CarolinaContractor Show and if there's
something you'd like to hear ustalk about, or just ideas or
anything, just start at thewebsite thecarolinacontractorcom
.
Now last week, donnie, wetalked about buying a house and
a lot of people are thinking Ican never buy a house, they're
too expensive, there's no chancefor me to get in there and we
(03:08):
kind of gave our own opinionsand we didn't really know a
whole lot, but we decided maybewe should get a professional in
and you had someone who is aprofessional, so we've invited
him on the show.
I mentioned his name, but I'lllet you do the official
introduction, donnie.
Speaker 2 (03:17):
Yeah, last week's show we had a lot of downloads,
so that's obviously a topic thateverybody wants to hear about,
and it really hit home betweenmy son, my fiance's daughter
they're both in their early 20sand in the process of trying to
find a house to buy and betweeninterest rates, inflation and
just everything going on in theworld.
Now.
That seems to be a lot harderthan it's been in our lifetime
(03:40):
really, and so I thought I wouldbe wise we, we.
Last week, like you said, itwas a show of a lot of opinions
and, uh, we threw a lot of goodstuff out there.
But where the rubber meets theroad is when you actually go in
to get that mortgage loan.
So, um, today we're bringing onKyle May.
He's a loan officer formovement mortgage, and when I
say this guy's a whiz, everybodyin town knows about him and and
, uh, I guess after today you'renot going to be my best kept
(04:03):
secret, kyle, but I thought itwould be wise for me to get you
on and just give everybodylistening to the show a lot of
information straight from thehorse's mouth.
So thanks for your time, bud.
I appreciate you taking thetime to do this.
Speaker 3 (04:15):
Yeah, thanks for having me guys.
Hopefully I could throw outsome information that's useful
for everyone.
Speaker 1 (04:19):
Yep.
So, first of all, how did youmeet Donnie Kyle?
How'd you two run into eachother?
Speaker 3 (04:34):
Well, Donnie, long story short.
Donnie is dating my bestfriend's cousin and been my best
friend since second grade.
So that's basically, I think,how we a few Christmas
gatherings or birthdays, andthat's kind of how we ran across
each other.
Speaker 2 (04:42):
I had no idea what he did and I was like what a cool
guy you know.
And then you know this personor that person around town.
Do you know about Kyle May?
Or you know if you're going toget a loan, call that guy and
you know he can.
He can work wonders in it.
You know, I guess, but with allthe loan officers and all the
options, all the banks in town,really it is who you know.
Because if you walk into a bankand they're not geared towards
(05:04):
young people or they're notgeared towards your type of loan
or your particular situation,then they just really can't help
you.
And Kyle is kind of one ofthese guys who's very diverse
and no matter what yoursituation is, I've seen him help
a lot of people.
So, like I said, I thought wewould be wise to actually get
him on and give some knowledgeout there and just give a lot of
information to our listenerbase.
And you know we just mentionedthat last week's show was
(05:31):
tailored around younger people,so kind of want to pick your
brain on what young people needto do.
As far as coming out of college, you've got an entry level job,
you know, not a lot of workexperience.
You're not making the mostmoney you're ever going to make,
and you know what kind ofchallenges do you run into with
young folks that come see you,kyle.
Speaker 3 (05:45):
You know, great question.
Typically, the biggest issue Irun into when somebody's fresh
out of college, fresh out ofhigh school, is what's called
work history.
Now, with that being said, youdon't have to be at one place
for five years and that's workhistory you could have.
Let's say, you went to collegeand you were going to become a
police officer.
You graduated.
Then you have an offer letteror a job.
(06:07):
We verify, you work full time.
Boom, we're good to go withyour work verification, even
though you've only been therefor a week, a day, a month.
The history is there that youwent to school, you got a degree
and now you have a job in thatsame type of job field.
So that would cover the jobhistory.
(06:29):
Now let's say you're 18, freshout of high school and you've
never had a job before.
That is going to be a littlebit longer of a journey and a
lot of it depends on what typeof work and job you have.
So let's say you're an hourlyemployee at the local Walmart
right after high school and youwork 25 hours a week, 30 hours a
week, 35 hours a week.
Well, in that situation it'sgoing to be very difficult for
(06:54):
you to get a mortgage byyourself, because your hours
vary and you're not technicallya full time employee.
Full time according to lenders.
They really want to see youworking 40 hours per week, every
week.
When you start going a littleunderneath, that again it's
variable pay and we can't really.
Variable pay is very difficultto use if you don't have a job
(07:15):
history.
So that would be my number onething is first, don't overthink
it, don't overcomplicate.
What do I need to do to get amortgage and think you need all
these things?
The first thing is you justwant to pick up a phone, call
somebody like me, and then we'regoing to walk you through.
Hey, you're not ready now, butif you do this and this and this
, in six months you will beready, or a year or two months.
(07:36):
There's a lot of variables inmortgage and we could go through
so many different scenarios.
Speaker 1 (07:41):
Well, kyle, I want to talk about the fact that so
many people, younger people, arebasically convinced that they
can't get a house.
Interest rates are too high,you need 20% down to be able to
even get a house and to get themortgage going, and there's no
way they're going to be able toafford buying a house, so
they're going to stay in theirapartment and not even make the
(08:03):
chance.
And, as you said, you need tostart somewhere by calling
someone who knows a thing or twoabout the business.
What is the, off the top ofyour head, maybe the biggest
myth out there right now abouttrying to buy a home?
Speaker 3 (08:18):
That you need 20% down.
Speaker 1 (08:20):
Explain.
Speaker 3 (08:21):
So, depending on your qualifications, depending on
which state you live in anddepending on the program that
you're using, for example, a VAloan if you're a veteran, that's
no down payment.
100 percent financing USDA loan, let's just say outside of city
limits.
Basically, 100 percentfinancing FHA.
Three and a half percent downis the minimum.
(08:42):
Three and a half percent downof the sales price of the house.
Conventional mortgages, threeto five percent down and a lot
of these down paymentrequirements.
You could get a gift from arelative let's say mom, dad,
sister, brother, cousin.
Let's just say you don't haveenough assets saved up, you're
fresh out of school, have a fewthousand bucks and you need help
(09:03):
from family.
They could help you financiallyvia the asset portion to help
you qualify.
So there's again I'll keepsaying this over and over during
this podcast is there's goingto be so many different
scenarios that are slightlydifferent, that require
different solutions.
So that's what I think I'mreally good at is I just don't
(09:24):
look at it in just one way andsay, oh, we can't help you.
Well, hey, can we add aco-borrower, can we get a gift?
Can we do a 401k loan for thedown payment because it's lower
interest rate than if you get apersonal loan.
So there's so many ways to lookat it.
But that would be the answer tothat.
That 20% down is a myth.
Now what they're saying 20%down is how you avoid PMI.
(09:47):
In layman terms, what PMI is isprivate mortgage insurance.
It is not something say itbluntly is helping you, the
borrower, at all if you stoppaying your mortgage.
I could dive really deep onthis so I won't try to go too
(10:08):
deep.
But with 20% down or not 20%down on a conventional mortgage,
let's say you did 5% down thatPMI.
Whatever that PMI is per month,it could be $20 a month, it
could be $300 a month.
It just depends on yourqualifications.
Once your value of your houseversus a loan reaches 20% equity
, it goes away.
(10:29):
On FHA, it doesn't go away.
So that's where and again onthis call I'm going to confuse
more people than I inform, butbasically this is the
information I run through mymind to see which program is
best for that person.
Speaker 2 (10:42):
Are there any other special programs?
I know you just rattled offabout three or four that are
pretty common, but are there anyother special programs that are
worth putting out there?
Speaker 3 (10:49):
Yeah, 100% One.
That's pretty big and growingright now and it's for people
like you, Donnie, is yourbusiness bank statement loan, so
a lot of self-employedborrowers.
We know that there's a lot ofwrite-offs, typically with
self-employment.
So hey, I make a milliondollars a year, but after all
the write-offs on my tax return,line 31 shows that I made
(11:12):
$40,000.
Speaker 2 (11:13):
I don't know what you're talking about.
Speaker 3 (11:15):
That's not going to get you what you want to get
right.
So a business bank statementloan.
Basically, we take 12 months ofbusiness bank statements, look
at the deposits, verify thedeposits are for work, divide it
by a certain percentage.
Usually, when we go that route,significantly more income can
be used than what your taxreturns are so we don't even
look at the tax returns.
We do verify your business hasbeen open for two years and so
(11:37):
on and that you credit qualify.
But the business bank statementloan is growing.
It is an increased interestrate.
It is an increased down payment.
But let me ask you a question.
If I told you you have to payanother $150,000 in taxes to
make your tax returns enoughmoney to where you qualify, or
take a percentage and a halfinterest rate higher, which one
(11:59):
are you going to choose?
Speaker 2 (12:00):
Absolutely yeah, no.
Speaker 3 (12:02):
And again it's just variables.
And then a big one in this Ericand whatnot down payment
assistance programs.
I'm certified through NorthCarolina Housing down payment
assistance.
Not all lenders do them anymorebecause, just to be bluntly,
lenders lose money when they dothem.
But we still do them, but westill do them.
(12:22):
What down payment assistancemeans with North Carolina
housing?
Speaker 2 (12:25):
And again, if you're listening from other states.
Speaker 3 (12:27):
Your state probably has a version of this, but it's
not going to be specific.
This is just North Carolina.
The most popular one that I useis it's a $15,000 down payment
assistance.
So basically, they give you$15,000, minus fees, to use
towards down payment and closingcosts.
Well, if you're looking atbuying a house $200,000 to
(12:50):
$300,000, that's going to coverprobably 90 plus percent of your
down payment and closing costs.
Now the caveat with downpayment assistance and I don't
think it's a negative If yousell or refinance your house
within 15 years, you have to payback the $15,000.
Now, with that being said, theycan't put you in a negative
(13:10):
equity situation.
So hey, kyle, I sold my house ayear after I bought it.
I'm not making a profit,they're not going to put you in
a hole or anything like that,but my mindset here is you're
going to have to come up with itnow to buy a house or maybe you
have to pay it back over 15years, because after 15 years
it's fully forgiven and it's a0% interest.
(13:31):
So you're not actually payingfor that.
So it's a phenomenal program, Imean.
I think, my wife and I were topin the state in that program
with doing those loans.
They're not any more difficultthan any other normal
traditional mortgages.
Again, we could have a wholenother podcast about NC Housing
and Down Payment Assistance.
(13:52):
But it is a phenomenal programfor people young people, older
people that just don't have theassets saved up right now but
they have good job history, goodcredit and so on.
Speaker 1 (14:04):
You made me think of something else, and that's
people go online.
When you mentioned interestrates, people go online and type
in mortgage rates and they seea percentage and go wow, it's
come down to 4.93 or 5.1.
And then they run to theirlender and the lender goes no,
no, no.
Is that a problem that you'rehaving to explain to people when
(14:27):
they go online to find thatgreat rate and they wonder why
you're charging higher?
Because I assume the website'snot right.
Speaker 3 (14:34):
Absolutely, and I will not name any names because
I don't want to get sued overhere.
But there's a lot of big boxbanks, online lenders that I go
up against and we have verycompetitive rates here at
Movement Mortgage.
But what I see a lot is this isjust numbers I'm throwing out
there.
They're not real.
Let's say, the current marketinterest rate is a 6.99%.
(14:55):
What I mean by current marketmeans you're not paying for that
rate.
I'm not giving you any moneyfor choosing that rate.
That's just the fear rate thatis given.
Joe Schmo says hey, while I wason Google and I seen where
so-and-so is offering a 5.99,why is your rate so much higher?
And I always say, hey, thatsounds like a really good deal.
(15:16):
Let's get online together andlook at what you're seeing.
Hey, you see that I button nextto the rate, click on that and
then you're going to see forthat interest rate.
It's if you have an 800 creditscore with 25% down in a small
town in Texas for some reasonit's Texas, I don't know why in
Texas and they're charging youthis is what's called points
(15:37):
$10,000 for that rate.
Hell, I could do the same thing.
You want me to buy down yourrate to that, sure, but a lot of
times investing that much moneyinto an interest rate, the
payback period is going to takefive, six, seven years.
Well, if Donnie thinks ratesare going to come down in the
next year or two, it makes nosense for you to invest that
much money in a lower rate.
(15:58):
Now, if rates were 2%, thenyeah, buy that thing down
because you're dying in thatrate.
You're never refinancing itunless you have to right.
So be careful when you guys goonline, really research it,
because 99% of the time if it'sa massive difference that
somebody like me is talkingabout or telling you you qualify
for, you're missing somethingor they're charging you fees on
(16:19):
the back end.
Speaker 2 (16:21):
Yeah, that makes a lot of sense.
I like the one about theself-employed.
I had no idea about theself-employed option on the loan
and I'm assuming that you haveto have several years under your
belt and file taxes for so longfor the self-employed Typically
two.
Really Okay.
So I'm building a house forsomebody self-employed now and
(16:41):
it's kind of one of thesesituations where he's paid as he
went.
So if he needed a work truck,he saved up, bought the work
truck.
He hasn't really needed creditand we had a really good
conversation this week.
From a common sense standpoint,it doesn't make sense that if
you've never needed credit foranything, that you have to have
credit to buy anything big and Iknow that's just a big, not
(17:02):
scam, but it sort of but it justdoesn't make sense.
If you've never had to borrowmoney before you, you would seem
like a prime candidate to toborrow as much as you wanted and
it just it works the opposite.
Speaker 3 (17:16):
Well, let's be honest , Donnie, and again, don't sue
me anybody out there, but creditcard companies don't make money
when you pay off your creditcard in full each month.
The only reason you're inbusiness and they make billions
of dollars is because you'regetting charged 20 to 30%
interest, right?
So, yes, unfortunately andfortunately, credit is required
(17:38):
so the banks know that you canpay your bills.
It is phenomenal that you guyscould pay everything in cash.
I wish I could be like that,but not everybody has three,
four $500,000 to where theycould go buy a house cash.
So that's where credit's reallyimportant.
And if it's somebody, thiscould be a 18 year old kid or an
80 year old man or woman orwhoever.
(18:01):
Credit is a need.
You have to have credit.
Now, with me saying you have to, there are, there's a, there's
a program for everything outthere, but usually there's a
premium.
There's things that you couldtechnically not have a credit
score and still get a mortgage.
But then you have to build anon-traditional credit profile,
which means, hey, we have toverify you're paying your gas
(18:22):
bill, your electric bill.
There's ways you could do itwithout having credit, but I
wouldn't go that route, I cantell you that much.
It's a higher interest ratetypically, maybe even bigger
down payment.
But what I typically tell youngwhoever is the easiest way to
start building credit is what isit called credit card?
(18:43):
Everybody hears it.
Some people love it becausethey get points.
Some people hate it becausethey're paying it off over 10
years because they had a reallyfun weekend in Vegas.
So if you're a younger kid andyou're listening to this, let's
just say you're around 16 to 18years old.
The best way to start buildingyour credit up safely is being
(19:04):
added as an authorized user to atrusted family member.
It doesn't even have to be afamily member, but a trusted
person, and what I mean by thatis let's say Donnie has a credit
card and his limit's $10,000.
It means he could spend $10,000on it.
That's how much he could spend.
Let's say he spends $1,000 onit each month and when that bill
comes due he pays it off infull.
(19:25):
That is a proper credit user.
He's not getting chargedinterest because he's paying it
off each month and he's notmaxing it out and then paying it
off, so he's keeping theutilization that's what that's
called low and then when thebill comes due, he pays it off
to avoid interest.
Those are the people you wantto add as an authorized user, or
(19:46):
you want to be an authorizeduser on their account.
So I'm Donnie's child.
It's possible.
Kind of you're kind of oldDonnie.
Speaker 2 (19:54):
I knew you were about to go with that Funny guy.
Okay, but you know.
Speaker 3 (20:01):
I want to build my credit, but you don't really
want me to get my own creditcard because it's just a little
risky at that age A lot risky.
Add an authorized user toDonnie Donnie's paying his bills
on time.
Now your child, or whoever isthe authorized user, is
basically piggybacking on yourgood credit.
So when you become 18, 19 andyou're ready to buy a house, you
(20:22):
already have established credit.
Speaker 2 (20:24):
Let me ask you a question related to that.
Okay, so I have two daughters.
They're 16 and 13.
And, um, if I were going totake that approach um, I know we
talked off the air about theminimum age and you said that it
was 13 years old to be added asan authorized user.
So what would that approachwork?
Twofold, Uh, could I take outtwo different credit cards and
add Laura Grace to one and Avato the other?
(20:46):
And, and I mean, if I haveenough time, wouldn't that build
their credit significantlyenough when they're 18, 20 to be
up there?
Speaker 3 (20:54):
So I don't know the in and outs.
I think each credit company'sgoing to have their different
rules and guidelines to it.
I'm not sure I think you couldhave multiple authorized users
on that one card.
Speaker 2 (21:06):
Okay.
Speaker 3 (21:06):
I'm not 100% sure, but that's something.
Again, whoever's listening outthere is, you know.
Call your current credit cardcompany and ask them what they
allow.
And that would be the best way,because as soon as I tell you
it's 13, it's going to be 15,with a different number.
But yeah, I think that's a goodthing.
But, guys, you got to becareful out there.
If you have a parent and they'rejust not good with money don't
(21:28):
become an authorized user ontheir account because they could
do vice versa they could ruinyour credit before it even
started.
So this is somebody that youknow maybe is responsible
financially that you would wantto piggyback and do an
authorized user.
Speaker 1 (21:47):
And we're talking with Kyle May.
He's a loan officer withMovement Mortgage and last week
on the Carolina Contractor Show,we were talking about how hard
it is to buy a house and thatit's harder for younger people.
I mean, it's harder for anybody.
But when you're just startingout and Kyle dispensed of a
couple myths right off the bat,the number one thing being you
don't need to put 20% down andthere's plenty of programs to do
that need to put 20% down andthere's plenty of programs to do
(22:10):
that we don't have to go toodeep in the credit part, because
I know there's some particularrules and each card can be
different on what they allowwith people.
But what I want to know issomebody they've got pretty good
credit.
They've got a 40 hour a weekjob.
They've had it for a couple ofyears.
Um, they've got a 40 hour aweek job.
They've had it for a couple ofyears.
They're interested in buying ahouse.
(22:30):
Their first step isn't to finda house.
So what are the first few stepsthey really need to take?
Speaker 3 (22:37):
Yeah, typically the first step that they think they
need to take is they need tostart looking on Zillow, which I
do, that too.
And then I end up at a house inCalifornia that's $30 million.
And then I'm imagining the boatthat I'll have when I'm fishing
.
And then you know it's twoo'clock in the morning, but
anyhow they usually talk to anagent a real estate agent first,
and then that agent is going tosay have you been pre-approved?
(23:05):
I do the pre-approval, I'm theone that looks at your credit,
verifies your income, verifiesyour assets and then gives you
the green light on what you canafford.
That's typically the first stepis again talking to somebody
like me.
And here's just a kind of a FYIfor people If your lender is
not asking for pay stubs or W-2sor bank statements, be worried.
(23:28):
Because if they're not verifyinganything and they're just going
off of sorry to say it, yourword that you work 40 hours a
week, I've seen that be a recipefor disaster a lot because
people think they're full-timeand they're not.
They're working 38, 39, 37, 34.
That's not 40.
So now you're not a full-time,you're a variable income
(23:49):
employee and we talked aboutthat earlier.
But that's something to lookout at if they're not asking for
any documents.
Now, if you're a salaryemployee, I'm guaranteed $70,000
a year.
I'm probably not going to askfor your pay stub right in the
beginning because salary issalary.
It's not changing unless youlose your job.
But I can still verify yourcredit score and your debts and
assets.
Speaker 2 (24:10):
Hey, we talk a lot about what's on the horizon with
construction and a lot of times, interest rates comes into that
conversation.
But what are you?
I know new administration tookover this month and what are you
seeing in terms of the whispersin your world about?
Are there going to be newprograms available to help out
young people or just anybody?
And what are you hearing aboutinterest rates?
Speaker 3 (24:30):
Gosh, I could really go into this one.
I love politics and hate it atthe same time.
But how can I say this?
Nobody knows the answer.
Since COVID, everything'sscrewed up.
I'm not going to go intoinverse yields in the 10-year
treasury in the stock market,unless we need to, but basically
(24:52):
in the past you could kind ofsee where things were headed
days on end, weeks on end.
Right now it could go up oneday crazy and down one day crazy
.
So here's my crystal ball.
I think we could all agree that.
When do interest ratestypically come down?
When the economy is not doingwell?
When does the interest rates goup when the economy is doing
(25:17):
well?
Link economy to jobs and thestock market that's really kind
of where your mind needs to go.
What's weird is on paper, theeconomy is doing phenomenal, but
does it feel that way Withinflation, with so many
different things?
And hey, inflation issupposedly down under 3%.
Speaker 2 (25:36):
Yeah.
Speaker 3 (25:36):
So that's potentially down to where it needs to be.
So that's where it's.
That's a tough answer.
But what I'm worried about is,if the current administration
does what they say they're goingto do, I feel like it could be
very painful until it getsbetter, and what I mean by that.
Again, guys, I'm not aneconomist, this is just my
(25:57):
personal opinion.
If tariffs start becomingmassive, that is typically an
inflationary thing.
Now, some tariffs are good ifyou're trying to bring jobs back
over and it's a niche typebusiness, right, but just
massive tariffs from myunderstanding of course there's
(26:18):
going to be somebody thatcompletely disagrees with me.
Typically, tariffs cause pricesto go up While inflation goes up
.
Guess what else is going tostart going up again Interest
rates Also, you start factoringinto mass deportations.
Mass deportations could hurtthe job market and the produce
and construction, which then isgoing to cause inflation, aka
(26:41):
rise interest rates.
So that's where I say dependingon how much they actually do,
what they're going to say,they're going to do is really
going to affect it.
Right now, just to give thelast 10 days or so, the market
had a pretty bad week.
The first few days the newadministration took over.
It's balanced out since thenand the last few days have been
(27:03):
in the green, aka better.
But I don't think anybodyreally knows what's going to
happen right now.
The Federal Reserve, the Feds,they're completely separate.
The president has no authorityover them.
He can't say lower theirinterest rates.
No, he can put pressure on themand maybe that works, but he
can't say this is what thefederal funds rate is going to
be.
(27:23):
You know.
So that's the tough part.
Speaker 1 (27:25):
He wanted.
He said when he was running forpresident that he wanted to
tell the head of the Fed tolower rates or to wait, and he
doesn't have that power.
But the other thing that I'mwondering is let's do some
cosplay here.
You are now president, okay,and I'm going to give you three
(27:45):
wishes.
Kyle May, you're a loan officer.
You have three wishes you canmake to change the economy, to
benefit at least housing andmortgage and loans.
But just in general, whatquickly, three things would you
do?
Speaker 3 (28:00):
Well, to back that question up slightly, the issue
that we ran into is rates shouldhave never dropped to two or 3%
.
That's where this started.
The housing market was stillstrong, even though COVID and a
lot of people lost their jobs.
Overall, the economy was stillpretty good.
Speaker 2 (28:16):
There was back orders and stuff and don't get me
wrong, it had its own issues.
Speaker 3 (28:19):
But if you look at the stock market, and outside of
certain professions theemployment was good too.
But again, the rate should havenever dropped that low, because
when something's really low fora while, what's the only route?
It's going to go Up right.
So in a perfect world, if Icould just have one wish, I
(28:39):
would say we need rates backinto the high fives.
A high five or somewhere in thefive is a healthy interest rate
for everybody.
Twos and threes is notrealistic guys, and I hate when
people say historical, well,these are average interest rates
.
Oh yeah, Historically, if welook at the last 60 years,
nobody cares about 50, 60 yearsago.
They see the last five or 10years.
(29:00):
So I feel like we all kind ofgot spoiled a little bit because
we had such massive lowinterest rates.
But at the same time, seven,eight is closer to the average
historically.
That's where I think we need toget closer to the average of
the last 10 years, which issomewhere in the fives.
A few months ago rates startedtrickling down a little bit and
(29:21):
I started locking some in at 5.7, 5.8, 6.1 for about two or
three weeks and the phonestarted ringing.
People wanted to refund.
I mean I was like, oh hell, getready honey, here we go.
My wife does the same job.
I was like no more vacations,we're working every single day
nonstop, and then the marketjust ate it and then gone.
(29:44):
Within one week rates went backup over a percentage and then
it was gone.
So this is just why I thinksomewhere in the fives is kind
of that happy space, because assoon as we started getting there
it was nuts.
It started getting really busyagain, which let me add that
into a different conversation.
Everybody says what do peoplesay during COVID Wait, don't buy
(30:05):
right now, wait for the pricesto what Drop.
Well, guess what guys Did theydrop?
Donnie Nope.
Speaker 2 (30:11):
Especially where we are.
Speaker 3 (30:12):
And now you're paying three times as much an interest
rate.
So now what are people saying?
Well, hey, wait for theinterest rate to drop.
Yeah, the price isn't goinganywhere.
And if it did, what's it goingto do?
Drop a point, 5%, yeah, Likethat's nothing.
We're talking about a fewdollars a month in payment.
So when people ask me when'sthe best time to buy a house, if
(30:33):
you could afford the payment,it's always now, because your
house is going to appreciate invalue, go up in value every
single year.
Speaker 1 (30:39):
I want to wrap up with.
One thing is we said earlier inthe show last week we talked
about how younger people feeltheir chances of buying a house
and they they feel pretty glumabout it.
So again we had Kyle May comein.
He's a loan officer withMovement Mortgage.
Kyle summarize for that personthat may have just caught the
tail end of this show why theydon't need to fear that a house
(31:04):
is out of reach for them, thatthey don't have $20,000 in the
bank and they can't do all thesethings that they think they
need to do.
Put them at ease.
Speaker 3 (31:14):
Well, let me ask you a question what's the interest
rate on renting?
Put them at ease.
Well, let me ask you a questionwhat's?
Speaker 2 (31:17):
the interest rate on renting 100%.
You're not getting any of thatmoney back Now.
Speaker 3 (31:21):
I am a super transparent lender.
If you're staying at home withmom and dad and you're not
paying any rent and you're justtrying to bankroll and save some
money up, continue to do that.
Maybe it's not time for you tobuy a house right now.
Maybe it's not.
Maybe your living situation isjust better where it is right
this second.
But buying a house again?
It is more affordable now thanit's ever been.
(31:43):
But do you think it's going toget better?
When do you guys see prices goup and then come back down in
anything?
So what I always tell people isdon't really worry about the
interest rates so much.
Do you love the house, yes orno?
Can you afford the monthlypayment?
Yes, let's roll, let's get thisapplication going.
Let's, let's get that house.
(32:04):
Because you start looking atall these other negative
situations.
You're going to talk yourselfout of buying a house and then
you're going to be still rentingor living at home.
Speaker 1 (32:13):
Kyle, if someone wanted to contact you to further
this discussion, do you have awebsite or something they can
check out?
Speaker 3 (32:21):
I'll just give them my cell phone number.
You could call me and text mewhenever, not really whenever I
might not respond, but usually 7am to 9 pm are my hours.
I keep them pretty open, but myphone number is 336-686-8272.
6, 8, 6, 8, 2, 7, 2.
And then my website is www.
Kyle K Y L E J may M a Ycom.
Speaker 1 (32:44):
We'll.
We'll put that on some socialsocial media blast also, so
people are interested in it.
But, like I said, I have aniece and they just were
convinced they couldn't get ahouse and she wanted one.
Of course they both did andwhen they finally took that
brave first step of asking aprofessional, it was literally
months later, just a few months,and they got a house.
Speaker 3 (33:06):
I tell clients all the time.
I said watch, you getpre-approved.
You think you're not going tobuy a house for six months and
three weeks from now you'reclosing on it.
It always happens like that.
Oh, I was just looking and, oh,man, this is moving fast.
Oh, wow, we're closing nextweek.
So if you guys are ready, thisisn't something that sometimes
it just moves quickly.
And one last point I want to sayout there is if you have bad
(33:29):
credit right now, that's okay,we can work with you.
I know a lot of lenders.
They quickly run your creditand then they probably never
call you back when they see youdon't qualify.
That's not what we do here.
If I pull your credit and Ilook at it and we need to do
some help or we need to work onit, I'm going to tell you, down
to the dollar, what you need todo and the timeframe in order to
(33:52):
get your credit score up towhere it qualifies.
And then ultimately, it's up toyou if you want to continue to
move forward from there.
And that's just something I canpromise you.
We're not just going to pulland never hear from you again.
We're going to make hey, it'sup to you.
I'll hold your hand as long asyou want me to, but we'll get
you in the house if you'reserious.
Speaker 2 (34:08):
I think big takeaway from today is is, instead of
wasting a realtor's time, callKyle and just get the process
started.
You'll know what you qualifyfor.
You know that pre-qualificationquestion that comes from a
realtor, that's going to be thefirst thing they ask you.
So, knowing where you stand, orif you have to game plan, like
Kyle said, if you live at homeright now and you're not ready
(34:28):
for that first house, at leastyou can get the process started.
You'll know where you need tobe when the time comes.
And we preached on this lastweek that that you know, giving
yourself a little time to getyour ducks in a row, that that
right deal might come along.
You know someone may be willingto owner finance.
Or, or, do you know, just giveyou a better deal than than what
you would do if you're forcingthe issue.
So get with the loan officerfirst, and I think that was a
(34:52):
that was big deal and lots ofgood information.
Speaker 1 (34:54):
Kyle, thank you for that, absolutely, definitely.
I want to thank you for comingon, kyle, cause it.
It gives information that wejust weren't in a position to
tell people and it just putsthem at ease and I think a lot
of people out there who werethinking I can't get a house
You're now probably feeling alittle bit more optimistic when
you have someone like Kyle inyour corner, who's going to tell
you upfront not only can you dothis, I'm going to help you up
(35:15):
front, not only can you do this,I'm going to help you improve
your situation so you can getsomething maybe even better than
you thought and you got to getaway from that fear.
Just take that step forward.
Next thing you know, as he said, I can't afford a house.
Three weeks later, they'regetting ready to sign papers to
start the process of moving intoa house.
So thank you again, kyle, forcoming on.
Speaker 3 (35:35):
Absolutely.
Thanks for having me, guys.
Speaker 1 (35:36):
And Donnie.
Well done, Excellent choice ofa guest and I'm sorry you're
still going with the Eagles inthe Superbowl and we'll cry
about that later.
But do check out our website,thecarolinacontractorcom.
We'll have the show up there ina podcast form.
Also the YouTube site we linkit there.
Social media If you have aquestion for Kyle or about this
(35:59):
show or maybe something you wantto know more about, you can hit
the ask the contractor buttonand we'll answer those questions
, Maybe even put it on the showor make it a topic of an entire
show.
And, Kyle, I'd definitely liketo have you back on again in the
future because that was a lotof great information and I know
you have a lot more you can givepeople.
Speaker 3 (36:15):
I could talk all day about it, guys.
It's my job.
Speaker 2 (36:17):
You just scratched the surface, yep.
Speaker 1 (36:19):
All right.
Well, we hope you all had agood experience with this and
learned a lot about buying ahouse, and we hope you tune in
next week to the CarolinaContractor Show.
Thanks everybody, thanks.
Thanks for listening to theCarolina Contractor Show.
Visit thecarolinacontractorcom.
Welcome to the Carolina Contractor Show with
your host, general ContractorDonnie Blanchard.
So, donnie, all our shows areon a podcast at the website,
right, so it's kind of like atime machine.
People can go back and listento shows that we've done in the
past.
Speaker 2 (00:17):
Yeah, I actually do that for entertainment sometimes
to think about how much we'vegrown.
And, man, I think I may havebeen smarter than I am now when
we got started.
I was just on fire back in theday, but sound quality, all
that's a lot better these days.
Speaker 1 (00:28):
Yeah.
So I want people to go back toSeptember, late September, you
know why?
Tell me.
Because back then footballseason was getting ready to
start and I asked you a questionat the beginning of a show and
said who's going to be in theSuper Bowl?
And I even wrote mine downbefore I showed the answer and
you said who is going to be inthe Super Bowl?
(00:49):
Eagles Chiefs.
And we both agreed the EaglesChiefs would be in the Super
Bowl and the Eagles Chiefs aregoing to be in the Super Bowl.
And we disagreed on what Ithink you thought the Eagles
were going to win.
Speaker 2 (01:02):
So the Chiefs had so many close games this year Not
going to talk football today butthey had so many close games
that they won by missed fieldgoals this year.
They're not going to get pastthe Eagles like that man.
I don't feel good about theChiefs' chances next week.
Speaker 1 (01:14):
I think the Chiefs were just sandbagging the whole
year.
Kelsey was sandbagging it andthey're just going to, and
somehow Tyreek is going to showup in a Chiefs uniform.
Speaker 3 (01:23):
Listen, they've never went against a running back
like Barkley.
So if he could get over 150yards on the ground.
It's over.
Speaker 1 (01:31):
Well, it's why we play the games.
Me and Donnie have agentleman's bet.
We're doing just braggingrights for it.
We are not doing real money, sowe'll see who wins that game.
That's right.
But you can go to the website,thecarolinacontractorcom, go to
the podcast and go in the timemachine and see that we really
did predict this correctly andwe'll find out who was the true
(01:52):
predictor of the final score, oror at least the winner, if it's
going to be Philly, or or ifit's going to be my chiefs.
Now, you probably heard thatother voice in there.
That's Kyle May.
He's going to be our guest.
We're going to chat in detailwith him in a little bit.
But, as I mentioned the website, go there not only for the
podcast and to see how we're theNostradamus of the world and
prognosticators of football, butyou can also go to our YouTube
(02:17):
page.
We've got links for it there.
You can contact us.
That's all of our social mediais listed right there.
You have a question about yourhouse, the inside, the outside,
maybe you have a question Can Iget a mortgage?
You can click on the Ask theContractor button and those go
to Donnie and he answers them,and we like to do questions on
the show and sometimes we justdo questions in general for an
(02:37):
entire episode of the CarolinaContractor Show and if there's
something you'd like to hear ustalk about, or just ideas or
anything, just start at thewebsite thecarolinacontractorcom
.
Now last week, donnie, wetalked about buying a house and
a lot of people are thinking Ican never buy a house, they're
too expensive, there's no chancefor me to get in there and we
(03:08):
kind of gave our own opinionsand we didn't really know a
whole lot, but we decided maybewe should get a professional in
and you had someone who is aprofessional, so we've invited
him on the show.
I mentioned his name, but I'lllet you do the official
introduction, donnie.
Speaker 2 (03:17):
Yeah, last week's show we had a lot of downloads,
so that's obviously a topic thateverybody wants to hear about,
and it really hit home betweenmy son, my fiance's daughter
they're both in their early 20sand in the process of trying to
find a house to buy and betweeninterest rates, inflation and
just everything going on in theworld.
Now.
That seems to be a lot harderthan it's been in our lifetime
(03:40):
really, and so I thought I wouldbe wise we, we.
Last week, like you said, itwas a show of a lot of opinions
and, uh, we threw a lot of goodstuff out there.
But where the rubber meets theroad is when you actually go in
to get that mortgage loan.
So, um, today we're bringing onKyle May.
He's a loan officer formovement mortgage, and when I
say this guy's a whiz, everybodyin town knows about him and and
, uh, I guess after today you'renot going to be my best kept
(04:03):
secret, kyle, but I thought itwould be wise for me to get you
on and just give everybodylistening to the show a lot of
information straight from thehorse's mouth.
So thanks for your time, bud.
I appreciate you taking thetime to do this.
Speaker 3 (04:15):
Yeah, thanks for having me guys.
Hopefully I could throw outsome information that's useful
for everyone.
Speaker 1 (04:19):
Yep.
So, first of all, how did youmeet Donnie Kyle?
How'd you two run into eachother?
Speaker 3 (04:34):
Well, Donnie, long story short.
Donnie is dating my bestfriend's cousin and been my best
friend since second grade.
So that's basically, I think,how we a few Christmas
gatherings or birthdays, andthat's kind of how we ran across
each other.
Speaker 2 (04:42):
I had no idea what he did and I was like what a cool
guy you know.
And then you know this personor that person around town.
Do you know about Kyle May?
Or you know if you're going toget a loan, call that guy and
you know he can.
He can work wonders in it.
You know, I guess, but with allthe loan officers and all the
options, all the banks in town,really it is who you know.
Because if you walk into a bankand they're not geared towards
(05:04):
young people or they're notgeared towards your type of loan
or your particular situation,then they just really can't help
you.
And Kyle is kind of one ofthese guys who's very diverse
and no matter what yoursituation is, I've seen him help
a lot of people.
So, like I said, I thought wewould be wise to actually get
him on and give some knowledgeout there and just give a lot of
information to our listenerbase.
And you know we just mentionedthat last week's show was
(05:31):
tailored around younger people,so kind of want to pick your
brain on what young people needto do.
As far as coming out of college, you've got an entry level job,
you know, not a lot of workexperience.
You're not making the mostmoney you're ever going to make,
and you know what kind ofchallenges do you run into with
young folks that come see you,kyle.
Speaker 3 (05:45):
You know, great question.
Typically, the biggest issue Irun into when somebody's fresh
out of college, fresh out ofhigh school, is what's called
work history.
Now, with that being said, youdon't have to be at one place
for five years and that's workhistory you could have.
Let's say, you went to collegeand you were going to become a
police officer.
You graduated.
Then you have an offer letteror a job.
(06:07):
We verify, you work full time.
Boom, we're good to go withyour work verification, even
though you've only been therefor a week, a day, a month.
The history is there that youwent to school, you got a degree
and now you have a job in thatsame type of job field.
So that would cover the jobhistory.
(06:29):
Now let's say you're 18, freshout of high school and you've
never had a job before.
That is going to be a littlebit longer of a journey and a
lot of it depends on what typeof work and job you have.
So let's say you're an hourlyemployee at the local Walmart
right after high school and youwork 25 hours a week, 30 hours a
week, 35 hours a week.
Well, in that situation it'sgoing to be very difficult for
(06:54):
you to get a mortgage byyourself, because your hours
vary and you're not technicallya full time employee.
Full time according to lenders.
They really want to see youworking 40 hours per week, every
week.
When you start going a littleunderneath, that again it's
variable pay and we can't really.
Variable pay is very difficultto use if you don't have a job
(07:15):
history.
So that would be my number onething is first, don't overthink
it, don't overcomplicate.
What do I need to do to get amortgage and think you need all
these things?
The first thing is you justwant to pick up a phone, call
somebody like me, and then we'regoing to walk you through.
Hey, you're not ready now, butif you do this and this and this
, in six months you will beready, or a year or two months.
(07:36):
There's a lot of variables inmortgage and we could go through
so many different scenarios.
Speaker 1 (07:41):
Well, kyle, I want to talk about the fact that so
many people, younger people, arebasically convinced that they
can't get a house.
Interest rates are too high,you need 20% down to be able to
even get a house and to get themortgage going, and there's no
way they're going to be able toafford buying a house, so
they're going to stay in theirapartment and not even make the
(08:03):
chance.
And, as you said, you need tostart somewhere by calling
someone who knows a thing or twoabout the business.
What is the, off the top ofyour head, maybe the biggest
myth out there right now abouttrying to buy a home?
Speaker 3 (08:18):
That you need 20% down.
Speaker 1 (08:20):
Explain.
Speaker 3 (08:21):
So, depending on your qualifications, depending on
which state you live in anddepending on the program that
you're using, for example, a VAloan if you're a veteran, that's
no down payment.
100 percent financing USDA loan, let's just say outside of city
limits.
Basically, 100 percentfinancing FHA.
Three and a half percent downis the minimum.
(08:42):
Three and a half percent downof the sales price of the house.
Conventional mortgages, threeto five percent down and a lot
of these down paymentrequirements.
You could get a gift from arelative let's say mom, dad,
sister, brother, cousin.
Let's just say you don't haveenough assets saved up, you're
fresh out of school, have a fewthousand bucks and you need help
(09:03):
from family.
They could help you financiallyvia the asset portion to help
you qualify.
So there's again I'll keepsaying this over and over during
this podcast is there's goingto be so many different
scenarios that are slightlydifferent, that require
different solutions.
So that's what I think I'mreally good at is I just don't
(09:24):
look at it in just one way andsay, oh, we can't help you.
Well, hey, can we add aco-borrower, can we get a gift?
Can we do a 401k loan for thedown payment because it's lower
interest rate than if you get apersonal loan.
So there's so many ways to lookat it.
But that would be the answer tothat.
That 20% down is a myth.
Now what they're saying 20%down is how you avoid PMI.
(09:47):
In layman terms, what PMI is isprivate mortgage insurance.
It is not something say itbluntly is helping you, the
borrower, at all if you stoppaying your mortgage.
I could dive really deep onthis so I won't try to go too
(10:08):
deep.
But with 20% down or not 20%down on a conventional mortgage,
let's say you did 5% down thatPMI.
Whatever that PMI is per month,it could be $20 a month, it
could be $300 a month.
It just depends on yourqualifications.
Once your value of your houseversus a loan reaches 20% equity
, it goes away.
(10:29):
On FHA, it doesn't go away.
So that's where and again onthis call I'm going to confuse
more people than I inform, butbasically this is the
information I run through mymind to see which program is
best for that person.
Speaker 2 (10:42):
Are there any other special programs?
I know you just rattled offabout three or four that are
pretty common, but are there anyother special programs that are
worth putting out there?
Speaker 3 (10:49):
Yeah, 100% One.
That's pretty big and growingright now and it's for people
like you, Donnie, is yourbusiness bank statement loan, so
a lot of self-employedborrowers.
We know that there's a lot ofwrite-offs, typically with
self-employment.
So hey, I make a milliondollars a year, but after all
the write-offs on my tax return,line 31 shows that I made
(11:12):
$40,000.
Speaker 2 (11:13):
I don't know what you're talking about.
Speaker 3 (11:15):
That's not going to get you what you want to get
right.
So a business bank statementloan.
Basically, we take 12 months ofbusiness bank statements, look
at the deposits, verify thedeposits are for work, divide it
by a certain percentage.
Usually, when we go that route,significantly more income can
be used than what your taxreturns are so we don't even
look at the tax returns.
We do verify your business hasbeen open for two years and so
(11:37):
on and that you credit qualify.
But the business bank statementloan is growing.
It is an increased interestrate.
It is an increased down payment.
But let me ask you a question.
If I told you you have to payanother $150,000 in taxes to
make your tax returns enoughmoney to where you qualify, or
take a percentage and a halfinterest rate higher, which one
(11:59):
are you going to choose?
Speaker 2 (12:00):
Absolutely yeah, no.
Speaker 3 (12:02):
And again it's just variables.
And then a big one in this Ericand whatnot down payment
assistance programs.
I'm certified through NorthCarolina Housing down payment
assistance.
Not all lenders do them anymorebecause, just to be bluntly,
lenders lose money when they dothem.
But we still do them, but westill do them.
(12:22):
What down payment assistancemeans with North Carolina
housing?
Speaker 2 (12:25):
And again, if you're listening from other states.
Speaker 3 (12:27):
Your state probably has a version of this, but it's
not going to be specific.
This is just North Carolina.
The most popular one that I useis it's a $15,000 down payment
assistance.
So basically, they give you$15,000, minus fees, to use
towards down payment and closingcosts.
Well, if you're looking atbuying a house $200,000 to
(12:50):
$300,000, that's going to coverprobably 90 plus percent of your
down payment and closing costs.
Now the caveat with downpayment assistance and I don't
think it's a negative If yousell or refinance your house
within 15 years, you have to payback the $15,000.
Now, with that being said, theycan't put you in a negative
(13:10):
equity situation.
So hey, kyle, I sold my house ayear after I bought it.
I'm not making a profit,they're not going to put you in
a hole or anything like that,but my mindset here is you're
going to have to come up with itnow to buy a house or maybe you
have to pay it back over 15years, because after 15 years
it's fully forgiven and it's a0% interest.
(13:31):
So you're not actually payingfor that.
So it's a phenomenal program, Imean.
I think, my wife and I were topin the state in that program
with doing those loans.
They're not any more difficultthan any other normal
traditional mortgages.
Again, we could have a wholenother podcast about NC Housing
and Down Payment Assistance.
(13:52):
But it is a phenomenal programfor people young people, older
people that just don't have theassets saved up right now but
they have good job history, goodcredit and so on.
Speaker 1 (14:04):
You made me think of something else, and that's
people go online.
When you mentioned interestrates, people go online and type
in mortgage rates and they seea percentage and go wow, it's
come down to 4.93 or 5.1.
And then they run to theirlender and the lender goes no,
no, no.
Is that a problem that you'rehaving to explain to people when
(14:27):
they go online to find thatgreat rate and they wonder why
you're charging higher?
Because I assume the website'snot right.
Speaker 3 (14:34):
Absolutely, and I will not name any names because
I don't want to get sued overhere.
But there's a lot of big boxbanks, online lenders that I go
up against and we have verycompetitive rates here at
Movement Mortgage.
But what I see a lot is this isjust numbers I'm throwing out
there.
They're not real.
Let's say, the current marketinterest rate is a 6.99%.
(14:55):
What I mean by current marketmeans you're not paying for that
rate.
I'm not giving you any moneyfor choosing that rate.
That's just the fear rate thatis given.
Joe Schmo says hey, while I wason Google and I seen where
so-and-so is offering a 5.99,why is your rate so much higher?
And I always say, hey, thatsounds like a really good deal.
(15:16):
Let's get online together andlook at what you're seeing.
Hey, you see that I button nextto the rate, click on that and
then you're going to see forthat interest rate.
It's if you have an 800 creditscore with 25% down in a small
town in Texas for some reasonit's Texas, I don't know why in
Texas and they're charging youthis is what's called points
(15:37):
$10,000 for that rate.
Hell, I could do the same thing.
You want me to buy down yourrate to that, sure, but a lot of
times investing that much moneyinto an interest rate, the
payback period is going to takefive, six, seven years.
Well, if Donnie thinks ratesare going to come down in the
next year or two, it makes nosense for you to invest that
much money in a lower rate.
(15:58):
Now, if rates were 2%, thenyeah, buy that thing down
because you're dying in thatrate.
You're never refinancing itunless you have to right.
So be careful when you guys goonline, really research it,
because 99% of the time if it'sa massive difference that
somebody like me is talkingabout or telling you you qualify
for, you're missing somethingor they're charging you fees on
(16:19):
the back end.
Speaker 2 (16:21):
Yeah, that makes a lot of sense.
I like the one about theself-employed.
I had no idea about theself-employed option on the loan
and I'm assuming that you haveto have several years under your
belt and file taxes for so longfor the self-employed Typically
two.
Really Okay.
So I'm building a house forsomebody self-employed now and
(16:41):
it's kind of one of thesesituations where he's paid as he
went.
So if he needed a work truck,he saved up, bought the work
truck.
He hasn't really needed creditand we had a really good
conversation this week.
From a common sense standpoint,it doesn't make sense that if
you've never needed credit foranything, that you have to have
credit to buy anything big and Iknow that's just a big, not
(17:02):
scam, but it sort of but it justdoesn't make sense.
If you've never had to borrowmoney before you, you would seem
like a prime candidate to toborrow as much as you wanted and
it just it works the opposite.
Speaker 3 (17:16):
Well, let's be honest , Donnie, and again, don't sue
me anybody out there, but creditcard companies don't make money
when you pay off your creditcard in full each month.
The only reason you're inbusiness and they make billions
of dollars is because you'regetting charged 20 to 30%
interest, right?
So, yes, unfortunately andfortunately, credit is required
(17:38):
so the banks know that you canpay your bills.
It is phenomenal that you guyscould pay everything in cash.
I wish I could be like that,but not everybody has three,
four $500,000 to where theycould go buy a house cash.
So that's where credit's reallyimportant.
And if it's somebody, thiscould be a 18 year old kid or an
80 year old man or woman orwhoever.
(18:01):
Credit is a need.
You have to have credit.
Now, with me saying you have to, there are, there's a, there's
a program for everything outthere, but usually there's a
premium.
There's things that you couldtechnically not have a credit
score and still get a mortgage.
But then you have to build anon-traditional credit profile,
which means, hey, we have toverify you're paying your gas
(18:22):
bill, your electric bill.
There's ways you could do itwithout having credit, but I
wouldn't go that route, I cantell you that much.
It's a higher interest ratetypically, maybe even bigger
down payment.
But what I typically tell youngwhoever is the easiest way to
start building credit is what isit called credit card?
(18:43):
Everybody hears it.
Some people love it becausethey get points.
Some people hate it becausethey're paying it off over 10
years because they had a reallyfun weekend in Vegas.
So if you're a younger kid andyou're listening to this, let's
just say you're around 16 to 18years old.
The best way to start buildingyour credit up safely is being
(19:04):
added as an authorized user to atrusted family member.
It doesn't even have to be afamily member, but a trusted
person, and what I mean by thatis let's say Donnie has a credit
card and his limit's $10,000.
It means he could spend $10,000on it.
That's how much he could spend.
Let's say he spends $1,000 onit each month and when that bill
comes due he pays it off infull.
(19:25):
That is a proper credit user.
He's not getting chargedinterest because he's paying it
off each month and he's notmaxing it out and then paying it
off, so he's keeping theutilization that's what that's
called low and then when thebill comes due, he pays it off
to avoid interest.
Those are the people you wantto add as an authorized user, or
(19:46):
you want to be an authorizeduser on their account.
So I'm Donnie's child.
It's possible.
Kind of you're kind of oldDonnie.
Speaker 2 (19:54):
I knew you were about to go with that Funny guy.
Okay, but you know.
Speaker 3 (20:01):
I want to build my credit, but you don't really
want me to get my own creditcard because it's just a little
risky at that age A lot risky.
Add an authorized user toDonnie Donnie's paying his bills
on time.
Now your child, or whoever isthe authorized user, is
basically piggybacking on yourgood credit.
So when you become 18, 19 andyou're ready to buy a house, you
(20:22):
already have established credit.
Speaker 2 (20:24):
Let me ask you a question related to that.
Okay, so I have two daughters.
They're 16 and 13.
And, um, if I were going totake that approach um, I know we
talked off the air about theminimum age and you said that it
was 13 years old to be added asan authorized user.
So what would that approachwork?
Twofold, Uh, could I take outtwo different credit cards and
add Laura Grace to one and Avato the other?
(20:46):
And, and I mean, if I haveenough time, wouldn't that build
their credit significantlyenough when they're 18, 20 to be
up there?
Speaker 3 (20:54):
So I don't know the in and outs.
I think each credit company'sgoing to have their different
rules and guidelines to it.
I'm not sure I think you couldhave multiple authorized users
on that one card.
Speaker 2 (21:06):
Okay.
Speaker 3 (21:06):
I'm not 100% sure, but that's something.
Again, whoever's listening outthere is, you know.
Call your current credit cardcompany and ask them what they
allow.
And that would be the best way,because as soon as I tell you
it's 13, it's going to be 15,with a different number.
But yeah, I think that's a goodthing.
But, guys, you got to becareful out there.
If you have a parent and they'rejust not good with money don't
(21:28):
become an authorized user ontheir account because they could
do vice versa they could ruinyour credit before it even
started.
So this is somebody that youknow maybe is responsible
financially that you would wantto piggyback and do an
authorized user.
Speaker 1 (21:47):
And we're talking with Kyle May.
He's a loan officer withMovement Mortgage and last week
on the Carolina Contractor Show,we were talking about how hard
it is to buy a house and thatit's harder for younger people.
I mean, it's harder for anybody.
But when you're just startingout and Kyle dispensed of a
couple myths right off the bat,the number one thing being you
don't need to put 20% down andthere's plenty of programs to do
that need to put 20% down andthere's plenty of programs to do
(22:10):
that we don't have to go toodeep in the credit part, because
I know there's some particularrules and each card can be
different on what they allowwith people.
But what I want to know issomebody they've got pretty good
credit.
They've got a 40 hour a weekjob.
They've had it for a couple ofyears.
Um, they've got a 40 hour aweek job.
They've had it for a couple ofyears.
They're interested in buying ahouse.
(22:30):
Their first step isn't to finda house.
So what are the first few stepsthey really need to take?
Speaker 3 (22:37):
Yeah, typically the first step that they think they
need to take is they need tostart looking on Zillow, which I
do, that too.
And then I end up at a house inCalifornia that's $30 million.
And then I'm imagining the boatthat I'll have when I'm fishing
.
And then you know it's twoo'clock in the morning, but
anyhow they usually talk to anagent a real estate agent first,
and then that agent is going tosay have you been pre-approved?
(23:05):
I do the pre-approval, I'm theone that looks at your credit,
verifies your income, verifiesyour assets and then gives you
the green light on what you canafford.
That's typically the first stepis again talking to somebody
like me.
And here's just a kind of a FYIfor people If your lender is
not asking for pay stubs or W-2sor bank statements, be worried.
(23:28):
Because if they're not verifyinganything and they're just going
off of sorry to say it, yourword that you work 40 hours a
week, I've seen that be a recipefor disaster a lot because
people think they're full-timeand they're not.
They're working 38, 39, 37, 34.
That's not 40.
So now you're not a full-time,you're a variable income
(23:49):
employee and we talked aboutthat earlier.
But that's something to lookout at if they're not asking for
any documents.
Now, if you're a salaryemployee, I'm guaranteed $70,000
a year.
I'm probably not going to askfor your pay stub right in the
beginning because salary issalary.
It's not changing unless youlose your job.
But I can still verify yourcredit score and your debts and
assets.
Speaker 2 (24:10):
Hey, we talk a lot about what's on the horizon with
construction and a lot of times, interest rates comes into that
conversation.
But what are you?
I know new administration tookover this month and what are you
seeing in terms of the whispersin your world about?
Are there going to be newprograms available to help out
young people or just anybody?
And what are you hearing aboutinterest rates?
Speaker 3 (24:30):
Gosh, I could really go into this one.
I love politics and hate it atthe same time.
But how can I say this?
Nobody knows the answer.
Since COVID, everything'sscrewed up.
I'm not going to go intoinverse yields in the 10-year
treasury in the stock market,unless we need to, but basically
(24:52):
in the past you could kind ofsee where things were headed
days on end, weeks on end.
Right now it could go up oneday crazy and down one day crazy
.
So here's my crystal ball.
I think we could all agree that.
When do interest ratestypically come down?
When the economy is not doingwell?
When does the interest rates goup when the economy is doing
(25:17):
well?
Link economy to jobs and thestock market that's really kind
of where your mind needs to go.
What's weird is on paper, theeconomy is doing phenomenal, but
does it feel that way Withinflation, with so many
different things?
And hey, inflation issupposedly down under 3%.
Speaker 2 (25:36):
Yeah.
Speaker 3 (25:36):
So that's potentially down to where it needs to be.
So that's where it's.
That's a tough answer.
But what I'm worried about is,if the current administration
does what they say they're goingto do, I feel like it could be
very painful until it getsbetter, and what I mean by that.
Again, guys, I'm not aneconomist, this is just my
(25:57):
personal opinion.
If tariffs start becomingmassive, that is typically an
inflationary thing.
Now, some tariffs are good ifyou're trying to bring jobs back
over and it's a niche typebusiness, right, but just
massive tariffs from myunderstanding of course there's
(26:18):
going to be somebody thatcompletely disagrees with me.
Typically, tariffs cause pricesto go up While inflation goes up
.
Guess what else is going tostart going up again Interest
rates Also, you start factoringinto mass deportations.
Mass deportations could hurtthe job market and the produce
and construction, which then isgoing to cause inflation, aka
(26:41):
rise interest rates.
So that's where I say dependingon how much they actually do,
what they're going to say,they're going to do is really
going to affect it.
Right now, just to give thelast 10 days or so, the market
had a pretty bad week.
The first few days the newadministration took over.
It's balanced out since thenand the last few days have been
(27:03):
in the green, aka better.
But I don't think anybodyreally knows what's going to
happen right now.
The Federal Reserve, the Feds,they're completely separate.
The president has no authorityover them.
He can't say lower theirinterest rates.
No, he can put pressure on themand maybe that works, but he
can't say this is what thefederal funds rate is going to
be.
(27:23):
You know.
So that's the tough part.
Speaker 1 (27:25):
He wanted.
He said when he was running forpresident that he wanted to
tell the head of the Fed tolower rates or to wait, and he
doesn't have that power.
But the other thing that I'mwondering is let's do some
cosplay here.
You are now president, okay,and I'm going to give you three
(27:45):
wishes.
Kyle May, you're a loan officer.
You have three wishes you canmake to change the economy, to
benefit at least housing andmortgage and loans.
But just in general, whatquickly, three things would you
do?
Speaker 3 (28:00):
Well, to back that question up slightly, the issue
that we ran into is rates shouldhave never dropped to two or 3%
.
That's where this started.
The housing market was stillstrong, even though COVID and a
lot of people lost their jobs.
Overall, the economy was stillpretty good.
Speaker 2 (28:16):
There was back orders and stuff and don't get me
wrong, it had its own issues.
Speaker 3 (28:19):
But if you look at the stock market, and outside of
certain professions theemployment was good too.
But again, the rate should havenever dropped that low, because
when something's really low fora while, what's the only route?
It's going to go Up right.
So in a perfect world, if Icould just have one wish, I
(28:39):
would say we need rates backinto the high fives.
A high five or somewhere in thefive is a healthy interest rate
for everybody.
Twos and threes is notrealistic guys, and I hate when
people say historical, well,these are average interest rates
.
Oh yeah, Historically, if welook at the last 60 years,
nobody cares about 50, 60 yearsago.
They see the last five or 10years.
(29:00):
So I feel like we all kind ofgot spoiled a little bit because
we had such massive lowinterest rates.
But at the same time, seven,eight is closer to the average
historically.
That's where I think we need toget closer to the average of
the last 10 years, which issomewhere in the fives.
A few months ago rates startedtrickling down a little bit and
(29:21):
I started locking some in at 5.7, 5.8, 6.1 for about two or
three weeks and the phonestarted ringing.
People wanted to refund.
I mean I was like, oh hell, getready honey, here we go.
My wife does the same job.
I was like no more vacations,we're working every single day
nonstop, and then the marketjust ate it and then gone.
(29:44):
Within one week rates went backup over a percentage and then
it was gone.
So this is just why I thinksomewhere in the fives is kind
of that happy space, because assoon as we started getting there
it was nuts.
It started getting really busyagain, which let me add that
into a different conversation.
Everybody says what do peoplesay during COVID Wait, don't buy
(30:05):
right now, wait for the pricesto what Drop.
Well, guess what guys Did theydrop?
Donnie Nope.
Speaker 2 (30:11):
Especially where we are.
Speaker 3 (30:12):
And now you're paying three times as much an interest
rate.
So now what are people saying?
Well, hey, wait for theinterest rate to drop.
Yeah, the price isn't goinganywhere.
And if it did, what's it goingto do?
Drop a point, 5%, yeah, Likethat's nothing.
We're talking about a fewdollars a month in payment.
So when people ask me when'sthe best time to buy a house, if
(30:33):
you could afford the payment,it's always now, because your
house is going to appreciate invalue, go up in value every
single year.
Speaker 1 (30:39):
I want to wrap up with.
One thing is we said earlier inthe show last week we talked
about how younger people feeltheir chances of buying a house
and they they feel pretty glumabout it.
So again we had Kyle May comein.
He's a loan officer withMovement Mortgage.
Kyle summarize for that personthat may have just caught the
tail end of this show why theydon't need to fear that a house
(31:04):
is out of reach for them, thatthey don't have $20,000 in the
bank and they can't do all thesethings that they think they
need to do.
Put them at ease.
Speaker 3 (31:14):
Well, let me ask you a question what's the interest
rate on renting?
Put them at ease.
Well, let me ask you a questionwhat's?
Speaker 2 (31:17):
the interest rate on renting 100%.
You're not getting any of thatmoney back Now.
Speaker 3 (31:21):
I am a super transparent lender.
If you're staying at home withmom and dad and you're not
paying any rent and you're justtrying to bankroll and save some
money up, continue to do that.
Maybe it's not time for you tobuy a house right now.
Maybe it's not.
Maybe your living situation isjust better where it is right
this second.
But buying a house again?
It is more affordable now thanit's ever been.
(31:43):
But do you think it's going toget better?
When do you guys see prices goup and then come back down in
anything?
So what I always tell people isdon't really worry about the
interest rates so much.
Do you love the house, yes orno?
Can you afford the monthlypayment?
Yes, let's roll, let's get thisapplication going.
Let's, let's get that house.
(32:04):
Because you start looking atall these other negative
situations.
You're going to talk yourselfout of buying a house and then
you're going to be still rentingor living at home.
Speaker 1 (32:13):
Kyle, if someone wanted to contact you to further
this discussion, do you have awebsite or something they can
check out?
Speaker 3 (32:21):
I'll just give them my cell phone number.
You could call me and text mewhenever, not really whenever I
might not respond, but usually 7am to 9 pm are my hours.
I keep them pretty open, but myphone number is 336-686-8272.
6, 8, 6, 8, 2, 7, 2.
And then my website is www.
Kyle K Y L E J may M a Ycom.
Speaker 1 (32:44):
We'll.
We'll put that on some socialsocial media blast also, so
people are interested in it.
But, like I said, I have aniece and they just were
convinced they couldn't get ahouse and she wanted one.
Of course they both did andwhen they finally took that
brave first step of asking aprofessional, it was literally
months later, just a few months,and they got a house.
Speaker 3 (33:06):
I tell clients all the time.
I said watch, you getpre-approved.
You think you're not going tobuy a house for six months and
three weeks from now you'reclosing on it.
It always happens like that.
Oh, I was just looking and, oh,man, this is moving fast.
Oh, wow, we're closing nextweek.
So if you guys are ready, thisisn't something that sometimes
it just moves quickly.
And one last point I want to sayout there is if you have bad
(33:29):
credit right now, that's okay,we can work with you.
I know a lot of lenders.
They quickly run your creditand then they probably never
call you back when they see youdon't qualify.
That's not what we do here.
If I pull your credit and Ilook at it and we need to do
some help or we need to work onit, I'm going to tell you, down
to the dollar, what you need todo and the timeframe in order to
(33:52):
get your credit score up towhere it qualifies.
And then ultimately, it's up toyou if you want to continue to
move forward from there.
And that's just something I canpromise you.
We're not just going to pulland never hear from you again.
We're going to make hey, it'sup to you.
I'll hold your hand as long asyou want me to, but we'll get
you in the house if you'reserious.
Speaker 2 (34:08):
I think big takeaway from today is is, instead of
wasting a realtor's time, callKyle and just get the process
started.
You'll know what you qualifyfor.
You know that pre-qualificationquestion that comes from a
realtor, that's going to be thefirst thing they ask you.
So, knowing where you stand, orif you have to game plan, like
Kyle said, if you live at homeright now and you're not ready
(34:28):
for that first house, at leastyou can get the process started.
You'll know where you need tobe when the time comes.
And we preached on this lastweek that that you know, giving
yourself a little time to getyour ducks in a row, that that
right deal might come along.
You know someone may be willingto owner finance.
Or, or, do you know, just giveyou a better deal than than what
you would do if you're forcingthe issue.
So get with the loan officerfirst, and I think that was a
(34:52):
that was big deal and lots ofgood information.
Speaker 1 (34:54):
Kyle, thank you for that, absolutely, definitely.
I want to thank you for comingon, kyle, cause it.
It gives information that wejust weren't in a position to
tell people and it just putsthem at ease and I think a lot
of people out there who werethinking I can't get a house
You're now probably feeling alittle bit more optimistic when
you have someone like Kyle inyour corner, who's going to tell
you upfront not only can you dothis, I'm going to help you up
(35:15):
front, not only can you do this,I'm going to help you improve
your situation so you can getsomething maybe even better than
you thought and you got to getaway from that fear.
Just take that step forward.
Next thing you know, as he said, I can't afford a house.
Three weeks later, they'regetting ready to sign papers to
start the process of moving intoa house.
So thank you again, kyle, forcoming on.
Speaker 3 (35:35):
Absolutely.
Thanks for having me, guys.
Speaker 1 (35:36):
And Donnie.
Well done, Excellent choice ofa guest and I'm sorry you're
still going with the Eagles inthe Superbowl and we'll cry
about that later.
But do check out our website,thecarolinacontractorcom.
We'll have the show up there ina podcast form.
Also the YouTube site we linkit there.
Social media If you have aquestion for Kyle or about this
(35:59):
show or maybe something you wantto know more about, you can hit
the ask the contractor buttonand we'll answer those questions
, Maybe even put it on the showor make it a topic of an entire
show.
And, Kyle, I'd definitely liketo have you back on again in the
future because that was a lotof great information and I know
you have a lot more you can givepeople.
Speaker 3 (36:15):
I could talk all day about it, guys.
It's my job.
Speaker 2 (36:17):
You just scratched the surface, yep.
Speaker 1 (36:19):
All right.
Well, we hope you all had agood experience with this and
learned a lot about buying ahouse, and we hope you tune in
next week to the CarolinaContractor Show.
Thanks everybody, thanks.
Thanks for listening to theCarolina Contractor Show.
Visit thecarolinacontractorcom.
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