Navigating the Home Loan Maze with Richard Yeppez: Insights from a Mortgage Lender

This is episode number 232 of The Homeowner Show. Whether you're DIY or looking to hire, we're here to help you find the best information and options for you and your home. My name is Kevin Hackett, and here with me is Greg Williams.

Hello, hello, hello, and welcome to The Homeowner Show. We're so glad you could join us for another episode live here in the studio. What's up, Kev?

Oh, you know, just another day living in the life of weirdness.

Weirdness?

Weirdness.

Got some weirdness going on?

Well, my wife, she—

I do think it's weird that you have a wife.

Well, I know we're all surprised and shocked about that, but nevertheless, I've fooled her long enough.

Okay.

But so she sends me a video of what appears to be a trench.

Okay.

In my backyard.

All right.

And I'm like—

That's a good play for it.

Yeah. I'm like, what is going on here? I don't know what's happening. And so I didn't see what she sent next, which was a picture of Toffee, my, uh, Goldendoodle.

Okay.

She was born in July with a mole in her mouth.

Nice.

And she had dug the entire mole tunnel looking for this mole. And it was not the first time she has done this.

Oh, really?

This is the second mole that she has taken care of.

Good for her.

And yeah, and Kimberly was like, I don't know what to do. And I was like, you don't do anything.

Yeah, like, let her do her thing.

I was like, forget that mole trap we bought. That thing's useless. I can fill in a trench. Like, that's not a big deal.

But did you get one of those like spring-loaded metal mole traps?

Yes.

And didn't work?

Well, I, I didn't try it back there. I— we— okay, we had some up in the front of the property, which honestly probably still gonna need it up there because, uh, the fence run— the electric fence runs probably where she can't get it. But, um, no, this was in the back of the property and I hadn't tried. But, um, so I hadn't had— I needed that one yet. But that thing's solid. Yeah, it'll work.

Oh yeah, it'll kill them.

Yeah, it'll kill them. But But she had like— I've got a picture and I'll show it to you after the show of like, of my dog with the mole in her mouth. And my, my wife had to go get my mother-in-law to hold her while my wife pried her jaws open to get the mole out. Because she's like, I don't want to— I don't want her eating it. And I'm like, she's gonna be fine. Yeah, she eats a mole. It's not the end of the world.

This is her reward.

Yeah, it's like, look, she looks like you have some Caddyshack problems.

Get that varmint.

Exactly. Like, I'm, I'm sitting here going, She, she done good. Like, let her have the spoils.

Let her do the thing.

Yeah, let her do the thing.

I mean, she has the scent now.

That's exactly right. I mean, we had a— we had— you, you kept Raider for us for a while, our Australian Shepherd. And to the best of my knowledge, in his life, it was possums 0, Raider 6. In his life, I know of 6 that he killed. And I'm like, good on him. I hate those things.

Yeah.

So anyway, I've got a mole-killing dog. Good. Really happy about it.

You can rent that dog out.

Exactly. Make money off of it.

Can't wait to see that Craigslist posting.

That's right.

Labradoodle for hire.

That's right.

Will kill your mole.

That's right.

So we'll need lawn man after.

That's right. Yeah. You're gonna have to fill in your own trench. The trench, trench fillage not included.

You can destroy.

You could be the new landscaping lead man. That's right.

That's right.

Anyway, post-apocalypse of the Labradoodle.

So that's what's, that's what's going on in my world. How are you doing?

Good, man. So I, I wanted to— we, we've got, we've got Richard in the studio. Yeah, from Next Mortgage, by the way.

Yeah, we've already kind of, uh, seen his face.

Do you want to introduce yourself real quick?

Sure. Yeah, uh, Richard Yepes, regional manager for Next Mortgage here in Houston, Texas. Uh, so yeah, we're a nationwide company. Uh, happy to be here.

Awesome.

We are excited to talk some mortgages and house buying.

It's gonna be fun.

Oh yeah, so I wanted, I wanted people to, to get a peek at this because we're probably gonna be talking about this again. I installed this in my house after the dryer debacle of the last couple of weeks.

Oh yeah.

Yeah, so this is actually pretty cool. I bought it as a set.

Okay.

And it's a, it's a gas detector.

Oh.

Yeah, so, but you don't have to install it, it just goes on an outlet.

Oh.

Yeah.

Beautiful.

Yeah, and so you can, you can actually put it in the rooms where you have those gas appliances.

So So it's not a CO2 detector.

It's a natural gas detector.

It's a natural gas.

I think it can actually do natural gas and propane.

Okay.

At least until the government takes away our ability to have those in our homes.

Come and take it, buddy.

Yeah.

So this is not a detector. We're gonna put this away now.

That's right. There's a weird microchip in here that is—

Cool.

That's awesome. And I mean, one of the things that people don't realize is that I mean, those and like, like water leak detectors are really, really like great. Like if you've got a, like a, like a pan or something under your sink or, you know, like your hot water heater or anything, you can, you can get a cheap water leak detector or, or a gas detector. It's gonna save you, like that could save your life.

Oh, for sure.

Funny, funny enough, my insurance company gave me a water detector and a detector like that and it actually saved me money on my insurance.

Really?

Oh, they give you a reduction in your— yeah. Yeah, we, we got the same thing when they, they gave us a— remember we did the, the episode? What was that thing called?

It was a home— it was, it was like a home monitoring thing. Monitoring thing. Yeah. And you— they, it—

they turned it off recently because we switched back.

Exactly.

Well, that was the thing is our insurance agent was like, look, switch over to this company. They're going to send you this thing. You get like a 10% reduction. You stay with them for 6 months and then you switch back.

Right.

I was like, okay, I'll put the thing in my house. Yeah, it was cool. I mean, like, it had like, you only had to put it— it had like a hub and then like 2 monitoring devices that were wireless.

Yeah.

And really all they were were like break glass and door opener detector. So I put one on my safe because I wanted to know if somebody opened my safe.

Yeah.

And then I put one on the front door.

Perfect.

And that was like— and they're still there, but they're not working anymore because we switched companies.

Yeah.

Wow, cool.

Um, but yeah, so I've already got it installed by the dryer. Hasn't gone off yet, so either it's a crappy detector or we got the leak fixed.

Or nobody's doing laundry.

That's right. We will see.

Yeah. So, okay, I, I heard a, a weird fact today. I know this is like— there's like a weird tangential I'm about to do. Um, but I heard it today and I I was today years old when I learned it.

Oh, nice.

Um, and for those of you that don't know, I really enjoy the whole hunting and fishing stuff, and I go and do it as much and as often as possible. And I was listening to a hunting podcast today, and they were talking about bobcats, and they were talking about how mountain lions will eat bobcats.

Oh, nice.

And so like, you'll find like dead bobcat carcasses, and sometimes they'll just do it for fun. Like, they'll just bite their heads off.

Okay.

Like, you'll just find headless bobcats out in the wild. Um, but one of the things they were saying about mountain lions is sometimes when you find what they've attacked, eaten, is all you'll find is like just the pelt and some bones, and the bones are completely licked clean. And there, someone was like, well, how do they do that? And they— the guy was like, don't you know? And the guy was like, no. And he goes, they have hooks on their tongue.

Ah.

And I was like, what? So I looked it up and sure enough, mountain lions have hooks on their tongue so that they can get down into those crevices. Yeah.

What?

I didn't see that on Naked and Afraid.

It's like they have Velcro on their tongue.

Yeah.

Like hook.

Hook.

That's interesting.

Yeah, it's super creepy.

I was gonna say, and slightly terrifying.

And so like, it like just, it's sort of amped up. You guys seen any of those videos of the guys that like come across mountain lions when they're out hiking and they're like, Oh yeah, they're like having like a staring contest with them.

That's why I don't go hiking anymore.

Yeah, exactly. Yeah, I— yeah, that just, uh, anteed up the fear level of like, I do not want some cat hook tongue in me. Seriously.

Yeah, I'm out.

I'm out. Doesn't look good on— doesn't look good on the gravestone. No, he was licked dry, Craig.

That's a good point.

We will miss him.

He was as dry in death as he was in life.

Ouch.

Alright. So, I mean, to, to kinda kick this conversation off, I've got 2 fun articles about the housing market.

Nice.

Right now, which I thought would be a fun subject because Kevin and I actually disagree about this. Kevin is of the opinion that in 2023, if you're still of this opinion, I am. That the, the market's gonna go up and it's gonna keep going up. I'm of the opinion that we're gonna see a crash. So Let's see. What's the date on these? All right.

So he's he's gone looking for research that supports his opinion. That's really what it is.

Okay, fine.

We'll start.

I've got I've got two, and the first one's from Bloomberg.

Yahoo Financial.

Here's here's here's the one from Bloomberg: Housing demand climbs as U.S. market starts to show signs of life.

Okay, here we go.

All right. So pending, and then the subtitle is pending home sales increase for the first time in more than a year.

Okay.

So this was, this was actually yesterday that this, this article posted. And it says that pending sales climbed 2.9% in December on a seasonally adjusted basis for the first month-over-month increase since October of 2021. And they got some, you know, and a lot of this is numbers that they're getting from Redfin. Okay. I will tell you, if you go over to Bloomberg's Instagram, They got completely roasted for this article.

Oh, really?

Yes.

Why?

People were just saying they're morons.

Oh, because they're saying that that's not actually accurate, not happening.

Yeah.

Okay.

So take that for what it's worth. And then Goldman Sachs reported. Let's see, when would this come out? This one came out. So that article was from the 25th. This article is from the 24th in the New York Post. It's a report. Goldman Sachs saying these 4 cities will suffer a 2008 crash in home values. So these 4 cities in particular, and the, let's see, the 4 cities, I know one of them's like, okay, here we go. San Jose, California, Austin, Texas, Phoenix, Arizona, and San Diego, California. And their projections are saying that they will likely see a decline of more than 25% in those 4 cities.

Yikes.

So that's Goldman Sachs. Redfin saying we're seeing a 2% increase month over month in December. That's gone up since October of '21, which I don't buy either. That doesn't seem right.

Yeah. Especially in Austin where everybody is moving to thanks to Mr. Musk, Elon. I wouldn't say that that's the town that's going to be— maybe all the other ones. But I mean, I wouldn't see Austin doing that.

Doing what?

As far as declining.

Declining?

Yeah. Yeah.

Oh wait, what?

That seems a little excessive.

I don't know. I'm just— this is what Goldman Sachs is saying, so I don't know. The other ones make sense to me. I kind of agree with you with Austin. I don't know that much. I mean, California kind of makes— the only thing with California that this may or may not make sense is there's so many people leaving.

Yeah.

Which to me creates inventory. Mhmm. Which that makes sense to me why the prices might drop. If they have so much inventory from people just not living there, it's gonna make sense that the prices are gonna come down.

Right.

Phoenix, I don't know. I mean, I don't know. I haven't heard about a mass exodus to Phoenix. I haven't heard about a lot of people moving to Phoenix. Right.

Well, Phoenix is a really popular place to live.

Well, I know. I know that.

The climate is, the climate is, is year round. Mhmm. pretty stable. So yeah, it's dry. And which I— that's where I grew up, and I love dry. So I mean, I didn't grow up in Phoenix, I grew up in West Texas. It's very dry there. But so I, I love it. People that live there love it.

Yeah.

Uh, but I, I've, I've been told that Phoenix is a real— just, you know, Arizona in general has some really desirable places to live. I It shocked me whenever I learned about that because I'm like, this is the desert. Why would you want to live in the desert? But apparently a lot of people do.

So the crazy thing, just to kind of add on to this, sure. And from what I'm seeing as far as what the market's doing, so yes, the end of the 4th quarter, December, last part of December, 1st quarter, first part of January, very cricket-esque. There was hardly a lot of movement. There wasn't a lot of applications coming through.

Do you think that was relative to what we've gone through the last year and a half, or just in, in general, was it quiet?

Well, the first quarter of— in, in the mortgage industry in general is slow.

Okay. That makes sense.

So it's not— so add a slow beginning to the year because we're just getting out of Christmas. We've just spent a lot of money on our family, and, and we're just figuring out what our goals are financially. Also take Then, then we got a higher interest rate, homes are higher as well.

Yeah.

And so that's still making you sit back in your chair saying, okay, well, am I gonna get up and get into this game? So I, I don't see people now— let's fast forward to today, or let's just even fast forward to Monday. Applications are up, phone calls are coming back regardless of what rates are today because they haven't changed from December.

Right. So like around 6%?

Inquiries and demands are coming back a lot stronger than they were at the beginning of this month. So that's, of course, I love to see that.

Sure.

Yeah, absolutely.

And so, you know, it's kind of hard to say. I don't, I don't think, uh, I don't think a, a doomsday scenario is coming as far as a foreclosure boom because I think banks in general have done so much to let people have that leeway to keep their house because we don't want them Financial institutions don't want houses. Um, but at the same point in time, um, there's so much value in people's homes. So just like, why wouldn't you just sell it, get your money out of it, that equity? Because everybody has equity now. I think that's a difference than where we were a couple of years ago where you didn't have that equity to

refinance. So you either lost your house or you had to short sell it. Now so many people have a lot more equity in their properties where they can at least break even. and then start over.

Yeah. Well, and I think there's some people that would probably push back a little bit back on that. It's like, yeah, they have equity in it, but that money's worth less than it was 5 years ago or whatever. So, I mean, it's the same to me. It's almost the same thing that people are talking about with the mortgage rates where a home that you would've bought, let's just to keep the math simple. I mean, you bought it for $100,000, you know, as opposed to when you were paying 2% interest, now you're paying 6% interest. Right. All of a sudden, the house that was once affordable now becomes unaffordable just because of the interest rate.

Right.

Of course. You know?

Well, and I think on top of that, you're, we are experiencing in so many ways is psychological in that people are driven by those things that that they fear. And a lot of what they, they fear are things that they're unaware of. Yeah. Right? We, we fear the things that we can't see. We fear the things that we can't control. Mhmm. My son was in my room last night because he thought he heard something.

Right?

So, like, that's, that's—

Was it a mole?

Yeah.

Exactly.

Probably was.

I'm like, coming for revenge.

I'm sitting here going, alright, Toffee.

You're out of your cage.

care of this.

Do your job, boy.

That's right. You got, you got stuff to do. Um, but like, I— so what I think happens— so we, we've talked about this on, on the show. I was giving you a little bit of a precursor, uh, before the show about me selling my house. And a lot of people are like, man, you're crazy. You, you don't know where you're gonna move, and the, the housing market is, is crazy right now. So you are— you're, you're crazy to risk it.

Right.

Right. And, and I understand that, but at the same time, you— we made a choice, and that's really what it boils down to. Are you going to make a choice, or are you going to sit back and wait for someone to make a choice over you, right? And, and around you, uh, or in spite of you, right? So I think that we find that so many people have said, well, I'm going to just wait till things settle before I buy, especially before I sell.

Right.

Because I just don't know where I'm gonna move. And not only that, like, the apartments are full, and they're expensive too. So, like, what am I gonna do if I have to get into a long-term lease, and then I find a house? And how am I gonna break my lease and still be able to afford it? So it's all of these things that people fear, and it just completely paralyzes them. Right? And so you get this analysis paralysis thing going on. on top of the fact that you're hearing conflicting stories.

Well, that's the whole reason I brought it up is like, here, here, here's a great example of that. 2 conflicting stories.

Yeah.

Um, you know, I don't, I don't, I, I couldn't see any like social media response to this, this New York Post, uh, story. Um, I don't even think they have a comment section on here.

Um, I'm, I guess I'm curious, like, so you're, you're in the mortgage industry. You've been, you've been doing this a while at this point. So like, what do you think? I mean, everybody has their predictions. Like, where do you— what do you see based on the things that you do professionally? What do you think is going to happen?

So I, I— so let's take— let's, let's kind of rewind and see why rates went up to begin with. Okay, so the Fed got it in their head that if they raised interest rates, everybody would stop buying homes, it'd slow things down. They're trying to get in front of this inflation thing. And so from what I understand, inflation has been down for the last 2 months. And so rates have started to trickle down. I don't want to say they're going down, but they're, they're, they're not in the 7s anymore where I would gladly quote you a 7 at the beginning of December. They're starting to trickle back down, back into the 6s, low 6s, high 5s.

Mm-hmm.

And so we're seeing a moment right now where rates are starting to trickle down. The confidence is coming back. And I think that's a lot of the reason why the phones are ringing. And I think because— and I think me, Craig, me and you were kind of talking about this— lenders, home lenders are starting to get creative.

Yeah.

On you feeling okay to buy a home again. And I think instilling that confidence, kind of like you were saying, into— because, you know, a home is going to be the biggest purchase you ever make. And if you don't feel confident, if you don't walk into your home, you'd be like, man, I really got taken on this house. Or I can't afford it or whatnot. If you don't have that confidence that you need to carry that sizable debt, um, then, then everything post-purchase is just ruined.

Yeah.

Um, but, and I think that's what lenders saw. I think they saw that, you know, a lot of people, they were really afraid to get out of the renting market because, uh, when you— even though you're renting and you're throwing away your money, you don't own that asset at the end of the day. It's controlled. You know what it is. It's not going to change on you.

I can budget it.

Yes, it's something that you can control. You know what the rent is, and you know how that's going to play out.

And if my water heater breaks, I don't have to pay for it.

Exactly.

There's still those things, you know.

You know, you definitely wish when you're a homeowner that you still had that kind of service. But yeah, so I think now what we're seeing is we're seeing lenders being creative, uh, trying to make the home purchase a little more easier. Um, and then rates are starting to come back down because inflation is, is starting to be controlled to a point. Um, and so we're, we're seeing people step back into the market.

Interesting. I mean, I, I, I like that. I mean, our, our whole economy works better whenever people are not driven by fear, right, and feel comfortable to make purchases. I mean, that's what economies are driven by is purchasing. So I'm a little discouraged to see gas prices starting to creep up again.

Yeah.

Because that is an indicator of a lot of things. Whenever I talk to— so we live in a very oil and gas heavy region and we know a lot of oil and gas people and they'll tell you the the best place is around $2.50 a gallon.

Mm-hmm.

For gasoline, that they're making money at that point and people feel pretty comfortable.

Mm-hmm.

At that point, if you get down to like $2.25, $2.20, then gas companies are kind of going, um, I'm having to pinch.

Mm-hmm.

And if you get up to like $2.75, $2.80, and now we're up to $3 and even over $3 in some places here in the Houston area, people are going, I can't go anywhere. Like, now, now travel is suspended, right? So those things even dictate people's fear in things as well. So I, I think it's just a really, really interesting thing. So you mentioned something that I want to come back to. Um, you mentioned that mortgage companies are getting creative. Uh, we, we kind of, uh, hinted at this on one of our previous episodes.

Just real quick, the National gas price right now is $3.34.

Yeah.

But in California, it's $4.52. Geez.

So just one more reason they're moving to Austin. I mean, you know, right? It's just the way it is. But that's not surprising to me. I mean, I know that, I know that we, we wind up having lower gas prices in Texas in general, but I mean, we always do. Yeah. We always do. And, and there are certain places in, in Houston that I know I can get cheaper gas at that location. Right. than other places.

Just Texas in general. I mean, because it doesn't have to go very far to get into those tanks to get in your car.

I mean, I know I have to go to Waller to go to the big Buc-ee's, but I'm going for the kolaches.

Gas prices are secondary.

Right, exactly.

I need that rest stop and a brisket sandwich.

That's exactly right.

And for those of you not in Texas and the small portion of Louisiana, you don't know what Buc-ee's is. God have mercy on your soul.

They're actually building one, like, in Tennessee.

Are they really?

They're starting to branch out a little bit.

Good for them. Yeah.

Exactly. But, uh, so we were talking about, um, some ways to get creative, and we were talking about one, uh, just before the show started as well. What ways are, are you finding that mortgages, whether it's your company or others, are getting creative to help people still feel comfortable? Like, I can get into this home and not let fear be the, the main thing.

So one thing that I see, uh, a lot of mortgage companies doing is, uh, I, I think, I think anytime you feel like you miss out on the party, uh, you're like, man, I should have waited. I should, I should have not done it now. I should have listened to my mom. Uh, so, but so what a lot of mortgage companies are doing, uh, Rocket Mortgage, one of them, my company's doing it as well, is they're offering refinances and where the lender will pay the cost of the refinance if rates go down a certain percentage. So just to kind of talk about our, uh, program, it's called the Rate Rebound Program. Uh, so if we— if the rates fall more than half a

point, um, on your— so if we lock you in at 5.5 and, um, for the next 5 years that you have this loan— now you can be on a 30-year mortgage, but for the next 5 years after you close, if the rates go down more than half a point— so if I lock you in at 5.5 and they go down to 5, and maybe they go down to 4.5 or 4, With any time in that next 4 years or 5 years, uh, we will pay for your refinance.

Okay.

And so, and then, uh, lender fees are just part of a refinance. There's also third-party fees like a title company because they have to title everything over. Um, and so we will pay $1,000 towards those fees.

Oh wow.

So a $5,000 in a standard category refinance turned into $1,000, right? Um, because we're eliminating our fees, we're paying for your third-party fees, and you're just paying the remainder of those fees, which may be just escrow, which is your taxes and insurance.

Wow.

So the great thing is, is that, you know, let's just say after the election next year rates go down because every, you know, just things fall into place, or the war in the Ukraine is over and rates go down. Yeah, the good thing is you can still buy your home now, get in on the home that you want, because, you know, you're looking for a reason. And then when rates go down, you're not missing out on the party. You can simply call us again and say, hey, I want to take advantage of my rate rebound program, and we'll lower your interest rate and then move forward with your mortgage.

Are you hearing that stuff happening in Ukraine is affecting the interest rates and stuff like that?

I think when anything happens in those kind of terms, as far as a war, that if it was just the Ukraine and Russia and nobody helped them, I don't think it would have affected us as much.

Yeah.

But when you say, okay, well, this country's losing gas because Russia's not doing this, and now we're sending money to Ukraine, everybody's blaming each other to raise prices.

Yeah.

I think, I think that's just that one excuse. Hey, we're doing this, and because we're doing this, we have to charge you more here. Um, and so it's just that one other factor. Gas could probably be one of those things, you know, like, like I remember driving up here is $2.99 when—

Yeah.

a month ago, it was $245. Exactly. So what are those factors that if the waves fall differently in Hawaii, then, okay, we got to do this. Sure. Who knows?

Yeah. Well, and I don't know that they've officially done it, but there's a lot of talks that Germany is quietly declaring war on Russia right now through the Ukraine conflict and stuff like that. We do know that they're sending tanks, but we're sending tanks too.

Yeah.

Um, but still bitter from World War II then, huh?

I guess that's gonna—

you don't get over that.

Keep happening. Sorry, not sorry.

Um, who, who is it that does the bit about— it was Norm Macdonald. Oh, it was like, you know, they took on the world.

That's a very Norm thing to say.

He goes, and we didn't learn our lesson because World War II came. And then again, they took on the world.

It's a great bit. That's good.

So, but anyway, yeah. So, like, well, yeah, I know I'm with you. I mean, like, anytime there's unrest and the market just kind of reacts, like, very aggressively about that kind of stuff. So, I mean, it makes sense. I just didn't know if there was something specific about Ukraine that was affecting—

I wouldn't say it's affecting the mortgage market, but I think it affects the market.

The market. Like you said.

Yeah.

Okay.

So, I wanna circle back around to this creative rebound thing.

Yeah.

So I, I, I don't know if everybody knows this. I mean, if you listen to our show, you should know this, that you can absolutely shop mortgage companies.

Oh, yes.

And it, it is valuable for you to do so because someone may have you know, 5.9, and someone else may have 6.0, and that 0.1 can save you, you know, a decent amount of money, right?

Right.

So especially depending on how much the, the mortgage price is. So, uh, shopping around gives you options. Um, I, I guess one of the questions— so, okay, part of my thought process is this. Most realtors have a preferred lender.

Mhmm.

And many times, it's for a couple of reasons in my— from what I can tell. One of them is relationship. This person succeeds. This person, whenever I say we need to close, close within 30 days, I've never had one not close in 30 days. I trust them.

Right.

So that, that provides a certain amount of trust to the buyer.

To that—

for that mortgage lender. I think there's also— I mean, there's, there's other relationships as far as, like, you know, kickbacks here or there. Like, I'm—

Oh, you know, what are you talking about? I like eating at Perry's on Fridays with my realtor. Okay. Right. Exactly.

Every Friday. And so pork chops ain't free. No, they're not. No, they're not.

Those pork chops are thick.

They're good. They're good. That's why you go on Friday.

I know. Yeah, Friday lunch specifically.

Yeah.

Uh, anyway, so, so we're all guilty.

That's what we're saying.

I know what I'm doing tomorrow. That's all I'm saying. Um, so I, I know that those, those things happen, and I think we should all be aware of it. Um, I, I think the question that I've got though is, is If I am a consumer and you're being not necessarily come work with me, you know, your, your industry, what is— what do our, our listeners need to be looking for in a mortgage company? Because everybody's gonna say, we're gonna get you the best rate. We're gonna close you the fastest. We're gonna guarantee this, that, or the other. But reality, there's a lot of things that play into that.

Right.

Like, the, the— if I don't get you the documents that you request, I could delay this. Right? If something else happened, there's all kinds of stuff that can happen. But how What do I need to really be looking for?

So one golden nugget that I'll give, uh, the listeners out here. So what people don't know is that when you shop for a mortgage company, when, when you finally say, look, I'm gonna have someone try to get me pre-approved and go from there. So what happens is, let's say that Next Mortgage pulls your credit on Monday, and when we pull your credit to get you pre-approved, we have to do a hard pull. Any mortgage company worth they're sold. Doesn't tell you— they say, oh, we'll do a soft pull. No one does a soft pull, okay? They have to do a hard pull for one of two reasons. One, because Fannie Mae and Freddie Mac give us, uh, FICO guidelines that we have to abide by. So we have to make sure you

have that FICO to give you that mortgage. Uh, the other part is, is that we have to see what debts you're carrying. So if you have a car, you have 30 credit cards or whatnot. But what people don't know is When I pull your credit on Monday, TransUnion, Equifax, and Experian lock your credit report for 2 weeks when it comes to mortgage lending, only mortgage lending. So if you come see me on Monday, you feel like maybe my rate's a little too high, you want to shop again, and you just say, hey, I've been banking at Bank of America for years, I want to see what they have to offer. And then you go to Bank of America on Tuesday and they pull your credit,

they're going to have the same scores I have, and it will be a hard pull as well, but it will not affect your credit report as an inquiry because TransUnion, Equifax, Experian know that you're shopping for a mortgage. So you have 14 days to make that decision and make it worth your while. So come day 15, If you're like, hey, someone told me about this mortgage company here, then when they pull your credit, they're going to get something completely different because you're outside of that 14-day window. Because— so they're giving you that opportunity to do your shopping because of course they want you to have the best thing too. It's no different than when you go shopping for a car and you walk in and the finance guy shoots your credit report to

like 13 different banks finding you the best deal. They're getting all the same credit report, but they're getting a credit report for their system. Same thing is when you're shopping for a mortgage, you have 14 days. So that's that little golden nugget if you didn't know that. But, you know, if you come see me on Monday, you're going to stay with Next Mortgage. Of course, we're the best.

Of course, of course.

Don't go anywhere else.

Of course.

Um, real quick, what, what's the difference between a hard pull and a soft pull?

Yeah, so, so a soft pull would be something that's just generally telling you what your debts are. Um, and so if you think of a Credit Karma, okay, that is a free service. Credit Karma is using their own algorithms to tell you what they think your score may be.

Aren't they? They're pulling from different sources too, aren't they?

They're pulling your information from all of your debtors. But at the same point in time, I've had a lot of people come up to me and say, hey, my Credit Karma is 700, I'm ready to buy. And then I'll pull them And it may be higher or it may be lower.

Right.

And then they get mad at me because Credit Karma is lying to them. Um, and so Credit Karma— and that's why Credit Karma is a free service. They're, they're, they're simply trying to link you with other creditors, right, to say, hey, look, by the way, you're approved for this Apple Card. Did you know that?

Um, it's a lead gen for lenders.

That's exactly what it is. Um, and so that's the difference between a hard pull and soft pull. A hard pull is going to let me know based off of TransUnion, Equifax, Experian, this is what your score is.

Yeah.

This is what—

somebody explained this to me once and I've since forgotten it because I don't remember things. Um, but there's, there's different credit reporting systems, right? And there's, there's some that are like that guys like you use, and then there's ones that like, I don't know, there's other credit reporting like apps and different things like that that they'll use.

Oh yeah.

So what are those? I can't remember.

So like Those other ones, like a— like, I know Wells Fargo has something that's called CreditWise.

CreditWise.

Okay.

Those are still the same kind of Credit Karma. We're using our own algorithm to figure out what your scores are. So there's something that's called a— there's a mortgage FICO. We go off of a mortgage FICO. And then there is a car credit report. So like, you may have bought a car right before you walked in to come by, see me.

Uh-huh.

And And when you bought your car, your score was probably 700s. But when you came to see me, your mortgage FICO was probably 667. And you're like, well, why is it different? I just came and bought this car. I did this. Also, a lot of people don't know is when we pull your TransUnion, Equifax, Experian score, we only use the middle score of the 3.

Okay.

And so if you have a 700, 650, and 600, and you're like, well, hey, I got that 700. Let's go ahead and use that. Unfortunately, we have to go by the middle score of the 3, so 650. And that's how all mortgage lenders practice.

Oh, really? Okay.

So, so another thing that a lot of people don't know is that if you're married, Texas is a community property state, for those who don't know that. And so if you and your husband apply for a mortgage and your, your husband's score is lower than your score, then because Texas is a community property state, if his middle score is a 600 and your middle score is a 700, we have to use the lower middle score of the two. So for qualifying, We have to use your husband's credit.

You just don't add and divide and get the average.

Yeah. Now there are ways to get around that, being a non-purchasing spouse and things like that, but that's when you really dig into the file. So, so, but when it comes to credit, that's the biggest part of buying a home, that credit aspect of it. Um, but knowing you can shop around, make sure you get the best rate out there. You have 14 days to do so. Get your credit pulled, figure out, get those banks lined up that you know that you're going to work with, because it's not bad to see what are other people doing as far as rates. Now, to kind of get back to your question, um, what makes you feel better about one bank or the— from another?

If you're—

if your agent who you trusted to find the home of your dreams is telling you, hey, maybe use this lender, there's probably a good reason for that.

I would agree.

As far as maybe they've done a few transactions together, um, and so I would take that into consideration. And the other thing is, is the availability. Now, if you're chasing down your lender, there's a reason for that.

Yeah, there's a problem.

Like, if you're, hey, I got to know what my rate is, or he never calls me back, I don't understand why I'm paying this much, that may not be the person you want to go with.

Sure.

So, uh, you know, someone that's available. Um, a big thing here at Next Mortgage is we're available 7 days a week. Because our biggest thing is, is especially for our agents and our builders that we work with, we're working when you're working. So everybody doesn't— not everybody works on the weekend, and that's when they go shopping for a home.

Yeah.

And if it's 5 o'clock on a Saturday, just because that's the only time you had to go look for a home and you want to know how much it's going to cost for you to buy a home that's right in front of you, if you call me and I don't answer, or someone on my team, and you're like, how do you make that decision? How do— how are you— how do you—

Can't.

And so then— Probably won't.

Right?

Especially in a market where you have to move fast.

Exactly. And then you're left the whole weekend saying, I, I lost that house because I didn't know if I could afford it or not.

Yeah.

Yeah.

So, I've got a couple other questions. So one, is there any chance that if I come to you and you say, hey, our, our score— I mean, our, our rate today is 6.0. and I go shop somewhere else and they find it's 5.9%, is there any chance you can change and match that? Like, do you have any leeway? Because I'm, I'm curious, and maybe I wanna use you, but someone else has a better score. Right? You tell me that's the best you have, and, like, what, what, what options do I have?

Right. So the great thing is, is we're, we're very competitive. And if, if any, any lender offers your rate, especially by ourself, if we offer your rate, It's based off of what we're looking at at the time on the pricing sheet. Hey, this is based off of your credit. This is based off of your loan amount. This is the rate we're offering right now. And so if you go down the street and they're like, oh yeah, I can beat that by a whole quarter. The great thing is, is if you provide us with a pricing sheet from that lender and say, look, I went down the street, I didn't want to, but they're actually a point lower than you. Then the great thing is, is that probably 9 times out of 10, my management is going to say, okay, let's match it.

Or let's beat it.

We want the deal.

Yeah.

We want the deal.

Yeah. That makes sense. I, I, I think that that's something good to know.

Yeah.

Um, the next question I've got is, talk to me just briefly about brokers versus, um, just like mortgage companies. Uh, because a lot of these brokers, they're, they're shopping around trying to get their, the best. And I assume that you're able to shop around as well on some level and figure out Uh, but I mean, y'all have your own things, but I, I'm just kind of curious, what's the difference and why should I pick one over the other?

So, so Next Mortgage is a financial institution. We're, we're not a broker. We do have the availability to broker deals out, some, uh, that we don't keep in-house. But if you close with us, we service your loan. You're paying us every month. If you have a problem with your loan, you can always call us and, and we'll figure it out. for whatever reason. So the great thing about Next Mortgage is that because we're a financial institution, we have a little more leeway than what a broker would. So what a broker does is a broker has a list of lenders that are buying mortgages, and those lenders give that broker guidelines. Look, if I buy a loan from you, it has to meet this box, and if it doesn't fit in this box, I'm not going to buy that loan

from you.

Mm-hmm.

And so the problem is, is that a lot of these brokers, if it doesn't fit in the box, then maybe they don't have a loan for you. They can't get you approved. Hey, look, you came to me, you're missing that one thing in that box. I can't fit that peg in and I can't sell it off to this other lender.

Yeah.

Where if you came to a mortgage company like myself and there's that one thing that was off, I could take that to management and say, look, this person's off because of this. But if you look at his credit, if you look at his income, if you look at his job history, this is still a viable deal for these reasons. And then my management can sign off on that deal for those reasons. Where on a broker side, because they're selling these loans off to third parties, if it doesn't meet it, they don't have that kind of leverage in some cases.

Hmm.

So a broker— but don't get me wrong, brokers work with a lot of other lenders, and sometimes they can do things I can't because those lenders are willing to buy maybe a lower credit score or something like that where I can't do it. And so it's, it's, it's, it's a Shop around people. It's a shop around kind of scenario. Some people are better than the others, but like I said, I think, I think it's all about the service. Yeah, I always, I boil everything down to service.

Yes, which is a huge aspect for sure.

There's a lot of mortgage lenders, but if you're not getting the service that you want— I mean, there's a reason I go to a certain IHOP, because this IHOP service is bad, so I go to this one, right? And so it's all—

It's a little bit further, but it's worth it, right?

It all boils down to service.

And you said something when you were explaining that that I wanna make sure people heard is that you're getting the bill from Next Mortgage.

Right?

Right.

That's actually big. So what you're alluding to is, like, some people get so confused because, you know, 6 months into this home purchase, all of a sudden, I've got a mortgage coming in.

2 months in.

I mean, yeah. Who knows? I mean, sure. And, like, it's from a totally different company. And you're like, what happened? And then you figure out, oh, they sold my loan.

Mhmm. And then you've— and what's— then I got confused because, I mean, this happened. multiple times this has happened now where I got a new, a new, uh, company servicing my loan. And then I was like, oh man, like, what do I got to do? I got to go— what documents do I have to get them? Do I have— do they have my direct deposit? Do they have everything kind of set up? And thankfully, this company is very good and they transferred 100% of it over. The only thing I had to go do was set up a new login and password online.

Online.

That's the only thing I had to do. However, I had to do it. I had to do it. And like, I don't know about y'all, but like, it's another login, it's another password, it's another email, like, website that I've got to figure out and I got to remember. And I gotta— what if I didn't bookmark it and then I threw that away? And like, all of a sudden, like, I just forget things because I'm so busy and I don't want to mess this up. It's my mortgage. Like, this is a big, big deal in my life. Of all the things that I pay, I pay my mortgage, you know? And And so I, I had a little bit of anxiety because I was, I was busy during the time that they

sold my loan. And so it was the middle of the summer, which is a super busy time for me. And so trying to figure all that out. Um, and, and if you're gonna keep my, my loan, man, like that, there's something comforting about that, I think. So anyway. Yeah.

We, I mean, like the, what happened to us, which, I mean, hopefully never, is there like an Amber Alert going on?

I think so.

Is that all these devices are going off? Okay.

Moles on the loose.

Sorry. Hope they find the child. She's not in here.

No, I've looked.

But what happened to us is, and it was, we'd had the loan for a while and they sold our loan and we'd had the account set up a certain way where we were paying the property taxes in that loan and somebody just clicked the wrong box and for like 4 months we didn't pay property taxes and we got a hit at the end of the year and we're like, what the heck is this?

I hear Montgomery loves that. Yeah.

So, you know, like, and, and all it takes is just some doofus clicking the wrong button on the computer when they, when they transfer that over. And I, I'm sure that doesn't happen often.

Right.

But, I mean, it happens.

Well, I'm not— had a, I had a weird deal happen, and I didn't know if I was gonna bring this up tonight, but, but here we are. A couple of weeks ago, I get a check from my mortgage company, and it is about the amount of a month mortgage. And I assume— I have not had time to go figure it out— I assume that my escrow was over. And so they had to reimburse my escrow because that's legal. They have to do that.

They have to do that.

They have to do that. And so I— my wife got a little giddy for a minute, and I was like, no, no, no, no, no, no, no, no, no, stop it. That is going into savings because surely they're gonna mess up my escrow now. and we're gonna have to pay that back. So we're just gonna slide that over to say, because we've been caught with that before. But part of me is like, oh, I wonder if it was a tax thing. I wonder if it was this thing. But I know we've been paying a certain amount on our mortgage.

Right.

So I'm just sitting here going, oh my goodness, what has happened? But like, that kind of stuff happens. And I think people— well, I mean, goodness gracious, when you get a multiple thousands of dollar check in, you know, right at the month after Christmas, you're like, woohoo! You know? And I, I'm just very cautious at the moment, you know?

Right, right, right.

And because it could be a lot of things and I just need to, I need to call and, and find out like what's going on. But, um, I don't wanna screw that up.

Yeah. Well, but you also don't wanna, I'm always, I'm always weird. I just kinda wanna like let it ride cuz it's like, well, yeah, just send that back over. That was a big mistake. I was like, no. Exactly.

I shouldn't have asked.

Shouldn't have asked.

Oh, you got that?

Oh, that was actually supposed to go somewhere else.

That's right. But I mean, seriously, I mean, my mortgage is not small. And when you get a full month back, right, you're like, whoa. Yeah, that is a shot in the arm.

Definitely.

For sure. So I don't know what I'm gonna do with it. But, you know, it's one of those deals where I gotta go, okay, did I overpay into escrow to begin with? Which I probably did. Most likely, I probably—

You were supposed to get a letter along with that. say why you got it. If, if you— usually they give you a letter saying, hey, this is why you're getting this.

I don't think I did. I literally think that, uh, I literally think it was just a check.

So, so if— again, here's some more education for you. So what a lot of mortgage companies do every March, they call it— they do what's called assessment. So every March they assess because, you know, everybody just finished paying taxes in December. And they do an assessment of your escrow. And so if you have more money in there, uh, by law they can only keep a month and a half of escrow in that little pot, uh, for buffer. And so anything over than that, they mail it back to you.

Yeah.

And say, look, uh, you probably filed for homestead. Your taxes are less than what we thought they were. Um, here's your check back.

Congratulations. I'm, I'm assuming that is what happened, by the way.

And that, or if you run into the scenario where your school district's building 7 new high schools and taxes went up and, and they're like, hey, We paid your school taxes, but they left you kind of short. So your payment's actually going up to cover so you're not short next year. But you're supposed to know that 30 days before that new payment takes effect. So just make sure you keep a lookout in the mail around March because that's when those letters kind of go out.

Ooh, fun.

Yeah. It's like riding this weird wave. I'm like, one day I'm up, the other day I'm down.

Yeah.

I don't know. I think I got knocked off my surfboard the other day.

We're gonna have to edit this part from the whole podcast because then we're like, wait a minute, we gave him a check?

Yeah.

Exactly right. That is funny. That is funny. I, I, I just think this, this is one of those weird— I mean, I, I knew nothing. It— one of my favorite phrases is like one of the most duh statements in the world. It's like, you've, you've never done something until you do.

Right.

Right? Which I think is really empowering for people. I'm like, just do it. You, you, you're, you're acting like this is like some big deal, but just go do it and then you'll have done it and now you can do it again.

But—

Unless you're a murderer.

It was— I don't know that— depends on how good you are.

It's not as bad as I thought it was.

It was just great. I can do this again.

Depends on how good you are. Um, but like, I think that, you know, the first time I, I got a mortgage, and I, I was just so, like, happy to have a house.

Mhmm.

I thought it was kinda like paying for a car, you know? And it's very different.

It is.

It is. I mean, and, and I didn't understand escrow at the time.

Right.

I actually thought I was gonna get into this house without escrowing, um, which I probably could have done, but I, I would have, um, it would have changed a lot of things about my entire loan process.

Mhmm.

Uh, we decided to go ahead and escrow anyway. But, um, I— here, here's what I want to do real quick, because I'm sure there's somebody listening on the podcast right now going, they're using this word and I do not know what escrow is.

Talking to you, Steve.

Yeah, exactly. So can you please tell Steve what escrow is?

So escrow is, uh, your taxes and your insurance. So, period. Uh, period.

That's it.

Taxes, insurance. That's it. So the insurance, when you think about insurance, Think about the same hazard insurance you have on your car that you're required to have. It's the same thing for a mortgage. So for your home, we want to make sure if anything happens to your property, you have insurance to cover that loss. And taxes are—

You're talking about mortgage insurance?

No, I'm talking about hazard insurance. Okay.

So that's why I'm asking, because, like, because, you know, you get that reduction if you put 20% down.

Right.

So, so, but mortgage insurance is not included in your escrow.

Okay.

Yeah.

So that's just included in your credit.

That's just confused Steve and everybody else.

No. That's why I'm asking because, like, it, it all gets wrapped up in there. So—

So what mortgage insurance is, what a lot of people don't know is—

Stupid.

It is. It's very stupid. You, you don't wanna pay. If you cannot pay it, and, and it— ask your lender, how do I not pay mortgage insurance? And I hope he gives you a great answer.

A wheelbarrow full of money.

What a lot of, what, what a lot of people don't know is that when our parents bought a home, they had to put 20%, 10%. That was the requirement to buy a property. And then some bankers came along and they're like, you know, not a lot of people are getting mortgages nowadays. How can we get a lot more people buy— get mortgages and we not lose on these mortgages? Well, someone came along and said, what if we put mortgage insurance on these properties for anybody that doesn't put 20% down on their home? That way we can lower the standards to 3% down, 3.5% down, 5% down, and then we'll put mortgage insurance on that loan. And that way, if they default— we still get paid on the loan. But if they don't, more

power to everybody, and we still get this little insurance on the loan.

So by the way, we own the insurance company.

So yes, mortgage insurance is— it goes absolutely nothing. It goes to your lender. It's not, you know, it's something if you could don't have to pay it, don't. But it is something that was created so those buyers that don't have 20% down could actually own a property and, and then pay that fee for not putting down more than 3% for first-time homebuyers. So, yeah.

So I, I think one of the things to kind of think through on this is escrow really does help protect people that are not good with money.

Savers.

Yeah. If, if you're not someone that, that has money in the bank, if you live paycheck to paycheck, and if something weird happens, you are up a creek without a paddle.

Oh, yeah.

You know, your washer goes out, you're like, I can't buy a new washer. Right? You're like, you're borrowing your friend's house. Because— and that's one of the reasons banks do it.

Right.

They do it to protect themselves, really. They force you to put all of your, your insurance and tax money into their little bucket so that they can pull out of that bucket to make sure that they have the money to pay for it. Right? And so, again, that's one of those things where if you wanna control your money and don't want an institution to control your money, then you cannot escrow depending on how much you put down because there's a certain— there's a threshold. I think it's 5%, isn't it?

You have to put down 20% to waive your escrow.

Yeah. 20%?

Mhmm.

I, I thought, we were gonna be able to do it at less than that. But—

Now it depends on different mortgage companies. I know, I know, TDECU, for an example, if you put down, uh, if you do one of these special products they have, it's an internal product, if you put down 15%, they'll waive your escrow.

I think that's where we were.

Okay.

We were, we were looking at putting 15% down. They were willing to waive it at that point. However, you know, at that point, you got, you got to make sure that you are willing to put money back so that whenever— because at the end of the day, you, you need, you have, you need home insurance, right? And, and escrow is making sure you have it. In fact, this actually was weird. Uh, I had a weird, weird deal. Do you remember whenever, um, we decided to change insurance companies and then they said they wouldn't insure— they wouldn't insure my roof?

Yes.

And so we were going to have to pay for a new roof before they would actually like insure the house. Insure the house. But we had already cut my other insurance off.

Nice.

It was a big problem. Thankfully it all worked out. My old insurance took me back, which is really nice.

Yeah. Yeah.

I was talking to my wife and, change your heart.

Yeah. It was, it was actually one of those types of things. And we got lucky. But I, what's, what's interesting about that whole thing is that if you don't have something in place to pay And somehow you don't have insurance in your escrow.

Right.

They will go buy insurance for you. And guess what? They will not buy you good insurance. And they will buy you the most expensive insurance that is not good.

Oh, yeah. It's called force-placed insurance.

It's horrible. Yeah.

No. They're not shopping. They're not calling the GEICO.

Nope.

You know, they're, they're They're finding you Joe Schmo insurance that they're not bothered on how much it saves you or anything. And you actually sign a document at the closing table that says you're supposed to have insurance for the life of the loan. And if you don't, they have the will to sign up for insurance on your behalf and you have to pay.

So they did that to me. And because I was in this weird vortex of I canceled this insurance, but I also canceled this insurance because I was up a creek without a paddle at this point. point. And, so they went out. It was— you literally—

Jerry to Perry's for lunch.

Exactly.

Well, here's what's crazy. He called his insurance buddy and said, guess what?

Yeah. So, so my, my mortgage all of a sudden went up, like, $300. And I was like, what in the world? So I called my, my mortgage company, and they were like, oh, yeah. Well, here's what happened. You don't have insurance. I was like, well, I do have insurance. They're like, you do? When did that happen? And I was like, well, this is what happened. And they were like, oh, you know what? This was just really unfortunate timing. They were like, that moment between when you canceled this one, had this one, but then canceled this one, and we're going back to this one, that few days right there—

Right.

Is when we looked to find out if you had insurance.

Yeah.

And it was like, you couldn't have picked a more perfectly awful time to check my insurance because if you have checked a few days before, a few days after, you would have had a different result. So then I had to just prove to them that I had insurance. They refunded it. It was not a big deal at the end of the day, but it was one of those things I was like, holy cow. Like, why is this so hard? Why is owning a home so hard?

My insurance is in the matrix. I promise. Exactly.

Exactly. And anyway, you know, those are the types of things that it, you know, you never know how to do something until you do. And once you, once you buy a home, and have a mortgage and you kinda work through the process, it makes more sense.

Right.

It really, really does. It feels daunting at the time, but I appreciate guys like you who can educate people like me on, on the ins and outs of those things because it's not like buying a car.

Exactly.

You know, it's just really not.

Yeah. Especially when buying a house is a 30-day process in the norm. There's a, there's a lot of emotions that can happen in 30 days. Yes. You go buy a car. Oh, I like the red one. Oh, we're gonna get it.

Okay.

I'm okay with the payment. And then later that That whole process, whether it be a long one, because I've been at a dealership for a good 5 hours one time. Sure.

Um, 5 hours.

There's a lot of conversations that can happen in 30 days.

Yeah.

And so making sure that you keep your hand on the buyer and just letting them know, okay, this is where we're at. Okay, we just got the appraisal in. Okay, your file just came out of underwriting. Um, you have to have those conversations because they want to know what's going on as, as much as that your agent wants to know what's going on as well. And if you're keeping them in the loop saying, look, your file got to this point, now we're at this point, they know there's some progression. And, and so sometimes no news is bad news, but no news can be, you know, scary, scary as well. Yeah. If you don't know what's going on. And there's so many horror stories I've heard where people get to

the closing day and then they find out they're not even approved for their mortgage.

Oh, well, and that, that actually, we had a weird situation happen. We were moving to Houston, we had a, uh, a home that we found that we wanted to buy. It's a long story, so I'm not going to tell the whole story. It's, it's really crazy. But the reason we didn't get the house is because the sellers got nervous because the first— they had, they had another buyer that literally the day of closing, their loan fell apart.

Yeah.

And the reason their loan fell apart was because the buyer had lied on some things.

Nice.

And, yeah. And, and it was one of those, you know, quick close types of things. And they had lied about some stuff, and they'd gotten all the way through to the end, and it fell apart. And so, those things do happen, unfortunately.

Right.

But, you know, it's one of those deals where if you have a good mortgage company, they should catch that before the last day.

Definitely. So, for those thinking about lying on their mortgage application, Don't.

Don't.

I see everything.

Yeah.

Everything.

Yeah.

What, what is it that usually people are trying to, like, cover up in, in those— in the— I mean, I'm, I'm sure you've had people try and hide stuff from you.

Right. So the, you know, the— a lot of the thing is, is, is like, let's take one guideline is 2 years of employment verification.

Okay.

Well, when I start doing my verification of employment and realize you have a 2-year gap or, or a couple of months gap, Well, you need to tell me those things. Not because I'm going to decline you and you got to walk away. It's because I need to prepare your file for that kind of, okay, well, you have a 4-month gap because you broke your leg or because you had COVID. We had a lot of that.

Oh, okay.

And people had COVID. They took off of work for a lot of time. They weren't getting paid. And so when you look at their W-2s and you're like, well, hey, you're making, you're supposed to be making $52,000. You only made $34,000 that year. Why?

Yeah.

You know, we need to build a case for your more— for your application. This is why we're approving them. Okay, well, why'd they have the 4-month gap? He had COVID. Here's his doctor's letters. Here's this. And we can proceed forward. And like, I never want to get into a situation where I'm trying to decline. I'm not looking for reasons to decline you. I'm making sure I eliminate those reasons to decline you. So my thing is, I want to get you approved. I just need to be— I need to know as much as you know So when the underwriter looks at your file and she has questions, oh, well, here's the answer. Well, here's the answer.

And so if she's finding stuff and I'm like, oh, I should have known that.

That's not good.

That's not good for anybody.

Yeah. Well, I think it's important to know that 2 years is really, really important because I think a lot of people even get into a situation where they're like, man, because side hustles are really big these days, you know, people, you know, trying to make a little bit of extra money, all kinds of stuff. Right. And so they're like, oh, man. My— I'm making so much more money. Like, I— now I can afford something.

Mhmm.

And they're like, you know, they're— they walk into a— to a situation. They're even working with their realtor, and they're like, hey, you know, we can afford $2,500 a month right now. And so we can— we can buy this house. And the realtor's going off all that information. They get to the mortgage company, and they're like, well, last we can tell, you can only afford $1,700 a month.

Right.

And they're like, no. I can afford $2,500. I can show you. And they're like, well, you can't use that because you've only been doing it for a year and a half.

Right. And that 2-year VOE is really, really important, especially when you're self-employed and doing those side hustles, because they are really big right now. You know, uh, it, it's, it's all about— I tell people, and when I tell them this way, they understand— if Uncle Sam doesn't know about it, I can't use it.

Yeah.

And so yes, you're making $2,500 in Uber Eats. Congratulations. Maybe I need to start doing it. But, but if you're not doing your taxes on that 1099 that Uber's giving you and saying, look, I'm making $2,500. There's no way I can use it just because it's not consistent.

This is why they've changed so much recently, like, where you're gonna be getting those digital 1099s from PayPal.

Right.

Yeah.

Like, if you do anything over $600.

Mhmm.

Mhmm.

Mhmm. Venmo, Venmo, PayPal, Zelle, any, anything that you have paid for one person over $600, yeah, you're gonna, you're gonna get that.

Well, it's cumulative.

Yeah. Exactly.

So, but, like, but there are ways around it. I mean, you can, you can do, like, from Yeah. But they're all my uncle.

That's right.

I mean, every single one of them.

That's my uncle too.

Yeah. It's like, sir, this, this clearly says OnlyFans.

Yeah.

We know what you're doing.

Right. We get it. Yeah. Anyway. Well, what, Craig, what, what questions do you have left?

Yeah. I, I was gonna ask if there's anything else that you can be competitive with from, from other mortgage companies. I mean, like, we talked about rates. We talked about services. Is there anything else That, you know, where you were maybe not like wiggle room, but something that you guys do that's different, something where you have a little bit more, maybe wiggle room might be a good way to put it. I don't know.

So, so again, because we are a financial institution, we, we, we, our biggest job is, you know, we're not like a Bank of America that has checking accounts and we have credit cards. Our biggest thing is mortgage.

Right.

We're only trying to give you a mortgage. I'm not trying to give you a credit card or anything in between. We're just looking to make our mortgage service better.

Yeah.

And so we, we're still one of the few mortgage lenders that offers down payment assistance. So for those buyers that want to get into the home but they haven't saved that money to buy a home, we offer down payment assistance through TSHAC, which is a grant company in Texas. Um, and so we do that in other states as well. Uh, we actually have a program called Home Fund It And the best way I can describe Home Fund It, it's like a GoFundMe account for your home.

It's like having a baby shower for your home.

That's exactly what it is.

We talked about this.

Yeah, I think we talked because you can do it as part of like your wedding invitation.

You could do it as part as anything. You're graduating from college, send me money. Don't send me a leather suitcase for a job I probably won't get. Yeah, you know, hey, I'm getting married, don't buy me a wedding set. send me money. And the great thing about the Home Funded account is the way gifts used to be before is you needed a paper trail. Okay, your parents were giving you $10,000. Okay, well, I need to see your parents' bank account. I need to see where they got it from. I need to see the money coming from their account to your account. There was so much information that had to go, and some parents don't want to give you your bank account.

For sure.

Yeah.

So the great thing about Home Funded is that anybody could put money into this account— your teacher, your, your friend. You could put it on Facebook and tell your story, and all the money that's raised from that account, Next Mortgage doesn't take a penny from it. They bank it into your account, and that money can be used towards your down payment and closing costs. And the great thing is, is for first-time homebuyers, uh, for the first $1,000 they raise, I match that $2 to $1. So I will give you $2,000 for every $1,000 you raise, up to $2,000.

Wow.

So if you just raise $1,000, You got $3,000 right there.

That's huge.

Towards your down payment.

Towards your down payment that you didn't have before.

So in— and I think we asked this question before and didn't get an answer. I can't remember, but you can update my brain. For the people receiving that money as the gift, do they realize that as income for their taxes? So, like, say they get it and they're hanging on to it for, like, 4 years.

Right.

Do they realize that as income in the first year, or how does that work?

No. So the great thing about it is that you could actually— there's no timeline when you can bank this money. So like, you could be a freshman in college, start this whole thing up, and then not bank it until you're a senior graduating. So the money that you're getting from this is a gift. It is gift funds because the caveat to it is that once you get approved with me, and let's just say things happen, maybe you lost your job or what happened, Yeah. and you can't get approved for a home loan, but you've gotten all this money. That is, that is money that your family and your friends have gifted you. And so that, that money necessarily you could keep,

but the—

Keep as in like you could pull it out and use it to like get groceries or— okay.

Yeah, you can use it.

It's your money.

Walk away with it.

But not your 2 grand.

Right.

Not my 2 grand.

Hey, no, I'm gonna keep that part. We're like, are you sure you don't want a house?

Yeah, it's still—

that's actually a really good deal.

Right. Yeah.

It's a huge deal.

Yeah.

Well, and, and something else you mentioned that I, I think is worth mentioning, you were saying we're not like these other financial institutions where we're trying to get you like a credit card or a car loan or something. Is, is that, is that a way that other institutions are incentivizing people? It's like, look, if you open this credit card with us, we can do this on your home loan kind of a deal.

So I can, I can testify this because I used to work there. Uh, Chase has Chase Preferred.

Right.

Clients.

Yeah.

Sometimes those guys get a better interest rate than I do, than I can give them because they're Chase Preferred.

Right.

Um, because they, they have what's called, um, multiple, multiple accounts. So if you're a person that has a check and savings and then you have their Sapphire and then all that good stuff, yeah, I'm a— I want to earn your business. So yeah, I'm gonna give you a lower interest rate on your mortgage than, yeah, than probably I would. Um, so. there's incentivized to do that.

Okay.

But then Chase isn't going to give you a rate rebound where you can refinance and they'll pay for it.

Sure. Yeah, this is going to be whatever the best rate is right now.

So it's all about seeing where I could win. Okay, well, Chase is giving you that. If you gave me a lender cost worksheet of what they're doing, you can— again, you can give it back to me and I can go see if I can match that.

Okay.

Do what's not—

yeah.

And, and I'll be completely honest, I'm not going to win every deal. And— but I'm a firm believer there's enough business out there for all mortgage companies that as long as you, like, again, provide that level of service, it, it's going to come to you.

Yeah. Well, I think that's true of most businesses, man. As long as you're willing to hustle, there's plenty of business for everybody. Definitely. I mean, nobody's gonna go hungry.

Right.

Exactly. Not around here, at least.

Not around here. That's for sure. Yeah.

Anything else?

No. I— well, yes.

Yes.

But no. But no.

So, uh, well, at the top of the hour.

Yeah. No, the thing is, And I don't know if Craig prepped you on this or not, but, uh, all of our first-time guests—

We haven't done this in a while.

We haven't done this in a while because we've—

Doing live shows.

We've done live shows. We've done some other things. We've done some, you know, just Craig and me here and there. But most of the people who have stuck with us for an hour and 8 minutes so far are anxiously awaiting the final 4. That's right. This is the final 4 questions we ask each and every one of our guests. And guess what? It's your turn.

And the prize is a CO2 sensor.

That's right, that's right.

So here we go. You gotta answer correctly.

We're gonna, we're gonna start from the top. So here's the question. Okay, what's the must-have tool you won't leave your house without?

Uh, um, uh, what? I don't even know what it's called because it's so crazy. It's one of those tools that you kind of open up.

Multi-tool.

A multi-tool. There you go. Multi-tools, pliers. It's pliers, it's a knife, it's everything you want it to be.

Okay. I think Gerber makes like a really good one, right?

Yeah. I mean, there's, there's a, there's a few different companies.

I got mine at academy.

What's, what's— but there's like a brand that everybody uses. I know it's not Gerber. Gerber makes one, but there's—

No, it's the— oh my goodness. You're making us— everybody right now that's listening to us is going, those idiots.

It's clearly a witchy to badula.

It's exactly what it is. Goodness gracious. What is it? It's, it's a, it's a brand. Yeah. Holy cow.

Here's the Gerber one. I'm looking at a tool.

It's not Gerber.

Leatherman.

Leatherman.

Leatherman.

Everybody's going, Dad, finally they figured it out.

Is yours a Leatherman?

I don't know.

You don't know?

I don't think it's a Leatherman.

Okay. I mean, they're Academy brand.

There you go.

There you go.

I think they carry that.

Yeah, I'm sure they do.

Probably a Leatherman.

All right, so first thing I'm gonna look at, question number 2. Here we go. Question number 2. What's a job you walked away from? Now, when we wrote this, there's a lot of people that probably don't know the— this, this here. So when we wrote this question, what we really meant was, what's a project at your house that you walked away from? Like, this is the Homeowner Show. So like, is there something that you had going on at your house that you started and you were like, nope, shutting it down, calling the contractor, I'm not going to finish this? Or your wife was like, nope, you're not going to do that.

Nope.

But that's not what we asked. We asked, what's a job you walked away from? So you can take that however you want to. So I'm now asking you the question. What's the job? Ceiling fan. This is going to be good.

My old nemesis.

Tell us more, oh wise one.

The old ceiling fan. So I wanted to put a ceiling fan in my backyard, okay? Because, you know, in Texas, gets kind of hot, you know, want to be covered patio, one ceiling fan. But what I didn't know is that when they put the outlet in my home, they had 2 outlets. One was for the turn on the fan and one was to turn on the light.

Okay.

And so the only thing that was out there was the light, and there was just more wires when I took everything apart that I knew what to do with, even after watching YouTube over and over and over again. And so finally I just had to pay someone to come.

Yeah. And they're like, oh, well, if you would have done this to that, I loosened it up for you pretty good. Right.

You just got to take it over from here.

Right, right. So this is only gonna be like $20, right? Because you, you, it took you 5 seconds to do that.

The YouTube said 4, but there's 8.

Now YouTube had a green and blue wire.

Theirs were perfectly separated too. They were all— these are hard and rigid. Those looked pliable and soft.

Yellow and blue, but I didn't want the yellow to be the green.

So yeah, so I will tell you that my, uh, so my brother-in-law isn't, uh, well, currently he's a firefighter, but he was an electrician for years and years and years and one of the smartest guys I've ever met. And I, I regularly am at my house and I'm like, you know, every time he's like, oh, what is this? Kevin's calling me. It's an electrical problem. So I'm showing him something. I'm like, what is this? And what is that wire? And the most recent one is I had one of those— it was a receptacle that had an outlet on the top and the bottom was a toggle switch for a light.

Uh-huh.

And so I was wiring it outside. And I was like, I can't— it's not clear in the instructions. I'm trying to make this work. And he was like, He was like, yeah. Uh, well, you're— so there's— there were 2 wire— 2 black wires coming out the back of it, and one of them I had to hook up to power. No big deal. I did that. I'm like, what am I supposed to do with this one? And he was like, yeah, loop it back into itself. I was like, what are you talking about? He was like, like, take it and put it in that hole above it. And I went, really? He's like, yeah. I would have never guessed

that.

The last thing I wanted to do.

That's the last thing I would have done. I would have never done that. It's like having extra pieces on a Lego set.

set, you're like, these gotta go somewhere.

This is it, right? Right. And I'm like, so you want me to put it into itself? And he was like, yeah. And so I was like, okay. And so I turned it on. I took a picture later. I'm like, it works. And he was like, I know. And it was just one of those weird, weird deals. You're like, nobody tells you these things.

Right?

Right. Like, how am I supposed to know?

You just imagine the conversation. You're messing with me.

Yeah, exactly.

Exactly. You know it won't kill me, but—

That's right. He's like, I remember that one time whenever you did the thing. Yeah, I'm gonna get it back.

Now it's coming right now.

It's like, bro, you know there's a house fire behind me right now. You're calling me about this light.

Exactly. Yeah, exactly. He's like, I'm over here trying to clean the truck. Anyway, it was— it worked. So I, I totally understand. Craig will— Craig and I will tell you, like, there are a lot of things we'll work on. When it comes to electrical, we're like, nope, I'm out. I'm out. Like, that's I mean, I'll look at it. Right. And then, I mean, I'll take the— like that up there. I'm like, yeah, okay, I'll look at that. I see all the things.

Oh, so that's your handiwork over there.

I'll see all the things.

Let's not point the camera over there.

Exactly. Exactly.

There's parts of the studio we don't reveal.

Right.

Exactly.

Well, what a lot of people don't— well, if you've been listening to the show for a long time, you do know, but this was a chicken coop.

Yeah.

Then we converted into a studio.

And here we are.

Yes.

We're not getting any eggs out of it.

Good acoustics out of the chicken coop.

That's right. All right, next question. Here we go. How do you wind down at the end of a long day?

I binge TV.

Anything good lately?

You're going to laugh.

No, probably not.

But I don't know if you know, on Facebook, when you're scrolling through Reels, Sometimes you'll see a show and you'll be like, man, how come I'm not watching that show? I got hooked on 7 seasons and I got my wife hooked on it, watching The Good Wife.

I am gonna laugh. You're right. I'm laughing.

And I swear when I was finished watching it, I wanted to be an attorney so bad. Yeah. I was like, oh, I could do that. Objection. Like, so for like the whole, the whole next week in my house, everything my kids did or my wife did. Objection, Your Honor. How did you know I didn't put the milk back and the top was on?

It's like that Progressive commercial, right? It's like throwing the red flag, right? It's like, um, it's pretty embarrassing, isn't it? It actually is. The replay. Yeah.

So, so I'm, I'm, if I see something good, I'll get hooked on it. Like the, I'm so afraid to start watching Yellowstone because everybody says how good it is.

It is good.

And I just don't want to get into it because that's I'm so behind.

Yeah. Yeah. No, it's, it is, it is. And a lot of what's good about it is, is the things that have nothing to do with the plot.

Right. You know, it's all about cowboys.

It is cowboy stuff. It really is. It's, it's about a life that most people don't know.

Right.

And I'll tell you right now, the people that do know it go, that is not second-class junk.

Yeah.

That's legit. Right. Actual cowboy. And they're actually doing it right.

Right.

The horses in that show are legit. Yeah.

For like, they're really good horses. And, and the people riding them know what they're doing. They know what they're doing. And, and most of them are actors. Right. But they know what they're doing. They're actually, you know, doing—

You're only making this harder on me.

Yeah, I know.

But not to watch the show.

Not to mention the fact that it's set in Montana is like gorgeous.

Yeah.

Like they show in the, like, they're like, you know, in between scenes where they, you know, they do the, the cut to something else and then, and they'll, they'll do this flyover of like the mountains or something. They're like, my goodness. Like, I wanna go visit there. And, and I'm sure that's one of the reasons.

Like, honey.

Yeah.

25 acres. That's it. We can get that.

Right. There's no speed limit up there. Literally no speed limit. So anyway, yeah. I don't watch it. No.

Don't do that. Do you guys know that that show is responsible for driving the beaver pelt market through the roof right now?

Really?

Yeah. Because so many people are fans, like, that the hat companies can't keep up.

Interesting.

Like all the Stetsons and the— it's interesting. Yeah, like it's, it's, it's going nuts. And the boot market as well, like it's getting harder and harder to get good boots, right?

Yeah, I know, definitely.

Um, I get it. But that's why you're—

trappers out there are just living in paradise right now. Oh yeah, it's like that. I can't, I can't sell enough.