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Jeb Smith (huntington beach Realtor/orange county real estate) DRE 01407449 Coldwell Banker Realty ➡I N S T A G R A M ➳ instagram.com/jebsmith ➡Y O U T U B E ➳ru-vid.com
Connect with me 👇 Josh Lewis (Huntington Beach Certified Mortgage Expert) NMLS ID: 234220 | CA DRE: 01209148 United American Mortgage | NMLS ID: 1942 ➡I N S T A G R A M ➳ instagram.com/borrowsmartjosh ➡Y O U T U B E ➳ru-vid.com
this was a great video. I do love how he admitted not all are the same as everyone is different. I would like to throw my 2 cents in from personal experience and what i see in the mastermind groups I am in. Maybe I am a little BIAS as I say credit union is your first place to start on EVERY DEAL. As a business owner who works way too much each week and an investor I have narrowed this down. My personal experience is for a primary home Credit union all the way. 100% financing no PMI and rate was cheaper then FHA. It just made sense. My personal experience with brokers have been that the only time I have had a closing miss big time was due to a broker. I have learned when you deal with a broker they are just a point of contact as they usually don't have guidelines or direct communication with underwriters. When I bought a condo hotel, it took 3 days to get a response on questions because the broker had to email a rep who is a sales person not originator for who they went through and then that person had to email and underwriter or manager for answers. Took 3 days to get an answer. After that i switched to a retail shop Movement and loved it with them as they are retail but also had like 30 different options they could broker. I also found they beat most brokers. Next I also had a broker in a meet up tell us all that Fannie Mae adds penalties if you pay off the loan in 1 year. I asked my retail girl and she said that is a lie, its called a early pay off where brokers get paid usually 2.5 points by the wholesaler and they lose part of their commission as why should they keep all that money when the bank makes nothing then. I had several friends who Left Movement and became brokers and I got more insight. They broker through Rocket and some national credit union and others but said about two months ago things are changing as law suits are coming up showing that brokers send 98% of their business to United when it isn't the lowest rate or best deal. They say brokers send to them because of the ease of the systems but know your not always getting the best deal because brokers don't show you three options 3 different wholesalers, they just pick one and say its the best. Now I switched to a lot of investing with not fannie mae and I loved my retail shop for them as they have guidelines and faster time, but I am very loyal to my friends. She is a broker now and I had her sign up with the retail shop I had good experience with because she has agreed to only charge me the same origination the retail did plus anytime I have questions she will get on a 3 way call with her person there and he answers everything. I love it because I get to help my friend with her business but yet no delays and basically get access to someone with guidelines when other brokers dont have them. Plus My last quote made me think when I got it from a broker that I have communication with the broker, but yet 3 people are involved in the deal. He had 1100$ 3rd party processing, who he was getting to fund the deal, and him. It seems like that was just so many hands in the cookies. Now in our mastermind groups here is what I see. You should always have Private lender especially for fix and flips I love EasySt and a Direct lender with investing. We have seen many people in our group get promised one thing from a broker and then they get the bait and switch. Our broker in the group said that is because brokers do not have access to full guidelines plus it is hard to memorize 50 plus lending partners. Especially when it comes to conventional loans that aren't as common. We had a debate in our group which was AWESOME, a broker vs retail and we got to ask questions. The knowledge and access to answers was so much faster with the retail side then a broker so for me I am ok paying more because I have more confidence. Our credit union guy in the group WHO I LOVE and tell every young buyer you must call them first, is amazing. I really hope all areas have credit unions like this is by far the best deal when it comes to primary homes. Our broker in the group has been trying to find away to broker to them because he admits no one out there comes close to a deal with 100% financing no mortgage insurance or even 97% with None. My friend who still works with Movement says he hasn't lost any deals to a broker as they are able to discount if need be where brokers usually are trying to get 2.5-2.75 in commission whether they hide in the rate or origination and then credit back. The other lesson I learned is that NEVER trust a Loan officer who is recommended by a group without diving deep and vet them yourself. Many of them PAY to be recommended but they aren't always the best. The largest group on youtube did this and it made me upset when I saw a friend on 3 loans in the last 12 months get charged 3 points each for investment deals as she was told just to trust them they are the best. She went full Karen when someone else did her 4th deal and looked her previous ones and broke down how much she truly was paying. Again amazing video, I would love to see if you would do one and invite the crash bros that call you out on their videos. It is crazy how different people can be but yet they do bring up good points, but you seem more level headed where they are not.
Why are you folks all locking rates without calling us? 🤣🤣🤣 Congrats on benefitting from the downturn in rates and thanks for watching. We appreciate it.
Hi. With interest rates going lower, do you expect to see prices go up sharply as new buyers are coming to the market or is that gonna happen swiftly as rate declines?
I don't think either of us see sharp increases to prices but rates moderating should put a solid floor under prices. If you are in an area where prices are increasing for the homes you are interested in, lower rates will create more demand and likely lead to higher appreciation than what you are seeing now but hopefully not too much!
Thanks guys! I even found differences between national banks versus regional banks when it comes to doing the loan and level of risk when you own another home. The national banks seem more risk adverse.
Yeah...it actually doesn't unless you have a massive inflow of cash at the beginning of the month and all of your bills are due later in the month. The people who could actually benefit from this strategy know how to invest and don't waste time stepping over dollars to pick up pennies. The math is out there in hundreds of videos from people who actually understand finance but the true believers still think there's a magic answer for people with more debt than income to wish it all away.
It's a great program if the home is eligible and your household doesn't exceed the income limits. Zero down, great rates and lower MI than FHA. Congrats!
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Yes, entry level is where listings need to be added to affect actual price. Very good. I just spoke on the "commoditization of real estate listings" at our local Lynchburg meet up.
1000%....If we have a healthy market for entry level buyers, we have a healthy market for everyone. Hopefully we can see rates moderate, increasing affordability IN ADDITION to more entry level supply so prices don't jump in tandem with lower rates.
Jeb's out of town, let's see if he chimes in. My best advice is just to stay on top of all the paperwork. If your Realtor or loan officer request a signature or documentation, see if you can get it back to them in 24 hours. Also, get your insurance quotes lined up early. That process is taking longer than it has traditionally and can lead to delays at closing. Hope this helps!
Real-estate agent's always say "now is the best time to buy a home". No matter how bad the economy or housing market is. They are all shady commission base sale sharks!
Velocity banking works for me because I get a huge amount of money at the beginning of the month and my bills aren't due until the end of the. month I also learned to pay small amounts of my credit card every few days because it raised my credit score by eight points in ten days. That allowed me to get $9500. 0% balance transfer credit card... saving me $2,400 in interest expense. I'm extremely self disciplined and only found me in this difficult spot because a young business partner surprisingly died leaving me with a challenge
🤔 Um, OK. Realtors NEVER get paid on the loan whether it's newly originated or assumed. This short specifically discusses a scenario where a seller has other buyer options. In such a situation, there is NO benefit to the seller in dealing with an assumption.
The velocity banking strategy is not a scam. And it is not a bad strategy; especially for those with high debt or those that would sleep better at night by eliminating debt at an accelerated pace. However, it definitely is not the right strategy for everyone. Paying off lower interest debts is not always the best decision. Especially when someone can get a much higher return in the market or on other investments.
People with high debt are exactly the folks that should stay 1000 miles away from this strategy. The spreadsheet shows it can work but you better be very disciplined and have more free cash flow than the typical homeowner.
@@TheEducatedHomebuyer Discipline and education on strategy and other alternatives are definitely critical. Im general, I would not advise someone to do velocity banking on a mortgage, but it could be effective on other consumer debts that have high interest cost or are significantly impacting someone's monthly cash flow.
The easiest way to tell someone has drank the Velocity Banking Kool Aid is when they tell you the magic is in simple interest vs compound interest. The ONLY difference in interest accrual between a mortgage and a line of credit is that the LOC accrues interest on the average daily balance. Velocity Banking ONLY works if you receive a large influx of cash at the beginning of the month and slowly pay out your living expenses over the course of the next 30 days thereby reducing the average daily balance. If you get paid on the 1st and 15th and most of your bills come due between the 1st and the 15th, you will have a miniscule reduction in the average daily balance that will be more than offset by the increased rate of interest on the LOC. So, if you are a business owner with large monthly revenue that you can apply to your mortgage, then use the "float" before paying your bills to reduce the average daily balance AND you have the discipline to not screw it up, it can work. That accounts for about .01 percent of the population. This isn't hard math. There is no magic.
"velocity banking" is a catchy name. kudos to the marketing team. However, i still dont understand it. folks borrow more money to pay off previously borrowed money?
Check out the video we linked in the description. That gentlemen has several spreadsheets walking through the math. It works in theory but rarely in reality and only for very specific borrowers.
I have a fixed heloc at 5.74%. Using a fixed heloc to pay down your mortgage is safer then increasing your payment amount. The problem is in the complexity when you live out of your heloc and applying all your money to pay it down. The other problem is you have a large low interest credit card and you are tempted to spend more then you normally world.
Great points Dave. Thanks for sharing. It's important to note, HELOC's that allow you to fix the rate on a portion of the balance typically have limits on how many times you can fix a chunk.
I just overpay my 2.875% 30 year fixed by $40 every month, each COLA we add another $10 ever since our first mortgage payment was due, In Jan 25 we will overpay by $50, Knocked years off the life Of the mortgage already, we have the double home exemption. Once we claimed it our property taxes almost halved, once we turn 65 and bring in less than 25k a year as a single person or 30k for married couples property tax freezes. We paid down 1 credit card, paying down another, Also we Add to savings so wouldn't make a lick of sense for me to get a HELOC
@@winniethepoohandeeyore2 That's great that you're aggressively eliminating debt. Have you thought about taking the extra principal payments on the 2.875% mortgage and allocating them to the remaining credit card until it's paid off? Since it's likely at a much higher rate, that would help you get to the debt free finish line sooner. Thanks for watching.
@@TheEducatedHomebuyer Ty, I’ve got 1.m retirement, 30 yr Fed retirement, and about $50k cash left over. Sooo many numbers, I’m just trying to make it work.
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Here in Wisconsin it’s still over priced and people are still buying. Neighbors house just listed at $650k, was sold 4 years ago for $430k. Within days it had an excepted offer. Add it’s one of the ugliest houses in our neighborhood. lol.
It's always interesting when people say homes are overpriced then go on to say how quickly and how high homes are selling for. To say something is overpriced assumes a lower price will be available in the future.... Fair market value is the price that an asset would sell for under current market conditions, assuming that both the buyer and the seller are seeking the best possible price. We would venture to guess the buyer who purchased the home wasn't making a gift to the seller, they felt that $650k was the fair market value of this home or any similar home they could have purchased instead.
@@TheEducatedHomebuyer Yes overpriced. When in the last hundred years, have you seen homes increase 45% in value in just 3-4 years time? I know wages haven’t done that for people. These prices are set up for low interest rates not 6 to 7%. It’s gonna catch up. People are maxing themselves out buying at these prices.
There seems to be a lot of, "The big real estate crash is just around the corner; there's more price cuts, what more proof do you need that buyers are staying away in droves, and it's going to get worse?" videos. This doesn't appear to be one of them, and I'm glad of it. A reduction in activity nationwide when mortgage rates are 7% when they were below 4% for effectively a ten year period, shouldn't come as a surprise to anybody. Not everybody is affected by this, however. Seems my area is doing a bit better than what was described. Housing are selling at list price in my neighborhood. 21% of them had a price cut. Number of homes sold is up yoy in five out of six zip codes in my town. Homes sold were up 16%. New listings and closed sales are both up double digits. Inventory and sales are both down at the same time nationwide. Seems there aren't enough houses for people to buy at a macroeconomic level even now. Inventory is lower in Dallas Cty than it was in '18 and '19 this time of year. There are fewer professional work opportunities in LA than there are in TX, btw. House insurance in the southern part of the state, is very high. Like in Lafayette. This is what's available to the general public and what I use. tradingeconomics.com/united-states/total-housing-inventory tradingeconomics.com/united-states/existing-home-sales fred.stlouisfed.org/series/ACTLISCOUUS Prices are up from last year on the whole. fred.stlouisfed.org/series/csushpinsa
Good analysis....no crashes except in transaction volume, no surge in prices with affordability strained and all pretty predictable with such a rapid spike in rates and prices. Here's hoping rates moderate to a "new normal" that supports greater affordability.
Question for you guys. On a sellers disclosure. If the homeowner says there was no asbestos on the property and we find it, what can we do? 60s home with the basement tiles being those old asbestos ones. Any help would be great. Thanks!
Always consult an attorney but to recoup damages it generally comes down to did the previous owners knowingly fail to disclose. Any past service records for that issue could unearth that information as well. Sorry to hear that and good luck!
@@Keytodaytonabeach thanks! I mean he was the only owner of the house and had the basement finished. So he 100% knew. I had basement guys come down and immediately said that they were the old asbestos tiles.
@@mitchellnebrosky2765 oh jeez that’s really unfortunate. Well you can always get a quote to see the amount of damages and then consult with an attorney and see if there is any recourse.
As a buyer- I’d want to use my own title company. The main reason for this is- depending on what title company you use- they have discounted home owners insurance available to you at HUGE discounts. I learned this the last time I bought a house. The other insurance companies were unable to complete with it- same coverage but hundreds of dollars cheaper
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im asking for a friend 1% down on mum and brother he put 1% dwn put not named on it what does that mean he is on the proberty if mum passes away please😊
If he is not on title, it depends on how she is vested and/or how her trust/will read. If he has no ownership interest, she can leave the home to whoever she wants upon her passing. It's important that she has a trust or a will at a minimum stating he is to get the home. Hope this helps!
Here is how this is going to go. Moving forward housing will be 40-60% over inflated from their true value. We cant go to the real number because that would send us deep into a recession that could take 20+ years to recover from. The fed won't drop rates to account for the homes because guess what, that will send us into ultra hyperninflation, and kill us instantly. What we will see is a few different things. One, the economy will stabilize and that could take, by conservative measurements anywhere from 5-10 years. Two, people will outright leave the market and not return and then we basically will become a teant nation, or three, which is the worst, we see an introduction of the 60-80 year mortgage. Which basically is us saying, you will never truly own anything, and that then transfers to your children. Sad times no matter what the option is.
100%....the "shortage" of homes is in the entry/affordable segment of the market. That price varies a lot by region but most areas don't have enough, even with strained affordability, there are more buyers than the few sellers.
Finally, someone who knows their shit. Way to go Josh !! If housing prices drop back to the normal historical trend line (2019), housing would be affordable again even with 7%or 8% interest.
Firs time viewing. I know you're primarily real estate focused. But any opinion on if we did have a worse recession than expected, or black swan event. If the stock market would drop substantially more than real estate? Bc with stocks people don't have those locked in low interest rates, and there isn't a "lack of inventory"? Idk, just something i've wondered as I've toyed with selling my house despite having the 3.5% rate. life has to go on and a house can't dictate your moves. thanks!
Stocks have always been more volatile than housing and more susceptible to corrections and crashes primarily due to the majority of homes being owner occupied. You need a place to live and selling your house requires finding a new home. Selling your NVIDIA stock does not require you buying another stock. You might choose to but you don't have to own stocks. Any downturn in the US economy will likely be similar.
@@TheEducatedHomebuyer Makes sense, thanks! Yeah, just thinking If i do decide to sell I'd be cash heavy. And if they start to cut rates, that'll mess with T bill and chill / Cd rates. So I'd def be looking for opportunities in stocks if there was a big correction. Tough decisions out there for everyone!
But that says nothing about Dave giving an arbitrary 25% of net income rule of thumb. Most homebuyers greatly exceed that and can "afford" their homes with no issues.
