The Real Estate Show Dec. Lender Update

Full Video Transcript 

[00:00:00] Alice Lema: Well, good morning, Southern Oregon, and welcome to the real estate show. I'm Alice Lema. I'll be your host today. I'm a broker here in Southern Oregon with John L. Scott real estate. Welcome, welcome back to the radio show with all things real estate here in Southern Oregon. So we've got Thanksgiving behind us.

[00:00:25] We've got The Christmas holiday in front of us. And we still have a lot of real estate activity. And you know, it used to be that things were kind of seasonally slow in Southern Oregon, or at least slowing down a little bit with our real estate activity. And that isn't really happening much.

[00:00:42] We still have more and more listings coming on the market. We still have the backlog of buyers that are wanting to still make a purchase. In fact, I think there's even more pressure on buyers now because of the impending interest rate changes. Although we're going to be talking today to Guy Giles and Beth Rodriguez of mutual of Omaha mortgage, one of our sponsors.

[00:01:06] They're going to talk about some of the lending changes that happened this week and they're huge. They're jaw dropping huge. So you want to stay tuned in to hear what Guy Giles and Beth Rodriguez of mutual of Omaha mortgage have to say about all that. But the reason I bring it up now is because it's adding even more force to the markets.

[00:01:28] We have people that are in big cities that are trying to get here to Southern Oregon. We have people in Southern Oregon trying to get to other places, in some cases for jobs. Some cases they think that our valley is just too busy now, too many people people have been here a long time or going someplace smaller.

[00:01:47] And then we have folks from some of the bigger cities coming here because compared to where they're used to, it's a little slower, little gentler, and definitely more fun to live here. So it's all about perspective. But it's very interesting because in addition to all of that, we have the mid age millennials. So the middle-aged, middle range, I should say, should call them mid range millennials kind of in their thirties, late thirties, early thirties, hitting the market with force. They're ready to rock and roll they're out there. They want to buy. They're buying nicer, bigger homes for their first home. Then a lot of us older folks did. A lot of us older folks started small a fixer-upper, not these kids. But there's more of them than ever. And that's definitely adding fuel to the fire. So we've got a great show in front of us today, want you to stay tuned. We're going to be talking to Beth Rodriguez and Guy Giles of mutual Omaha mortgage. Do not touch that dial. We have a great show. We'll be right.

[00:02:55] Well, welcome back folks to the real estate show. I'm Alice Lema, broker John L. Scott here in beautiful, but chili Southern Oregon. And today we are so happy to have our monthly visit by Guy Giles mutual Omaha mortgage. He's also one of our very much appreciated sponsors. Hello Guy welcome back.

[00:03:14] Guy Giles: Hey, thanks for having me back.

[00:03:18] Alice Lema: Love all your good information. So I'm so thankful you come every month. And today you have one of your loan officers with you.

[00:03:26] Guy Giles: I do. I have the one and only Beth Rodriguez. So.

[00:03:33] Anyway. Yeah. I just kind of wanted to introduce her. She's been in the valley doing loans for a long time. So she's got, I guess I could let you talk a little bit about your experience if you want, far as brought her into the business years ago. So anyway, she did a few years with me doing that and then she jumped off into the, into the escrow side of . And did that for a couple of years and just really decided that she liked helping people in this. Happy to have her here in the office. She speaks fluent Spanish as well as English, obviously.

[00:04:00] Alice Lema: And Well, welcome Beth. So your a loan officer at mutual of Omaha mortgage, correct. Tell us a little bit about yourself.

[00:04:08] Beth Rodriguez: So I've lived here in the valley for going on 16 and a half years about now. So went into lending, did that for a few years. And then as Guy said, switched over to escrow officer for awhile did that for about three years. Very thankful for that time, just being able to learn the back end of things and how all of that work was definitely a huge asset for me to have coming back into lending.

[00:04:33] But for sure, decided that I really enjoy the, the lending side of it better. I just have a lot more hands-on with the clients and get a lot more involved than I was really able to do in escrow. So I'm just definitely be, you know, happy to be back as a lender again and here. The bilingual part in Spanish is also a very good asset to have, much needed for sure as well in the valley.

[00:04:59] And so I've been bilingual in Spanish now for, oh gosh, going on, oh, it's been over 30 years now. So not only bilingual, but bi-cultural, which is very important because I really understand the culture as part of my family. And so very immersed. So it's one thing to be able to speak Spanish, but it's also a whole different thing to be all, to understand the culture and their mindset and their thinking.

[00:05:27] It's just can be some, you know, different aspects. So it's served me well and whatever business that I do. And I'm just really glad to, to bring that, you know, to be a part of this time then and lending.

[00:05:40] Alice Lema: Well, Beth, and I think you make a really good point. And I think a lot of us don't keep that in mind when we have bilingual people, regardless of the language, when they're helping us or helping our clients. The cultural aspect is huge.

[00:05:53] Yeah. How people deal with each other? Yeah. What, what what means polite and what doesn't .So well, we're so excited. How long have you been working with Guy now?

[00:06:06] Beth Rodriguez: Well all together, maybe about three years.

[00:06:11] Alice Lema: Okay, great. Great. So the last three years have been really interesting in lending and, and even just like the last three weeks.

[00:06:22] So Guy what news do you have for us from lending land?

[00:06:27] Guy Giles: Oh man, as far as, as far as that goes we finally have the official numbers. Everybody was, was thinking that we're going to end up landing around $625,000 for what are called the conforming loan limits. And again, that's Freddie Mac, Fannie Mae, the big guys that you hear about all the time that's where most of the loans are.

[00:06:45] I mean, other than, you know, FHA VA and maybe some of our more non-traditional loans. It ended up landing at $647,200. So that means if you have a believe it or not, this numbers are going to sound pretty crazy to us, even though we live in kind of a high cost area that's like $809,000 purchase price if you have 20%. And you're still in what are called the conforming loan limit.

[00:07:12] Alice Lema: So what does that mean within conforming loan limits, exactly.

[00:07:18] Guy Giles: So they've always been kind of, there's been a relationship between the government and Fannie Mae and Freddie Mac they're they're these big companies that, that write the pretty much the rules for the loans and how they're, how they're done after the crash.

[00:07:32] In 2009, the government kind of came in and took over the CFPB went in. Anyway, it just kind of took over these two institutions. And so instead of being something that was just kind of semi ran by the government, they're basically taken over by the government whether that's good or bad. I try to leave politics out of it.

[00:07:49] I think a mixture is probably good. We don't want such loose lending that, you know, the, the word is loaning to anybody that'll fog a mirror. And at the same time we want to have the markets, you know, decide a little bit on, on which direction we're going. Those are just, it's the majority of the loans that are, that are backed by backed by them.

[00:08:10] And that's pretty much what, what all of the lenders out there are originating. So you can go higher than that, but, but it's just, you're going to get the best deal if we can stick you into one of those programs. So that still means if you did, you know, 5% down, as long as your loan amount is that 647,200 or under, do you know you're still subject to, to all of the same conforming guidelines. So it's basically a normal loan went up just under a hundred thousand dollars in 2020.

[00:08:44] Alice Lema: am I understanding that a conventional mortgage buyer, borrower can now buy have a mortgage of $647,000 with a 5% down.

[00:09:00] So they'd be buying what, like seven something. So I just want to make sure I understand. So we can be writing offers in the seven hundreds with 5% down on a regular 30 year fixed conventional. Is that what you're saying?

[00:09:17] Guy Giles: Yeah. So.

[00:09:20] Alice Lema: That's that's mind boggling and a game changer.

[00:09:25] Guy Giles: Yeah, no, if it really is, and it was kind of a well-needed thing here. If you're talking about a, a place in the middle of the country that the median house price is $120,000, it's a little bit, it's a little bit different, you know? So I mean, it's kind of weird that there's, there's just this, this one all the way across, but for our area it's absolutely needed. So. Yeah, it just, it adds a lot of, it adds a lot of flexibility.

[00:09:50] Alice Lema: You know, this is instead of doing a Jumbo loan?.

[00:09:54] Guy Giles: Correct.

[00:09:54] Alice Lema: Yeah. Wow. That really is mind boggling. We'll have to let that soak in. I know

[00:10:07] people are going to say, say that again $647,000 wow. So, Beth do you, have you seen, have you had any phone calls with people wanting to get qualified? For that. And do you think there'll be more groups of people, like more than one family member coming together to meet that, that loan amount? $647,000.

[00:10:34] Excuse me. Yeah.

[00:10:38] Beth Rodriguez: So that just rolled out. I just, you know, been starting to tell my agents, I work with partner with and let them know, so no calls as of yet it just came out. So I'm definitely excited to get the word out though.

[00:10:50] Alice Lema: So how will you get the word out and how do you explain this to people?

[00:10:54] Guy Giles: Well, I mean, at least from my standpoint is, I mean, I think it does fit into and speak to what you're talking about. I have people right now that actually are buying a Hayden home that has two master suites in the thing. And they're going to end up father and mom, and then the son. And daughter-in-law, they're realizing that the parents are going to need a little bit of help down the road.

[00:11:16] They're perfectly fine right now, but it's like, why not be together? Go in on a, on a house it's a little bit more expensive and have yourself set up for the next 20, 30 years as far as that goes. We are starting to see the multi-generational and this could speak to that, you know, pretty well. And at least address, you know, some of the, some of the housing concerns that people have, because it's, it's expensive for one family to buy a house.

[00:11:40] Alice Lema: Or, yeah, I was just saying, actually, I wonder if you run the numbers, if it's less expensive to do a group purchase, have another family member or two buying a single property, plus then you don't have people fighting for two houses.

[00:11:54] Guy Giles: That's it it's true in the right circumstances. It's good. You know, I'm not always a huge fan of pooling your money together with somebody that's not immediate family. You know, just because life happens, you know, one person wants to move on and then all of a sudden, one person wants to sell and the other person doesn't.

[00:12:13] So, I mean, I, I get could pose, you know, some, some issues with that also. So it's not always a one size fits all. That's why we really like to dig down and find you know, what people's goals are. You know, so we can get them into the right program. I've had, I've had people that realistically, you know, weren't going to be a year before they were going to be out of their house.

[00:12:32] Well, I don't wanna, you know, is, is the lowest rate, the most important thing at that point. You know, maybe a cheaper loan at that point. And then that way we can look at redoing you or, you know, you're going to sell or you're going to pay it off. You know, so it's just, it's just a math problem at that point.

[00:12:47] So we like to do, individually get people into whichever programs, the best one.

[00:12:52] Alice Lema: Well, and to, to be able to offer that new conventional financing loan, where the loan amount is, what'd you say best six, what? 647,200. So, and then you have your down payment on top of that. So, but you could do a 5% 30 year conventional mortgage.

[00:13:15] It doesn't have to be 20%. It doesn't have to be a jumbo. And that's what happened this week. Is that what you're saying?

[00:13:20] Guy Giles: Correct.

[00:13:21] Alice Lema: And is that is that nationwide or it's our area.

[00:13:26] Guy Giles: I mean, it's, it's nationwide it's so what they have is they have high cost areas that are like, say San Francisco or New York, and those conforming loan limits in those places are the same, but they have kind of a high cost areas. So they might go up to a million dollars for a conforming loan., Some of these really high cost areas. But the vast majority of the country, I would say 90, probably 95%, 96%.

[00:13:52] I can actually send you a map that you can maybe put up on this thing, but probably 97, 90 8% of the whole country. This is the, this is the conforming loan limit at the $647,000. Well, so then that's what I was kind of going to earlier where, you know, if you're in a, in a cheap place, down in, you know, someplace down in Tennessee, it might, you know, may not be warranted to have price this high, but for a lot of the country, for us Sacramento, places like that, that aren't the real high cost areas. It's, it's, it's going to end up being a really good benefit.

[00:14:27] Alice Lema: Well, and also acknowledges that Southern Oregon is pricey.

[00:14:31] Guy Giles: Yes. Yeah. Yeah. So, you know, It's just, it's just good, because you can keep people into this sort of a deal. It's going to be a lot better than having to go off into, into the jumbo land usually.

[00:14:44] They've actually had some pretty good, pretty good rates on jumbo loans recently. And that's that's any dollar amount over where Fannie Mae and Freddie Mac are allowed or allowed to purchase them, but it's going to end up putting it at about $680,000. I'd have to do the math on it, but just kind of in my head with 5% down now, put you up to about a 680.

[00:15:04] Alice Lema: I just can't believe it.

[00:15:06] Guy Giles: Yeah, I know. It's, it's going to be, it's going to be a good thing.

[00:15:13] Alice Lema: So, well, we're going to have to take a quick break here. Coming up we're talking to Guy Giles and Beth Rodriguez mutual of Omaha mortgage. I'm talking about the new loan limits put out by the who put it. Oh FHFA. So do not touch that dial. We'll be right back with more.

[00:15:35] Well, hi folks. Welcome back to the real estate show. I'm Alice Lema. I'm your host today. I'm a broker here in Southern Oregon with John L. Scott and we're having just kind of a jaw-dropping conversation with Beth Rodriguez and a Guy Giles and mutual Omaha mortgage who are also one of our sponsors.

[00:15:52] And they just brought to light some new loan limit changes for our area. Well, over $600,000 for a conventional mortgage with 5% down. So folks let that sink in. That is a real game changer, but it's kind of badly needed. Isn't it, Beth?

[00:16:09] Guy Giles: Yeah. So to, to piggyback with that, I mean, they will still do a 3% down, believe it or not.

[00:16:16] Alice Lema: So there's really a 3% conventional. Yes. Yeah. So how does that work?

[00:16:22] Guy Giles: Well, it's just the mortgage insurance is a little bit higher on it. Mortgage insurance is one of those things. Was a one size fits all deal up until just a couple of years ago. And then they really started driving it a little bit more like, like you would on a credit card or a mortgage where it's more credit score driven.

[00:16:41] So if you have a, you know, I've got people with $20 mortgage insurance, not, not on 3% down, but this is kind of a sliding scale. So if you're at 20% down, you know, you don't have mortgage insurance at all. If you're at 19% down and you'll have really cheap mortgage insurance, 3% down it's going to be a little bit more expensive.

[00:16:59] Alice Lema: This they're trying to get to that 20%, right? Isn't that the cutoff?

[00:17:05] Guy Giles: Yeah. Yeah. I mean, so I mean, if you're able to do that. A lot of people you know, that's a lot of money to come up with to have 20% down. So we'll just, you know, sit down with people. If we can get them into more of a conventional loan, the mortgage insurance will go away at some point.

[00:17:21] So that's why it's nice when rates are still low, like they are right now. If we can get people into the right deal, then they're not thinking one's going to have to refinance in three years or five years or seven years. Whenever that mortgage insurance is done, there's still a lot of ways to to have it a little bit cheaper or get rid of than we can do an appraisal before that time.

[00:17:44] Alice Lema: And also, how do you know, as a buyer, a borrower, how do you know that in three years, you're going to be able to refinance. I mean, we all, we all assume that our jobs are going to get better and this and that and the other thing.

[00:17:59] Guy Giles: It's true, we saw, we saw lending tighten up a lot. We saw, you know, a lot of changes happen after that last crash. And a lot of people were blindsided by it. So it's true and even if you still have your job and everything's fine, but we had, you know, inflation stayed, stayed kind of hot. Like it is right now, rates just might be up. So then there's not going to be any benefit to to doing that anyway.

[00:18:22] So we're definitely not a big proponent ,let's just get you into a loan and then refinance a few months.

[00:18:28] Beth Rodriguez: Yeah, I think definitely the important thing is really being honest and upfront with our clients and letting them know what that future might hold. And not just let's go fast and do this to get it done. But as Guy was saying, you know, what are their goals? What's best for them. And to give them all of that information. So then they can make a good educated decision is definitely something.

[00:18:51] Alice Lema: Yeah, that's awesome. Then they can kind of decide because you know, the FHA program is amazing and I'm not bashing it. I don't want anybody to get the wrong idea because there's some, there's some times when that is the appropriate program. But, and it wasn't that long ago that FHA stopped letting you drop the mortgage insurance.

[00:19:14] And so now the only way you can have it dropped without refinancing is being in a conventional loan. Or, or your VA and you don't have mortgage insurance.

[00:19:24] Guy Giles: And if you have a bigger down payment, you can get rid of the, the mortgage insurance at some point on an FHA. But if you have a bigger down payment, you might as well go conventional, just depending on the down payment. But I think one thing to maybe ask, ask Beth here is, you know, just, just say somebody was coming in to meet with you. What kind of things would you like to have to have with them to be ready to go.

[00:19:54] Beth Rodriguez: Yeah. So basically, you know, it's not a a huge amount at the get go, so it's not very daunting. But just their IDs, you know, making sure that everything is good on that. And then status, legal status, that sort of thing is always important. And then basically just last two years of tax returns, W2's and last 30, take 30 days pay stubs from their job, if they're self employed, then those tax returns. And the last two months bank statements of any account that they would be using for those loan purposes.

[00:20:27] Alice Lema: And, and those are looked at just to make sure that they're not getting in over their head and. That everything's accounted for. Right. It's not just being Snoopy nosy.

[00:20:40] Beth Rodriguez: Yeah. A lot of people are like, well, you know, I did the whole, you know, online with another company and they didn't ask for anything. Well, that's all great and good. But that doesn't mean that I'm not going to get asked for those things down the road.

[00:20:52] Alice Lema: So it was probably also in 2005, nobody cared.

[00:21:01] Beth Rodriguez: Yeah, that way it's so important because we've actually looked at their credit documentation and we're basing it off of their information and the credit . So it's going to be a stronger case where we're not just in the dark, not really knowing, you know, it's not going by just what they state, but actually taking a look at those things so we can, you know, say comfortably that, yes, it looks like you are, you know, you are able to do the loan.

[00:21:27] Alice Lema: And that's good for the consumer and that protects them. And that's what we were missing before the crash and that fed the crash. And then after it unwinded, the lending standards are so different. So. When people are sitting with you, Beth and getting pre-qualified, are any of these buyers asking you about the market? If there's going to be another crash, do you get much of that?

[00:21:51] Beth Rodriguez: I get a ton of that actually.

[00:21:53] Alice Lema: If you don't understand, the lending practices are so different now.

[00:21:57] Beth Rodriguez: And then we get that question a lot and they really want that advice and that input. You know, what's the market going to do or is it going to crash? And I wait to buy is now a good time to buy. And so again, it's just really, you know, circling them back to what are their goals. Because for one family, it might be actually, this is a great time for them and another you know, better to hold off. It just depends on what their lot more long-term goals are.

[00:22:22] So by giving them the full picture and all of the information and all of the options, it really can make a big difference in them feeling comfortable, whether they want it, you know, go ahead and go through with the process now, or maybe just wait a little bit. So we definitely just try to educate them and give them all of the information that we have. And again, that just helps them make more comfortable decisions. So they actually know the facts and can go forward at that.

[00:22:50] Alice Lema: And that's definitely a reputation Guy Giles has always had. You know, education, choices, doing a good deal, but it's that neighbor thing when you live in a small town, right Guy, it's like you, what what'd you call it at Costco? Something about throwing somebody throwing something at you..

[00:23:05] Guy Giles: Well kind of like my canned soup theory or something. So, you know, it's, it's just a little different when you're trying to deal with local, you know, and when they ask us too many questions about what the market's going to do, that's why we love to have a good realtor like you on the other side.

[00:23:21] So we can say, you know, we're not going to say anything to that, you know, to Alice, but I'll bet that she'll probably kind of reaffirm the same thing. That, you know, nobody has a crystal ball, but this there's just a finite amount of houses in this area. And if you can own one it's probably not going to be a bad thing for the long-term.

[00:23:38] Alice Lema: I look at the people who bought something just 18 months ago. Yes, 30 to $50,000 in equity, just boom, literally, almost overnight.

[00:23:50] Guy Giles: I will get a phone call from somebody and it's like, we want to buy a new house and I'm just like, well, didn't you just get into your house? No, it's been a year ago and I have 120,000 equity and we want to move up. Yeah. Blows me away.

[00:24:06] Alice Lema: Yeah, but I would say for our Southern Oregonians, because our economy is not always stellar here. I am so happy for all those people because home ownership is a beautiful thing. And that was just like money from, from the sky. And now they can move up into a bigger house or whatever they need to do.

[00:24:25] So I'm just really happy for our locals. 'cause it doesn't always go that way. Right?

[00:24:32] Guy Giles: Not at all. And then I think the other part is just realizing it's a, it's a longer game, you know? I mean, if you're going to try to play Mr. Or Mrs. 2010 and buy something, that's a foreclosure and fix it up and flip it, you know, that's just not really a thing right now like it was back then. You everybody needs a house and, you know, go into it. Just, I mean, that's part of your portfolio, you know, you have a 401k you're investing in, you know, If you have a house, as part as a, as a piece of that, it's just a really good wealth builder and just more of a more rounded portfolio.

[00:25:05] Alice Lema: So how, how how many investors like landlord people are you getting right now that want to purchase more properties?

[00:25:13] Guy Giles: You've had quite a few lately. It seems like we've been talking about a deal or two.

[00:25:18] Beth Rodriguez: Yeah, definitely. There's been an uptake in that more investors looking for properties and sure.

[00:25:23] Alice Lema: Do you see any trends forming any common? Like what kind of properties they're looking for? Why they're picking now?

[00:25:30] Beth Rodriguez: For me, it's been either just the, you know, single family, just one unit. Sometimes there has been the two to four units, duplexes. I think why looking now you know, rates just still being good, the opportunity.

[00:25:43] Guy Giles: And I was going to say we had a little bit of a scare there for awhile. They came back and were charging a lot of money. Basically you could only have 7% of your portfolio being an investment property as, as a bank or as, you know, as a servicer. So everybody was really leery. Yes. But so, so they were really, really expensive to do any kind of investment properties for a few months this year. They actually backed off on that now. So it is starting to become a little bit more attractive.

[00:26:13] I've actually had, I'm dealing with three kids, right that none of them own a primary residence and they're all 22 to 25.

[00:26:23] Alice Lema: Oh, I love it. And they're buying rentals.

[00:26:25] Guy Giles: Yeah. One of them has got about probably nine doors now. We've done all of this investment properties. They have tightened up a little bit where they want you to own a primary residence before you buy an investment property.

[00:26:35] Alice Lema: Why would they care? Like, why would the bank care? Is that the wrong question to ask?

[00:26:45] Guy Giles: You told me not to get political.

[00:26:46] Alice Lema: Oh, well there's gotta be economic factors.

[00:26:52] Guy Giles: I don't know it's as much as everybody should deserve no more than one house. There you go. I went political.

[00:26:59] Alice Lema: Oh my goodness. That's terrible.

[00:27:02] Guy Giles: That's the conspiracy theorist in me. The other part. Yeah. Well, I can't think of another explanation.

[00:27:08] Alice Lema: Oh, all right. Well, moving on these kids that are buying properties and being landlords, they're doing this in Oregon. Yeah. Are they here in Southern Oregon?

[00:27:22] Guy Giles: They're from here. They're from here. Okay. So two of them are from here. They live in Boulder, Colorado right now. And so they're actually moving back home, be closer to family again, but one of them is down in the, in the California area. There's actually four altogether.

[00:27:39] Alice Lema: Wow. Look at the millennials. The young millennials. Yeah.

[00:27:45] Guy Giles: No, it's, it's, it's, it's, they're, they're a great group and any way their businesses is successful and they're, you know, they're running it all remotely and anyway, it's been active.

[00:27:57] Alice Lema: Those kids are so smart. They are so smart. You know, growing up with the in the digital age you know, I don't know what it's like when they walk into your office, that when I meet them, they're just so informed and so ready to go. It's it's really. Can you imagine building, buying houses when you were in your early twenties or maybe you did? I didn't.

[00:28:17] Guy Giles: But when you accidentally said building them, yes, I was a hog carrier for a Mason, so I built lots of them. But no, I didn't even think I'd ever own one, to be honest.

[00:28:27] Alice Lema: Yeah. Wow. Wow. So that's, that's an interesting trend to look forward to then. And I know, I don't know as CoreLogic or KCM, one of those reports came out this week, talking about the millennial ,the older millennials were really starting to come out in force to be purchasing. And it was the biggest demographic group in forever, it was like right now. And this idea of the market slowing down ,because we see prices softening as we get more inventory. But but the demand is there. And then they made this prediction this week that the demand is going to increase in 2022. What do you guys think of that?

[00:29:08] Guy Giles: Well, I mean, it is funny because Fannie Mae said that, that it's only supposed to go up about 7% this year. But then if you go back, Goldman Sachs is talking 17%.

[00:29:19] Alice Lema: And those two predictions are not that far apart time-wise.

[00:29:23] Guy Giles: No. So I, I think that I think it still goes up as, as they loosen up on the mandates, people are able to work remotely and companies are realizing to keep good talent, they have to let them be a little bit more flexable with their time. And I think it's going to make places like this more and more attractive all the time.

[00:29:44] Alice Lema: Well, we've got to take another break. So hang on, folks do not touch that dial. Beth Rodriguez, Guy Giles mutual Omaha mortgage. We'll be right back.

[00:29:54] Well, welcome back folks. We're here with Beth Rodriguez and Guy Giles, Mutual of Omaha mortgage. I'm Alice Lema, broker John L. Scott here in Southern Oregon. And this is our monthly update from the mutual Omaha mortgage team. And it's very interesting. We were just talking before the break about the surge of millennia people that are buying houses and that some of them are buying investment property. But you know, that's, that's interesting. Cause the first time home buyer mentality is unique. There's there's just really no other buyer, like a time first timer. So Beth just wanted to ask you, like how can people get ready and what should they do and not do if they think they might want to consider buying a house or property?

[00:30:39] Beth Rodriguez: Yeah, we're definitely just so big on educating them and giving them the correct information. Because a lot of times what they're getting from what friends and family may be information that isn't quite correct. So the good thing is to even just start early, come in and talk to us. Not per se. Maybe we're going to just pull your credit on the, you know, and the first step just to see where they're at, but to really educate them on what they can do to prepare them.

[00:31:07] You know, a really good thing that we tell them is just having that credit karma is, is good, you know, to be able to just, it's not going to be totally accurate, but it's gonna, the best thing is for it's just to show them if their scores going up or down, but to be able to really make sure that their credit is in a good place.

[00:31:24] Alice Lema: But what is a good place? Like define good place?

[00:31:27] Beth Rodriguez: Well just making sure that there's no judgments, no collections having high limits my balances, you know, they're going to have their limit. They're really close to that limit, it can be a negative thing. So really keeping those balances low on the credit.

[00:31:42] Yeah. Yeah. Thank you. And also just being really careful, a lot of the places, you know, stores will say, Hey, if you sign up for this card, you don't have to use it, but you'll get the 20% off and we'll just cancel it. So those type types of things, having them realize what does affect their credit is so important.

[00:32:03] You know, just to really protect, not having anybody and everybody checking that keeping their balances low. Another thing is oh, it just left me super important.

[00:32:15] Alice Lema: I didn't knowthat those discount cards, like at the retail stores would affect your credit.

[00:32:21] Beth Rodriguez: Yeah. Well, if people are pulling it. Yeah. So, because your credit, you have to extend your credit. That's considered the hard pull and then it's gonna affect.

[00:32:30] Alice Lema: Okay and when you guys do a credit check, it doesn't really hurt somebody when you do it. It doesn't hurt their credit score. Right.

[00:32:38] Guy Giles: If it gets pulled a bunch of it can go down a couple of points as far as that goes. So, but it's, it's better to just take a look at it and make sure that there's nothing to address later on down the road. Cause we have had people that had a, a phone bill that, you know, that they've had, that they thought they took care of five years ago and they're just really not taking a look at their credit at all. And now it's something that we either have to address or don't have to address. Sometimes it's an old wound that's mostly healed up. So it's just good to be able to, for us to take a look at that. And just kind of analyze it and see maybe what should be addressed or what shouldn't be addressed. And you know, sometimes you'll get somebody. That I had a lady in here 37 years old, that was a ghost, no credit score at all, just a week and a half ago. And then that posed a little bit of different challenges as far as putting her into a loan program.

[00:33:29] Alice Lema: They don't, they didn't have utilities or credit cards or anything.

[00:33:33] Guy Giles: She was a ghost. She had nothing and she'd been married to a guy and he had a perfectly good credit score. They've been married the whole time. And just somehow they didn't even realize that it was happening over the years. That she didn't put herself on things and it was, it was, it was kind of crazy. But it was something that we, we addressed before they found a house. So, you know, we're able to, able to come up with some plan. But anyways, it's just, it's just good.

[00:33:59] The time to try to work on your credit is not in the middle of the deal. Yes. All right.

[00:34:05] Beth Rodriguez: So I remember that the other thing that I was going to say, you know, a lot of, you know, especially maybe some of the younger generations, not realizing that even just one 30 day late payment just makes a huge difference.

[00:34:18] Alice Lema: Oh, yeah, you can't have, you can't be late, but we also, even if you have some lates, we still want you to come in and talk to you guys.

[00:34:25] So with that in mind how early in the process can a person come in and just start getting some education in the process? How, how early?

[00:34:38] Guy Giles: Well when they start thinking about it, you know what I mean? And like, so you, even if, if they're like, you know, Graduating college in a year from now, you know, then we can just kind of talk to them, but we don't have to pull your credit at that point. But we can just kind of talk about what your rent is right now, you know, and that's a nice thing to, to say, you know, I I've had people literally come in that want to buy a $400,000 house.

[00:35:00] And when I dig a little bit deeper, what's a comfortable payment for you. $750. How much do you have saved? I don't know. It's going to depend on what I get back on my taxes. And then you go in to like what she was saying, and you have a whole bunch of maxed out credit cards. You're like your rent is only 750.

[00:35:17] And I mean, I'm not here to judge somebody or tell somebody, but as a, as an advisor this is maybe a good conversation. Yeah. You know, you might want to try on a $1,500 mortgage, just pay yourself that difference for a few months while you're thinking about it. A you're saving money and B you're not, you're not in that already.

[00:35:40] So, I mean, it's just a good way to try it on. At the end of it, it might be, you know what, 1700 bucks wouldn't be bad, or I really need to stick lower.

[00:35:48] Alice Lema: So there's nothing wrong with coming in early, right? Sorry.

[00:35:54] Beth Rodriguez: No, not at all. And we're always happy to answer questions and you know, the sooner people can prepare the better off they're going to be when they are ready and get ready, you know, quicker when they know the right things to do.

[00:36:05] So I was just going to say, I, I learned that from Guy and I use it with all of my clients , you know, what, what are you paying for rent and start paying yourself what you think that comfortable payment is. And I know a lot of my clients who have done so, and it's really served them.

[00:36:19] Alice Lema: That is such a good idea ,then there's no stress. The other thing is it's okay to go and talk to you and find out that you're not ready yet. It's like that that's the perfect time to come. Right? Because you get a list and then you know what to do, like you just said the right thing to do.

[00:36:36] Beth Rodriguez: Correct. And I've had clients that I spoke to a year, year and a half ago, and then they've come back ready. And then, so we can get them into something. So, you know, is this helping us? And it's helping them. And it's just a good situation.

[00:36:49] Alice Lema: You put them on track with the right list of things. Yeah. Order to fix or change. And, and sometimes they get from their friends and family or social media, the wrong information, and they go and do those things only to find out it didn't help at all.

[00:37:08] Whoops. We lost our audio. Oh, yeah, you're back.

[00:37:13] Guy Giles: Sorry, I got a phone call. I don't know how to mute that.

[00:37:17] Alice Lema: Sorry, folks. We're still working remotely.

[00:37:22] Guy Giles: I had a guy that had like $30 on a old sprint bill or something. I don't even know if sprints a thing anymore, but literally I said, well, Hey, why don't you pay that thing off? I was new to the mortgage industry. This was a lot of years ago. And. He's he said, anyway, I talked him into paying it off, dropped his credit score 20 points because it was an old wound that was completely healed up.

[00:37:43] And this was just one of these things that, that could have been information from his buddies saying, well, if you owe that would only make sense that your credit score would go up if you paid it off. So it's good for us that have looked at a lot of credit reports. We're not a credit repair place at all, but we've looked at enough of them.

[00:38:04] Alice Lema: Yeah, well, Beth Rodriguez and guy Giles mutual of Omaha mortgage. If somebody wants to get ahold of you to get some lending advice, how can they find you?

[00:38:16] Beth Rodriguez: Well, my phone number, my cell number they can call is (541) 292-1477. One more time, (541) 292-1477. And I just want to tell first time home buyers, especially no question is dumb. So always feel comfortable asking a lot of questions, more questions the better.

[00:38:41] Alice Lema: Perfect. Thank you, Beth Rodriguez, Guy Giles. Thank you folks. We'll talk to you next week. Have a beautiful Southern Oregon weekend. Bye now.