Real Estate Show Lender November Updates with Guy Giles
Real Estate Show Lender November Updates with Guy Giles
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Southern Oregon Real Estate November Lender Updates
Alice Lema: [00:00:00] Well, good morning, Southern Oregon and welcome back to the Real Estate Show. So glad you could join us today. I'm Alice Lema. I'm a broker here in John L. Scott, Real estate in Southern Oregon and your host of the show today. We're excited to welcome back Guy Giles, from Mutual of Omaha Mortgage. He comes on the show every month and brings us up to speed about what's going on with mortgages, money, interest rates and such.
And boy did we have another big week here nationally with the interest rates. The Federal Reserve Bank did raise the rates again this week 0.75%, which is quite a hefty, hefty increase. But you know what? I don't wanna say we're sort of getting used to it, but we're sort of getting used to it, and I'm proud of our little Southern Oregon housing market to continue to find ways to move forward with their purchases and sales with that in.
Let's talk about the stats for the [00:01:00] week. This week the days on market in Jackson County were 48. Josephine County averaged 52 days on market, Klamath Falls averaging 48 days on market. Why are these numbers important? Because a normal neutral market, as you might remember, is 120 days to 180 days on average to sell residential property.
So we are hovering right around two months for all three counties that's still more buyers than sellers, but you have to dive down deep and look at the different price points. Cuz some of the price points are super competitive, like if they're under $400,000 and much over five or $600,000, gets really soggy and more of a buyer's market.
But when you average everything together, we still have about two months of supply in all three counties. I did also wanna take a quick minute to point out that we still have appreciation so [00:02:00] far this year. Jackson County has 5% appreciation. As of this week Josephine County has 6% appreciation and Klamath County has 10% appreciation.
We track this every week, and it's telling us that we still have a nice sustainable appreciation in all three of our markets, which is healthy and sustainable. And it means that buyers are not having to arm wrestle so hard to get a property and they're not having to overpay. So anybody who was trying to buy and sell, gosh, six months, a year ago, it was a much more frenzied market, as Lennox Scott likes to say. A very good definition of what we were experiencing, and now it's slowing down, which was the Federal Reserve Bank's intention. But we're still doing okay. We still have a nice sustainable appreciation. Okay, so with that in mind, let's take a quick break and get on with our show.
Well, hey there, Southern Oregon. Welcome back to the [00:03:00] Real Estate Show. Gosh, I'm so glad you could join us again. Today we have Guy Giles with Mutual Omaha Mortgage. He is our in-house lender and a sponsor of the show. He comes on every month to kinda bring us up to speed. Good grief Guy, welcome . Thanks. Yeah,
Guy Giles: it's, it's really fun keeping everybody up to speed when it's changing like three times a day. So it's, It's really volatile right now. We almost broke through this week to where we're getting a really good trend for some lower rates and it's just barely been get, getting beat back, you know, the last few days.
So I guess we'll, we'll know how soon the rates will drop one of these days soon. You know, I'm still anticipating sometime maybe first quarter, second quarter, next year. But I, I don't know for sure, but that's kind of the best, you know, just kind of the best I can guess on that in, in our crystal ball
Alice Lema: So I have a question for you cuz you know, all the buyers and [00:04:00] sellers are concerned about the interest rate increases. We're just all so surprised, you know, they did it again. But, What if the rates don't go down? I mean, I, I know a lot of us think they're going to, but what if they don't? Does that mean the price is stabilized? If the rates do go down again, does that mean the prices go up? What do you, what do you think the reactions are gonna be?
Guy Giles: Well, I think you just hit, hit either one of 'em on the head. I mean, if something's gotta give right now, you know, I think the, the regular person is just kind of priced out of the priced out of the market. So you know, we either need some lower rates or we need housing to come down. I mean, that's really the only thing. You can only give so much when you have your gas prices up and just kinda everything else in life going on, energy prices, God knows what that's gonna look like this winter.
You know, I won't, I won't get political since I never do, so I'll just keep my mouth shut.
Alice Lema: We appreciate that. Thank you.
Guy Giles: But I, everybody's in kind of a [00:05:00] tough position. You know, there's, there is a lot going on right now. I think the Fed was a little behind the curve trying to get some of this stuff under control, but I think they're doing what they, you know, have to do at this point finally. You know, another three quarters this last week, and, you know, hopefully they'll start tapering. We should, we should start seeing. A little bit of, you know, just backing off from them and then, maybe once it calm down a little bit, if history's any kind of indicator, then we should maybe be looking at what they call quantitative easing.
Kinda like what, what they did after the oh eight, I remember rates dropped a couple of percentage points almost overnight and day before Thanksgiving, I think I locked 30 loans that, that day. It was, I just had people kind of ready to go. I'm just kind of setting it up for that whole thing. So I don't know how fast, I don't know exactly when, but I do really believe that we will see a dip in rates.
Alice Lema: Okay. So with the scenario that we're, we're [00:06:00] discussing right now as if the rates start going back down in 20 23, 20 24, then a lot of folks that purchased right now would be able to refinance into a lower interest rate. Is that what you're saying.
Guy Giles: Yeah, I've been, I've been doing some math on this cause I wasn't completely sold on, you know, one thing that's hot out there right now is doing two one buy downs.
Alice Lema: Can you tell people what that is?
Guy Giles: So essentially what you're doing is, you know, maybe asking the seller cuz the sellers, I think you can finally feel like as bad as everything is with the rates right now, one thing you are in charge of a little bit is the transaction. I mean, it definitely feels a lot more like a buyer has, is in the driver's seat at this point.
So, you know, not a hundred percent, but you know, not that long ago, we were going up 20, 30% outbidding everybody. And you know, if you can look at it like this, you're not gonna have to get into a bidding war. But you can actually go in and maybe ask for a little bit of closing costs.[00:07:00] That might translate to what I was talking about, like a two one buy down where you're essentially just kind of having the seller prepay what interest you would pay.
So it, it, it's, it's a little bit of a shell game, but it might help some people get into a house a little bit more comfortably. Right now, as long as you have, you know, 5% down. You know, when you go to refinance, there's no, what we call l LPAs or pricing hits for doing a no cash out refinance, so, yeah, and, and that was just some of the stuff I wanted to check on and do some pricing before I really talked about it too much.
So it, it might be a pretty good option to get people in you know, doing a little bit of, of mass. So, you know, you, you might ask the seller to pay $8,000. You know, and so instead of having, you know, a six and a, you know, six and a half percent rate, the first year you have a five and a half or a four and a half percent rate.
Pardon me, That's the two and the two to one buy down the second year, it would be down by one percentage [00:08:00] point. You know, I, I would want people to really think about this and, you know, make sure that it was something, if something crazy happened and you were not able to refinance, you know, You know, you, you, you'd wanna be prepared to have that higher payment.
But I really do believe in the next couple years, I have no crystal ball, but rates should come down and hopefully you can refinance into something a little bit more reasonable and it actually could put you in a lot better position than out bidding somebody by 30, $40,000, you know, and just not even getting the house that you want.
Just one that you could get an accepted offer on, which really what was happening a year ago. So I can't say high rates are great for the consumer, but in this instance, I. You know, the, the, we have a few different tools that we can look at to maybe just get you in the house and then hopefully look at something a little bit better down the road.
I, I'm a huge proponent of getting in somebody in the right loan the first time. That's why I was a little reluctant with this program at first, but now that I'm doing the math and looking at what it [00:09:00] would take to refinance and how it would impact you. Know maybe a hundred percent financing, one might not be the best, you know, option as far as being able to do that.
But if you have a little bit of a down payment, you know, that could come from your parents, family members, things like that. Grants, you know, be careful a little bit of the grants because sometimes they have like a five year buy back, and so you can't really sell or do some different things within a few years on those.
So keep your eyes out. But this might be a tool that could get you in a house. And this one scenario that I ran that was a $350,000 loan amount it would save you about $450 a month for the first year.
Alice Lema: And wow, that's huge.
Guy Giles: And now keep in mind you're still qualifying like it's the higher payment. We're really not trying to get into real stupid lending again, you know, like we did before. But you know, then that gives you 12 months hopefully to, you know, either get a raise at work or you [00:10:00] know, you know, find some lower rates. And again, that's why I say, you know, you always expect the worse. But then, you know, I, I, conventional wisdom is rates will go down at some point in the near future.
So hopefully, you know, people will want you to make six monthly payments, you know, after that six payment is up, you know it's okay to do it. And we're actually offering for anybody that's doing loans with us, if they've made that six payment, we'll, we won't charge you any bank fees for a refinance.
Alice Lema: Oh, that's awesome to do that. So that's awesome.
Guy Giles: You know, we understand everybody's in a tough spot and it puts us in a tough spot, frankly, we're not, you know, just the nicest guys in town. But, but at the same time, you know, we wanna work together. You know, we, you guys get into a house and, you know, obviously we earn a living doing these, so after the first year, so if you do that two, one buy down, say the rate is six and a half percent, you'd be paying four and a half percent for the first.
The second year would go up to five and a half percent, and [00:11:00] so you'd save about $230 a month instead of the $450 a month. And at the end of that third year, or the beginning of the third year, then it would go up to your regular payment. So like I said, it's a conversation that you really want to have, not just, hey, this looks really good and shiny right up front, you know, have, have a real conversation, hopefully with me, but with your loan officer, if not, and you know, kind of talk about that.
I have another thing that I've actually been talking to people a lot about lately is, is we do and you're gonna love me or hate me when I say this reverse mortgages, and I've always been a huge terrible, don't do it. It's expensive to get into. But I've had some people that we've really helped getting in reverse mortgages, some people that were able to stay in their house and I've never been thanked before, you know, like I have been when somebody actually closes one of those.
Alice Lema: Well, yeah, they could be amazing. They're not for everybody, but when it's the right [00:12:00] fit. Wow.
Guy Giles: Well, and, and, and I've had a lot of people come up here. I have one gal for a Eugene that, you know, she'll sell our house and walk away with about $350,000 and she's old enough to do a reverse mortgage, so she wants to pay cash.
She really doesn't, can't afford, you know, a big payment. She owns her house there, but she wants to be closer to her kids. So if we do this, this Hecken, which is, it's a version of the, of that loan, she could potentially buy a $700,000 house, still not have a payment. So her goals, you know, she's in the house of her dreams or just because houses went up a little bit, you know, she's in a little bit more of an expensive house.
But the net to her is, is the same. Her family would still have the equity that's left in the house when she passes away. And it's conservative when it comes to, you're not really gonna go in the hole like a negative amortization loan. You will go in the hole a little bit, but you're not gonna get underwater where, you know, you're not leaving anything to the kids at all. And then you just [00:13:00] could have a nice house for the rest of your life where you're only paying the tax and insurance on it.
Alice Lema: Yeah, we're talking about reverse mortgages right now with Guy, Mutual, Omaha mortgage, and there's a lot of emotion about reverse mortgages. But in my experience, when you have the right fit, just like you were talking about, what a relief it is to the person who gets to stay in the house. They don't have to write that check anymore.
Guy Giles: No, it's, it's, it is been really strange. Like I said, I've never been thanked like I was on, on those one.
Alice Lema: Oh, it makes such a difference for people. It really, really does.
Guy Giles: Yeah. And then, and if it's not the right move, you know, we, we'll have that conversation too. .
Yeah. I'm happy to have your family in here when we're talking. Right. You know, everybody in, on the thing. Cause it does impact everybody in the family, but, Like I said, if, if you come in and you're only walking away with $250,000 outta your house, where are you gonna actually buy where you can be comfortable?
So if you do this purchase loan and use that for the purchase loan, you could get double the house. And you know, I mean, it's [00:14:00] gonna depend on your age and there are variables. Like I said, it is pretty conservative in a lot of ways. But, but you will be able to realize the appreciation on the house, you know, and that should offset anything that you're going negative as far as not making your payment. So it's just, it's just a good conversation to have.
Alice Lema: And I think it really is because sometimes people are really stressed out about their end of life choices or lack of choices. And you know, we we did one of these for my mom and it was a little bit of an uphill conversation with the rest of the family.
And in fact, it was kind of like what you said. They didn't, they didn't really understand the benefit, but boy, the more we looked into it, the better it got. And now she's okay. Excuse me, she's not gonna lose her house. And if it's making that kind of a difference in an elder's life and they're able to stay in their home, I think reverse mortgages can be super helpful. I'm really, really glad you guys are looking into those.
Guy Giles: Yeah, [00:15:00] Yeah. Beth and I are originating those, so, you know, I mean, it's not one of those loans you just walk in and say, I want a 30 year fix. You know, they're usually longer conversations, you know, you really want people to be comfortable with them. And like you said, it's not for everybody, but for the right people I, I'm definitely ready to have conversations about those.
Alice Lema: And doesn't the doesn't the buyer have to go through some kind of reverse mortgage counseling?
Guy Giles: I mean, there's, you're very well educated before you ever get into a reverse mortgage. So, you know, they, they are a little more expensive to get into upfront. It doesn't mean you're paying that outta your pocket. But you know, so there are a few things to talk about, but you're, again, really educated by the time you get into one of these loans.
Alice Lema: Yeah. We're talking to Guy Giles Nu of Omaha Mortgage. He comes and joins us the first week of every month to try to bring us up to speed on all the crazy stuff that's going on in the world. So we appreciate you. We're gonna take a quick break. We're brought to you by Rogue Valley Association Realtors, Guy Giles Mutual of Omaha Mortgage and John L. [00:16:00] Scott, Ashland, Medford will be right.
Well, welcome back to the Real Estate Show folks. Alice Lema, here, broker John L. Scott, beautiful Southern Oregon talking to Guy Giles, a Mutual Omaha mortgage. So glad to have you back, Guy.
Guy Giles: Well, I'm glad to be here. It feels like winter finally. Yay.
Alice Lema: I know, right? Right. Yeah. So here we are. Thanksgiving is coming and the market is not only changing, but accommodating some of the interest rate, increased stress. I've been seeing a lot more people taking contingent offers, writing contingent offers, you know, contingent with another house to sell and getting them accepted and getting them closed.
Guy Giles: Yeah. Yeah. I think I'm starting to see that too. We have kind of a, a bridge loan, you know, the, to where it's called buy now, sell later to where,
Alice Lema: Oh, let's talk about.
Guy Giles: Well it's funny cuz it's, it's a program that we just started, so I'm still getting the literature on it right now. But basically we'll go up to like a [00:17:00] 60% debt to income ratio.
So you're almost, you, you know, you, you are kind of qualifying for both. But for this one instance, it's a guy that really doesn't owe much on his house. And we're qualifying him. And then what we'll do is we'll just encumber both properties and then we will release the one, once the house sells, pay that thing off and then you're just into your, into your new loan there.
Alice Lema: So, Oh, that's cool. So how much time are you, do you give people to sell their house?
Guy Giles: There's not really a time limit on it, really. I mean, yeah. There, there, there's, there's a goal. You know, obviously you want to do it . Yeah. But, but I, I will definitely be up to speed on that. But the funniest part is on both of 'em that I that I started to do with people, you know, both of 'em said, you know what, let's just shoot for a contingent offer first. And that's actually what made me think of it.
Alice Lema: So, because the market's different, they felt a little braver to try that.
Guy Giles: Yeah and, and I thought, Oh man, I got this, this killer program. And, you know, but, but really, if, if, if they'll accept one of those, you know, then you're not getting [00:18:00] stuck with two houses for a little while or worried about trying to, you know, I guess you wouldn't have to worry about trying to rent the thing out if you got stuck. But, but we, we do have an option, you know, both ways as far as that goes.
Alice Lema: Mm-hmm. , so that's, Well that's really good. And do you do you think the market conditions are changing and accommodating those contingent transactions because the sellers are understanding that we're in a different kind market now? Or is it just cuz the end of the winter, I mean, end of the summer and everybody's scared to not sell their house. We sell houses all winter long, but people sometimes are nervous.
Guy Giles: Some people, you know, if it feels like, Hey, I'm going into the Christmas season, you know, I'm not gonna disrupt my whole life during this.
But, but as far as house is selling and people, you know, still moving, they're, they're, they're doing it, They're definitely feeling a little bit more comfortable about giving up a little bit on, on the other end, just because they're, [00:19:00] they are a little scared. You know, it wasn't that long ago that you could just put your house on the market and within, you know, a week you had a whole bunch of offers on the thing and for whatever you wanted. And, and I think that the sellers are definitely not, well, I said driver's seat earlier. Not quite driving anymore.
Alice Lema: Yeah. But that's okay. Isn't it nice to have a little bit of a normal market so that the buyers and sellers have time to contemplate their offers and their transaction terms?
Guy Giles: Yes. Yeah, it's, it, it's, it's, it's a lot better, and especially considering like, my side, that's primarily, primarily what I work with is the buyers. So it's nice to have kind of my people, I guess you know, spoken for it a little bit at this point because they, they really haven't had much say in anything in a long, long time. Yeah. Other than, you know, getting a low rate, which was a, was a nice bonus. There's no doubt about that. But, you know, I don't know why there has to be, big losers and winners in these big swings as far as [00:20:00] these go, You know, someone needs to sell a house and someone needs to buy one, and it's just math at that point.
Does it make sense? Is it the right house? Is it the one? One that you want? And that's why it's just, it's good to work with somebody like you rather than I'm just gonna go out and try to do this on my own or sell my house on my own. There's just, there's just things that you learn over the years as far as everything from schools to, you know, are you on the north side of the hill and are you gonna see the sunshine for well, the 20 years I lived Yeah on the north side of the hill. I bought it in, you know, summer and everything felt great. But I, somebody didn't have those conversations with me and yeah, it's just, that's why it's nice to, for someone to call you.
Alice Lema: So earlier you were talking about and, and maybe it was a little bit of a joke, but you were saying the rates are changing like several times a day or every day. Can we understand the volatility that you've seen the last few weeks?
Guy Giles: Wow. Well, I'm, I'm unfortunately not tech savvy enough to, I mean, I'd have to just point my camera at my computer or [00:21:00] something to show you what, yeah, it's, it's, it's crazy. And, and, and what we deal on our side is, you know, if the Fed raises rates or lowers rates, it does not directly affect mortgages. You know, the, the, the Fed has supposed to be two jobs, Employment and, and inflation. They've only focused on inflation lately.
You know, sadly we've had some good job numbers come out, but a lot of it has to do with how many jobs there are. And yes, there, there are more jobs. You know, I think we've added 279,000 or so this month. But that said, if you're working three part-time jobs, you might say, Yeah, we created a whole lot of jobs, but you know, this, it's, it's not quite as quite as healthy. So they're, they're trying to get the fed to focus a little bit more on the, the job side as they're raising a rates cuz it's just kind of a double thing.
But, but we're, we're a little different traded on the mortgage backed securities. We're looking you know, 30 years sometimes. You know, will somebody have [00:22:00] a loan for 30 years? Probably not. But, but realistically, we're definitely not looking at, you know, hey, the fed's going to, you know, start lowering rates once inflation gets under control.
You know, people will probably be in 'em a little bit longer than that. So no, we, we, we've had wild swings and generally when people are putting up money that could potentially be for years or decades, you know, they're gonna be a little bit cautious as far as that goes. So you know, people are sticking in their loans a lot longer right now because if you have a 2.7% rate you know, why would you, That's cheap money, you know, It's hard to get, it's hard to get rid of that.
So I think we're seeing that a little bit. Also, as far as, you know, not, not everybody moving around like they did. When I got into business I think it was two to four years, that was the average people were in a house.
Alice Lema: Well, it's longer than that now.
Guy Giles: Oh gosh. Yeah. I can't even imagine. Yeah. You know what it is.
Alice Lema: But so when, when people are talking about the low rate and, and not [00:23:00] wanting to sell their house, or not wanting to move because they have this like amazing rate what I've been noticing ,they just haven't, and maybe that is the case, maybe they should stay put. But there's a lot of people out there that do want a different property, a bigger property, a smaller property, a rental. They want something else. And once they start running the numbers, they see that they can sell their house. They have this huge, huge down payment now, and their monthly interest rate, the rate might be higher, but their payment is actually not that much different.
It's just hard to, to, it's hard to get people to let us run the numbers with them just so they can see what the math looks like.
Guy Giles: Yeah. And, and that's always my first stop with people, especially when they say, well, we could sell our house. What are you gonna make out of it? Well, we. I'm just like, you know, call Alice, call a real estate agent. Find out what your house is worth. Let 'em do a net sheet for you and so you can [00:24:00] find out what you're gonna walk out there with. And you're right, a lot of times people are pleasantly surprised. You know, they're just focused on the rate or focused on this or that, and they don't even, they don't even put that part into the equation that now they have a huge down payment.
When they bought their house, they only had 5%. Yeah. So it's, it's probably not a bad, you know, time to be thinking about that. Even if you have to, you know, pay six or $7,000 to help somebody buy their rate down for a year or two. You know, it's a whole lot cheaper than you know, a lot of the alternatives and that might just entice that buyer to come in and, and buy your house also.
Alice Lema: Well, and I'm getting a lot of those phone calls now, just like in the last eight to 10 days. It's super brand new. So we'll see if the trend becomes a trend. Yeah. But right now, they're finding houses that they like online, even though they weren't planning on moving. And they're going I can, if you can get me that house, I will sell mine.
And then they can come and talk to you about their[00:25:00] down payment and their you know, if closing costs or instead of closing costs, it sounds like you're talking about perhaps having buyers discuss with their sellers, using that money for buying down their interest rate instead of for closing costs. Is that kinda what you're talking about?
Guy Giles: Absolutely. Yeah. And, and we could talk about the two, one buy down, but if it makes enough sense to where you're just buying the rate down period, you know, that might be a more comfortable thing for someone that's a little bit more conservative. You know, it's not gonna be quite as low for the first year or two, but year or two goes by fast.
Alice Lema: know, I know people aren't even unpacked a lot of times by two years.
Guy Giles: It is . It's, I know, I know, I know it. Its, it's, it's crazy. So, you know, and then that's why it's just good to come in and have conversations. That's one thing that we're unfortunately losing a little bit since this whole covid is the one on one interactions.
We're still really big on that. I do like people to just kind of throw their information online so it's not a [00:26:00] data entry meeting, but a meeting where we can really get down to what he or she or they or whatever you know, goals are. You know, I mean, it is just, there, there is a variety of different things that we can look at doing and having those conversations, not just letting some guy from some online lender tell you what he or she thinks is the best thing for you, but really sitting down and having those conversations and having a local lender that's accountable in case we don't close on time. You know, you can come punch me in the nose and you can't .
Alice Lema: Well, you guys always close on time though.
Guy Giles: We do. We have for a long time. Yeah. Everybody should be closing on time to be fair right now.
Alice Lema: Well, but it is so hard, you know, and I just have to tell people every week when they're in escrow, you know, it might be a few days early, it might be a few days late. We've had some situations where there's been traumatic events at the end. We had an elderly person on a ladder. We always [00:27:00] recommend no ladders in older people's lives. Hit the ground. Hospitalized, three week delay, we were able to close, but holy Moy, power of attorney had to get roped in. It was, everybody's gonna be fine. But you know, those injuries are hard on people and if you're elderly to start with, Oh my gosh. They can be devastating.
Guy Giles: No, absolutely. That's why I was telling them, if you're gonna get on the. Don't fall on your signing arm. Cause we can sit, leave the hospital .
Alice Lema: That's hilarious.
Guy Giles: I know some, some people say heartless. I don't know. I try.
Alice Lema: Oh well it's just a joke. People, it's just a joke. But the warning is still the same.
Guy Giles: If you need to get on a ladder, call me and I will come do it for you. Yeah. I'm semi so there.
Alice Lema: Yeah, very scary times sometimes. But you know, a lot of times people will hang into those transactions if somebody's injured or has a stroke or breaks a leg. [00:28:00] Gosh, we have everything happen in real estate land, don't we?
Guy Giles: Oh, yeah, absolutely. And if, if anybody listening on the phone, Beth kind of crept in here at the last minute. She's my business partner, completely fluent in Spanish. And the nicest girl in town. So I don't know where, how I got so lucky.
Alice Lema: But yeah, Beth is awesome. Beth Rodriguez, yes, is gonna be joining us in the next segment. So please stay tuned. We'll be right back after Quick word from our sponsors. The broadcast will be aired again tomorrow on Sunday. 6:00 PM on Radio eight 80 K cmx, so you can listen to all the great information that Guy Giles and Beth Rodriguez have from Mutual Omaha. We're also gonna be saying thank you to John L. Scott, Ashland and Medford for being one of our sponsors. We appreciate you. The local Rogue Valley Association of Realtors, RVAR and thank you, Guy Giles Mutual, [00:29:00] Omaha Mortgage. We appreciate your support so we can bring you this show every week. We'll be right back after a quick word.
Well, welcome back everybody to the Real Estate show. We're talking to Guy Giles and Beth Rodriguez, Mutual of Omaha Mortgage. Thank you so much for being back you guys.
Guy Giles: Hey, thanks.
Alice Lema: So during the break Beth we were talking a little bit about having group purchases more than one buyer, co-signers, something like, Let's talk a little bit about how people can put those together so that somebody gets a house.
Beth Rodriguez: Yeah. As far as cosigning, and I think there's a, you know, really good things about it. There's pros and cons as with anything. And we are seeing a little bit more these days with, you know, interest rates in the housing prices being higher, where we are seeing more families or friends or roommates going in together and you know, co-signing or, you know, having the co-signer, non occupant as well. So that what it [00:30:00] does is obviously it helps bring additional income. So say if you have a, you know, a grown child, adult that needs to purchase but doesn't have quite, you know, the income to show there yet, then a lot of times they'll bring a parent on and, you know, have that cosigner even though they're not living in the house.
So basical that cosigner is just, you know, saying that if something were to happen and the mortgage didn't get paid by the main borrower that occupies the cosigner would then be responsible for that payment. So the con, I guess, and that could be for that cosigner. It just really depends where they wanna be long term.
So if you cosign on the loan, obviously if you try to go get a loan for something else, you, you know, at that payment will get counted as one of your liabilities. Also I wanted to talk about a lot of people, the biggest issue that I see is they will [00:31:00] cosign on auto loans for children or for friends or girlfriends or boyfriends.
We see that a lot. And you know, that can be hard too because if they don't have 12 months of payments to show from the, you know, bank account of the person that owns that auto, then that cosigner will also get hit with that liability payment so that sometimes too can kind of make or break qualifying for a home.
So there's a lot of things that go into to cosigning. So it's just good, I think to educate everybody and for people to know and to understand what that means, what happens when they co-sign and, and what, you know, what that means afterwards. .
Alice Lema: So when people are doing these co-sign situations on behalf of somebody. How is that different from just being on the loan as a full buyer?
Beth Rodriguez: Yeah, so one if you have the non occupant cosigner, they're not living in the home. They're just, you know, cosigning on the loan. And then also if [00:32:00] they, you know, we'll see sometimes where they will be the co-signer but not be on title. So they're just, you know, helping to qualify as a borrower. So there's kind of different ways that.
Alice Lema: Oh wow, that's kind of a subtle difference.
Beth Rodriguez: Mm-hmm. that, that they can be on there. So different options there, just depending on the situation, circumstances.
Alice Lema: So, and circumstances are a great great lead in like what circumstances are people bringing you so that co-signing and group purchases make it all happen. Are they, like you said, adult older people with their adult kids, are they I don't know best friends. Do we have any more first time home buyers, or are these people a little further down the road with their real estate experience?
Beth Rodriguez: I would. Yeah, I would say definitely you see it a lot more in first time home buyers.
And it's usually younger adult children with the parents cosigning for them is what I mostly [00:33:00] see and, you know, have done. Sometimes it'll be, you know, maybe fiance or, you know, girlfriend and boyfriend, that kind of scenario too. So I would say those are the most common ones that, that I have. Yeah.
Alice Lema: And in Oregon, I'm sorry, let me just throw this in real quick. Just to remind everybody in Oregon, we're not a community property state. So we can buy and sell things as married people without the same fuss in other states.
Guy Giles: No, that's cool. I was just gonna mention, another way we're seeing people step in a little bit is if you have a parent or somebody that's saved a little bit of money, you know, if you have seven, 8%, 10% inflation, A hundred thousand dollars you have sitting in that account is now worth $90,000 at the end of the year, so, Oh, okay you might just step in and help somebody with a down payment, or maybe even help them pay off some of their debt if you wanted to help your kids out or something, you know, if you're gonna leave it to 'em anyway someday. I don't know. It's just, it's just kind of a, a [00:34:00] thing you think about if you got some money sitting around doing absolutely nothing, and even if you try to short term, you know, invest it, you're really not gonna have a return.
And things are a little scary in the markets are going up and down a lot right now. So we have had a lot of people stepping in. And helping their kids or helping their parents for that matter with down payments.
Beth Rodriguez: And a lot of times those parents already have their homes paid off. They are financially stable, so it works out great for them, you know, It, it doesn't hinder, you know, purchases that they want to do after you know, helping to co-sign for, for themselves.
Alice Lema: And it's so beautiful to watch. A lot of the first time home buyers, regardless of their age, they're nervous, they're stretched. And then frequently partway through their process, somebody will step in somebody they were not expecting. Somebody who may have told them, No, I'm not giving you a dime.
And then all of a sudden there's five, 10, $20,000 coming people's way and they actually get the address and it's harder [00:35:00] now, don't you think, than when it was our age when we first started buying houses. Doesn't it seem that it's harder for people to qualify now?
Guy Giles: If, I guess it depends on when you, when you hit that age.
Alice Lema: I went back to the seventies? Why ? Yeah. I, sorry. eighties.
Guy Giles: See, you're . You're not as old as you think you are. I think you just remember that, just historically speaking. Yeah. Historically speaking. So , you know thinking back like the house I bought upon Hillcrest when I was, you know, my early twenties.
That was only $130,000. I was probably only making 14 bucks an hour or 15 bucks an hour. But I managed to come up with a little bit of a down payment. I mean, it did seem attainable back then, to be honest, but right now you, it feels like you have to either have a great income or be a couple of you buying the house, not just, and it could be husband and wife.
But I'm, I'm, I'm also seeing a lot more [00:36:00] responsible people that I really didn't see before the crash. You know, they, they were around, but I think that the whole world learned after, after we had the problem that we had before. Definitely lending learned even when you,
Alice Lema: Financial responsibilities is a beautiful thing.
Guy Giles: Yeah. I guess unless you got student loans.
Alice Lema: Well and, you know, we should do another show on that Guy and Beth. Cuz navigating through the, that student debt. You can still get a house, but you gotta structure it differently. Mm-hmm. , and here's where maybe having some co-signers helps.
Guy Giles: And, and it, and it does structure, it is different between Fannie Mae and Freddie Mack and how they look at it also. So I think that would definitely be something good for us to bring when we come back.
Beth Rodriguez: I, you definitely, even with FHA. That would be a great segment for sure.
Alice Lema: So we're just about outta time. We're talking to Guy Giles and Beth Rodriguez Mutual, Omaha Mortgage. We'll be back again tomorrow on Sunday with a repeat of this [00:37:00] broadcast. Somebody wants to get a hold of you Guy. You got 30 seconds. How do they get you?
Guy Giles: Well call me at 541-944-6987 and my biggest advice about student loans is don't let those clowns talk you into some degree you can't make any money with. Do a little research before you get them.
Alice Lema: Don't let the clowns talk you into it, and don't let the feds worry you. Just because the rates went up again this week doesn't mean we can't still make it happen. Right,
Absolutely. It's nothing like it was in the eighties. All right, . All right folks. Have a beautiful southern Oregon weekend. We'll see you next week.