Real Estate Show Lender Updates Feb 2023 Mutual Mortgage
Real Estate Show Lender Updates Feb 2023 Mutual Mortgage
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Real Estate Show Lender Updates Feb. 2023
Alice Lema: [00:00:00] Hey there, Southern Oregon. Welcome back to the Real Estate Show. We're so glad you could join us today. We've got a great, great show. We have the team from Mutual Mortgage here with us, and they're gonna help us dissect and unpacked all the financial stuff that happened this week. And we had another announcement by the Federal Reserve Bank.
They announced a raising the 0.25%, which is a little more relaxed than we've had of recent, but it was still an increase. But all these changes that are happening affect mortgages, buyers, sellers. It affects what's going on here in our southern Oregon market.
But I also wanna say, This was a busy week for buyers. We had a lot more buyers get pre-qualified. We had a lot more buyers jump in and start searching. We had a couple of multiple offer situations. We don't have very many of those anymore. But we had one in [00:01:00] Jacksonville and one in in East Medford. And Yeah.
So when Mutual Mortgage comes on in just a couple minutes, we'll bring them in. We've got Guy Giles, Beth Rodriguez and Michael Ronchetti, all from Mutual Mortgage today. Let's take a quick second and talk about our local Southern Oregon stats. Now, next week we'll have our M L S, our Southern Oregon m l s, and Rogue Association of Realtor stats, they come out every month, but it comes out a little later. So we'll talk about that next week.
But here we go for our residential market. Let's talk about how many new listings we do or don't have. Klamath Falls is still down 9% in new listings from this time last year. Josephine County is dead even. Isn't that interesting? Josephine County has the same number of new listings as it did this time last year, and then Jackson County is down 9% now.
Our prices are still up. Klamath [00:02:00] Falls is up 8%. Josephine County is up 5%. Jackson County is up 5%, so we're still down in the listing department, but we just had a bunch of buyers enter the market this week. Our prices are still up from the year before. So, so far no crash, not whoop, and also, We have the spring selling season.
We've got a lot more listings coming up. We've got a lot more tours. We've got open houses again. So we're looking forward to a great spring market here in southern Oregon. So with that said, let's take a quick break for our sponsors. We're gratefully brought to you by John L Scott, Ashland, Medford, the local Rogue Valley Association Realtors and Guy Giles Mutual Mortgage We will be back with the team from Mutual Mortgage. It's gonna be a great show. Don't go away.
Well, hey, Southern Oregon. Welcome back to the Real Estate Show. I'm Alice Lema. I'm your host of the show. I'm a broker here in beautiful southern Oregon with John L. Scott [00:03:00] Real Estate, and today we're so excited to welcome back Guy Giles Beth Rodriguez, and they brought along Michael Ronchetti, all from Mutual Mortgage. Welcome everybody.
Guy Giles: Hey, thank you very much. Good morning. I know it looks like it's spelled Ronchetti but I think he pronounces it. Ron Ketty.
Alice Lema: Ron Kedi. Sorry, sorry, sorry. Mr. Ron Kitti.
Guy Giles: He's the, he's my boss, so I figured I'd have to back him up on this right now.
Alice Lema: Even better . So welcome everybody. We had a really, really big financial week. Who wants to kick it off?
Guy Giles: Well, I mean, I could say a thing or two. I mean, we finally have pal. You know, talking about the, from the Fed saying that inflation is actually starting to go down, which, which has a little change from the language. I mean, people, people watch what the Fed does, but the biggest thing about it is what language do they use? So that was a little encouraging. And I think we, you know, going forward, we, we did get a quarter point [00:04:00] raised this week again, so, you know, they, they've literally raised this thing, you know, since the beginning, about four and a half percent.
And we're probably looking, you know, for the next couple months, for March and May for maybe two more, two more rate hikes. And hopefully that'll be the end of that. Maybe you can get a little bit of relief on your credit cards or something.
Alice Lema: But So what does that mean exactly? When you say it's how they word it, what is, what does that mean exactly? Well, to the average person.
Guy Giles: It's sometimes it's a little difficult to, to, you know, you just kind of have to read between the lines in what they're saying. Investors live and die by this stuff, you know, if rates are gonna be high you know, there, there's certain times you're making money in the markets and there's certain times you want to be in some safer things like bonds and treasuries and if they allude to the fact that, you know, Hey, inflation is terrible and it's just gonna get worse and worse and worse, and we raised it up three quarters of a point. It's a [00:05:00] little bit of a different story that now they're, they're taking their foot off the gas. For, for the first thing. And that's something that's obviously not said. You just see that in how much, how much they do it. But he literally kinda used the language that, that they are seeing some, some things ease.
You know, unfortunately the core cost of shelter was not one of those things that, that they're really seeing yet, but the cost of goods are coming down. Some of the fuels coming down, you know, we can't, obviously, we, we don't know for sure what the government does, you know, so they could, you know, that could affect something separate from the Fed.
I won't say anything about them good or bad, but beyond that, if every, if everybody just kinda leaves everything alone, we should be looking at this inflation, which has not been fun for anybody, really easing over the next few months. And that'll translate in our direct world to some, to some lower rates.
But they'll just throw out little, little tidbits during their speech. You know, and honestly it was different two years ago, even two years ago, three years ago, you didn't really know [00:06:00] what the Fed was gonna say, and now they have a little bit of a different system where they like to kind of leaf things out so people kind of know what's gonna happen before it does.
So it's, it's a little, it's a little different dynamic these days. But, but we're still, you know, we, we just kind of look at what they're actually doing, try to read between the lines with some of the verbiage that they use and. That was probably way too long of an explanation for that.
Michael Ronchetti: It really comes down to just that, to to sum up Guy, is truly about the verbiage. And the speculation is what the future speculation is gonna be. And everybody knows that they were gonna raise rates. The, the question was gonna be how many more times are they gonna raise it? And that's gonna really come down to inflation and all indicators right now is that we should, the CPI that everybody hears about was consumer price index and the PPI the producers. What's, and those numbers gonna be coming out here over the next week. And a year ago is when they were spiking. So the, the speculation is we're gonna see continued easing and the [00:07:00] language is basically bearing that. And of course we also had some news today, specifically from the European banks effectively saying the same thing. So it's all good news coming from you know, that global economy that we've kind of shifted into now.
Alice Lema: So Michael, you are the regional vice president and you have kind of a big area that you're servicing, taking care of right now. What kind of what kind of side effects have you seen in the last six months from from your perspective as the regional vice president of a lending company??
Michael Ronchetti: You know, there's yeah, it, it's vast. I mean, cuz it really does go down to market to market. We've seen a shift from the urban areas. The cities as they say to, you know, the rural areas and the suburbs. People have been pushing out. A lot of that dynamic has been through technology and the ability to work remotes and that some of that's the aftermath of the pandemic.
Also the aftermath of [00:08:00] a higher rate. People are moving to affordability and you know, the, the suburbs are more affordable. We're seeing more movement from even certain higher end states to lower cost of living states. So we're seeing some big shifts there. That's a lot of the activity. And but I do think as rates can, you know, come down, affordability picks up, more people can enter the markets, we'll start seeing those the urban areas, some of the higher cost areas traditionally start rebounding in the coming months.
But for sure over the last six months through this whole rate push higher you know, that's really been, you know, the dynamics that we've seen, you know, most on a macro level is just where the shifts, where the purchase markets have been happening and where the price increases have still been going up. While certain markets, obviously Seattle as a whole has been going down due to that.
Alice Lema: So this will be interesting because we're all used to, when there, when there is inflation, a [00:09:00] lot of us are old enough to remember the seventies and eighties that people do move up to the outskirts cuz it is more affordable and they move back. To the urban areas, but with the remote the permanent remote working phenomenal. What do you think, what do you think's gonna happen to our our bigger urban areas? Do you really think they'll come back?
Michael Ronchetti: I, I, you know, I, there's always gonna be a, an appetite for You know, some of the areas like Lake Oswego, if you took in, in Oregon and around Portland, that's always gonna have a demand.
It might fluctuate through this time, but there's always an appeal to be in that area. Same thing if I, if I'm in the Seattle marketplace, if you're in Green Lake or some of those areas. However some of the other areas some of the, some of the folks that maybe lived downtown, You know, 700 square foot rental studio, that they're paying 3000 a month for.
That individual's probably not going to head back anytime soon. They're, they're probably relishing the fact that they have a yard, right? And a pool a pool [00:10:00] for probably still less money. And So you, you're gonna see, you know, those parts of the city, the city proper, if you will, the, the Portland Metro and Seattle Metro. You're gonna see you know, it's gonna be tough for those areas. I think even in the long term, there's probably not gonna be a whole, you know, a lot of appeal to run back into that environment. Plus, you know, other geopolitical situations going on. You find yourself.
So yeah, it's, yeah. Yeah. It's gonna be interesting to see how the, how the cities find their way back outside of the, again, the areas like a Bellevue, like a Kirkland up in Seattle to to Lake Oswego and so forth.
Alice Lema: So Guy and I every month talk about how the numbers don't point to any kind of huge crash, at least for us. What are you seeing for 2023? Just cuz you have a much bigger perspective. You're, you're managing a much bigger area.
Michael Ronchetti: You know, well, and I think Guys dead on, in in, especially in in the Greater Medford, if you wanted to [00:11:00] say Southern Oregon. I think Southern Oregon always has an appeal. It has an appeal not just for the folks in the city areas, but it has an appeal also for California and folks in the city areas of Northern California, specifically the San Francisco, Sacramento areas looking for affordability and getting out and looking.
You know, blue skies and, and so on. So you will always have an appeal to Southern Oregon. And in those marketplaces, I think we'll continue to do well. Our biggest opportunity is still gonna be inventory. And I think, you know, we, we had a buyer's market to a degree over the last few months, but that was more because of rates and there was less affordability, so there was less buyers.
So it wasn't, you know, now as rates start to come down, then this is what we're kind of telling our looky lous that we pre-qualified is, now's the time to get out there and make those offers because as rates come down, you know, this is where it's gonna turn back into the sellers. We're gonna get the multiple biddings.
We [00:12:00] are already seeing that in some marketplaces.
Alice Lema: Are you really?
Michael Ronchetti: Yes. You're seeing multiple offers. Again, we're starting to see some multiple offers. Not in everywhere, but typically, you know, the, the first stone is cast, the wave goes from there, and so it, that action is starting to happen and you know, the word gets out in the street, I think it's gonna then, you know get out there. Especially, maybe, again, not so much maybe in the urban, but in those sub, you know, suburban areas. But then again, traditionally we're starting to head into that purchase season where we start seeing more listings coming on and so forth. And and, and honestly it might be a good thing that we start seeing the multiple offers, cause that's gonna prompt sellers to say, Hey, okay. Things are going our way again. And I better get my house listed.
Alice Lema: But don't add another zero to it, please.
Michael Ronchetti: Right, exactly.
Alice Lema: Cause that's what they all wanna do.
Michael Ronchetti: No, we, we still have to and they're still gonna be, cuz you know, as we all know too I think appraisers and, and different valuations are also taking a a lot more look at valuations in the area.
But [00:13:00] it's definitely gonna be, so this upcoming year it's not gonna be in, in, in my opinion, it's not gonna be a record year. But it will, you know, I, I do think that we will see an uptick over what we've seen for sure over the last six months and you know, it will open up and it will create a a seller's market again and look for more inventory to hit in the market.
Alice Lema: Interesting. So Beth, how's your business going? Are you seeing an uptick in pre-approvals or are people kind of coming, coming back to life?
Beth Rodriguez: Yeah, we definitely are. We, last night was kind of a late night just cause we got some in late afternoon and, you know, having to work on that. So definitely seeing the uptick and the leads and pre-approvals.
Michael Ronchetti: We stayed, you know, we've had some slow moments, but staying pretty steady in the leads for December and January. So I think February's gonna be even yet a bigger, you know, monthly leads for us.
Guy Giles: Yeah, we're starting to see a little bit better quality leads. I don't know if people just [00:14:00] think that the housing market's gonna crash or somebody heard on the radio that maybe rates are coming down a little bit.
Michael Ronchetti: But we've got some stuff coming outta woodwork in the last two months and we're, we're just really trying to, you know, come up with solutions for people. Actually, I'm trying to help a guy right now. I'm not trying, we're gonna help him with this down payment assistant program. Maybe we can talk about that a little after the break.
Where their only options were U S D A or you know, really this other lender didn't have a lot in the way of options. So that, you know, just getting a little bit creative with some of these people. A little bit lower, FICO scores, a little bit less down payments, and like I said, we're, we're starting to see some more people that are a little bit more ready to buy, but we've been weeding, we've been getting some good practice at the weird lately.
Alice Lema: So , well, everybody should, should talk to a lender. And even if you can't manage, you know, guy and Beth and Michael will help you get ready. So it's, it's time well spent. We're talking to Mutual Mortgage today, Guy Giles, Beth Rodriguez and Michael Ronchetti. Just wanna [00:15:00] say, we're gonna have to take a quick break here cuz we are brought to you by Mutual Mortgage. Thank you very much. We're also brought to you by our local Rogue Valley Association of Realtors and John L Scott, Ashland, Medford. Thank you all. We appreciate you bringing the show. Every week we'll be back after a quick word.
Well, hey everybody. Welcome back to the Real Estate Show. We're talking to Guy Giles, Beth Rodriguez and Michael Ronchetti, all from Mutual Mortgage. Before the break you guy you happen to mention down payment assistance. Let's, let's talk about that, cuz that sounded intriguing.
Yeah, I I, well we, we've been doing 'em around here for a
Guy Giles: little, a little while. Really what we have is a, is a second mortgage. And, and a first. But Mike, actually, I'd really rather have you probably explain this one a little bit. It's a program that I'm literally diving into for the first time today. It doesn't look super difficult, but I think you'd probably be a little bit more familiar with the guidelines on it.
Michael Ronchetti: No, absolutely. The one great thing about the down payment assistance, you know, we had seen them kind of dissipate, [00:16:00] not be used a lot, especially over the prior two years. A lot of it with the market shifts, a lot of it with affordability factors and and then also, Just in the escalating markets that we had seen, especially two years ago. You know, folks sellers were calling their shots.
We've seen down payment assistance now come back into the market, especially recently, and it's allowed to bring in more buyers, especially the millennials and even the, older Gen Zs that are coming in and, and, and quite honestly, 40% of the purchases that are gonna be happening through this year are going to be millennials. And having these products and programs out there at their disposal to bring in more is gonna be, it, it's gonna be crucial. And we have a great product that is out. There's a lot of different DPAs. There's everything from state bond programs. Oregon has a state bond program as well as Washington and several other states. The only opportunity within those programs are your credit scores.
[00:17:00] Some of them have a more conservative credit score or your debt to income, which is how much you make as opposed to what debt you have going out, and they're more restrictive. We have a product now that's out that's really great for the market. It's really gonna be great for Southern Oregon as, as specifically where the debt to income requirements are far higher than the state programs. And at the same time with the loan to values, you know, going to 96.5, but then doing, as Guy mentioned a second behind that, which allows to go actually up over the a hundred percent mark. And being able to finance even some of the closing costs.
So it gives individuals, especially if there's some seller credit, which we're starting to see creep back into the market right now for sellers that are aggressively marketing their homes. That you know, in theory someone could come in with a pen. We haven't seen that in some time in the marketplace, so that's why I said some of the dynamics with some of the products that are coming back.
And a lot of [00:18:00] that has to do with speculation on you know, maybe we've hit that flat mark in certain areas that they're, that have declined and in other areas are still seeing an increase. It's a good sign to see these type of programs coming back out. Cause it just shows where we're going in the future.
Not to mention allows more people to afford a home.
Guy Giles: Well, and it's also a nice thing that you're not, you know, historically we've had people come in from access or different places, are offering some kind of help for down payment and then the money runs out and you're not dealing with the bureaucracies of the state.
You know, you're really dealing with somebody that just does this for a, for a living. I mean, I just had Mike speak on it because again, I'm just going through some of the training right now, but everything I'm looking at on it is basically just like doing, doing a regular loan and. And again, it's just regular underwriting standards.
By the way we're not going back when you hear a hundred percent financing. We're not talking about negative amortization loans. We're not talking about, you know, that we're still fully underwriting these people and, and they're vetted out.
Alice Lema: Yeah. You have to qualify [00:19:00] for this, right? Yeah. Yeah. , we're not, we're not reliving the two thousands Yeah.
Guy Giles: Running the numbers up against even a us DA loan on this. The so far that I've done this morning on this one that I'm putting. We're going to, purchasing powers is gonna be a lot, a lot better. Just they're, what he said earlier, the D T I or the debt to income ratios are a lot lower on the U S D A program and you can't buy everywhere.
You know, as we grow, we've, we've ruled out, you know, Central Point and. And Grants Pass in the last few years just because, you know, the, it, it really is a, a program that's designed for rural communities. And, you know, so yeah, you, you are, you really gonna go get a U S D A in Ashland, even though you can with the pricing there, then you're gonna make too much money for the program.
So it's, it's, it's a good program in some, some places. But I'm pretty excited about this, this new DPA program. By Monday you can call me and ask me any questions on it. Cause that will be all turned up.
Alice Lema: You will be [00:20:00] well versed. So on the down assistance assistant down payment assistance, sorry, I'm getting ahead of myself. Is that a conventional loan or is that f h a or what is that? What kind of program is that?
Michael Ronketti: That is running as a F H A program. So it's and it, because what we're doing is we're utilizing the guidelines within F H A for that down payment component that second. And historically that is what most of your down payment assistance programs run under. Just because of some of the conventional guidelines around.
Alice Lema: Okay. And so if it's an FHA type in that family, then is the minimum down payment also three and a half percent or do you have different.
Michael Ronchetti: Well, yeah, but the, the, the second mortgage act says the gift.
Alice Lema: Right. But I just didn't know, like, Where the lines were
Michael Ronketti: Oh yeah. Yeah. Still, still 96.5 on that first mortgage. Okay. [00:21:00] And and putting everything together and pricing it all out. But to Guy's point, and it's a really great point is one, from a pricing standpoint, it's, it's very competitive. And quite frankly when you, when you do look at U S D A as some other options, there's, you know, some of these other programs are so restrictive or you're waiting, you know, are they running outta money today?
You know, do I am, is my income too high? And and of course, even with U S D A, their income requirements are based upon what you're making today, not necessarily what the income is you're qualifying under. And it's it starts throwing people into loops with all the advanced mathematics on how everything's gonna be compiled.
Alice Lema: Well, in southern Oregon, it's a little even more challenging to have a U S D A buyer only because, , if I remember correctly, they, they don't do double wide manufacturer, triple wide manufacturer on land. And we just, we just have so much of that. It's how many of [00:22:00] many of our residents get to live in the country is because they have that kind of construction.
Guy Giles: There's one or two ways that you could work with those, but it's very restrictive as far as the manufactured houses. The other problem, If an appraiser goes out, you know, because we are a little bit more rural and usually that's where the manufactured house is gonna be out on some land. If you have a barn there and the appraiser gave $20,000 value to that barn, USDA's gonna back that in that right out of the appraisal.
So I literally had a house appraisal. Yes. I ended up finding him another house and we're still friends, but back first doing it yeah, we got completely sabotaged by an outbuilding of all things. Wow. And it was in great shape. But U S D A sounds like it's gonna be this really good rural land, but it's really more for keeping small towns alive than it is for you know, real rural properties where you're gonna be.
Alice Lema: Well, and I think the pandemic and the remote [00:23:00] work and the flee from the urban area is keeping all the small, small towns alive. So now maybe we are gonna have to figure out how to keep our inner city, our urban areas alive. But that would be a different, that would be a different radio show than today, than today. We're talking to Guy Giles, Beth Rodriguez, and Michael Ronchetti all from Mutual mortgage. We're talking about down payment assistance, Southern Oregon, the economy. And we were gonna talk a little bit about some construction.
So that's, that's an interesting question just to follow up on the down payment assistance that mutual mortgage offers can that be used in some kind of, Rehabilitation, renovation, situation?
Michael Ronchetti: We on, on that, we do offer renovation loans. So that would be different from the construction program. You mentioned a little bit about manufactured homes, and I do think that [00:24:00] they're, you know, from an affordable housing throughout the country as a whole, manufactured homes are gonna be picking up a big slack of the affordable housing, especially as people move from the urban areas, driving up prices and so forth on other homes and the construction program does cover people that are buying manufactured homes and looking to put those on land.
Alice Lema: Oh, super cool.
Michael Ronchetti: And you know, and that's actually a great program for that. And you have the ability to effectively buy manufactured home, put it on land for three and a half percent down utilizing FHA. And you know, we do have conventional outs.
So it's not just about building a stick home, but also going and buying a manufactured home and putting it on lands. And I, I really do think in, in this time right now that we're in, that's gonna be a huge program going forward for consumers looking.
Alice Lema: And I think that in Oregon, cuz Oregon is so on the front of the [00:25:00] progressive energy movement, because manufactured homes are highly energy, super, super energy efficient. So yeah, so Guy, I interrupted you.
Guy Giles: Oh, no, I that's funny. An email popped up and I, I might have lost my train of thought, but as far as just the manufactured Houses, you know, I mean, I, I lived in one when I first got married and it was still had axles on it, and it was it was nothing like what you're describing you know, today, if you tried to put my stick built house on a, on a trailer and ride it down the road, the thing would fall apart before I hit the highway. These things were built. Really, really well. But as far as the construction piece of the thing you know, you're gonna go in and you're gonna get the builder and you're gonna get all of your, your items together.
But, you know, they thought it through really well where you can still finance in separately cuz that that guy's not necessarily, or a gal that you hired to be the contractor isn't necessarily gonna do wells and septics. So it does allow for you to finance in the wells and the septics as [00:26:00] part of the whole.
You know, and, and you would obviously have, you know, a different contractor for that. And, you know, so I mean, it, it is a really well thought through program that I'm, I'm really excited. I got three of 'em that I've started up really in the last week where we're, well, we're just getting 'em started up right now.
Alice Lema: Now are you talking about financing or brand new manufacturer on land? Are you talking about construction?
Guy Giles: I'm talking about both. Where? Both. Okay. Where, you know, a, a lot of times somebody will, will want you to have your well and septic on there or own the property. This, with this program, you can purchase the property.
Alice Lema: Oh, I see what you're saying, the construction piece. I see what you're saying.
Guy Giles: Yeah. So I mean, it's, it's, it's pretty ready, you know, pretty, pretty ready to go. But I guess what I was, what I was talking about, Just on some of these other things, you are able to finance those into the construction loan and it's not something that has to be done separately.
And lastly, I know we're coming up on the break. It's not a interest only loan or, you know, something that you have to worry about. It is a [00:27:00] true one-time close where you know your rate and you know everything going into it at first. So that's, that's a huge bonus.
Alice Lema: That is because not all lenders do that. And then you get kind of surprised at the end cuz you might not have heard that little, that little snippet in the original piece of information.
Guy Giles: No, you're just focusing on that you're paying interest only.
Alice Lema: While you're well that you're getting a house. We get so excited about the house, we forget about the, the loan. We're talking to mutual Mortgage today. Michael Ronchetti, beth Rodriguez and Guy Giles. We're gonna have to take a quick break. We're brought to you by John L. Scott, Ashland, Medford, mutual Mortgage, and the local Rogue Valley Association realtors. Do not touch that dial. We will be right back.
Hi everybody. Welcome back to the Real Estate Show we have Mutual Mortgage on today. They come on the show, the first of every month, Guy Giles, Beth Rodriguez and Michael [00:28:00] Ronchetti. Thanks for being on the show guys.
Guy Giles: Thank you. I'm glad to be back. Thanks for having us.
Alice Lema: So before the break we were talking about construction loans and assistance programs for down payments. And we were talking about the difference between U S D A, which is a no money down, and how that's not really very practical anymore in our area. And then these construction loans that you guys are doing will actually work with manufactured homes and or drilling wells and putting in septics. I think that's quite remarkable.
It, it really is. It's, it's a great program that
Michael Ronchetti: historically had been, you know, your local community banks that were the places that folks tended to go, and you had to wait in line and now to have the ability and, and that is a product that we do in-house. We don't broker it. So, you know, you hear a lot of people talk about, well, yeah, but I send it to a broker. This is something that we use and in many cases it's, it's [00:29:00] you know, it's our funds as well, so. It's, it's a unique situation that you don't typically see with most lenders, and again, most folks have had to wait in line with their local community banks and we're looking to bring it out.
And really, again, a lot of it is, it creates a lot of affordable housing opportunities for consumers getting in that are, you know don't have the income to maybe get some of the homes, but they can still get in the areas. And get out there and buy homes. And quite frankly when it comes to manufactured homes or buying homes as, as you mentioned earlier, energy efficient and well constructed.
And if you have lots and things and, and the other part is we can finance and put the buy of the lot in the program.
Alice Lema: Oh, can you really? You can do the land purpose.
Michael Ronchetti: So some, yes. So some of the folks some of the programs that on the traditional construction, you have to go out and buy a, get a lot loan, buy the lot, get the lot all done.
Yep. We can actually use the purchase of the lot and put that in the [00:30:00] financing of the loan itself, along with you know, getting any permits and requirements done as well as, oh, absolutely.
Alice Lema: So on the construction side can the buyers also do a VA version? Of that for the construction.
Michael Ronchetti: So the, the, the loans that we offer are conventional. And that would include if you're in high balance areas as well. I know Oregon currently does not have any high balance areas, which is, is shocking.
Alice Lema: But what's a high, what's a high balance?
Michael Ronchetti: High balance would be loan amounts that go over your traditional traditional loan limits. But that said, we do it in conventional FHA, VA and U S D A. So if you, if you happen to fall under a U S D A area, we can do that same construction program and effectively the loan is based on the standard guidelines for FHA, VA.
So a VA construction loan is effectively a hundred percent loan. And it's a great way to go. To, yeah, I, I love that product because our veterans [00:31:00] deserve to be able to get into a home and potentially have no money out of pocket.
Alice Lema: And they, a lot of 'em don't know that. So we should we should make a thing now. I know we wanted to talk a little bit about first time home buyers, and then you've got some special buy down and, and other programs. We've got a little bit, five minutes left. What, what do you wanna talk about for first time home?
Michael Ronchetti: So the great thing that we're seeing right now, as we mentioned earlier, was millennials are a, a big part of what we're gonna be seeing. We're gonna be seeing a lot of first time home buyers coming into the market, and God bless 'em. Let's get 'em out there. And now's the time to jump in the, the Fannie Mae, Freddie Mac, otherwise known as F H F A the, the Federal Housing that oversees, they did away for first time home buyers.
They did away with loan level price adjustments, otherwise known as LPAs. And what that has done is it's lowering the pricing for, first time home buyers to get into the marketplace and be able to buy and afford homes. So [00:32:00] effectively a rate for someone that's, you know, that's buying a home again, or has bought a home already within the last you know prior three years.
My rate's gonna be higher than someone coming in that's never owned a home prior to and coming in and buying their first home. And it's a great time for somebody to jump in as we talked earlier, from just a stand point of it's still that buyer's marketplace or still an ability to get some possible closing costs paid for that may not be here 90 days from now if rates continue to go down. But it allows for more affordable housing to come into play for that first time home buyer. So now's a great time to jump on things and be able to get lower pricing.
And if you co, if you put that together with what we're seeing a lot of right now, which is two one buy downs, where you can effectively get your rate bought down. Year one, it's 2% lower than where it's going to be currently, and then one, you know, after 12 to 24 months, one 1% [00:33:00] lower. You take that with the adjustments that just came out from from Fannie Mae and Freddie Mac. It's, it's just, it's a great time for first time home buyers to get out there and buy homes.
Guy Giles: I've also recently had, and I apologized for a minute ago, I was trying to silence my phone. I'm bound and determined for that not to happen again. But I actually had three different times lately where people are going in, they're getting sellers concessions, you know? Cause everybody thinks you know that, Hey, the market I missed out. You know, it was six months ago when everybody was bidding up 30, $40,000.
Well, just because there's not a frenzy like that right now, doesn't make it not a good time to buy. We've had, we've had three in the last month that they came in, they asked the seller, you know, for something, the seller was happy to give it so that they could move on with their next project. And then we ended up buying down their rate with that and now, and then their appraisal came in high.
So I think, $15,000 high. So, you know, we really haven't [00:34:00] corrected like that. God is a little bit in some of the sellers right now, so it's working out for the buyers and I do think it is a good time to be, to be talking to us. Rates have come down, you know, about a percentage point from their highest, where, where they were, and just because they're kind of, for lack of a better word, trickling down, doesn't mean that they're not coming down and, and that is gonna be the overall trend for later.
So, you know, it's. I'm just a huge proponent of a working with a good real estate agent. Cause I don't know that a, you know, trying to do this all yourself would necessarily yield you a house that appraised for more than value. But come in and get ready. And if you know, if. Right now is not the right time.
It might not be next, or it might be next month when that house pops up. But if you're in here, we've got you fully underwritten, ready to go. We're having a lot of 'em closed in, you know, nine days if they need to. And that could be the difference also in you getting the house.
Alice Lema: Wow, that's exciting.
Guy Giles: Being able to bargain for it. So we're, we're here and, you know, we're, [00:35:00] we're busy, but we have plenty of bandwidth to be able to take care of people. And I really don't know anybody around here that's beating us on rates and fees. So shop us, you know, I'll right in the eye if I'm getting beat.
Alice Lema: Talk to a mutual mortgage and find out what you can do in your next real estate step. Well, it's unfortunate, but we're out of time again. So Michael Ronchetti, Guy Giles, Beth Rodriguez, let's have you on again and let's have you on again soon. We still have lots and lots of first time home buyers stuff to talk about. We, there's a lot of construction conversation we didn't get to have, but you guys are great. Guy, 10 seconds. How do people get ahold of you?
Guy Giles: Just gimme a call on my cell phone. It's (541) 944-6987, or g Giles at Mutual Mortgage, and we have Beth here too that's completely fluent in Spanish for your people.
Alice Lema: Thanks guys. Have a beautiful weekend. See you next time.