Real Estate Show More Lender Updates for September

Real Estate Show More Lender Updates for September

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Real Estate Show - More Lender Updates Sept 2022

Alice Lema: [00:00:00] Well, hello, Southern Oregon. And welcome back to the real estate show. So happy you could join us again today. I'm Alice Lema. I'm a broker here in beautiful Southern Oregon with John L. Scott real estate. And today we're lucky to have guides from Churchill mortgage back filling in. There's been a lot of new developments in the financial world this week. So Guy Giles agreed to jump back in, which is great.

Before we get to talk to Guy Giles of Churchill Mortgage just wanted to go over some of our local stats real quick. We're tracking week to week right now, residential, all three counties. And this week Jackson county listing activity up 6%. Josephine county this week listing activity is up 9%. Klamath county listing activity this week is down 5%. Now these are total active, not new. That's just, what's still on the market right now.

And then we wanted to [00:01:00] look at the super important numbers. Not that they're all not important, but they sold numbers are really interesting. Jackson county this week is down 3%. Josephine county sold is down 8% this week. And Klamath county number of solds is down 4%. Again, that's just residential and then the average sales price, which is very very interesting, Jackson county is up 5% price for this week. Josephine county is up 7% and Klamath county is up 9%. So those are some really interesting numbers. We're down on our solds. We're up on our listings and we are up on price.

So in a possible recession, I know there's some argument out there about if we're in a recession or not. I'm I'm of the vote we are, but I'm not an economist. I don't [00:02:00] play one on TV. However, my point is that as a real estate person, I find it very interesting. The prices still up moderately when our inventory is up only slightly right now. And our number of solds is down. So that's our stats for the week. We're gonna get to talk to Guy Giles again, this month here real quick talk about some of the latest updates from the financial world and the lending world. Before we get to our interview with Guy Giles, wanna take a quick break and say thank you to our sponsors. We're thankfully brought to you by John L. Scott, Ashland, Medford, our local Rogue Valley Association of Realtors. Also known as RVAR and Guy Giles, Churchill Mortgage. Don't touch that dial. We'll be right back. It's gonna be a great show.

Well, Hey, Southern Oregon, welcome back to the real estate show. So glad you could join us again today. We are so excited. We get to talk to Guy Giles of Churchill Mortgage an extra time this month. There's a lot going on in the market. [00:03:00] He was so gracious to agree to jump in today and kind of fill in some of the blanks. Welcome back Guy.

Guy Giles: Hey, thanks. It's just, just another one of those weeks where everything is crazy in, in my world. Anyway, just trying to keep people well.

Alice Lema: And that's why we need a little more of your expertise. So there's an awful lot of hardship being experienced in people's budget and the housing market, at least according to the mass media, sounds like it's slowing down. What's the reality? What are you seeing?

Guy Giles: Well just looking at the raw numbers, I think we we're down at purchase applications like 23, 23% or something. So that doesn't seem like it's that big of a hit. But in our overall world, if you think about all the refinances that were happening, not that long ago, those are probably down 80%.

And I. I was at a meeting a little while ago, and I honestly, I didn't, I didn't print everything out, but, but those should be fairly close to where we are right now. So it's just, it's a lot different world than it was [00:04:00] just six months ago. You know, I, I, I feel like people are settling in with kind of the new reality right now and, you know, maybe, maybe jumping in on a house when, you know two weeks ago they, they wouldn't have at all.

But now that we have a couple of strategies in place, you know, as far as, maybe not reducing your house $50,000, but asking for, you know, 2% in closing costs, we can buy your rate down to where it's not all the way down to where it was before, but it will sure feel a lot closer to the good old days than it would just quote in a raw rate today.

Alice Lema: So is that kind of what people are doing? Is they're adjusting. They're trying to adjust their lifestyle and their finances so they can still buy something. Is that what you're seeing?

Guy Giles: Yeah. Yeah. I mean, I, I'm not a huge proponent of, let's just, let's just do this no matter what, maybe, maybe it's not that $600,000 house. Maybe now it's a $450,000 house. But even, even with what's [00:05:00] expected to happen this year, as far as housing prices, I mean, is, is all we're supposed to go into, at least as far as what most people are saying is like a more realistic appreciation rather than just the ridiculous appreciation that nobody you know that nobody could keep up with.

I think I did some math the last time, but if it kept up, like it did last year, a $400,000 house would be worth 34 million at the end of 30 years. So we, we like our house to go up in value, but we don't need inflation like that. So, you know, just, this correction really needed to happen. And it's painful for us in this business. And it's definitely painful for the people that are not in the house right now, or wanna move up or wanna move down. But it's, it's a correction that needed to happen. And, you know, we have a, we have a fed, that's been a little bit in denial for a while. But I think it's finally stepping up and doing, you know, taking the, the right actions to at [00:06:00] least address the inflation.

So it's not gonna happen today, you know, but I, I do believe by first quarter, next year, maybe even the end of this year, we're gonna start seeing some pretty good relief in these. So I, I, I think my main advice for people at this point is let's get you ready right now.

Alice Lema: You know, I think that's excellent advice.

Guy Giles: Yeah. Even if you're not buying in four months and say you have a 720 credit score, which is very respectable. If we can work with you over the next month or two, you know, you, you stay on with your search with Alice and let her send you, you know, let her send you listings every week. So you see the stuff that comes out. And then when that one comes out, that's just the perfect, you know, maybe it is time to jump or if, if you're, you know, really needing to wait for the rates to come back down a little bit, and now we might have worked on your score a little bit. I'm not a credit repair place, but we can definitely give a little bit of advice on, you know, this might get you an extra 20 points on your, on your credit score.

And there are very real things. Maybe we can talk about that [00:07:00] in a minute, as far as what you can do on your credit score, but I'm thinking.

Alice Lema: Yeah, that would be great. I, that would be great because part of the problem I'm watching people have on the real estate purchase side is that with the volatility in the market and the ever increasing interest rates, they don't either qualify for the house they wanted, or they do qualify, but the payment's higher than they are comfortable with. You know what I mean?

Guy Giles: Yeah. Yeah. And, and, and again, that that's just about getting in and really getting educated. I mean, some people got burnt there's, there's no doubt about it. They got into a house, their lender may not have locked them in time. The rates may have gone up while their house was being built. You know, I, everybody knew rates had to go up, but, but some people did get caught in the middle of that.

I was actually meeting with with Myra, an agent, believe it or not this morning for a minute. She, she lost about four deals outta escrow, where [00:08:00] the one guy was buying a $550,000 house. And literally when the, when the rates went up, this wasn't anything, this wasn't one of my deals. She was just telling me a story. But when the rates went up, it just kind of put him out of, out of that market. And now they're back down looking at houses at $350,000.

So it was, it was quite a shock. And that's kind of why she was meeting with me as she searching for a new lender to talk to. But you know, that, that said, you know, every, everybody got caught a little bit in this, in this whole thing and it, it won't be forever. You know? When, when you mentioned dream house a minute ago, maybe it's not your dream house right now. Maybe it's just a place to get into the game, you know, because, because these aren't gonna go down as far as, as, as the houses, I don't think at least around here, the, the fires were a huge factor. There's just a lot going on. That that are, you know, just kind of determining our market and the availability of houses right now.

My dream house was a single [00:09:00] wide, was my first one. And it was cool to have something that was mine, but at the same time, I made money on that. It was on a little bit of property and I bought it for 80 and sold it for 119k, a couple of years later. So even if it's not your dream house, You know, maybe figure out how to get into something, if it, if it pencils out. Again, that's where it comes in to just, you have family or friends that are thinking about it. Have 'em come in and sit down with me, you know, I mean, I, I, I'm not gonna obligate you to working with me if I'm not competitive on my rates. I'll look you right in the eye and, and be happy that you got something else.

But I'm, I, I think that right now is the time to really educate people, to get 'em like I said, ready to go and, you know, no surprises. And actually the numbers that I go over with them right now, will probably look a lot better when they, when they buy, you know, end of your first quarter next year.

Alice Lema: So there's also this ongoing argument that the rates might go down.

Guy Giles: Mm-hmm [00:10:00] well, I really, I really believe that. I mean, the, the, the fed God, I, I, I don't know how you hire anybody to do the monetary policy for everybody that, only three out of maybe 14 of you actually ever even held a job in your life.

Alice Lema: Oh, you're talking about the people that are running the federal reserve. Yes. Okay.

Guy Giles: Yeah. so, so Yeah. Yeah, I, I, I, I won't, I won't go into deeper.

Alice Lema: Yeah, we're we, we gotta, so the question is about, are the rates, are the rates gonna go down?

Guy Giles: I really believe so. We, we just, I was reading something this morning where FedEx, you know, the CEOs oh, really slowing down and you, you have to look at signs rather than, you know, I mean, I think the white house came out with a big party the other day, cuz they got rid of inflation or something the day that the Dow dropped 1200 points.

We, we need people that really [00:11:00] understand what is going on with this economy. And we had to raise these rates up in order to, to slow down, you know, what was happening with this inflation mm-hmm , you know, gas is gonna go down if people buy less gas and the high gas prices cause that to happen.

Us raising up rates, you know, we're looking at at least three quarters of a point at this next meeting is, is where they're gonna end up going with this. And I really do believe, you know, even on Friday, the Dow was down another 360 points midday, that, that some realities coming back into it and that's what needs to happen.

And then once we recognize it, we get this inflation under control, I have no doubt that the, you know, they'll figure out some way to do some quantitative easing through, through the fed.

Alice Lema: Yeah. Yeah. Well, goodness only knows what the economy's gonna look like even first quarter next year.

Guy Giles: I, well, hopefully it looks like crap. And then everybody will admit that it looks like crap [00:12:00] because that, you know, I mean, just like ripping off a bandaid. If we just try to keep throwing money at inflation, like we have been, it's not gonna help anything. We just have to really realize what will get us out of this and what will get us out of this is having some higher rates. You know, pulling some money outta the system rather than putting money into the system. And I, and I do believe that that's finally getting recognized by everybody. So I, I do think that, you know, like I said, first quarter, I think, I think by the middle end of next year, we're, you know, squarely in the fours again on the, on the rates.

Alice Lema: And wow that would be so interesting.

Guy Giles: I'm not writing policy, but, but actually that Myra that I met with you marry the house, not the mortgage. You know, it's not like you have to have that forever. If you end up going, you know, a little outta your comfort zone or something, or you end up buying a house right now, that's not the rate you have to have forever.

Alice Lema: Mm-hmm mm-hmm and well, and then are you seeing that the appreciation is still [00:13:00] happening in Southern Oregon. We've been tracking almost week to week, which I know is kind of micromanaging. But just this week, Jackson county was up 5% year to date. Josephine county was up 7%. These are prices week to week. And Klamath was up 9%. Those are almost normal. You know, repeatable kinds of appreciation. But it just seems counterintuitive doesn't it, to have appreciation when we are quote unquote, maybe in a recession air quotes.

Guy Giles: Well, I, I, I, I think a lot of these numbers are driven on, you know, like a 12 month moving average. So as those as those really high numbers move out from say, September, October, last year, You know, talking year over year and then you're replacing them with, you know, what's actually going on right now. I, I do think those will come down some. I, I honestly don't think a ton. I, I I'm thinking like 3.8% maybe next year, and I don't watch that [00:14:00] as, as close as you guys do.

Alice Lema: But just, that would still be a nice, I think so.

Guy Giles: Yeah. Yeah. I, I just don't see them going down. I mean, it might feel like they are because there are so many price reductions right now, but that's just coming off of the unrealistic highs that you know, is stretching everybody to begin with. And you couple that with some higher rates. And now all of a sudden, you know, the buyers are a little bit more in control, which that makes me happy because those are the people I represent.

Alice Lema: Well, and also it's nice for the market. Purchase market to have what I call breathing room in between the time of looking at property and writing offers. It's that was one of the negative side effects. I thought of the, you know, like total overwhelming seller market is people didn't have any time they had to overbid. And there was no thought necessarily going into the purchase.

Guy Giles: No, I would I would absolutely take asking them for a little bit in a concession rather than [00:15:00] having to reduce the prices right now. I think you just, you make up your time a little bit quicker that way.

Alice Lema: . But skews the perception for sure. Yes. So we've gotta take a, a quick break. We're talking to Guy Giles, kind of a volatile week in the financial world. He graciously agreed to jump in and kind of fill in some of the details. Guy Giles, Churchill Mortgage. Will have a quick word from our sponsors. We're thankfully brought to you by John L. Scott, Ashland and Medford, our local Rogue Valley Association of Realtors also known as RVAR and the man in the seat today Guy Giles of Churchill Mortgage. This broadcast will also be repeated on Sunday at 6:00 PM. Do not touch that dial. We'll be right.

Well, welcome back to the real estate show folks. I'm Alice Lema, broker John L. Scott here in Southern Oregon talking to Guy Giles of Churchill Mortgage again. He was gracious enough to jump on the show today after an extremely volatile financial week here in here in the United States, probably volatile [00:16:00] worldwide. But we are focusing more on Southern Oregon and our national economy.

Right before the break we were talking about some of the hardship people are experiencing and how difficult it is to reset a person's lifestyle goals. But Guy, you were saying that people are, they're doing it successfully. And able to kind of move forward with their purchase. Is that what you're seeing?

Guy Giles: I'm starting to see it, see it again. I mean, I think everybody lost a lot of their pipeline recently. You know, when, when everything just kept shooting up, everybody got a little bit scared. But once reality kind of sets in and you, and you realize that there's still not enough housing around here, even for the people that we have right now, let alone anybody wanting to escape California.

You know, I, I am seeing people kind of jumping off the fence, some, some higher dollar ones, to be honest, I've had three or four doctors moved to town that I have in contract right now. And Uhhuh the, the medical piece always seems to go strong, no matter what the economy is. But, but I am seeing people kind of coming off the fence and, and [00:17:00] pulling the trigger so to speak. So it, it feels like it's changed some.

Alice Lema: Well. That's good. That's good. Do you do you have a lot of relocaters still in your loan program?

Guy Giles: I actually, I actually do. I tend to I don't know why I tend to attract that kind of people, but, but I always, I always kind of have, I just, I just work with a lot of agents that work with out a town buyers.

So we've, it's, it's always been a huge part of it. The only the only, the only real drawback right now is just you know, at least with people coming to town is they don't know exactly where they want to be. And that's, that's one of the hard things is just like, you go find a house in east Medford and you fall in love with the house and you know, nothing about the neighborhood.

So, you know, a couple of them are, are now in contract, but they've spent, you know, a couple of months just renting something, even if it was kind of expensive for them. Just to kind of fill it out and find out where they wanna be. Cause that's, that's another mistake that could be made if you, if you just, haven't [00:18:00] got your really your feet wet.

I have a couple moving from New York next month. That they still haven't even been here. They bought their house that wasn't even built yet and sight unseen. So, they'll have a couple surprises when they come to town next month and everything's all done.

Alice Lema: Well it's, it's very volatile right now and it creates a lot of stress and anxiety for people. So what about the first time home buyers? How are they faring this week with the yet again, more intense level of volatility?

Guy Giles: Well not as well, to be honest, you know, we, we, we have a program that we affectionately call the bond killer, where there is a hundred percent financing for first time home buyers.

Alice Lema: And what, what is that?

Guy Giles: Well, it's, it's a, it's an FHA loan that, that will cover your down payment with a second mortgage. So there's two kinds of seconds, depending on what your income level is, but they actually work off 160% [00:19:00] of the median income. So really that takes us to about a hundred. Gosh, I looked it up yesterday and then I went home it was at the end of the day.

Well, over a hundred, I think $30,000 that you could actually make. You can get this second mortgage, one of them is repayable and one of them is not. There's you know, the big print, give it the little print, take it away syndrome wherever. So it does have what we call a recapture on that second, if you don't if you sell the house within 10 years, so it really has to be a place that you intend to be for a little while, but okay.

They will, they can use, you know, use that for your down payment, some of your closing costs and basically get into a house without much skin in the game. I know it really feels like that's what got us in trouble before, but they're still qualifying for the loan. So So anyway, it's, it's just all off the FHA guidelines.

And if we can get you approved from just a regular FHA loan, you will you will actually approve for this [00:20:00] loan.

Alice Lema: Wow. So it's what kind of so what would be, I don't wanna say buyer profile, cuz that's the wrong word, but what kind of buyer, financial situation, how about that? What do you look for, for somebody to qualify for this a hundred percent? We give you the down payment program. Is that through access?

Guy Giles: No. No. I just spoke with somebody about access.

Alice Lema: Yeah. Cause access does something similar. Yeah. Yeah. Tell me about yours.

Guy Giles: Well, and, and then from what I understand, they're outta money right now. Anyway, they, they, they run a great program. So this is just it's it's through one of our, one of our broker channels and oh, through Churchill Mortgage. Yes. Yeah. So I, I think just a real life example that just happened with it, was somebody's house that burned down their house. Wasn't worth a lot, but they ended up walking away with about $30,000.

The real estate agent went to him a little while after and said, do you still have your down payment? I think I have the perfect [00:21:00] house for you. And he said, no, I had to buy a trailer. So my family could have a place to live. And, and, and then something about his daughter needed some braces, just life happened basically.

And right. He ended up having to spend his down payment just to, just to survive. And that would be kind of the perfect scenario, as far as somebody that's just responsible that pays their bills, you know, does everything, but just, it doesn't, isn't able to put together a down payment.

Alice Lema: Interesting. Interesting. So, and so they're going off of income and credit score.

Guy Giles: Yeah. And, and, and I'm sure in the background, again, I, it is a, it's a program that I just kind of dug into yesterday. I'm not really seeing a lot of weirdness with it. It looks like it is actually a good viable program. I'll wanna, you know, I'll be done over the weekend, kind of vetting the thing out. But I, I think it's a great option for, for people, you know?

Alice Lema: Well, see, and this is why we wanna talk to you again today because when the world is going, you know, [00:22:00] Looks like it's spiraling down in a hand basket. There's always little opportunities out of these kind of mini crisises. And it's, it's really great that Churchill Mortgage is responding this way with these new ideas and fresh strategies so that people can keep moving forward without over in debting themselves. You know, cuz that's super. Important right now, too.

Guy Giles: It is I've, I've lived on both sides of that coin and it's a whole lot more fun to , you know, it's not the absolute end of the world. man. So that was, that was a lesson I never forgot. And I always try to, you know, educate my, my buyers on that and, you know, but, but again, I still think that if, if everything's not the perfect scenario for buying house, there's there's always some, some light and, and the, the light is a, you're not gonna have to have this rate forever. But, but the, the other part of it is what's the alternative getting to [00:23:00] a bidding war where you're, where you're bidding $10,000 over that next person.

Alice Lema: Well, see, and that's what that was like until not that long ago.

Guy Giles: Well, well, yeah. And then, I mean well, you had to overpay and then you had to promise that if you if, if your house didn't appraise that you were gonna make up the difference with your own money. Yeah. And I mean, which is terrible. Yeah. I just, I felt for the people cuz they needed a place to be, but at the same time I was watching the interactions go back and forth in the offers and, and I'm just kind of shaking my head saying I might be a blessing if this house doesn't appraise.

Alice Lema: Yeah. And some people were saying no inspection whatsoever, which, you know, that's risky even on a new house. We've had brand new houses with broken sewer pipes for $12,000. So, oh my gosh. Yeah. It's a big gulp, you know, when you're in that heated, heated market.

So I think A lot of us are welcoming a little slower pace. Just because it, it feels more sustainable, but there, you still have to go back to this thing [00:24:00] where the prices are going up slowly in a sustainable way. Like we were just talking about Jackson county this week had a 5% increase from year to date, so to speak in residential.

So how do you counsel people that say, well, I'm gonna wait till next year. You know, I wanna wait till next year and see if the interest rates go down. What do you say to them? When we're faced with some appreciation anyway, in this market?

Guy Giles: Yeah. For me, for me, I, I, I just really try to sit down with them and let them know what a realistic number is, is going to be. You know, I mean, I want to go through, through the taxes, through the insurance, through the mortgage insurance, if, if that's gonna be applicable on their particular thing and just, it is just a math problem at that point. That's one cool thing about my, the way my brain works. It's just, everything kind of breaks down to a math, a math, and, and it's either it makes sense or it doesn't make sense.

And. I, I don't [00:25:00] see a big crash just because we did not do the, the poor lending, like was done before the crash in 08, 0 9. So I, I, I, I just, I talk to them and, and if it makes sense, it, you know, it does. And if the math doesn't make sense, I just kind of tell 'em, you know, let's, let's work on, you know, maybe you need a little better job. You know maybe, you know, it was out in necessity that I broke outta my you know, kind of blue collar, minimum wage type thing a lot of years ago. My daughter needed braces and I thought, am I gonna go into debt for five years over these braces or think about something else to do. So I, I left working for the county and started doing something else. So. Maybe you're delivering pizzas for the next six months on the side so that you can save up a little bit for a down payment.

Alice Lema: Yeah. So how does that work? How do lender, how do you guys look at somebody who has a side gig that may or may not be permanent? I mean, somebody comes you and they say I'm working two, three jobs, so I can buy a house. How, how do you look at those that extra?

Guy Giles: You would have to have a, a history of [00:26:00] that. I mean, the, the last thing I'd want to do would be. Put somebody into an extra job just so they could afford their mortgage. I was mainly thinking, like, to get your financial situation in a better, oh, payoff debt save up for down payment, that kind of thing. Yeah. I mean, if, if, if you have a long history of doing a couple of jobs, you can count that income and definitely something.

Alice Lema: So people who work a lot of overtime.

Guy Giles: Yeah. Yeah. We just, we just average that out and then we find out if it's expected to continue, same thing with bonus, commissions all, all of that. You're just, you're really just averaging out what they have been making historically on those. And if it, if it's a newer job, you document through the company that it's something that's, that's gonna keep on happening.

Alice Lema: So, and that's different than what was happening in the crash. Cuz in the crash we were the lenders weren't asking it, not all the lenders were asking a ton of questions.

Guy Giles: Yeah. Well, and, and, and even, even if they were asking questions, it was like, you know, I, I just. I got in with a couple of girls that were super smart, so I never sold that kind of thing. But back then, if you had [00:27:00] a 680 FICO score, you could do what was called a stated loan. And you could just tell us what you made and without anybody checking. Yeah. And, and if you had a under 600 credit score, they would charge you a half a point. So a half a percent on the loan and you could still tell us what you make.

Was, it was, it was crazy. I, I did not engage in that stuff. Mm-hmm so I, I was just super lucky. Karen Burket told me never to do that same thing with Peggy Nichols.

Alice Lema: Yeah. Peggy don't do those ones. I remember her. She's great. Yeah. So you know, we only have a quick minute left on this segment. We've got one more coming in 30 seconds, how do you wanna just wrap up, revising your expectations?

Guy Giles: Well, I, mine haven't really changed, you know, I mean, I, I am at the mercy of, of the fed and how aggressive they're gonna get. But I really think by, by the end of the year, this year, first quarter, next year, we really start seeing some relief in the [00:28:00] rates and, and it's just gonna make everybody feel better about it.

But in the meantime, I'm just a proponent of, if you're not ready to buy, let's get you ready. Yeah. So you have choices. Keep your eyes off for that right house. And you just might find it right now.

Alice Lema: Okay. Guy Giles Churchill Mortgage. We're gonna take a quick break and be back. Don't touch that dial.

Welcome back to the real estate show folks. I'm here with Guy Giles at Churchill Mortgage. I'm Alice Lema, your host for the day from John L. Scott. And one of the things we have not talked about today, Guy is what happens to our tenant population in these troubling times. And what's the difference between hunkering down and staying in your rental versus trying to branch out and, you know, take the plunge into home ownership. What are your thoughts on that?

Guy Giles: Well, just kind of like we talked about, you know, and in the previous segment, it's just about getting, getting ready right now. What's the worst that can happen if you got that [00:29:00] extra job and started saving some. Worst thing is that you're still renting next year, but now you got $10,000 sitting in a bank account, which is freedom, as far as that goes.

You know, so I, I, I think that if you're a renter and that is your long term plan, it might feel better for the moment. But if you look back 10, 15 years ago, there's no doubt that you could be in a house cheaper than what you're paying for rent at this point, if you catch it, you know, kind of at the right time, cuz rents are gonna go up.

I mean, I'm a, I, I do have a couple of rentals and I know what happens when things cost more money. You know, people don't want to give up their quality of life, so, or they still have to make ends meet or whatever. So rents are gonna go up just like everything out there in inflation. And, and even though your taxes will go up a little bit every year, that's a really good way to buffer yourself for the, for the long haul, as far as that goes, cuz at least you're, you're in control.

If your taxes are only going up 3%, but if your [00:30:00] whole, your whole nut for your, for your rent is going up 7%. I heard a ridiculous number today with inflation. The way it is that that rents could actually go, you'd probably be more familiar with, with me, but it was over 10%. Yeah. Just because they, they factor in the inflation piece on it also.

So even though we had low inflation, when all that legislation was put through, without that you're, you could be subject to a lot higher rent and people are still paying it and they seem like it. So I, I think you're you're best way is home ownership to get out of that, that rat race, either somebody selling your house out from under. Or they're raising.

Alice Lema: Well, yeah, there's a lot of that happening.

Guy Giles: Oh yeah. That's, that's, that's what I see a lot. And I just, I tried to help some, some people, you know, not, not that long ago and he had a boat, he had a truck, he had a bunch of things and it, it boiled down to that was more important to him than having a house, which, you know, Hey, you [00:31:00] know, it just is what it is.

But, but that's what I mean about just getting in early and starting to take the steps because none of 'em are gonna hurt you in your overall life. If you, you know, work on your credit score, if you pay down debt, if you save some money for, for a down payment. You know, you're always gonna be in better shape than you would be just, you know, living day to day.

Alice Lema: Well, and some of the security that people derive from home ownership is, you're not really able to explain it until you actually own your own house. And you have that sense of financial security and also just insulation from some of the housing market gyrations that renters, you know, when, when renters are going through these volatile times, they don't know, it's that unexpected financial crisis that could be looming, that homeowner's don't have. But it's hard to explain to people what that's like it [00:32:00] is, cuz it's you know, and, and a lot of times you don't realize that it's just, it's a whole piece of your financial picture. People will put money into you know, they'll add to their 401k. They'll do different things to try to prepare for the future.

Guy Giles: But the, the biggest, most sustainable one that to my experience has been buying the house. I mean, so, but, but if you're not selling it right away, it's like, well, great. That's some money that I can't access. But at that point when you do sell it or, you know, whatever happens later on, that's just a huge part of your net worth.

That's just gonna be growing and compounding, you know, every, every year. And. I mean where for 20%, can you, can you realize the appreciation on the other 80% plus your 20%? Meaning if you put 20% down on a hundred thousand dollars house, now you're getting whatever you said, 5%. You just made $5,000 just on, on that.

So if you're [00:33:00] paying $1,700 for rent and you're like, oh my gosh, now my mortgage payment is $2,200. But you, your house appreciated $19,000 basically you know, the net to the whole situation is that you're you're you're ahead of the game way.

Alice Lema: Yeah. You're yeah. Your net worth has gone up. Your security has gone up. You're not having anything change in your mortgage except what Jackson county, does for your insurance company does.

Guy Giles: Instead of your landlord having an extra $18,000 equity in his or her house,

Alice Lema: Well, that's the thing. If you run your rent for a year and then multiply that for five years, let's say your tenant for five years, that's frequently buying somebody else a house.

Guy Giles: Oh, I, I, I know I have no doubt. My family bought the house we were in when I was growing up. I watched them pay $118,000 rent for a house that was paid for, for $36,000. So yeah, all, and anyway, I did that math after I got into this [00:34:00] business and it's, it's pretty, pretty amazing, but yeah, like I said, even if your payment's up a little bit, you're still able to write off your mortgage interest. You're able to write off your taxes. If you are in a certain income bracket, you could write off your mortgage insurance. And you have this asset that's it's worth more at the end of each year than it was, even if it goes down for a year, the trend is always gonna be up. So you're just, you're just creating wealth for, you know, for your family, for, for the future.

Alice Lema: Yeah. And the other part is that tenants are nervous about going to talk to a lender. I'm not sure why. I know it's hard to get all those papers together, even if you're an organized person, it's like, it takes, it takes a couple hours, but, well, how do you, how do you talk to first time home buyers, tenants, and, and, you know, and get them to just make the appointment, at least online?

Guy Giles: Yeah. I mean, it's, it's one of those things, you know, I mean, if, [00:35:00] if, if you can't find a bank statement or you can't find a pay stub, you probably shouldn't buy a house.

Alice Lema: But in the digital age. If you can't get a bank statement offline. Yeah. And maybe it's too soon, but you should still come and talk to a lender. I think, I think so that funny. Cause well, and, and, and again, he's just kidding folks.

Guy Giles: I mean, because I'm that guy that can't find one, by the way. But, but it's just, it's just about getting in and, and having the conversation. And if it literally, I mean, I've had people that come in here and I say, what are you paying for rent? And they tell me $700. And I, I can't look them in the eye and say, maybe this is the best financial move for you right at the moment. But I guarantee you that we'll call me three years from now when the house is getting sold out from under them.

Alice Lema: Well, Yeah. And that's what happens. Like if you're sitting there with a really low rent, you don't think your landlord knows what the current rents are. People are paying a [00:36:00] thousand dollars to rent a room, a master, like just to get their own master. I'm sorry. We have to say Maine main suite main on suite room with your own bathroom. People are paying as much as a thousand dollars.

Guy Giles: I, I saw some numbers yesterday on rents, how much they'd gone up year over year in the state. And honestly, I didn't even believe them enough to, to quote them.

Alice Lema: I know you think it's a mistake, but it's not. They're really, really high.

Guy Giles: And, and, and it was showing the average two bedroom over $2,000 right now to rent.

Alice Lema: Yeah. And for sure, 1600 two bedroom, two bath, for sure. Landlords are getting 1600, well, you know, Guy Giles, Churchill Mortgage. This is great information. It's gonna make people feel better. It's gonna give them some real strategic action items. In just a few seconds we have left, how do people reach you by phone? If they wanna talk to you this weekend?

Guy Giles: Yeah, my, my cell phone number. I'll answer it on the weekends also, unless I'm at church, but my number is [00:37:00] 541-944-6987

Alice Lema: Thanks so much Guy Giles, Churchill Mortgage Southern Oregon. Have a beautiful weekend. We'll see you next week. Bye now. Okay. Thank you.

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