Real Estate Show Lender Updates June 2023

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Real Estate Show Lender Updates June 2023

Alice Lema: [00:00:00] Hey, Southern Oregon, welcome back to the Real Estate Show. So glad you could join us Today. We've got Guy Giles from Mutual Mortgage coming on the show to bring us up to speed on what's happened in the last month with interest rates, mortgages, buyers, and he also has a program he wants to talk about for veterans that has to do with rehabilitation, renovation, that kind of thing. So that'll be super exciting and great for our service people.

In the meantime, let's get to our local stats, cuz we have a little bit of good news for a change. Let's start with Klamath Falls. Our prices year over year in Klamath Falls are actually up 10%. A single family residential home will now cost you $352,321 in Klamath Falls, and that's year over year. So yay for Klamath. The number of solds for residential and Klamath year over year are down 26%. The number of listings in Klamath year over year are down 10%. [00:01:00] We had zero foreclosures closed this week in Klamath County, zero short sales closed this week in Klamath County, and zero million dollar residential properties closed in Klamath County this week.

Josephine County prices year over year are down 14%. So that brings us to you $445,450 on average in Josephine County. The number of sold year over year in Josephine County are down only 4%. The number of listings year over year in Josephine County are down 12%, and we had zero foreclosures closed in Josephine County this week. Zero short sales close in Josephine County this week, and zero million dollar residential sales close in Josephine County this week.

So let's get to Jackson County. Our prices year over year, this time last year are down 15%. Bringing us to [00:02:00] $457,707 average for Jackson County year over year. The number of properties sold, these are again, residential, Jackson County, number of solds year over year are down 38%. Number of listings year over year in Jackson County are down 11%. We had zero foreclosures closed this week in Jackson County, zero short sales closed this week in Jackson County, and zero million dollar properties closed in Jackson County this week. And again, that's all residential, single family, home.

The numbers are different for different kinds of properties, so we have a tiny bit of an uptick. We've been saying for a couple of weeks we thought we were bottoming out. We might. We might be, but that's why we do this every week. In the meantime, let's take a quick break, say thank you to our sponsors, and let's get Guy Giles with Mutual Mortgage out here to talk about what's happened in the last month with interest rates and mortgages. Don't [00:03:00] touch that dial.

Well, good morning again Southern Oregon, and welcome back to the Real Estate Show. We get to interview Guy Giles again today from Mutual Mortgage. Welcome back Guy.

Guy Giles: Hey, thanks. I'm kind of enjoying this little change in the weather this last week, and it's just been, I thought, I thought we were just gonna get hot and be done, but I don't know. I guess well,

Alice Lema: Welcome to Southern Oregon. It's kind of like the housing market, right?

Guy Giles: Oh, God. That, that's what I was, that's what I was gonna say. You know, I tried to figure out what's gonna happen in, in our markets and everything, and then I get surprised sometimes in this weather. It feels like to be honest, it feels more like the old days. I remember, you know, 20 years ago, we would always get thunderstorms in the spring and, and a lot of rain with them and you know, I know it's pretty wet out there. It was at least on Wednesday and Tuesday night. So anyway.

Alice Lema: Well, and everything goes in cycles. You know, the old timers say the weather in southern Oregon is on like a 18 to 25 year cycle. And, and then [00:04:00] a lot of people talk about the housing market being on a nine to 11 year cycle. So you and I were talking before the show. That we both felt like there was going to be some kind of a breakout in a positive sense in the housing market. And then and then it just kind of doesn't happen. So just wanted to ask that question to kinda get the conversation started for today's show.

Guy Giles: I know I, I, I feel like my crystal ball's just in the shop and it's been there for a long time. Cause I can't, I can't seem to figure out what in the world is going and every time I get a handle on it or think I do. Something else happens and but I, but I agree and, and I do, I, I, you know, just a couple of things have to come. Back into place. And I, I think that it's gonna make everybody feel a little bit better about, about selling. And I know I'm getting a lot of phone calls this last week on we was, was my loan assumable was my loan assumable, you know.

Alice Lema: As, oh, we were getting those questions again.[00:05:00]

Guy Giles: Yeah. If they're thinking about listing their house, you know, that would be a pretty nice thing to be able to put on, put on a listing if some, if you're able to take a, I think the last one yesterday was a two, 2.9% rate that I had somebody in on a 30 year fixed. But they are looking to move, you know, it's time.

Alice Lema: So, but let's talk about that assumable thing, because that hasn't been on the buffet of choices for so many years. Can you just briefly remind people the mechanics of all that.

Guy Giles: Well, yeah, I mean basically you, you would still have to qualify. I'm generally not involved on that end of things. I could tell you, you know, if something's assumable or not, but, but you know, they're not gonna let somebody just take over a loan. You're gonna have to go in there and, you know, show 'em a little bit of documentation and demonstrate the ability to be able to pay it.

But that said, most places make their money on servicing loans. Fannie Mae and Freddie Mac, they already have that loan on their books. And even though it's a low rate, you know, you might think, well, it'd be really good to get outta that low [00:06:00] rate and make somebody have a higher rate and it, and it would be for them.

But if you're just servicing that loan, meaning you're collecting the payments on it, you're taking care of any issues with it. That's where a lot of the banks actually make their money, is just servicing loans for Fannie Mae and Freddie Mac. Somebody could come in if they're buying a house and say, you know, I'd love to buy your house right now.

And it's, it's really nice and it's just as nice as the one next door. But if your loan was able to be assumable, then you could walk in there potentially and get you know, a 3% rate or a three and a half percent rate. If somebody was, you know, if it was an assumable loan. So I don't mean to get everybody excited thinking, man, let's just go find, you know, an assumable loan.

Because like the regular conventional loans, which are, most of the loans are not assumable loans. There's a clause in there that it, that it has to be paid, you know, as soon as, as soon as.

Alice Lema: That's the, that's what I thought. I didn't even know assumable loans were a thing since the crash.

Guy Giles: Well, [00:07:00] FHA. Can be. And same thing with with VA now, and I mean VA is VA's always been assumable. That said, you want to be really careful if you're on the selling end of that because your guarantee on a VA loan is tied up with with that property. So if somebody assumes your loan, your guarantee is still tied up there.

So, okay. They've actually made some recent changes where they'll make, they'll allow a non-vet to assume a VA loan. It's always been just another veteran would have to do it. But again, you just wanna be really careful as a seller, you know, and as, as an agent, maybe that's protecting their seller if they think they're gonna go out and buy another VA house.

And they just cut a really good deal to sell their house and let somebody assume that loan you may not have your VA eligibility ready for your next house. I know that was like three different things, but basically conventional, you [00:08:00] cannot assume those loans. If, if it's a F H A or a VA yes, but again, you just wanna look. There's not the ramifications on an FHA loan as there would be on, on a VA one.

Alice Lema: Okay. But, okay. So that's why we needed to talk about it, because it is kind of a complex thing. And so I guess, just to give the listeners a heads up, if you see a listing that says it has an assumable mortgage, it's not a slam dunk, A, that you're gonna get it, and B, you've gotta go through all the hoops with that particular lender. Is that right?

Guy Giles: Yeah, yeah, yeah. There are, there are hoops here.

Alice Lema: Because they're going back to the same funding, the same loan.

Guy Giles: Yeah. And it could potentially be a really good thing. I mean, it could be, I mean, I have not done the math ever on this, but if you think about, you know, the, well, I mean, I've done the math between a difference in a 6.5% rate, a 6.8% rate, and a 3% [00:09:00] rate.

So if you could get a, a rate that low, that, that might not be a bad thing, so, it, it's something I could look into a little bit more. As far as, you know, if, if there's 25 years left on the loan, does that mean they allow you to go back into 30 years? I mean, I wouldn't think so. So, I mean, honestly, I, I feel a little ignorant right now.

Alice Lema: Well, but see, you just got all these phone calls this week, right? And that's. That's kind of what we're talking about is how everything just changed again this week when we thought it was gonna be stabilizing. Where, where are we on interest rates now? Cuz I'm, I'm getting conflicting reports.

Guy Giles: Well, I think most of the conflicting reports are because, you know, if you get on, if you get on like one of these online lenders, they could be, you know, giving you a really good rate, but you're going to be paying points for that rate and by points. I know I've said it before, but it's worth repeating. If you're paying a point on a loan, it's 1%. So you can just take the word point, throw it out of a loan [00:10:00] percent in there. Yes. So on a $400,000 loan, that's a $4,000 fee I've seen. Two, 2.6. Do you know? 2.83%? You know, for that rate. And you look in the, you know what, the big print give us, the little print, take us away, you know, and you, you just look in there and you start seeing, well, this is 25% down and this is a 785 FICO score and this is a you know, this is paying two or three points for this rate.

So, you know, they, they genuinely could be, you know, a, a decent deal, but it's just something that you really need to dig into. And if you're really tempted to go with one of those online lenders, honestly just gimme a call. Let me take a look. And if they're beating me and they legitimately, you know, it makes sense and you got a good credit and you got good income and everything, I'll say, you know what? Right now things are slow enough. You'll probably be able to close your loan on time now if you have a well [00:11:00] or well see.

Alice Lema: That's the experience most agents have with the online lenders, and that's why we don't like 'em is they, oh gosh, they don't get it done on time and they don't talk to you.

Guy Giles: Well, and they, they can't in a lot of instances because the person up front taking that order is basically, you know, it's not the person in the back, you know, cooking the thing at all, and they have no knowledge of that person, what that person's doing back there.

You put in what you put in, if you make a mistake on your application. They're not gonna, they're not gonna even know enough to go back and say, Hey, look, you know, this, this looks a little weird. You know, I need to address this right now. So everybody thinks everything's okay. It goes back to underwriting.

The appraisal gets ordered, and now all of a sudden you're dealing in the 11th hour with, with a major, major deal.

Alice Lema: Yep. Yeah, and that's the experience. Most real estate, at least in southern Oregon, we all talk about it with each other.

Guy Giles: Well, and I can't imagine that these online lenders are only targeting southern Oregon, so it's gotta be happening everywhere as far as that goes.

Alice Lema: Yeah. Yeah. [00:12:00]

Guy Giles: You know, I, I know everybody's trying to do what they can to make a buck right now, but literally, that person that's doing that initial data entry is really, no you know, for the most part, not gonna be anybody that understands anything more than a little bit of data entry. They, now, I, I can't tell you how many times I've had somebody come in and they're with an online lender.

And that person just said, Hey, you're qualified. You know, you're good to go shopping. And truthfully, a lot of times they are okay to go shopping, but digging a little deeper and thinking, you know, talking to these people, it's like you find out this isn't the program or the down payment that you need to be going in at at all.

Alice Lema: Yeah. That actually happens a lot. And you know where else that happens is some of the bigger banks. Oh yeah. Yeah. And so that's when you're out shopping for lenders, that's one of the reasons why your company is so good is because you do a more thorough evaluation. So when you get that approval letter, you're not gonna get surprised in the middle.

Guy Giles: No. No. And, and there's always gonna be, you know, something, but at least we know how to deal [00:13:00] with it and you're gonna be able to come right back to us.

Alice Lema: Yeah, it's important to get it all upfront, so cuz that that's just, oh, and it's happened so many times, but Yeah. And, and we don't need that right now. The market's weird enough.

Guy Giles: That is absolutely true. And people, you know, really should have the time right now to be able to go through a loan and figure out, you know, what, what the best options for people are.

Alice Lema: And yeah, cuz we're not in a frenzy market right now, but you know, Lennox Scott, the, the gentleman that owns our brokerage was saying that they're having multiple offers and a frenzy market in a lot of the urban areas on the west coast.

So, yeah. And that's brand new. So again, this is where you and I were talking before the show. We still have some volatility. We keep thinking we're gonna have this, what did you call it? A breakout, like a breakout moment where we change and go forward again.

Guy Giles: Well, yeah, I, I, [00:14:00] I mean, it just feels like it's right there. And every other week, you know, all of a sudden things will just start going crazy. Your phone will start ringing. Everybody's trying to make an offer, and then, and then it's just dead for four days. And I'm just like, God did I, I don't know. Did I like make the whole world mad. And, but, but overall, I know I'm a lot busier than I was 12 months ago right now, but that said, I, there's obviously a lot of pent up demand, you know. People need to move, you know, I've got one guy that's got just a whole herd of kids and he needs a bigger place and, you know, Money Will will trump that for a little while, but at some point, you know, his wife's gonna look at him and say, you know, hey dude, you know, we're gonna have to pull the trigger on something else.

Hopefully rates will be a little bit lower and hopefully it won't be too far down the road. But that, that said, you know, there is a necessity for people to move, whether it be getting to a bigger house, a smaller house. You know, to a school district, whatever, and Yeah. Yeah.

Alice Lema: Or a job, new job.

Guy Giles: Oh, [00:15:00] yeah. That's definitely a big one. That's probably more of what I'm seeing than anything right now is medical professionals moving to town.

Alice Lema: Well, we're, we're talking to Guy Giles Mutual Mortgage. He comes on the show once a month to bring us up to speed on the latest glamor and trauma of the housing market. In the minute we've got left. Where do you think and we can talk more in the next segment, but where do you think the rates are gonna go and how long do you think it's gonna take? Just real, real quick here.

Guy Giles: I would say within the next couple months, I mean, they're down, I mean, down, I mean, is, is is the trend. I mean, honestly, i, I, it is a deeper conversation than than 30 seconds, so maybe we should talk about.

Alice Lema: Okay. Well, we'll, you know, so, so we'll loop back after this quick word from our sponsors and we wanna say thank you to Guy Giles, Mutual Mortgage for bringing the show every week. Also, John L Scott, Ashland and Medford, and our [00:16:00] local realtor Association. The Rogue Valley Association of Realtors is also a sponsor. Very grateful to them. And we'll be right back with Guy Giles and Mutual Mortgage, talking about interest rates, making some predictions for the rest of the summer. Don't go away. We'll be right back.

Well, hey everybody. Welcome back to the Real Estate Show. I'm Alice Lema. I'm a broker here in beautiful Southern Oregon with John L Scott Real Estate. And we're in the middle of talking to Guy Giles of Mutual Mortgage who comes on the show the beginning of every month. And we were just talking about interest rates. And some possible timelines for going up, going down for the rest of the summer. Where, where do you think things are gonna go?

Guy Giles: Well, I, I'm still a firm believer that they're gonna go, they're gonna go down and. It's the, you know, kind of kinda of the one thing that's this weird about, about home loan rates, when everything is going great, home loan rates [00:17:00] tend to be up.

Alice Lema: And when they, I mean, when the economy is going great.

Guy Giles: Yeah. Yeah. So I guess that would've been a little better way to explain that.

Alice Lema: But, well, no, I just wanna make sure it's true.

Guy Giles: Sometimes I'll say something, I'm like, wow, I could have just used one word. But, but definitely You know, like, it's funny because I think the last thing that I read was what the truckers thought, and you know, oh, well, believe it or not, the, the, the truckers. You know, they, I think I used to love old big rig hits when I was a kid, and trucker songs. And they talked about, you know, it being the pulse of the, of the country. And it kind of is, if you think about, you know, you have to get goods from one place to another. And truckers, you know, they see oil prices, they see, you know what it's gonna cost to get 'em there.

They see what they're shipping, you know, and and they are feeling a little bit more what we call kind of bearish about it. So it's, I mean, I, I, you [00:18:00] know, as far as the, the whole economy, I think the Fed has, has done what the Fed. Is mandated to do at this point, and we're really hoping that not only will they have a break for a couple of months for hiking rates, but they'll, they'll just stop doing it because we need to, we need to let this, let the higher rates just settle for a little bit.

What happens is when everything's cheap, houses are cheap. Credit cards are cheap. Cars are cheap boats, everything. People will buy them and. And it sounds like it's good because it's commerce going on, but, but it makes, it causes inflation and, and when you're paying more for things just because, it's just how many things are chasing, how many things, you know, how many dollars are chasing the boat, how many dollars are chasing this or that.

And when everybody's out doing that, there's just not enough to fill the demand. So then you end up charging more for things and prices go up. That's when the Fed steps in and [00:19:00] says, hey, we're gonna raise rates a little bit or a lot, and we're gonna make it more painful to go finance something because good or bad, that's kind of our economy.

People finance things, so they've been been raising rates for a little while. Two, a little while a, a while now, trying to cool down, you know this. So, you know, if you have 20 people going after one boat, maybe now you only have two people going after one boat or no people going after that boat. So now they're gonna lower the prices a little bit on, on things.

And that's really what, what the goal of the Fed is. And it's, we're pretty much there right now. Other than some stubborn job numbers, everything's really showing that that they've, you know, cooled down the economy and they should not have to raise rates anymore, and that should translate to lower rates.

It's just, it's honestly, by now, I would've thought we would've been down around 6% and then down around mid fives [00:20:00] by the end of the year. And I really haven't heard anything for the people that do this for a living as far as just saying where things are gonna go. That nobody's saying the rates are not gonna be down, so it's still gonna happen. We just don't know exactly when. We got surprised on Wednesday when Canada decided to raise their rates a quarter percent just in the middle. Again, it's just, it, it is just trying to clamp down on inflation, I guess, for lack of a, lack of a better word. You know, the target rate for inflation, you know, is around like 3%.

You know, they don't really want it any higher than that. And, you know, when we're up here around 6, 8, 10, and, you know, to to, to be honest, they, they've, they've messed with the numbers over the last few decades on those too where they pull out gas and they pull out, you know, some of the, some of the food and some of the things that we're really getting hurt the most.

So inflation could actually be higher than what is reported a lot of the time. But there, [00:21:00] there finally, I think there is a handle on it. So the, the hope is that we start translating that into some lower home loan rates and the Fed just kinda lays off and lets this thing, you know, back when I used to do chemistry, you know, if I needed something to react, I didn't just keep adding stuff, you know, you, you had to add, you know, a little bit of acid or whatever. If you're trying to lower the pH, let it have time to react. And that's what really needs to happen right now, is the markets just have to have time to react to all of the, all of the upward, you know rate hikes. So we're hoping we get a pause this next month. And that's what everybody's really anticipating right now.

And hopefully that'll just kinda let everything settle down and then they'll realize that they, they don't really need to raise rates anymore, at least here in America. Canada they're, they're Canada man. I I, right.

Alice Lema: And it's only just interesting for the [00:22:00] conversation that they kind of, yeah, just out of the blue. Did that this week.

Guy Giles: But but it completely affected our markets this week.

Alice Lema: So Well, we're everybody's so reactionary. That's the thing. When you have unsettled times, then every little thing causes a reaction.

Guy Giles: Oh yeah. Yeah. And, and you know, we can't discount in this day and age, you know, the, the world economy is gonna kind of affect us too, if if you're for the EU. Or you know, somebody goes and starts having trouble, that's gonna slow down. You know, generally slow things down. Or if we do that, it's gonna have an effect on the rest of the world also. So we do need to watch these other places. But it, it had a effect, you know, on Wednesday on the mortgage backed securities, which is what we trade on for our rates.

So they, you know, we got a little spike after having a few really, really good days. So that's what I mean, I think, I think you said it best a while back when you were talking about the old lost in space. You know, where they're just trying to get a new planet and it's like, oh, we hit the ground, yay. And then it's like we're bouncing a little bit for, for a little [00:23:00] bit and

Alice Lema: for us older people. Yeah. And then all the dust, Lost in Space landing was always bumpy.

Guy Giles: Yeah. So once I can clearly see through the dust, I'll let you guys know kind of where we landed, I guess.

Alice Lema: Well, let's just project out a few months. So because we've had all of this volatility to absorb in the interest rates. And it happened hard and it happened fast and, and it seems like the market's trying to do that. We still have people buying houses. We don't have enough people selling, but we still have a lot of people wanting to buy. So, so this is early summer and then we're going into an election year. So doesn't, isn't there a a typical housing market reaction to an election year?

Guy Giles: Yeah, well, didn't. I thought we just got out of an election. I mean, this is insane. I mean, maybe it's just accelerating cuz I am getting older. But you're right. You know, it is kind of coming in. [00:24:00] Yeah, I, you know, rates, I mean, honestly, if, if you were to look historically when, you know, and then this isn't political, this is just facts.

Alice Lema: No, no. We're not being political. We're just being, yeah. Matter of fact, yeah.

Guy Giles: Generally when the Democrats get in, it's good for housing. They're, they really try to do things to make everybody be able to get into a house. That has not happened this time around at all. I mean, I, it, it, you're actually seeing the opposite come out. And these are, these are nonpartisan people that are making a lot of these decisions. They're appointed. So I'm not blaming that on the Democrats or the Republicans. You know, maybe somebody could have a little sway on these people. But as a general rule, you know, the guys that have been in it way longer than me always said, you know, you'll end up doing really good.

You know, as far as the market goes, and we, we haven't seen that. In fact, we've seen the opposite. Where, where they're hitting people with, with pricing, you know, and, and, and telling you, if you have a good credit score, now we're gonna [00:25:00] penalize you.

Alice Lema: So did that go through, is that actually

Guy Giles: That part's, that part's there. The, the part that, that they killed was was a part on, on some loan to values and things like that, that, that started to come in and they, they got a temporary thing till September and now they've, they've finally killed that. But, but this other part is there. And, and don't go killing your credit score thinking that you're gonna get a better deal. Because it, it honestly is, all it is is more pricing hits for people that have a good credit score. The people with a lower credit score, they're getting hit still in other ways. So there's really no benefit to, we, we've actually had people call in and say they want to crash their credit and they'll, they'll let us know

Alice Lema: To save up to save $500.

Guy Giles: Yeah. Yeah. So, you know, I've come up with a couple of creative ways to maybe deal with some of these, what they call loan level pricing adjustments. I'll probably get in trouble at some point for doing it, but I'm gonna always look out for the, for the,

Alice Lema: Well, we'll just keep it between us. Yeah. It'll [00:26:00] be our little secret, so don't tell anybody.

Guy Giles: Yeah. I mean, it's not a bad time to come talk to me and get a second opinion because I have, I have thought through some of these things and I, and I think I might have a couple of solutions that.

Alice Lema: Yeah, you just gotta stay on your toes. Every single week folks, we're talking to Guy Giles of Mutual Mortgage getting our early month update like we do the beginning of every month. So the volatility that we've been experiencing and the very recent, it feels like resting, like the market's resting and might be ready to, or bottoming out. That would be another way of thinking. That our local market might be bottoming out. Do you have that sense? Do you, do you feel like we could start making a turn for the best or is it still too soon to tell?

Guy Giles: Well, when, when we talk about a turn for the, for the best. I, I think so. I think people still want to be here, you know, I mean, that's, that's not gonna change. And you know, if you [00:27:00] if you're, if you're getting, you know, say you're in your seventies or you're, you know, and, and, and your goal is to be here, at some point you're gonna have to pull the trigger and do it whether, you know, whether it's the best rate or, or not the best rates.

And, and when we talk about like hitting a bottom, at least price-wise, I don't think we ever really went down. You know, maybe a, maybe a tiny bit, but, but it felt more to me, and I'm not on your side of things, that, that, that it was more like, well, I'm just not gonna raise my, you know, raise my purchase price up as much as I was going to.

I'm just gonna keep it a little bit more flat. So I, I, I don't, I don't see these big price reductions that everybody's thinking about. And, you know, people waiting for a bunch of foreclosures. I don't, I don't know that that's gonna.

Alice Lema: No. Cause I'm tracking that every week. And the foreclosure market is, and the short sale market is almost non-existent. And I think isn't a normal healthy market have something like, Eight [00:28:00] to 16% foreclosures. That's probably too high. It's been so long since we've had a market like that, we'll have to go back and check. But the prices like Jackson County year over year last week, the prices in Jackson County for single family homes was only down 3%.

But you know, the dramatic part is the number of single family homes sold in Jackson County year over year last week was down 31%. And it's not because. Of the prices necessarily, it's because there's nothing to sell. We have such a shortage of inventory.

Guy Giles: Well, yeah, and if you're, if you're thinking about making a move, I mean, honestly, I still think it's, it's a good time to do it. Not cuz. It's the best rates or not because of, you know, a few different factors, but for the simple reason that if you were in this at all a year and a half ago and in a position where you had to bid over the next person and you don't even know what you had to bid over. Right? So, you know, everybody's going [00:29:00] at it, like just driving the prices up, up, up all the time. Right now might be a time where you can get something. And then I think this window is short. Cause I do believe that it's it's, there's not gonna be much of a catalyst to turn the whole thing around.

Alice Lema: Yeah. And we're gonna have to take a quick break and we're gonna come back and talk more about what the prices are and are not Guy Giles Mutual Mortgage. We're thankfully brought to you by Guy Giles, Mutual Mortgage, John L. Scott, Ashland, and Medford and Rogue Valley Association of Realtors. Do not touch that dial. We'll be right back.

Hi everybody. Welcome back to the Real Estate Show. I'm Alice Lema, broker in John L. Scott here in Southern Oregon, and we're talking to Guy Giles of Mutual Mortgage. Right before the break we were talking about prices and they're not down very much like you've, you've mentioned, but some of the first time home buyers are getting shots at little Cottages that are under $250,000. Yeah. [00:30:00] And, and again, like you were just saying before the break I think people should jump on it cuz I feel like we're poised to start going up in price as well.

Guy Giles: Well, and and just, especially if you don't own a house at all. I mean you gotta be in the game. I mean, honestly, I just like, like I always go back, I mean, even the, my very, very first place that I ever had was the single wide on a little bit of acreage that you know, I paid. $80,000 for, and it was on 18 acres and you know, granted this was a little while back but a few years later sold it before I moved into my first stick build house and, you know, 8, 9, 10, 11, $40,000. So I made 50% on the thing in like five short years

Alice Lema: just by having a place to live. Yeah. It's so important that those first timers, they just gotta get something. Don't be too picky. Just get something and get that equity building started.

Guy Giles: Oh my gosh. Yeah, it's funny, I, I talk about short years. They didn't [00:31:00] feel like short years when my daughter was like literally living in the closet, cuz that was the only place to have her little crib. But, but still good memories and still, you know, especially, it really set, set us up to buy our first house in town. And, you know, it's just, I, I, I don't know, I'm just, I'm a, I'm a huge proponent. I still have that house now and, and it's just, it's been really, really good for the family.

Alice Lema: Oh, that's great. That's great. So you kept it as a rental? Awesome. Very smart. Very smart. And then your wealth building is exponential. Yeah. If you can pull that off. But there's nothing wrong with selling a house to buy a different property. You know, it just kind of depends on your situation.

Guy Giles: Well, and I absolutely sold, I sold that, that property to buy this, this the house, the stick bill house we still have. That property we sold. And enabled us to have $40,000 down. A little bit of equity. And that was not bad in 98.

Alice Lema: So that's another thing I wanna talk about, because even though the rates are higher, [00:32:00] dramatically, If you owned a property, you have so much equity. I'm not seeing that the payments are really all that much different. Are you, just because the down payments are so much bigger if you were a homeowner Yes. Already.

Guy Giles: No, it's absolutely, it's absolutely true and I mean, I. The longer I'm around more, I realize that you want to be where you want to be. I mean, if you're perpetually waiting for everything to be perfect you know, I, I know if my wife was waiting around for the, for the right guy, she'd have never married me. And it's just, you know, the right time, the right everything. I certainly didn't have money. I might have had a little more hair, but I wasn't perfect. And I'm still not by any stretch, but if you're waiting for everything, just fall in line. You know, it's, it's never gonna happen. Yeah. And, and, but, but just getting in there and, and, and doing it is, It is, I don't, it's been great for me and my experience is really the [00:33:00] only one that I can do.

But I have had so many people come around me the last couple of years with all this appreciation and selling their house, and like you said, they have a very good down payment for the house. So, you know, it's good to get with Alice, get a net sheet, see what you'd walk away with. Come talk to me and we'll look at the numbers and if the numbers don't make sense, that's fine. You know, we'll pat you on the back and say, you know, you've done perfect and you know you should stay put.

Alice Lema: Yeah. And the best time to buy or sell is when it suits your life. And it makes your life better to do that. Timing the market, even professionals can't always pull that off. And it's not really about timing the market necessarily. It's about getting from where you are to where you wanna be in a certain amount of time. And houses can either make our life better or hold us back. It's, it's kind of a weird thing to say, but it's true.

It it, yeah. No, it, it is and people are, are really [00:34:00] creative, you know, right now as far as having family step in, maybe help 'em with the down payment. Yeah. There's a lot of that going on. Group purchases. Yeah. Pulling money.

Guy Giles: Yeah. So I don't know. I mean it's just, it's just a good idea to come in and have a conversation.

Alice Lema: And, and you know, especially for the veterans, cuz you were mentioning during the break some specialty veterans programs that I don't think a lot of people know about.

Guy Giles: Well, I think it was just mostly that, that it's, it's, it's assumable, but if you have any,

Alice Lema: Aren't there, aren't there some construction arms?

Oh, as far as construction, yes. Yeah, we, we actually have really good construction loans and that might be the thing, but if there's not a lot of inventory out there, yeah, you probably have an aggressive builder that, you know, you could, you could meet with. And we have, we have a really good all-in-one construction program where we'll give you a decent rate up front. But if they come down, which that really is where everything seems to be heading, we'll give you that lower rate when we go, when we go to close.

[00:35:00] The nice thing for the real estate agents with us then, this is gonna sound awful, but it's, but it's true, you know, a lot of times on these construction, for the most part, you're waiting till the thing's all done to actually get your paycheck. We'll pay you upfront, at least from the real, real estate agent's standpoint, when we close your loan and the buyer doesn't necessarily have to have payments while this construction loan is going on.

So it's actually a really good one. And we'll do, you know, we'll do VA,, we'll do FHA. We'll do regular. You can if, you know, if you're buying out in the country, you can make your septic, your well part of the construction loan, so we can , it doesn't have to be done before you come see us. And it's, it's, it's worth talking about. I've had a few people recently that we've got into construction loans that it's just, it's a good option.

So, on, on the VA program, normally the, the generic VA program, the veteran does not necessarily have to have a down payment, for the [00:36:00] construction, VA construction. What, how does that work with that program?

It's, it, it is basically the, the, the same thing, the VA really basically like 25% down.

You can build a house for no money down if you're a veteran.

Yeah. Yeah.

Guy Giles: And, and you can go conventional. You can still do, believe it or not, 3% down construction loan.

Alice Lema: So, wow. That's a really good deal.

Guy Giles: And I have, I have Misty that I brought on here. She's brought her on as assistant or whatever, but she's become so invaluable. I, I don't know what, what her title's gonna be, but she's great with these loans and she's been helping me with a couple of 'em that, that we've been doing and come in and well look me up cuz that's how you find her about

Alice Lema: Well, the buyers must be absolutely thrilled beyond belief to get financing like that through a veterans program for construction.

Yeah. It's, it's kind of a, it is definitely a cool, it's definitely a cool program and, and we work with the, you know, for the draws and all that. That may not me mean anything to a lot of people, but [00:37:00] that's, that's how the builder gets their money during

Yeah. You do incremental payments to the construction people. It's called a draw.

Guy Giles: Yeah. Yeah. We use We use the biggest one in the country for that. So even though we're funding it, we're doing it with our own money. So we're not beholden to some bank. I know that there's a lot of banks that have really cut back recently on their, on their construction, but,

Alice Lema: Well, they're nervous then and they don't, yeah, they don't wanna do it.

Guy Giles: I mean, they, and they don't have the liquidity to do, to on the limb for this stuff. And, and it's a lot of the function of what the Fed's doing and everything. You know, that's, that's me getting political. The, and I don't, well,

Alice Lema: No, but that's matter of fact. I mean, that has always been the question mark for 18 months.

Guy Giles: It's causing a lot of the regional banks, which I don't, I don't deem as a good thing, it's causing a lot of the regional banks to really struggle or potentially go under. And I don't know if the ultimate goal is to have one bank or two banks or three banks, but at the end of the day, it's, no [00:38:00] competition's not good for the consumer at all.

Alice Lema: Yeah, I agree. And you know what, we're out of time. I'm so sorry. Guy Giles, Mutual Mortgage, thank you so much for coming on the show again, great information.

Guy Giles: Well thank you. And we'll see you next month. So next month some lower rates.

Alice Lema: Yeah, hopefully. So the show will be re-broadcast tomorrow, Sunday KCM X 99.5. Have a great weekend folks.