Jon Grauman
speaker
142 appearances
1 recordings
1 series
first heard Nov 2024
last heard Nov 2024
Jon Grauman’s voice in public audio — every appearance, attributed to the second.
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You're going to save a tremendous amount in interest over that 15 year period. Tremendous. But your payments can be significantly higher. So whether or not you can afford it is, you know, case by case.
I would say that meeting with a mortgage broker early in the home buying process is critical because what they're going to do is they're going to take this very blurry picture and help bring it into focus. One of the things they'll do is they're going to look at your credit.
So if your credit is, I think to use your very technical term, then yes, they should hopefully have a credit repair specialist that they can refer you to. It can be dicey in terms of what they can actually do, how quickly they can improve it. And there's no guarantee, right? There's three different credit bureaus.
And if you pay off this line or pay down that line, how much it affects your credit, they don't know until they rerun it. So if you have things that need to be fixed up in your credit, yes, a mortgage broker by proxy can put you in touch with someone that could potentially help you with it.
The mortgage broker's fees? Generally. Generally, there's a commission that's paid or a percentage of that loan that then gets paid to them. But you can also buy down the rate where perhaps you pay more to get a lower interest rate, but then maybe they have to charge you a point. So it's like anything. There's levers, right?
If it's 6% with their compensation being paid for by the bank, maybe you can get it down to 5.75, but then you have to pay a point.
Ooh, that's just a question of leverage. And that goes back to, again, your very technical term of BRRRR. I counted for all the Rs there. Where the whole principle in real estate investing is to, again, buy something, create value, add equity, increase your loan to value position, and then leverage that to go buy more. You could apply that same principle to a HELOC. I would just say, be careful.
You don't want to get in over your head. And most lenders won't allow you to do that anymore anyways, meaning that they keep the LTV requirements very low or rather very high on the HELOCs so that they don't allow you to be able to over leverage on them. But yes, borrowing against to go buy more, you know, I would say reward favors the bold.
Buy a foreclosed home?
These questions are so much more nuanced than truth or trend. First of all, to buy a foreclosed home, like either the court steps or at auction, you have to have cash. So unless you have a big pile of cash to use, if you need to get a mortgage, you're not buying that foreclosed home. You're not getting that, you know, that savings. You're not realizing that savings or discount.
What will happen is they'll try to sell it again, either like the court steps or at auction.
Well, I mean, not technically outside, but, you know, they'll try it like there will be a court date set, a sale date, and you can either buy it there or you can buy it at auction. And potentially you could realize a significant savings in doing so. You're buying it non-contingent. You have no opportunity to inspect the house, look under the hood, kick the tires. You're paying all cash.
Few people can play that game. If they're unable to sell it there, then they hire a broker and they try to sell it at whatever the market value is to try to recoup their, you know, whatever their losses are on it.
Yeah, that's true.
I remember this. Okay, John, as you know, I end all my episodes by asking for one tip listeners can take straight to the bank.
Can you share one thing people can do to help navigate this crazy real estate market? Oh boy. I probably have given you the same answer. I think three times, if you've asked me the same question, which I don't remember, don't go it alone. And I think I, as I'm saying that I'm having some deja vu, so I may have given the same answer. Don't go it alone. You're not meant to be a real estate expert.
That's, that's why I exist. That's why I have a job. So please don't take it away from me. You know, it's the way, it's the reason that financial advisors have a job, right? Like I, I, I keep tabs on my investment portfolio. I don't manage it. I know what I know. I know what I don't know. These are challenging times. They're uncertain times.
And I think, as I said before, all real estate agents are not created equally. There's about 1.3 million in the United States right now, which just as an interesting stat, there's about 900,000 listings available for sale. So there's more real estate agents in this country than there are.
Wait, say that again?
There are roughly about 900,000 homes available for sale relative to 1.3 million agents in the United States. There are more agents in this country than there are active listings available. And that's up significantly. We were down at around 400,000 active listings a year ago.
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