Podcast: (Pt 1) Preparing for your next mortgage

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Real Estate

Real Estate Agent Man: The Podcast

Secrets of Florida Real Estate That Should Not Be Secrets

Season 1 Episode 2 ( For the hearing impaired: Transcription below by artificial intelligence software - errors are inevitable)

Your host and Florida Realtor, Steve Martin Smith, interviews Tony and Michelle Moore with Gulfside Mortgage Services. In this episode we discuss the benefits of using a correspondent lender, when you should contact a lender, the most important questions to ask in preparation to make a purchase and how interest rates affect your buying power.

(Part 1) Preparing for your next mortgage with Gulfside Mortgage Service

Steve Martin and The Smiths  00:02

You are tuned in to the Real Estate Agent Man podcast, coming to you from Sarasota County, Florida. We are in the studio today with Tony and Michelle Moore from Gulfside Mortgage Services discussing secrets of real estate that should not be secret.

Listen close and you will be much better prepared for your next home purchase.

Michelle  00:34

Pressure I feel the pressure.

Tony  00:35

No pressure.

Steve Martin Smith  00:36

Tell me Michelle, how does it feel to have been voted best mortgage company by the readers of the Venice Gondolier for the past 16 years.

Michelle  00:45

Steve, it feels amazing. It's very, it's humbling. My employees work so, so hard, and they deserve this. So it's nice to be recognized for all the hard work that our team does, as well as Tony and myself. So it's absolutely amazing and we are beyond grateful.

Steve Martin Smith  01:04


Tony  01:05

It's just like she said, that's a huge honor. We've been in the business now for 17 years Gulfside has been around, and just to be voted best in the industry for the last 16 years in a row is amazing. We don't just want to be another place to get a mortgage, we want to be the best place to go and get a mortgage. Somewhere where people actually feel like they're at home. They're taken care of, their hands held all the way from the start to finish and there's no surprises at the table. I mean, that's what it's all about just making a difference.

Steve Martin Smith  01:33

Well, I can tell you from somebody who has watched many people get mortgages from Gulfside Mortgage, that you've earned that title. I'm excited that you were able to take time out of your busy schedule, and come over here and do this podcast with me because I think a lot of people are going to benefit from the knowledge that you're able to share today.

Michelle  01:52

Thank you so much. We appreciate that.

Steve Martin Smith  01:55

Well, you're welcome. So I'm ready to get this thing rolling. Later in the podcast, I will have to ask you about current interest rates. Everybody wants to know about current interest rates. But for starters, let's talk about what makes a correspondent lender better than big banks, online lenders and mortgage brokers when you're trying to figure out how you're going to buy your home.

Tony  02:16

One of the biggest things that I see Steve is that the difference that it makes is that we have a ton of people that come to us, you know, after they've been in the process already for 45 days, and get turned down from another lender. We see this all the time. They come to us and they're like, hey Tony we need to turn around and get this closed. We're due to close in a week or two weeks, and they can come to us, we look at the file and first of all, we can see whether or not they're approved or not. Right. Then if we can find an outlet for them, that's the big difference that we have. We're not stuck to go with just one lender. Or if we broker we don't have to send it out to that lender to review it and find out if they'll do it, and then get it back and then package it up and send it to another one. With this when we actually send it in with a correspondent lender. We have one underwriter that underwrites for every lender that we use. We have 20 to 30 different lenders that we can use, but the same underwriters underwrite it. Well guess what, if it doesn't fit with one person, they can immediately take it to another one. Another good thing about that, too, is if we were to send it out to one, and they don't accept it, we can use the same appraisal, we can use the same documentation. So we have the ability to do that. Another great thing about it, is when we're comparing interest rates. We get to look at interest rates from all these different lenders and find out who has the best one to find the best rate and program for the borrower.

Steve Martin Smith  03:32

So one of the things I hear all the time from people is like I've been online, and I've seen that, you know, this online lenders offering this interest rate. One of the things that you know, I'm aware of, but I'd like a professional to really talk about is how whatever they're seeing today isn't necessarily the rate that they're going to get. Can you explain that process? What you have to watch for is when you lock in the interest rate? That's the biggest thing like tell everybody - get that fee worksheet, find out if it's locked and find out what kind of points they're charging you. Because you're gonna go online, and the big thing is online is it says right underneath it "advertisement". You have to watch for the word advertisement, because there's no guarantee on that interest rate or that they're going to deliver that rate to you. So you have to make sure that what you're locking in is what the rate is. The one thing that I tell everybody is, if it's too good to be true, it's too good. You know, if nobody else is offering it to you, and everybody else out there is telling you the rates a quarter percent or half percent higher, but yet this one company is telling you, it's that much lower than everybody else, you're not going to be able to get that.

Steve Martin Smith  04:33

I see people fall for that all the time, though.

Tony  04:35

It happens all the time.

Michelle  04:36

It does. They're also not disclosing it may cost points to get that rate as well. So that's what you have to look forward to is you know, how many discount points are they paying to get that interest rate?

Tony  04:47

Yeah, and another thing, we'll be talking about current rates a little bit later. But one of the big things is when you look at these advertises online, or the advertised rates, you have to remember they're advertising the best possible rate out there. They're not advertising the rate for your particular program. There's 13 to 15 different things, on average, that makes up your rate. What's the loan to value? What's the loan amount? What's your credit score? How much is your downpayment? What type of property? Is it? What type of use? Is that primary investment? Or what are you using the property for? When you put all those things in, it's a different rate for everybody, just like a credit score is completely different for each individual. You have to know that.

Steve Martin Smith  05:24

So it's all of the details that they couldn't even possibly put into an advertisement if they wanted to, because there's just too many details. But those are the things that actually end up determining what your rate's going to be. The locking the rate thing that you hit on earlier,  I've seen people wait until the very last minute to lock in the rate hoping for the best, but end up with worse than had they locked in at the beginning. So it's a bit of a crapshoot in regards to that, right.

Tony  05:52

That's what I was going to say. It's a gamble. You know, if you like gambling, that's when you can gamble and figure out what's going to happen. You know, rates are good, but then they go up faster than they go down. When there's a spike in rates, we're going to see them go up a lot faster than they come down.

Steve Martin Smith  06:08

Okay, so this isn't in my notes anywhere, but this is the way these podcasts go as we're having conversation, we start to think about stuff, right?

Tony  06:15


Steve Martin Smith  06:15

So the buying power that you have as an individual, you know, you've got your job, and  you've got tax returns, and you're going to be able to buy whatever you're able to buy based on that and other factors. One of those factors is the interest rates you're going to have on your loan. So how does the interest rate affect your buying power? Like say, I was qualified to buy a $300,000 house? And then interest rates went up a point? Could I still buy a $300,000 house?

Michelle  06:48

It just depends on your situation. You know, there's so much more that is involved, we have to check your income, we have to check how much debt you have. Is there HOA dues?  What's the tax bill? What's the homeowners insurance bill? So yes, it could potentially affect your pre qualification? Absolutely, because the payments gonna go up drastically at 1%. So you might not qualify anymore.

Steve Martin Smith  07:12

If interest rate went up 1%  and you're borrowing, you know, $250,000 on a $300,000. Okay, Tony's breaking out his calculator there. Awesome.

Michelle  07:25

What would that payment be?

Steve Martin Smith  07:26

Yeah, I'm curious if it went up a percent? How bad that would affect me. Because if my debt to income was already really close, for that $300,000 purchase, borrowing 250, and it goes up a percent, I might not be able to buy that house now.

Michelle  07:42

That's true. Absolutely.

Steve Martin Smith  07:43

So okay, Tony, you were looking at your calculator and figuring out some math for me, what'd you come up with?

Tony  07:47

I was so you know, your question was, what does 1% difference in interest rate do so... for every hundred thousand dollars,  1% of interest is $50 a month difference. So every hundred thousand. So if you're talking about a $300,000 house with rates in the low threes, compared to in the low fours, you're talking about $150 a month more for that same house, that's a lot of money over 30 years.

Steve Martin Smith  08:11

That is a lot of money over 30 years. It also it might be enough to kick you out of being able to qualify for that if you were cutting it that close.

Tony  08:19

The second part of that I want to say because it's more than just what the rate is. That's one thing that consumers think they have to ask, what's your rate? What's your rate? That's actually one of the questions you want to know, but it's not the main question. I had two buyers that were coming in, they were looking at buying $500,000 homes, they were both doing 10% down and they had credit scores in the mid seven hundreds. When I did their calculation for them and figured out what their payment was, I could have got their payment down $200 a month just by getting their credit score up 11 points. 11 points to get their credit score equaled $200 a month in payment. The reason why is two things happen. One the interest rate's based on your credit score, that's one of the things that it's based on. So getting the credit score up got them a lower rate. The second thing was they had PMI mortgage insurance on the property. That mortgage insurance went down drastically to get them up to a six 760 credit score. The two combined actually got them down $200 a month. So more of their questions should be not "what's your interest rate?" What can I do to get the best interest rate? Right and there's things that matter to make that happen that are more than just finding the right lender. It could be you that's getting the worst rate because of your situation.

Steve Martin Smith  09:35

Wow. There's a lot of power in what you just said and and I haven't heard it said that well yet. Maybe because I don't hang out with you enough.

Steve Martin and The Smiths  09:45

We are over halfway through this great podcast with Tony and Michelle Moore. You do not want to miss the next nine minutes. Before the day is over, visit GulfsideMortgageServices.com - When you call them, let them know that you heard this Real Estate Agent Man podcast. Now, back with Tony and Michelle Moore.

Steve Martin Smith  10:11

So one of the things that I had in my notes to make sure I asked, but it was later on, but it fits perfectly right now... is when people are thinking that they're going to buy a house, it's usually not just, Hey, I wasn't thinking I was going to buy one yesterday, but today I want to buy a house, right? There's usually a plan in their head, like, you know, I think by next year, I'd like to buy a house. Maybe in two years, I'd like to buy a house, there's some sort of planning in there. But they wait until the last minute till they found something they like on Zillow, before they call you or me. I'm always saying that you should be talking to a REALTOR talking to a lender as soon as you get an inkling of a thought that you might want to buy something someday. That right there is the reason if no other reason to do that.

Michelle  11:00


Steve Martin Smith  11:00

Do you find that people come to you early on? For me, it's always kind of last minute.

Michelle  11:07

It's very rare, very rare. It's usually the same thing at the last minute. If they would come up front, then it could potentially save so many issues and make the process effortless. We just had a situation where they've been employed at the same job for 15 years, but part of their income is W2 and part of their income is 1099. In their mind, that's not an issue, because they've been there for 15 years and that's just normal to them. But in the lending world... you know, when you're dealing with underwriters and money, it's a different world, if people make any sense.

Steve Martin Smith  11:43

Oh, it makes total sense. You know, people don't know what they don't know.

Michelle  11:46


Steve Martin Smith  11:46

I had a young woman recently in the last year somewhere, qualify for a mortgage, and then quit her job. Because she thought, okay, we qualified, we're buying a house, I can quit my job now and start looking for another one. Needless to say, they didn't get their house. She had to go out and get another job and wait for the paychecks to start coming in and go through that whole process.

Tony  12:10

Yeah, we have many horror stories about different things like that they do. But back to your original question...

Steve Martin Smith  12:15

Oh, he remembers my original question. I love it, when that happens, go for it.

Tony  12:18

So, you know, the first thing that everybody does, and you being a REALTOR, you know, that does a lot of business, you know, the first place they go is usually you. Which is absolutely the wrong thing they need to do. What they should do is go to a lender first, because as I mentioned to you just a second ago, we can save them thousands and thousands and thousands of dollars, if they just got prepared and ready to buy. We could show them how a difference between 3% down and 5% down makes a huge difference in their interest rate or their PMI. Or we could show them that, you know, by getting your credit score, like you know getting his credit score up another 10, 15, 20 points and how to do that, because we're going to teach them how to do that, it's going to save them a ton of money, right. So there's a bunch of little tricks that we can teach them to get them ready and prepared and what I like to call it is put them on a roadmap to purchase the house. Get them prepared so they're taking those steps to be ready. Like you said before, the majority, or Michelle said, the majority of them come to us after they found a house. Or when it's too late, we don't have time to now help you fix your credit, or teach you what to do.  Now you're stuck with - this is what you get. We don't have the ability to give you options, because this is the only product or program we can put you.

Michelle  13:31

Right, that seems to happen a lot. I think that they come to us, their credit scores are low. So then we take six months, coaching them and telling them what they should do to get those scores up. So then they can buy six months later. If they would have came to us first before they looked at 10 houses, and it would have really changed things and then they wouldn't have got their hopes up and all excited thinking that they're going to buy a house.

Steve Martin Smith  13:56

What you said about, you know that they should go to you first. I agree as long as they go to you. Alright, but I get a fair amount of people that come to me and they have already gone to somebody first like and I don't mind throwing them out there because they need the bad reviews, Quicken Loans. Right. Okay. I mean, I have had the worst experiences,  trying to help my customers get from contract to closing. It's like the easy part is finding them a house actually. The hard part is getting from contract to closing. You know, that's just one of the big institutions out there that, you know, people tend to think it's going to be easy and great, and it's just horrific. I had one earlier this year that we were five weeks in - now Quicken had given them - and I feel like I can do this. You guys really don't want to talk bad about your competitors, but I don't mind. Okay, you can talk bad about other REALTORS if you want. They came to me, they were already settled on Quicken, so okay, fine, I'll deal with it. We call Quicken and Quicken says, oh yeah, they're completely qualified, we can do this - no issues. Well, four weeks later, when we were supposed to be closing, we had to do a one week extension. We do that one week extension, we're getting to the end of that they're still not ready.  Katrina, and I really pushed them on the phone. "Are you confident you can do this by next week?" Well, no, I'm not sure we can. Okay, so they ended up going to another lender, unfortunately, not you guys. But they did have somebody else in their back pocket that they decided to go to. That person got them closed in 28 days. One of the things that I'm a big fan of is, I know that I can walk into your office, you're gonna be able to sit down with me. We can work through a problem when there's a problem.

Tony  15:45


Michelle  15:45

Yeah, I'm sure. I can't speak for Quicken, but I'm sure they have quite a few great loan originators there. But I think the problem with them is they're so big, when when you call, you're probably not going to talk to the same person.

Steve Martin Smith  15:58

Oh, you're not, you're not.

Michelle  16:00

I've never gone through their experience so I can't, I'm just going from what I've been told.

Steve Martin Smith  16:04

You've been told correctly.

Michelle  16:06

So you're never going to talk to the same person. You're just, you know, a person next in line.

Steve Martin Smith  16:10

So the last deal that I did with with Quicken was the one I was just talking about. When I spoke to them the first time I explained to them, okay, look, I've done multiple deals with you guys and the biggest beef that I have, is that I talk to a different person every time I call, so there's no relationship building there. There's no consistency. Oh, well, we've taken care of that. Now we've got this person, that's going to be your main contact. That person did not speak to me one time in five weeks.

Tony  16:38


Michelle  16:39

So where is, you know, they're giving your personal information, their banking, their social security numbers ,their driver's license, their retirement accounts? Where is it going? How many hands? Is that going through? So that's a big deal.

Tony  16:50

Well, and not even that. I know, that's a huge part of it, but to me, the way I look at it, Steve, is how much does it cost for an appraisal? How much does it cost for a home inspection? How much does it cost to get the AC and the water test? How much does it cost for your survey? I mean, when you're putting up all this money up front, and you're working with somebody who and this is not just Quicken, this can be any lender. If you're working with somebody who doesn't know what they're doing, and doesn't really give you the right guidelines and mapping of how you're gonna get to closing. If they screw up and you don't close, guess who's out that money. Your buyer is out that money, which is thousands of dollars. Then in your case where you talked about Quicken Loans extended for a total of six weeks, who paid the mortgage payment for those six weeks.

Steve Martin Smith  16:52

That was the seller.

Tony  16:56

The seller, right? So by going to the wrong places, you're costing the seller extra money, you're costing your buyer extra money. I mean, in the end, it's not good for anybody.

Steve Martin Smith  17:46

I like to tell the story, you know, when I'm referring you guys to customers about how we had that one deal. Remember, it was the million plus out in Panther Ridge that we were doing a while back. There were some concerns and some issues coming up on the part of the buyer. You know, I mean, just buying a million dollar house, you know, you're trying to make sure everything's going right.  I think that the gentleman had like seven LLCs or something. So there was just a lot, a lot of details involved in this.  I remember a Friday night that he was all worried about something I said, well let me shoot Tony a text and, you know, see what I can find out and you walked out of a lightning game to go out in the hall or wherever you had to go to actually call me. Now, Friday night, nine o'clock, lightning game, how many people who are working in any type of business are going to come out to take care of their customers. So I tell that story like every single time I refer you guys. Not trying to get you call out of a lightening game on a Friday night, but just the fact that you know, you saw my text you saw it was important, and you came out to help resolve it and make the customer feel cared for, which is what all three of us do every day of the week. We're making sure that our customers feel that they're cared for - know that they're cared for. That we are going to get you from contract to closing because you're working your business and you are right there caring.

Steve Martin Smith  19:14

What a great interview this has been. There is so much meat here that we are going to give you an entire week to digest it. Join us next week at the same time as we continue with Tony and Michelle discussing jumbo loans. Great loans for snowbirds, current scams and free money for first time homebuyers. Yes, it's real.

Steve Martin and The Smiths  19:35

Real Estate Agent Man, Real Estate Agent Man, write down his cell phone number and do not forget his name.

(941) 894-9800

Steve Martin Smith dot com

Steve Martin Smith is a licensed Florida REALTOR with RE/MAX Platinum Realty and Steve Martin Homes Group


Tony Moore NMLS NUMBER 220640


Michelle Moore NMLS NUMBER 223691