Rick Ripma 0:31 Good afternoon and thank you so much for joining us today. I'm Rick Ripma. With the hard working mortgage guys I am joined today by Ian Arnold who is also with the hard work of mortgage guys, we're both with Advisors Mortgage Group. And we truly appreciate you joining us the best way to get a hold of us if you have any questions you want to talk about mortgages is hard working mortgage guys.com. That's hard working mortgage guys.com. You know, today and we want to talk about you know, if somebody wants to get a home, they're looking to buy we know that what the markets like today, we know that there's a tremendous amount of first-time homebuyers. In fact, Ian and I actually do a first-time homebuyer seminar about once every three weeks it's an unlined, if you know of anybody who'd like to join, just, you know, get a hold of us again, hard work and mortgage guys. Let us know that's what you want. And we'll get them signed up for the seminar. It's all online. And it's free. And it's free. That's important. So, if somebody's looking to buy a house or thinking about the next little while, how do they get prepared? What should they do? Ian Arnold 1:33 Well, the first thing I would definitely say is to contact us because like I like to tell you to tell most people is everybody has a story. Well, guess what? Not everybody's story is the same. I mean, some people are going to be an I got just graduated college, I'm ready to buy my first house, I have great credit parents are helped me money down. we're golden. Awesome. We're gonna have other people that hey, look, I ran into financial issues, I got a little lower credit score. I need help there. Okay, well, great. Now we know where to start. Some people are gonna be hey, I need help getting money down. Okay, well, so every person’s story is going to be different. mean? So, the first thing I tried to ask a lot of people is if you're wanting to wait a year, why is that? And then it's whether it's credit money down money. But if credit is good, money is down. And there's like, well, I'm hesitant with the market. Well, that's where I would tell him to pause, let's talk about this a little bit more. I mean, with the way the housings increasing and stuff like that, if you're ready to purchase, like mathematically, I would say let's, let's get you going. Because with houses, the way they're increasing, even though interest rates have gone up a little bit, you're still better off buying a house, because your appreciation is going to be more than what the little bit of interest has gone up. And we've actually I've actually seen that quite a bit with a lot of several customers. And once they got the house, now they start getting equity. So, and that's what you want. As a homeowner, you want equity, the interest rate matters but you don’t what to miss out on a home because of the interest rate, especially with the huge appreciation numbers we are seeing, because guess what, if interest rates drop in two years, guess what you can do? You can refinance, and then get that lower interest rate and still and then start paying off your house earlier. So, what is it? I talked to Rick about this a couple of weeks ago, one article I read said that home appreciation is going to increase about 12 and a half and then another 115 I think Rick said he saw one person 18 So let's just say 15%. I mean, if you're looking at a house for $400,000. Guess what? Now if you wait one year, that's house gonna be 115. If you're looking at a house for 200,000, you wait one year, that's, that's 230,000. Wait, that increased quite a bit. Yes. But guess what, your rate is not going to really affect that. So, if you're ready to purchase, we'll let you know. And we'll show you those options. And I don't know if you've seen anything like that, Rick. Yeah. Rick Ripma 4:06 And you know, to go along with that, you got to look at that both ways. If you go ahead, and if you want to buy a house, and you can buy today, and you and you and you buy, you get to take advantage of that appreciation. If you don't buy today and you wait, then you pay that appreciation to the other person who's selling the house. You don't buy a $200,000 house. That's $200,000 today, and then a year buy it for $200,000 if it increased to 15%. You pay $230,000 Yep. Okay. So even if rates are a little lower in two years or in a year, it's not it probably won't offset it. But you can always refinance that same house. And, and as we talked, what else does that do? You put 5% down or maybe your first-time homebuyer put 3% down and then now after you put 3% down, the home's increased in value by 15%, and you've paid your mortgage, which means you've paid some principal. So, it's highly likely, that you're now at a 20% equity in what happens when you have 20% equity and you refinance, bye-bye goes PMI. That's right PMI goes away. That's private mortgage insurance. Everybody, nobody really wants to pay private mortgage insurance. But it's vital because you couldn't have bought a house, it used to be that 20% down, it takes forever to get 20% down. You couldn't have bought it for 3% down. But now that goes away because now, you're at 20% down. And you did it pretty much with equity and just paying the mortgage down, correct. It is hugely beneficial to people to do that. Ian Arnold 5:49 One other thing that most people don't really think about, especially if you're renting. Well, let's just say, for mathematics, simple, your mortgage, or your rent is $1,000 a month, and you want to wait one year. So, you just paid $12,000 In one year to somebody to live in that place. What could you do with $12,000? Rick? Rick Ripma 6:13 You can do a lot, but it's even worse than that. Because it's $12,000 in rent, and they also the equity they would have received. If the $200,000 house, they lost $30,000 in equity. So, we're now at $42,000 that they don't have Yep. Now it's probably not exactly that, because you still had to make a mortgage payment. But that mortgage payment if you paid $1,000, mortgage payment, a couple $100. That's probably going towards the principal. So, I mean, it's it is having a home is hugely beneficial. And I remember reading and I don't remember the exact number. But the net worth of somebody who is a renter compared to a homeowner, the difference was like $500,000, it was, it was incredible. One of the ways to have financial freedom is through your own home. It's just it's a critical piece. Additionally, you know, you said $1,000 a month, but homes are increasing in value at 15%. They said rents increased by 17%. Correct. So, your rent is going to increase faster than the appreciate appreciation. So, your rents gonna go up rents a negative thing faster than the appreciation that you would get if you just owned a house, which is a positive thing. So, it's good. If you buy a house, that's great to live in. It's also great if you want to buy a non-owner-occupied property or rental property because the rents are going way up. Ian Arnold 7:50 Alright, so now. So now, take away the good people that are ready right now. So, what about credit? So, when you're looking at credit, if you don't have the best credit, and let's say 550 or something like that, and you need it, there are many ways to try to get that up. I mean, again, each scenario is gonna be different based on each person. I mean, Rick, and I see it quite a bit where we look at somebody's credit. And if they paid off a couple of collections, their credit would start shooting up because they're getting neg collections is a negative on there and everything you're doing positive, where do you make that credit card payment on time? Or that car payment on time? That's might be positive, but anything negative is, is what brings the credit down. People don't realize how fast your credit can shoot up? And how much that makes no payments. I mean, once you got to be at least five at for us to even really to start looking at getting you approved. But I mean, the higher the better, the better credit equals what Rick? Rick Ripma 8:55 Better, everything better rate. Yep, better terms. You know better everything to go along with that there is a thing, I had a customer who they had a 572 credit score, we did our thing. had them do a couple of little things that cost them less than $200 paying down debt. Okay. It was less than $200. Let's say it was 300 bucks. I know it was less than $300 $300. And this isn't gonna sound like a lot but something that people don't really understand. It took the credit score to like 592. Okay, it took the credit score from not being able to finance to be able to finance, right, yep. But it doesn't have to be a low credit score. What people don't understand and I think it's kind of not known out there is our rates are affected, basically, and 20 credit score increments. So, somebody with a 700 to a 719 doesn't get as good a rate or as let's just say that a rate was just said terms as somebody with a 722, a 739. And they don't get as good a term as somebody with a 742, a 759. And they don't get as good a term as somebody with a 760 and above. So, there's just 20-point increments there. And it goes down 680 to 699. So, it matters. So, if we can take somebody and help them just increase their credit score a little bit, which you do a bunch of Yes, I do. It is amazing how much that helps them. So, you don't have to have really low scores, just little incremental changes, even with good scores can make a difference. Yep. After the break, we're going to talk more about if you're looking or know anybody looking to buy a home in the future, you know how to get set up for that what needs to happen? Or maybe why you should go ahead and buy today. Announcer 11:27 Brought to you by Advisors Mortgage Group, where we believe the more you know about financing a home, the less stressful buying and refinancing will be. Rick Ripma 11:42 Thank you for joining us today, I appreciate it very much. I'm Rick Ripma. With the hard working mortgage guys at Advisors Mortgage Group. And I'm here with Ian Arnold. Also, with the hard work and mortgage guys, with the Advisors Mortgage Group, if you would like to get a hold of us want to talk about a mortgage, or have any questions on anything that we've talked about when not looking for a real estate agent, we can help you with that there's pretty much anything on real estate where we can probably point you in the right direction. Just go to hard working mortgage guys.com. That's hard working mortgage guys.com. And we've been talking about you know, somebody wanting to buy a home in the future. We talked about, you know, the cost of rent over time, which is amazing. And you use really low numbers because most people don't have $1,000, they pay more than $1,000 a month, but you're very conservative that way, which is being fair. We talked about, you know, getting the credit score up a little bit, is there any other thing any other pieces of getting the credit score, because you do so much of that you help so many people get their credit score up. So, they're in a position to either finance or get a better rate? Is there anything else I need to think about with that? Ian Arnold 12:52 Well, the other thing is, especially when they're looking at their credit a lot of times and we see it quite a bit is their student loans. And most people will see, they'll look at all those student loans and be like, Oh, that's so much? Well, there's a couple of different things is one, if they're deferred one and two, if they're not, if you're making payments, mostly, if they're making payments, we already know roughly what you're paying per month, then if they're deferred, most people don't realize is we only have to use either depends what loan you go with, we can use point 5% of that, or only 1%. This is awesome, because it doesn't add when he's talking about that. I mean, it doesn't add up as much as you think it does. Rick Ripma 13:38 So, a $10,000 student loan is $50 or $100, depending on what program. And it depends on when we're talking about this. We're talking about whether it's FHA or conventional, and how they require us to count the payment. And I mean, there may be a few people out there still making payments on their student loans, but the vast majority of ones I run across are deferred. Yeah, they're all deferred right now. Yeah. It's just a rarity that you see anybody making the payments. Ian Arnold 14:05 So, I mean, if that's what's stopping you, then you definitely need to contact us. So we can sit down and go through your story and figure it out. Because that will you'll be shocked and what we can do for you. Rick Ripma 14:18 Yeah, and you know, all this comes in together. It's you know, we if we can see what the credit is. And credit is more than just the score. It's the other thing. I think that that's a little misnomer, because we all talk about it as you know, what's your credit score, what your credit score, what's your credit score, and when we're talking about credit score, there are three credit bureaus, you know, and we're going to take as a mortgage, it's always the middle credit score. And what we pull is going to be what's called a tri-merge credit report. And it's going to have all three bureaus on there, and it's going to be different than when you look it up online on your credit card that they give it to your bank gives it to you for free. That's a different credit score. That's what's considered a self-poll, it's even different than if you were pulling it for a car loan because they're going to rate it for a car. Generally, the worst credit score number you're going to get is going to be a mortgage, it's got the highest risk, and it's gonna have the tends to have the lowest score, but it may not because you may pull, pull it and they gave you the worst score you had. And we take the middle score. So, it may be different. Generally, that's not what we see. But for but it can happen that your scores are higher than you think it is. A dip, if you give us a little bit of time, many times we can help get that score up. And as we said earlier, before the break, a little change in the score can make a difference, and what options you get and what the terms are for your mortgage. Correct. Ian Arnold 15:55 So even if you are saying, say you just signed your lease, and you're a year out, why not contact us to see what we can do if let's say your credit score right now is 700, which is good, but it's not great. So what if in one year, we get you to 760, and get you even phenomenal rates, then you're gonna be like, Oh, thank you. So that's why we always say let's go through it, even if you're out a little wise, let's see what we can do to make your situation the best situation for you. Because if you just wait and wait and wait, what will happen is you've just run out more and more time, the longer you have, the better we can help you out. Rick Ripma 16:34 Right? The longer we have, the more we can do. And you have to understand there's no cost us helping you improve your credit, we're not a credit repair company, we're not going to do that type of thing. What we're going to do is we're gonna run everything, and we're gonna give you the instructions on exactly what you need to do. And one of the things I tell people, I'm sure you do, too, is we give instructions, and it's this is why you need help. Sometimes the instruction says you need to pay this credit card down to $20. And if you pay it to zero, it's going to hurt your credit score. Credit doesn't make common sense, does Ian Arnold 17:24 it? No, it does not, especially in the short term, it doesn't make, it'll baffle you on some of the things that we see. Rick Ripma 17:31 Yeah, I think that's critical, this short-term, long-term payment to zero and six months for it to improve it will. But short term, you have somebody who has a 685 credit score, and they do a couple of little tiny things. Sometimes it's more, but sometimes it's a little tiny, and then their credit score is 727 25. That makes a big difference in the type of financing that you're able to get. And the benefit. I didn't just I think it’s really important people understand how much benefit they can get by that. But it's not just that you also help them figure out how to come up with their down payment. How much money do they need? Where can they get it? Ian Arnold 18:15 So, there are many different ways to think about this sometimes. So, I had one customer, and I'm going through everything and I'm like, Alright, so do you have any student loans? And they're like, yes. Do you have a car payment? Yes. Do you have any credit cards? And they're like, yes, I'm like, alright, well, let's start with a car. And we're like, When? When is your car gonna be paid off? They're like, oh, we paid off in a couple of months. Awesome. I go does it run well? Does it do it drive? Good? Yeah. All right, that's even better. Here's what I want you to do. Once you don't want that car payment done. Do not go buy a new car. Take that money. So, if you have a $400 car payment, and you put that in a separate account, and just put it like in a small savings account, so we're not going to talk about interest or and all that. So, you just put that $400 in one year. That is six. That is a man I'm putting on like $400 Yes. 400 100 bucks. Yeah. 1400 for one year, so you almost have five grand. This isn't talking about tax returns. This isn't saving an extra five grand in one year for just saving your car payment. There you go. That's quite a bit of down payment right then and there. I mean, it's just a little stuff like that. You don't most people don't think about it, because they're like, oh if I need five or 10 grand, that's a lot of money to save up right away because you're thinking every two weeks that you get paid or every month that you get paid. Not hey, if I just take a little bit, this will add up quickly. Just so you know that lady bought a house in a year Rick Ripma 19:51 and where else can people come up with a down payment how else can they how else can they do it? Because I think that may be something that Okay, so there's one way you have you have somebody who's got a car, they're just going to pay it off. Don't, don't buy another one, take that payment and save it. Ian Arnold 20:07 Another way is and I had some people do this is not to go out all the time. So, Rick and I actually just talked about this last week, because I had a customer and they were out there talking about going on this go into this. Here's what I told him. Look, tell your friends and family for one year. You're gonna sacrifice. Look, let's be honest. One year goes by fast. I mean, think about two Christmases ago. I mean, it's just like it was just yesterday. I mean, think about when COVID started, let's be honest. It's like, oh, wow, that again, you know, you don't realize that's almost two years have passed. Rick Ripma 20:43 Three months is already under this year over three months or past? Yeah. That's how fast Ian Arnold 20:47 Yeah. So, if you just sacrifice one year of going on vacation, and doing all that stuff going out all the time, just stay home. And to be honest, if you tell your friends and family, especially the ones who have a house, you know what they'll tell you? Yeah, we even remember that. Good luck. What do you need help with what do you want to come over and just have a game night and we'll bring over board games, they'll do it? They understand. Give me Rick Ripma 21:09 There are free ways to have entertainment, you can save, you can get what you want, which is a house. I think that's the big piece that you're talking. You have to remember your goal. Yes, the goal is we want to buy a house, right? So, before you start doing all this, you need to talk to us. Yep. Because we can help you understand what you know and how to get there so that you can set this up. But I think this is perfect, what you're talking about. So go to hardworking mortgage guys.com It's hard working mortgage guys.com Contact us from there, you can fill in the information, send it to us, Ian, or I will get back to you. But definitely do that. But you were saying you know, having the game night, which what a great thing to do. How much fun is that? Ian Arnold 21:52 It is I mean, but I'm a little biased because that's the way my family grew up. I mean, every holiday or whatnot, we got a board game. So, I'm a little biased when it comes to that. But guess what, now I have kids, we do the same thing. And guess what? It's not $100 Going out to take them to the movies, because you got movie tickets, and then you got popcorn, you got all this other stuff. Guess what? They just went ahead and had a good time, we actually had conversations and stuff like that. So, there are other ways to do stuff. Rick Ripma 22:22 On the other hand, save money, save money and still have a great life. Yep. Ian Arnold 22:26 So, here's the other thing that especially because I do a lot of this, rebuilding the credit to help people with down payments a little bit more than what Rick does. But here's what I do, is I call you at least once a month, once a month, or once every other month depending on your situation. But what that allows you to do is hold accountability. And I had this conversation sometimes there's when I call you there are several things I hear, hey, everything is awesome. I got this paid off that taken care of I have this much in my savings account. Awesome. I also hear this car alternator just went out, I just had to get my savings and pull that out. Great. Look, life happens where we can't stop life. But what we can do is get you over the hurdle, and keep going. And that's what people need is a way to keep going. Because as soon as some people hit a hurdle, they stop. Well, guess what? We're not stopping. We're gonna keep going. And we're gonna get you all the way past that finish line. Rick Ripma 23:25 Yeah, because the key is, and I'm quite a bit older than you and I can tell you in my life, the key has always been knowing what I wanted. Yep. You can sacrifice, going out to lunch, going out to dinner, you know, bringing your lunch to the office, not going to dinner, you know, three times a week, that kind of thing. Or instead of going to, you know, Ruth's Chris, you go to McDonald's, whatever, okay? If you know your goal, and you keep your goal-focused, and it's big, it's a big enough desire, that you're willing to give up these other things. And what I love about what you said is, it's not just, you can not only do that, but you can actually enjoy it. Yep, you have a great time you can play whatever your thing is, my wife is into puzzles. The puzzles don't cost very much. No, you know, so and a puzzle takes her, you know, months, my daughter in laws into books. And so they don't, they don't go out, they read. And you can do that pretty much for free from the library. Ian Arnold 24:37 So, there's a story that goes through my house and we all make fun of my dad. So, it's, it's funny, but it actually hits his home. So, when he and my mom were getting together, they wanted to buy a house. Well, she was still in college. So, he was going, he was like Alright, so here's what I'm gonna do. I'm gonna sacrifice everything I have, and I'm only going to eat ramen and canned soup and everything, everything else goes to the house to put down for the down payment. He did that for a year. Can you imagine eating ramen and just canned soup for a year? I mean, give it give him credit. I mean, he made it when they got their house, but you don't think but again, one year, flies so fast that you just don't realize it. By the time that one year is up, you're like, Wow, really? That was only a year. Rick Ripma 25:27 And I bet he liked that house more than most people like their house because of what he sacrificed. Right? Yep. You know, and you appreciate it more. It's very, very important to do that. Now, we've been talking about a little bit differently on this. But let's get back to, you know, the like collections. We talked about student loans. So, what about, you know, if somebody has collections if they have some issues, what so Ian Arnold 25:51 what we'd want you to do is try to get those taken care of, and there are several different ways a lot of times you can set up payment plans with them. Another thing that most people don't realize is collection companies buy those 10 cents on $1. So, if again, I'm gonna make hypothetical numbers, but say you owe $1,000. Well, you may not have $1,000 on your, but what do you call it and argue with them? I make it sound easy. But let's be honest, you're gonna have to fight a little bit. Let's say they settled at $500. Well, then guess what? Do you do that? Rick Ripma 26:24 Call it a day, get a receipt. And guess what? That's gone. So that negative on your credit, it's gone, but it's not going to know it. But it's not going to be connected? Is that relevant? That? Yes, it's on your credit and it's key that you do it enough ahead of time that it isn't affecting your credit score scores, right? Ian Arnold 26:42 Yes. Yeah. I mean, it's, it's still going to show for about seven years. But what is not going to do is hit your credit, as hard. So, and that's what you want to show. And let's be honest, if you're looking at getting a house, and you have in your payments gonna be $1,200, and you have a $300 collections. In my mind, why would I give you a loan, if you can't make a $300 payment and you want to make $1,200? That doesn't make sense. So, you get that taken care of, you'll watch your credit go will start going up? And you'll be like, Thank you. Yep, Rick Ripma 27:19 I think we should also say that, before you do that, it would be really helpful to talk to Ian Arnold 27:25 Yes, again, everybody's situation is different. That's why I started this thing. Always talk to us first, because we want to know because we've seen this more than you. I mean, so we were going to know Alright, do this, this, and this to get your steps going. Because without that you could mess yourself up to begin with Rick Ripma 27:43 and we have a very, very elaborate program to help with that to make sure that we're doing the right things to get their credit scores up. So, we're running out of time, but you know, we've talked about the ways to get prepared to buy a home. One of the things about down payment we talked about a little bit but there are other ways to get a down payment, you might have a 401k you might be able to get a gift from a family member. There are ways to come up with a down payment. Again, the key is to talk to us so we can help you out. We can get you going in the right direction. Again, thank you so much for joining us. I'm Rick Ripma with the hard work and mortgage guys and advisors Mortgage Group. I'm Ian Arnold and we thank you for your time thanks so much for joining us and have a great weekend. Announcer 29:47 NMLS number 33041 Rick Ripma is NMLS number 664589 equal housing opportunity some restrictions apply