What is a Mortgage Broker

This is episode number 136 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 Craig Williams.

Hello, hello, hello, and welcome to The Homeowner Show. We're glad that you could be with us for this epic episode of The Homeowner Show here In the Homeowner Show studios that has decided to try and murder us.

If I had any hair left, it would be pulled out right now.

So the technology at the Homeowner Show—it's not lacking; it's just uncooperative.

Oh, we have plenty of technology. We got plenty of audio devices. Why is it so difficult? I don't know.

I don't know either. We're gonna—we're gonna figure it out, guys. We're—we're—we're. We're working hard to get this content out to you guys. We're staying up, we're grinding the midnight oil and then tomorrow's oil. Yeah. And all the oils, the oils are being consumed and grinded and yes, all of the things. And then on top of that, like, I'm swole on my neck.

Oh yeah, I see it right there.

Yeah, I'm— do I need to like— is that, is that a better angle?

Oh yeah, yeah, is that better? It— yeah, it looks like you were Like sunburned really bad.

Yeah, well, what happened is, if you follow my business page, you might have heard my confessions of screaming like a little girl, which is accurate. Because I was installing 6 hives on my property, 6 hives of bees, and one daring bee. Yeah. Ended its life.

Yeah.

Yes. Uh, quickly, by somehow sneaking inside my bee suit and then stinging me in the behind my ear. And so it didn't get the usual comical response that is my usual response, which is like to swell up my face and I look like Sloth from The Goonies. Um, but the venom just decided to like work its way down my neck. And so like it Like, I can't like turn and it's just all stiff and it's unpleasant.

Well, it makes all of us happy.

So I do, I do it all for you guys.

Yeah. I wish we just had a video of the whole event. Like whenever you put new, new hives in, right? New, you know, bee— whenever you put new bees on your property, you just need to start a camera because I've, I've done that before.

And like, here's the thing, like, I put on the camera anticipating that I'm gonna get something funny. Yeah. And then nothing happens.

Well, you need to do it more often.

I feel like it's better just to have the story that I can recount later rather than actually catch my humiliation on video. So I gotta tell you, like, if anyone ever sees me like install a package of bees and they've never seen a package of bees installed, it would freak them out. Yeah. I mean, it's, it's basically like a 1-foot box by 1-foot box. like kind of a rectangle cube-ish looking thing with a circle hole in the top. You unplug the circle, you pull the queen out, and then you shake the bees out of the box.

Oh yeah, well, that sounds terrifying.

Well, for them.

Yeah, exactly. And they're gonna be terrified.

The weird part is, man, is like, you know, 90% of them do nothing. They just kind of— they just kind of fall in the box.

Really? Yeah.

It's the other 10% that, you know, sting the ever-living hell out of you.

Yeah. That those 10% are very pissed.

Yes. Yeah. And they're carrying the anger of generations of bees before them that were squished and yeah. And they take it out a lot on my face.

Which is an unfortunate demise for them. Right.

But, um, I mean, I mean, how dare they mess with this chiseled perfection?

Um, I'm not gonna go there right now.

No, because you like girls. I get it.

I do. I do very much so.

It's weird for other men to compliment their handsomeness. I get it. It's fine. But you can keep it suppressed.

I'm fine with complimenting my own. Uh-huh. But then to also—

That must not happen very often.

No, of course not. Of course not. I'm fine with it. I just don't get to very often.

Okay. Okay. Yeah. So, what do we got going on today, Kev?

All right, well, so, uh, today we've got a fun episode for you guys. We've got a, uh, a fun, uh, interesting guest here. We, we— so, so when we push this out, we're gonna kind of ask, ask a question here, like, what is a real estate broker? Because I don't really know. But we've got Patrick Morales, uh, with us. Patrick, thank you for joining us today. We're gonna bring you in. If you don't mind, just tell us a little bit about you and what you do, and we'll kind of go from there.

Okay, so for a little correction, I'm actually a mortgage broker.

Mortgage broker.

There you go. That's a big difference.

Absolutely big difference. A little difference.

I mean, like, probably, probably just right off the bat, tell us why there's a difference there.

Well, the real estate agent is the one that helps you find the property and negotiate the contract to buy the property or to lease the property. As a mortgage broker, I'm the person that helps you find the financing.

There you go.

Most people cannot buy the house without the financing for the purchase. And I'm a mortgage broker, which is a little different than a banker. Uh, has to use only the, uh, products of the loan lending products that are available to that bank. And for me, I'm a mortgage broker, so I have— I actually have more than 100 different lenders that I can use to finance a deal. So if it's financially, mathematically possible and legal, And moral, I can actually find the right process to get somebody financed to take care of their purchase.

Okay, so let me see if I get this straight. So a bank only has certain options available to them. So if you go through a bank to get a house financed, you just use whatever product they have. That's your option. But if you go through a—

Correct.

Yeah, so if you go through a mortgage broker like you, there's a possibility that you're still reaching out to that very same bank because they're an option, but you've got lots of other banks and lenders that could also equally be an option, or, um, maybe they're not the best option. Am I, am I getting that straight?

Yes, correct. Um, to give you an example, one of my friends, uh, owns an auto shop. And he does it, he does pretty well. But the problem is, is he's a business, and as a business, he can actually write off quite a bit of his income. So it doesn't show a regular W-2 income. So he went to a bank, a general big bank, and asked him for a loan, and they said no, they couldn't do it because he showed no income. Truth of the matter is, he's got a lot of income coming in, going out, but taxable all legal and doing it the right way for the tax man, he shows no income, or actually he shows little income.

Yeah, he's not doing anything unethical.

I was just saying—

No, everything's legal. I mean, you've heard the stories where Amazon paid zero one year in taxes, though it made billions of dollars. Obviously in a much smaller Situation, so he couldn't get a regular loan. So I told him he's got to talk to me. Unfortunately, he went with someone else. He got it taken care of, but he did. But he did talk to me later. I said, "What you do is is what's called a statement loan." This is designed for people who are self-employed. So most banks do not handle the self-employed pretty well. They either don't have the products for it, they don't have the programs for it, or Like in his case, they just said

they couldn't do it. They didn't say someone else couldn't do it. They said they couldn't do it.

Yeah, they're just not in— they're not interested in taking on that type of risk, right?

Correct. Yes. Uh, so there, there, there are investors out there. They specialize in certain risks no matter what. Uh, so I mean, I could find people who do with hard money if you want to do house flips. Going to buy and sell a house within a couple months. There are special lenders for that, and there's business lenders. There's lenders for people who haven't gotten all their paperwork in order for the United States yet, so they don't have a green card. So regular banks have to say no. We can take care of it. I can also take care of. DACA kids, because I have over 100 different lenders that I can go to.

Well, so these people that you're using, or these instruments that you're using, they're not banks then, are they? I'm sorry, say it again? I was asking, so these products that you're actually able to have access to, they're not— you're not getting these from banks, you're getting these from like independent investors, and what are the different entities that you're pulling these loans from?

Right. Well, you can get— there are institutional investors. There are also some hedge fund investors. And there's also companies that all they do is they lend in a particular niche because they know that industry better. So, like most of the people who do hard money lending for people who do home flips, They started pretty much as a flipper on their own, and then they became a lender.

Okay. So they just understand that. So they're willing to take on a certain amount of risk because they understand the process, whereas some— take a bank, for example. They probably never flipped a house. So that's not a big deal for them because they don't know what they're doing. I mean, it is a big deal for them because they don't know what they're doing. They don't understand the risk. They don't care to understand the risk. So go find someone that actually understands it. Use them. Right?

Right. Because a bank, they work with normal people who are having a regular bank account, regular checking account. So they already attract, you know, particularly huge number of clients and customers that easily fit the box that they have for most of their customers. So the majority of people Work W-2, you know, they, they do their taxes like normal every year. There's nothing complex about it, and the banks love that.

Okay, so I— the first loan we ever got, um, we, we— I, I don't, I don't remember. Uh, I know that we went through some sort of a, a broker, but I don't remember how we arrived where we arrived, but we arrived with, uh, Bank of America. being the lender that we went with. They were able to get us the best rate, so we went with that. I didn't really care as long as I got the best rate, right? But then about 3 months after we had our loan, Bank of America then sold our loan to someone else, and we essentially had to start paying another bank, another lender, so to speak. for that. Um, why would something like that happen? Do you see that

often? Is that something that you notice happens often?

Yes, that happens all the time. It happens very often, uh, because the company that services the loan basically does the collections of the payments, does the tax information of the payments, does the amortization of the payments, and shows that everything's taken care of. So if you pay a little extra, they have to adjust that principal amount every time. That's the servicer. Even though you pay Bank X, the actual loan is owned by someone else. Okay.

So it's like a, it's like a, it's like a third party that is collecting things for the actual bank that is servicing the loan. Is that, is that what I'm hearing?

Yeah. Most loans for most regular people are sold. They're sold in the secondary markets called mortgage-backed securities. The great thing about that is that it actually frees up money for the next loan, for the next purchaser, the next buyer. That's actually one of the few good things that the government has gotten right. Now, they've messed it up since then, but when they first started it, FHA was great because what ends up happening was they made it so if a loan met a certain criteria, they can sell it to an investor. So the investor would do the collecting of the money, actually through a servicer, but then take care of it and take that risk. And then that freed up the bank to do

more loans. Um, so that— think about it exponentially. Every bank, every bank, including the big ones, um, sells almost all of their loans. Uh, the few and far between ones are the ones that are portfolioed and they hold on to, but almost everything is sold off to the mortgage-backed securities, which again frees up money for the next investment, the next home, the next purchase.

So then, do you see that a lot of times once that loan is sold, that it stays with that second company, or does it sometimes get sold again?

Most of the times it goes to a third person, which will handle it for most of the rest of the life of the loan. Usually by then, somebody will refinance or sell and go to another property. Um, before it gets sold again. But I have seen it where people's homes— you know, people's homes— people's mortgages have been sold off to several different lenders. Um, but on the average, most of the times it's, uh, few and far between. And then there are some, uh, lenders that have their own servicing, um, system and their own servicing company because they want to Keep it in-house.

Yeah, I, I think this is really huge, uh, for, for, for people to understand because I, I know that the first time that my loan got sold, uh, I, I just didn't understand what was happening. I was very confused. I didn't know why. I was like, look, we did this, are we gonna pay more for this? I think that this is just something that is important, especially for like a first-time home buyer, to understand this is normal. So you should almost expect this to happen. Um, and it's not that your mortgage lender, whether it's, uh, you, Patrick, or, or somebody else, whoever the mortgage lender is, um, or the broker, sorry, it's not that the broker did anything wrong or that, you know, they're the ones now doing

something else. It's just that that's the way banks do business with mortgages, right?

Correct. And then a good mortgage broker or good mortgage lender will advise their customer, yes, it will most likely be sold off. Or in certain cases with some of my lenders, I know that they'd love to hold on to their loans.

Yeah.

So it depends on the lender.

Okay. So Patrick, with some of these more unique lending opportunities that you provide, are you able to get the same sort of like competitive rates that some of the banks are getting right now, or in some of the same terms, or are they different because they're for different kinds of buyers and investors?

Right, once you add risk, you're going to have added cost.

Right.

So, I mean, think about this. Who would you lend $250,000 to? If you lend it to somebody who put down $50,000, you'll feel a little more secure than somebody who put down $5,000. Uh, your security would be a little different if you put it down with somebody who has a regular job or somebody who just started his own business. Uh, so the risks vary, so depending on what the situation is. Uh, so like in the case of, um, my friend who's had, um, Bank statement loan. You'll have to put more down, but the rate's a little bit higher again because the risk is, is higher because somebody who owns a business can have 1, 2, 3 bad months, right?

Versus somebody who has a, you know, a government job with a salary that just stays the same for the next 20 years.

Well, and when you say put, put more down, I mean, like some people look like, like an FHA loan and they go, well, I've only got to put 3% down. So when you're talking about more, Are you talking about more than, more than 10, more than 20, or is it just case-by-case basis?

There's, there's so many different cases. So if you're talking something similar, like I was talking about with the bank statement loans, you're talking at least putting 20% down.

Okay.

If you're talking about some of these jumbo loans, if somebody is buying a $5 million house, most of the times the ones that get the really best rates for a jumbo loan They're putting down 50%.

Oh, wow.

I mean, but at them, it's a jumbo loan at $2 million. I can get them at 10% down.

Okay. I mean, that's a significant difference.

Yes. Yeah. I mean, most of the times when you see somebody buying a mansion, $11 million, they're putting down a sizable amount. In real cash and then financing as much as I can. But then again, if you free up $6 million out of your $11 million purchase to work with, you can do a lot more with $6 million than just leave it sitting in a house.

But on those jumbo loans, you're going to typically pay a higher interest rate. Is that Is that accurate?

Yes, because you have a little different risk there. Even though somebody puts down a lot more percentage-wise, houses of that value don't move in 30 days, 90 days. Some houses like that, you know, you put up for sale and maybe you'll sell it within a year.

Yeah.

So, yeah, so there's a bigger risk there.

Yeah, exactly. But But, like, you don't have to buy an $11 million house. Isn't that— isn't that, like, line of demarcation somewhere around $550,000, $600,000?

Okay. So, what you're talking about there is the conforming loan. I'm trying to remember. It's like $540,100, something like that, where you can get— the better rates because you're at that amount or less.

Okay. Yeah.

Once you go above that, you go into jumbo realms, which there are different guidelines, different rules, and generally a little bit higher rate.

Yeah. And the only reason I know anything about that is because we've considered buying some land. And whenever you start getting into that, that category, and then I was having to be educated on different types of loans at that point, and that All of a sudden this word jumbo showed up, and I'm like, "Where? What does that even mean?" And so one of the things just to know whenever it comes to that is the amount you have to put down can offset some of those things as well. So I think that there's a lot here to kind of explore whenever it comes to getting creative with your financing, which. A lot of banks just aren't willing to do. They're not willing to, to get creative with the financing because, to be

quite honest, they don't need to. They don't need to. They're, they're fine with you having a checking account and a savings account and a car loan through them. Um, they don't really— I mean, they don't want to get creative. They'd rather someone else take on that risk.

Right, because the sheer number of people and customers that they have, they can take, you know, only the ones that fit that small box that That fit nice and neatly in there.

Yeah. Yeah. So do you have a certain type of loan that you really enjoy doing? Is there something that, um, you know, maybe it's just the standard run-of-the-mill, you know, $150,000 to $200,000 house, or do you like the creative part of it?

Oh, that's, that's a, that's a loaded question. So, um, The good thing is, I mean, I, I, I like the, uh, the easy ones. I like the ones where people come in with, uh, you know, they fit into the bank box, but they come to me because they know I can beat the bank rate. Um, so I love those. They're, they're, they're usually quick and easy. Um, the people, you know, have their paperwork in order, their credit rate's good, spending every dime that they can. So Great loan. But then when I get somebody like one of my recent customers where they're a veteran, something happened and their credit score is not as good as it should be. I found

them the right bank to go to so I can get them in there. It was a bit of a work, a real big job to get it done and find that and find the right place. Lots of extra paperwork, but it did that. I actually, I enjoy those more because it makes a much bigger difference in somebody's situation. I have another one where I spent a year helping them fix their credit score, and now they are buying their first house, and it's it's a nice size house. So because they actually listened to what I told them to do.

They followed the plan.

Yeah. I mean, um, there's a, you know, you do a couple of little blips and your credit's, um, changed. Yeah. So, um, that can actually make a big difference if somebody wants to get into a home. And then if you think about it, uh, with today's rates, how low as they are, um, If somebody's got to fix their credit and it's going to take a year, who knows where the rate's going to be next year?

Yeah.

So I, I tell them, that's a good case. Let's see what we can do to get you into a house now, because, you know, if you're, um, spending $1,500 in rent, that's $18,000 if you wait one more year.

Yeah, nobody wants to be looking back going, man, I wish I would have.

Yeah.

It's just that, that's not a great situation. On, on the one you mentioned, uh, just before that, was it, was that a VA loan?

Yes, a VA loan. So VA, uh, the actual guidelines with VA, they don't require credit, um, because it's a guaranteed loan.

Mm-hmm.

But the lenders, the ones that actually put the money out, um, they actually have to have some sort of credit to know that the, borrower can repay because it's not only just about getting them into the loan. It's also about getting them into a loan that they won't default on. Right. Nobody wants their banks, their loans, their borrowers getting foreclosed on. It's never a win for somebody, never win for the bank either.

Yeah. But you're— what I heard you say about it is pretty much what I've heard over and over and over again about VA loans is it was a lot of paperwork. It took a lot of time, and it was a lot of headache, which I mean, for me is just irritating because like these VA programs were put in in order to help veterans, and it really just makes it. I mean, like it provides them a good financial vehicle to buy a home and to get into a home, but it's so difficult for them to do it. And it's like I don't know that this is actually like productive towards the end goal that we were trying to do, which was make it.

easier for veterans to buy a home, right? Like, well, I know a lot of people that just won't even mess with it. So yeah.

Yeah. Well, let me interject. It was that particular case that was challenging. If you get somebody with a veteran loan, and they have reasonable credit and reasonable income, their loans are actually pretty easy. Oh, it really depends on the person. You just have to follow the rules. Okay. Yeah, the challenge with that one was it was the credit.

Yeah, the one thing that, that you just have to realize though, from what I— from my own experience is that we actually sold a home that was being purchased with a VA loan. And the VA loan is a huge service to the military being able to get them into good housing, and they go to great lengths to make sure that that house is a good house and it's in good condition for them. It's a fantastic thing for the buyer.

Yep.

However, it is, it's a lot of red tape and it's gonna take a while. It takes longer for those to close typically, unless you got a really, really good, uh, you know, lender out there, um, a broker for example, um, who's, who's really staying on top of things. For you, but you know the inspection has got to be that that that that that that's just got to be perfect. And they're gonna they're gonna typically they're gonna make sure everything is perfect in order for that to happen. Is is that has that been your experience as well, Patrick?

Did we lose him?

Nope, he's back. You got me, Patrick.

Yeah, we just had a little wireless issue.

That's okay. Did you hear my question?

Well, I mean, I heard. So with veterans loans, for the seller, they really don't have to worry about it. The challenge with a veteran loan is going to be as long as it takes to get the VA appraisal taken care of. And then the inspection is usually a little more rigid. Yeah, yeah, yeah, definitely. Otherwise, I mean, you should be able to— a good mortgage lender, good mortgage broker should be able to close a VA loan in the same time as any other loan.

Okay. Which I don't doubt that, but I think about the market that we're in right now. I had a real estate friend of mine tell me the other day she had a listing and within 2 days she had 25 cash offers.

Jeez.

And I can imagine a seller Like you get 25 cash offers and out of those 25, you got like, you know, 2 of those are VA loans. And if they've had any experience selling their home, they might just pass on those because they know that, you know, well, I've got, you know, 23 other offers here that aren't VA and I'm not going to have to go through as much. That's really my issue with it is like it really seems like it magnifies it in this market right now where buyers are going to get passed over because there's so many other people trying to buy that property. with, you know, easier vessels that are, you know, favorable to the seller

than they are favorable to the, to the person trying to use that, that VA loan. That, that's really my, my beef with it right now.

Um, right. I mean, yeah, if you got somebody with a cash offer, um, or more down offer, they're definitely going to have an edge over somebody who has a VA loan or an FHA loan or a USDA loan.

Yeah. And so, and she, and she was actually telling me like she has some VA clients right now and her, I mean, and they're insisting on using the VA loan and she's like, well, you're just gonna have to be patient. Yeah. It's, it's crazy right now. I mean, like literally houses are staying on the market like 2 days around here.

Mm-hmm. So I know I've been reaching out to all my builder friends. I said, hey, let's go find a place and start building homes. And yeah, let's do it. Sell them before, before they, before we're done with the paint.

They literally would. They would. I mean, they just have to have the plots.

We know a really good builder if you want to hook up.

Yeah, we know a few.

Yeah, we can hook you up with that.

Okay, that sounds good.

Yeah. I think that what you're telling me sounds really good. One of the things that I'm curious about is, let's say that I'm looking to to buy a home, but I'm not exactly sure if I qualify. And maybe I'm not ready to do a hard credit pull because I'm, you know, I've been working on my credit or whatever the case is. I'm just not quite ready to do that, but I really need to have an idea in my head about what I can afford and what I can't afford. And honestly, from my experience, a realtor just doesn't know That information. Um, they're, they're typically not going to be able to, to, to go, okay, tell me how much you make and how much you owe, and, you know, who want— who, who has control of your money and all that kind of stuff,

and, and be able to give you a good idea of what you are going to qualify for. Um, is that something that, that you can help with, or is it really, look, you need to get a credit pull in order to make this happen?

Okay, so you definitely will need to do a credit pull to make it happen. You really do. It's not— no lender is going to let you do a loan, a regular loan, without a credit pull.

Yeah, but I get— let me hold on. I don't want to cut you off. I just want to make sure that I'm stating my question correctly. I just want to know where I'm at. I'm not ready for the loan yet. I'm not ready to buy yet. I'm just kind of trying to figure out, can I qualify for anything? Is it $100,000? Is it $200,000? Is it $500,000? Can I qualify for something? Does that automatically require a credit pull, or is that something you can help with?

No, uh, most people have some idea where their credit is if they're being realistic. Um, most people know if they struggle to pay their, their bills every month or they don't.

Yeah.

Um, so I mean, if somebody's reasonable and, and, um, honest, uh, I can give them an idea what they're, uh, ready to do. Um, I find it's a, it's a challenge is, uh, that so many— there's so many zero-down programs out there that everybody's touting. But not everybody fits into that. Not every property fits into that. So there are people who think that you can buy a house with nothing, and that is not true. You have to have some assets to get in there. You have to have income. You have to have a job. You have to be able to do something.

Yeah.

So it's—

But Patrick, I got this really big stimulus check.

$5,000. What's the top 3 ways you could spend that? If you listen to our last episode, we tell you.

Right. But, um, but for certain people who got that stimulus check, that might actually be the tipping point whether they can buy a house now or they have to wait still. Sure. Um, but I mean, I don't know if you guys remember last year when they did that first stimulus. Mm-hmm. The day that came out, I saw people going out of the stores with brand new TVs.

Oh yeah.

And I mean, it's actually good for the economy to keep it going, but you want the TV or you want to save a little bit and buy the house, right?

Yeah. So most people opted for the TV.

Yeah, yeah. I think it was a little bit different whenever we got this last stimulus check because it was more than double what the first one was. So I think that that really, really helped. Um, people probably saw that it's a different level of money. They're like, okay, yeah, what can we do to either save this or invest this or, or move it forward, right? Um, those sorts of things. Hopefully they did. I hope so. But you, you really did answer my question there, Patrick, uh, that you, you can at least give me a roundabout answer and That doesn't necessarily mean that you're going to be spot on, that, look, I can pinpoint it's going to be this much or it's going to be that much. But help

me understand, um, let's say that I'm ready to start really looking for houses and there's something out there that my realtor is telling me that I need called, uh, I need like a qualifying letter of some sort from a lender. Um, to be pre-qualified in order to buy this house. Can you give me a little bit of information about what that means?

Okay, so, um, what we're talking about is actually a pre-approval letter or a pre-qualification letter. Uh, what you want to do is when you're going to buy a house, uh, if somebody's going to take the house off the market when you put in an offer, they need to know that you can afford the house you want to buy. A pre-qualification letter is basically, I, as a mortgage broker, I talk to the person, I ask them a few questions, and pretty much, you know, if the questions fit, they can afford the house.

Okay.

A pre-approval letter requires more information. I ask them the questions, I pull their credit score to see what they really owe, and then I also saw their documentation as far as their assets, whether they have the money for the down payment, pay stubs, and check their job information or their work information or their tax returns if they have a business, so I can verify that they have the income to buy the house. So that's a pre-approval letter. So it's much stronger than somebody who just did a prequalification letter.

Yeah, I'm hearing I'm hearing that there are a lot of properties, especially during COVID right now, for a couple of different reasons. Partly because people just don't want a potential buyer to walk in their home and just look for no reason, because that's more bodies in their house. They don't really want more bodies in their house because there's this virus going around. But they want to have that understanding that, yes, the person walking into my house has the funds available, they can buy my house. So what I'm hearing is, especially in a house that's, you know, $250,000+, that they're pretty much requiring a pre-approval letter before you can even walk onto their property. Are you finding that to be the case?

Not necessarily. Okay. But when you put in, yeah, there's no No good realtor is going to take an offer without a pre-approval letter.

Right.

With the name of a mortgage lender that they can call and verify that information. The mortgage lender can't give them the information, but I can verify that, yes, I did check their credit, it's good, or it's adequate. I did check their income, it does fit. Stuff like that, I can't give out, you know, too much information. That is, that is actually very private.

Yeah.

But I could say, hey, yes, this person can afford the house. I can say, well, I see no problems with getting to closing. So obviously sometimes you find out later on that there's a child support issue that didn't show up.

Right.

But for most cases, I mean, when you get the pre-approval letter, uh, the information, they're pretty much good to go.

Hmm.

So then, then the whole process when everything gets checked, uh, that sometimes things are unearthed that, uh, somebody didn't know about. Um, so that becomes a little bit of challenge, but most of the times a good mortgage person knows ahead of time If this deal is going to close or not.

Which, Patrick, for me raises another question. Just before someone steps foot in your office, what are some things that they should have nailed down before they begin to have a conversation about buying a piece of property or buying a home? I mean, what are like sort of the key essentials that they need to have gathered up to even have a conversation with you?

Oh, well, you're talking about the basics of understanding that, you know, they have to show that they're Have a continuity of employment or work for at least two years. There there are other programs for people who have less than that, but most of the times you're looking you'd have to have been in the same type of job or the same job for at least two years. You have to show that you have adequate income. I mean, if your mortgage payment that you're looking to buy is more than half of your take-home pay. Um, that's— you know, that math is not going to work. Math is always math. Um, so you need to know that. You need to know what your credit score is. Now,

um, I love it that there's some programs out there and applications out there where you can see what your credit is and see what's going on. Uh, but what they show you on these programs is, um, the rosy picture there, or the consumer picture, which is a little different than when they, they pull your credit for a mortgage, because the mortgage, they want to see how serious you are. So it's a little bit more stringent.

Hmm.

So, all right, got it. Um, I mean, the basics are your 5 C's of, uh, of, uh, of credit. I mean, it's your, your character, your job and what you have, your cash on hand. You have to have cash on hand. You can't buy a house without anything. Your credit and show that you paid stuff back. Oh great, I blanked out on the other 2 C's. But conundrum. Yeah, I like that one. So I mean, it is really easy, but best thing to do is just talk to a mortgage broker and even just tell them, look, hey, I know it's a few months out and then I know you're busy. Just take 15 minutes, talk to them, figure out what it is, and then say,

from now on, you talk to me. So one thing that does happen that's really interesting, and it also does bug me, is when I do a credit pull for somebody, all of a sudden the customer is getting inundated with offers and showing them how low of a rate they can get. And buried in the disclosures or buried in the information is How they get there. So the offers are coming into my customers, yet they don't understand. I have to explain to them over again that it's technically not a bait and switch, but it's saying that if everything was perfect, you would get the absolute lowest rate, right? And no one's perfect. Every case is individual.

So I. try to make sure my clients know what's going on so that way I could tell them, as soon as I pull your credit, everybody's going to be calling you and telling you they could do better. If you believe it, have them talk to me. But my goal is to get you your best deal. Now, the best deal is not always the lowest rate.

Right.

Sometimes it is getting in the house, or sometimes it is working out a little higher rate but getting a lender credit so that way You bring less cash to the table at closing. So there's so many different variables. And that's where a good mortgage person, again, if they interview you correctly and get enough information, can do the best for you.

All right. So, so you brought up a very, very important thing, in my opinion. And that is, you said, if they interview you correctly, They ask the right questions, then they can get you the best deal, you know, possible. Which, which I do believe a broker is a really, really good way to go for that. But how do I know if I'm using a good broker? What types of things should I be, as a buyer, what should I be looking for? I mean, do I just trust my realtor? Because a lot of times realtors have a relationship with with a certain lender or broker. But what if I— how do I know? Do I just have to go on trust, or are there some questions that I,

the buyer, should be asking and should be kind of looking out for?

Well, I mean, you're gonna have to use a bit of your gut. Listen to the person. Not— I mean, the one that could rattle off the 5 C's all at once, unfortunately not me, um, is not, not necessarily the one that, um— I mean, the one that knows all the details is not necessarily the one that knows or cares about you. They need to find out what you need. Um, so yeah, you're gonna have to use a little bit of trust, a little bit of your own gut, uh, trust in your realtor. I mean, If your realtor's telling you that you can get away with doing this or that, the likelihood is they're gonna be working with somebody who's gonna

let you get away with this or that. You don't wanna get away with anything in your mortgage because that's actually technically could be fraud.

Hmm.

And that could be pretty serious. You do want to interview your mortgage broker, ask them, why should I use you versus someone else? Look at their reputation. Talk to people, talk to some people that have worked with them before if you want to. A lot of times what ends up happening is once, you know, somebody's ready to buy the house, they're just ready to rock and roll, and then they go with whomever they get to first. So for my customers, I tell them to go ahead and use your, your gut. Um, one thing that, uh, sometimes the— some mortgage people do is they tell you right away, don't let anybody else pull your credit because it's going to kill it.

Um, if your credit is good and they pull in your credit during the time that you're shopping, That is not going to hurt your credit. Okay, now if your credit is 1, 2, 3 points away from being unacceptable, then that would be one time you'd probably stay away from from shopping around. But if your mortgage broker is afraid of you shopping around, there's a problem. You should be concerned about that. But obviously also, as busy as everybody is right now. Um, most people don't want to, um, burn through too much time. Uh, they want to take care of people, uh, but they, um, obviously don't want you to go, I'll go shopping, you know, around 2 weeks later and figure something out. Because

if you look at the rates a couple, you know, a couple weeks ago, a little different than they are now.

Yeah.

So it's a, it's a balancing act between, between how you can trust them Where did you get the referral from? Referral from a customer who's happy with the, with the broker? Or did you get the referral because you clicked yes on something online? I, I personally would like to know that I can go to somebody's office and see their face. That's one of the things that I am. But then again, look at all this gray. I'm a little older.

There, there definitely is something about being able to sit across the desk from someone and have that kind of conversation. But I mean, I mean, a lot of deals are brokered across the phone, right?

Yes, a lot, a lot of deals, a lot of deals done with Zoom. Uh, I mean, many of my customers, um, I don't see now. I used to have a a steadfast rule that I was at closing for all my customers. Uh, I never, never really had to be there. It was mostly just for security, make my customers feel secure. Um, but once COVID hit, my customers got used to it. They're, they're not expecting me to be there.

Yeah.

Um, but I always tell them I'm a phone call away, and I used to call them right before closing and say, hey, Um, make sure everything is fine, you're in good hands. And I use the name of the, uh, the closer is going to be there. Um, the title closer is going to be there, uh, and reassure them. And usually by that point in time, it's pretty much perfunctory. You go through the signing. Um, and then again, there's just so much to sign, most people don't read everything.

Yeah.

Um, and I promise them, it's like, I will not let you get into anything that is not right for you.

Yeah. Well, Patrick, is there anything we haven't, we haven't covered, uh, tonight that you wanted to make sure we, we got to?

Oh wow, uh, we can go on for a long period of time. Sorry.

Oh yeah, no, that's why I'm asking.

I could talk a long time for this, but then again, I know, uh, put people to sleep. But, um, one thing I, one thing I really would like to bring up is, uh, I'm do— I'm holding a, um, home improvement expo I've noticed that many of the people in my neighborhood and neighborhoods nearby are staying in their homes and they're fixing it versus thinking about selling. And then what do you do about finding a house when houses are so hard to find? And I try to tell them, okay, there's a strategy to that. We can— I could do a whole episode on strategy on how to buy and sell in in this particular market. But I

also know that a lot of my neighbors, they just need some people they can trust to come by and remodel their house, come by, do their, their floors, windows, stuff like that. So we're doing a home improvement expo.

Mm-hmm.

And it's gonna be over at District 249. It's a restaurant with an outdoor section right on 249 just south of—

And it's like the main drag going through Tomball, right?

Yeah, it's main drag going into Tomball. Um, yeah, and it's, it's got a great location for it. Um, and I just hope it's going to be sunny instead of raining. Um, but we'll be out there. Um, and I'd like to invite people to come on by and take a look at what, uh, what some people can do. And thank you, Craig, for— you're going to be there so you can be able to do some Broadcasting at the same time.

Oh yeah. So, so here's the deal, guys. Uh, Kevin and I are actually gonna be attending the, uh, Tomball and North Houston Home Improvement Home Decor Expo with Patrick. It's actually gonna be a cool event. I mean, like, we're gonna be out there doing a live show. We're gonna be talking to the vendors. We're gonna be interviewing some of them. We might even bring some of you up to the microphone to have a chat with us. We're gonna have the, uh, the infamous homeowners. What do we call it, Kev?

The disc. I just call it the disc. The disc. I don't know what else to call it. The edifice. It's like 8 feet of roundness. Yeah, that looks— it looks like this. If it's ever been your dream, it's just this, this big disc of— it's, it's perfect is what it is. Glorious.

If you— if it's ever been your dream to have your picture made in front of it, we will have it there with us in all of its glory.

Who, who doesn't have the dream of taking their picture? I don't know. Weird people.

Yeah. So yeah, no, we'll, we'll, we'll, we'll come with, with all of our tassels and mics.

I'm not showing people my tassels.

OK. OK. Um, then you heard it, guys. He didn't say he wasn't going to be wearing them. Yeah. He's just not going to show them to you. Exactly. Totally different scenario. Yep. Um, so anyway, yeah, this is, this is actually gonna be really fun. Uh, I'm, I'm actually looking forward to enjoying some food.

Yes.

While I'm there and actually meeting, meeting a lot of these different folks. Yeah. So we'll be broadcasting live. I think we'll probably put it up on Facebook. Yeah.

So, you know, come out and see all the vendors. I mean, this may be a really good opportunity for you to get in front of a bunch of people that are doing a lot of different things around your home. And as a bonus, you get to meet me. Yeah. And Craig will be there too.

I will also be there. So not meeting anyone.

And who knows? I don't want to meet— maybe his neck will be more swollen.

I could have gotten stung again by then. These are some surly bees.

That's right.

That's right.

Are you gonna bring a, a box of bees?

I could, but it— I, I think the attendance might drop. Yeah.

Yeah, definitely.

We, we could get some good video footage though.

That's— oh yes. Going back to what we were talking about, we need some video.

Just open the box and throw it in the middle of everyone.

Who knows? Who knows what would happen?

Pandemonium. Pandemonium. It'd be perfect. Yeah.

It's like Jeff Foxworthy. He's like, it was pandalerium.

Yes, pandalerium.

be killed or even worse.

Well, so let's make sure everybody knows. So this is May 1st. It's going to be from 11 to 4 at District 249 in Tomball. If you have any— if you want any more information about it, you can email Patrick at patrick@patricktx.com. And we'll have all that in the show notes as well. Anything else about the event, Patrick?

Um, no, that's it. I mean, I'd love to have people out there. and get to know some people. Um, I am certain that I'm gonna have some sort of nice giveaway, uh, that'll be very useful in the Texas summer heat.

Ooh, so intriguing.

We'll get that out there too. Yes.

All right, all right, good deal.

Well, very cool, man. This is— this has been a really good episode. I mean, I think this is one of those— one of those things that, man, if you just— if you don't know some of these things, you— you could be quite overwhelmed whenever you step into— I mean, That— because the fun part is going out and looking at the houses. That's the fun part.

That's always the fun part.

Yeah, let's go look at the houses. Let's see what we can afford. Let's see what we— and then you fall in love with one, and then you got to go through this next process, and that process can be very stressful. So, um, hopefully this has been good for the people who are listening right now, um, just getting some information.

What is—

what does that process look like? You know, what am I stepping into? Because sometimes knowledge is power in that I, I just don't have to stress out about what's coming next. I've not done this before. Even if you have done it, maybe it's been a while, um, and you forgot what it was like. Um, so yeah, this has been really good. Uh, so, so thank you, Patrick. But before we get away, I don't know if Craig warned you.

Nope, I didn't. It's more fun this way.

Yes. So we cannot let you get away without, uh, doing what we do. with every one of our guests for the first time. And that is take you through, through the wringer of the Final Four.

The Final Four.

That's right. So these are the Final Four questions we ask each one of our guests. So we're just gonna jump right into it. You ready?

Sure.

All right, here it goes. All right, first question. What is the must-have tool that you won't leave your house without?

Oh, it's my cell phone.

It's not even a question, is it?

No, not at all.

Yeah, no, no, we, we get it. It's funny because like, absolutely the number one answer that we get on this, this question is cell phone. Yeah, I mean, we get it. There's so many things you can do with it. And we even joked that like, if you don't have the tool, you can just pull up Amazon and order it. So I think you're covered either way.

We have had the occasional handgun answer.

That's true. Yeah. Yeah. So, but not those ladies.

I wouldn't mess with any of them anyway.

All right, we're gonna jump into the second question here. So what is a job that you walked away from? If you're reading on the, on the screen here, it says, what's a project you walk away from? That's because we actually wrote this question poorly whenever we first wrote it. And, uh, some people want to talk about a career maybe that they walked away from, which is fine if that's the way you want to go. What's a job you walked away from? But we're actually curious too, if you have had a project at your house, a job at your house you started and just didn't work out. Maybe you want to do this because you're a man, right? But then at the end of the day, then you're like, forget it, I'm

calling in the expert. So take it whichever way you want to. But what's a job that you walked away from?

Okay, so actually, I actually enjoy doing lawn work. I actually enjoy going out there and mowing the lawn.

Yeah.

Um, and, and doing the trimming and stuff like that. But 2 hours, uh, my lawn guy comes in and has it done in 15 minutes. He's got a little team, but it's done in 15 minutes and it's much better. So I'm like, you know, I could, I could I can step away from something I like for that, you know. But then again, so what I do every once in a while is, um, I'll have some fun with a chainsaw and, you know, chop down a tree or something.

There you go.

But otherwise, um, yeah, I stepped away from that a long time ago. And then my wife also said, you know what, it's hot outside, uh, you can have a heart attack, don't do this. That's right, smart wife. I said, okay, my guys, my guys, uh, my, uh, my lawn guys come in, they do a great job, they take care of my trees too. So my wife won't let me go up the tree with a chainsaw Either.

Hey, this is all right. Pay attention. She's holding you back, man. Yeah. Well, I don't know.

Pay attention here because because she somehow he fig he broke the code.

He broke the code.

He he figured out a way to get his wife to tell him to pay someone to do something. This is a this is a I don't know, guys. You need to pay attention. Follow Patrick. He's way smarter than he's letting on right now because he's broken the code.

There. I need, I need a couple of follow-up questions. Patrick, are you doing laundry and dishes?

Uh, unfortunately, yes.

Oh, there you go.

No, see, she, she broke the code. It's just in her favor.

She broke the code the other way too.

Yeah, yeah, this is, this is— they've got the most healthy marriage ever. This is it. We, we've, we found it out. All right, all right, we're gonna move on to number 3. How do you wind down at the end of a long day?

Oh wow. Um, I actually hang with my boys. Um, I got 2 boys, uh, they're 12 and 14.

Great.

And, and we hang. We, uh, either play, uh, they play the video game, or, uh, we play a card game. Um, and then we just, we just relax together and spend a little time together.

Um, you talking about like, you talking about like traditional deck of cards? Is there like a, like a kind of game that you guys play?

Um, a traditional deck of cards, a non-traditional game, uh, game called Nerds. I never heard about it. Oh yeah, Nerds. My son, my son brought it in and it was, you know, some sort of a, um, multi-part multiplayer solitaire game. Okay. And they have fun with it. And, uh, for me it's whatever time I can spend with those guys is great. I just wish they could, I could get them to come out there and do some lawn work with me.

Craig, have you ever played Nerds?

It's been, it's been a day or two, but okay. I think back in the day I did play some Nerds.

Awesome. Yeah, it was a good youth group game back in the day. Yeah, yeah, yeah, definitely.

I think I remember another one called VC that's kind of similar. Is that VC?

VC? Yeah, I don't know that one. Okay. I know, I know, um, like ERG or ERS. Sorry, ERS. You know that one?

I don't. Egyptian Rat Screw. Okay, yeah, yeah, yeah, yeah, yeah.

Okay, ERG.

I don't know what I'm— yeah, I can't make enough acronyms.

I can't acronym right now, y'all. Sorry. But yeah, cool, man. That sounds awesome, man. I actually love that. We, we, Craig and I say this a lot. We, we are big, big advocates, advocates of, uh, family time and spending time with your family. So I love that. That's a great, great answer. I think a lot of people would do well to to, to hear and, and model that as well. That's excellent stuff, man. Uh, all right, 4th final question. Uh, what is one of the best pieces of wisdom or, or advice that you've ever received?

Oh wow. Okay. Um, there's so many different pieces that are great. It's hard to really choose one. Except that I go back to the Jim Rohn thing. You're the 5 people you spend the most time with, uh, you know, on the professional level. Um, they, they will make, uh, make or break you. I mean, you— if you are around people that challenge you, um, healthy challenges of course, uh, and push you to do more, um, and be a better person, um, that's, that's the best That's, to me, that's the best advice. Get yourself surrounded by good people and, you know, be a good example for more good people.

Absolutely. 100%. Yeah. I'm a big Jim Rohn fan. So he's, he's actually, uh, he, uh, me and my daughter actually sit down and take some of his classes together from time to time. So the guy's still adding value from the grave. Yeah. So definitely incredible.

Cool. Well, I hate to tell you this. But we actually have one more question. And I actually— it's, it's an easy question, which is why Craig gets to ask the question.

It's also the only question I can remember. That's right. Patrick, how do people get ahold of you if they want to?

Okay, best way to get ahold of me is to email me at patrick@patricktx.com. That's TX for Texas or patricktangoxray.com. So, uh, or my phone number, uh, my office phone number, uh, always gets to my cell phone no matter what. And that's 832-639-3350. Um, again, 832-639-3350, and it'll get to me, and then I'll be calling you back as soon as I can.

Fantastic. Yeah.

That's excellent.

Well, Kev, we did another show.

Yeah, yeah, it took us a while to get going, but we— man, this was, this was really good. And like you said, uh, Patrick, I know that there is a lot more that we could, you know, really sink our teeth in, dive into, and maybe we'll do that another time. But, uh, for now, thank you all for taking the time to download this episode, and, uh, we, we are just very, very thankful for all of you out there And, uh, we ask that you would, uh, take a moment and hit that subscribe button if you haven't already, and, uh, go over to Apple Podcasts and leave us a rating and review. That would be really, really

helpful for us. Um, but yeah, we are here each and every Tuesday, so thank you and come back. And until next time, we'll see you later. See ya.