Podcast: (Pt 3) 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 6  ( 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. 

As we continue our conversation we will unravel the mysteries of interest rates, and get the truth about first time homebuyer programs.



Tony Moore, Michelle Moore, Steve Martin Smith

Steve Martin Smith  00:01

You are tuned into the Real Estate Agent Man Podcast coming to you from Sarasota County, Florida.

Welcome to the last of three episodes with Tony and Michelle Moore from Gulfside Mortgage Services. We've been discussing secrets of real estate that should not be secrets. Today we will unravel the mysteries of interest rates, and get the truth about first time homebuyer programs.

Let's talk about first time homebuyers, because I put that one off earlier to talk about jumbo loans, investment properties, snowbird houses, and whatnot. The first time homebuyer thing, my favorite so far has been being able to use the USDA loan. That's what my first podcast was about, the way I got them into that house for $1,700 out of pocket, with a combination of including the closing costs into the mortgage, and then 100% financing. That's not the only option out there. What other types of opportunities are there for first time homebuyers? Before we even do that, what is the definition of a first time homebuyer as far as mortgages are concerned?  I know it doesn't necessarily have to be that you've never bought a house before.

Michelle  01:20


Tony  01:20

I love this question. There's two reasons why. A first time homebuyer is considered somebody who has not purchased a home, or owned real estate, in the last three years, any type of real estate, been on title at all. That's what defines a first time homebuyer, but the reason I love this question is because lenders throw around this term "first time homebuyers" like it's some big special thing, and they have all these special advantages to being a first time homebuyer. Well, to be honest, there's only two loan programs out of hundreds that are for first time homebuyers only, only two loan programs.

Steve Martin Smith  01:55


Tony  01:55

Two. One is a 3% down program, conventional loan, that says one of the borrowers on the loan application must be a first time homebuyer. That's all it is. Well, FHA, USDA, 3 1/2% down programs, 5% down programs, 100% programs, 100% VA programs, all these programs that are available out there, it doesn't matter when you owned a home, or if it's been within three years, but lenders throw this term around there and people think there's a program. I get daily calls,  "Do you do first time homebuyer programs?" Yes, but there's way more than that. And these programs are better usually then that one. So it's kind of a word that people just throw around more than it's really a thing.

Steve Martin Smith  02:49

The only positive I see in that is because as somebody who has never owned a home before, a lot of times, there's so much fear of the process. You just don't think you could even do it. To hear that there are first time homebuyer programs gives them hope. At least at that point, they are making the call to me or you and we're able to tell them, yes, there's probably going to be a program that we can put you into. In fact, there will be a program. Whether you're ready for it today or not, is what we have to figure out.

Tony  03:21


Michelle  03:22

Right. Typically, when they're talking about the first time homebuyers, they're asking about the bond programs and so forth. The bond programs aren't bad, but there are so many other loans that will give you a better loan than that bond program. The bond program, it gives you so much money for free, maybe. It will be a lien that you will have to pay back if you don't sell the property within 30 years. After you sell the property, you have to pay it back. The interest rate on those are so much higher. If you put them in an FHA loan and just have the seller pay closing costs, or a 3% down loan and have the seller pay closing costs, you get a great rate. That bond program sounds good if they're getting a $7,000 credit, but if it's costing them a point and a half higher in their interest rate, that's not a good loan.

Steve Martin Smith  04:12

Oh, they're totally paying for that.

Tony  04:15

The good one that there is, as long as you can get it, is what's called the SHIP funding  through Sarasota County.

Steve Martin Smith  04:22

SHIP funding?

Tony  04:24


Steve Martin Smith  04:24

Not to be confused, na - I won't say it.

Tony  04:25

Yes, exactly. The SHIP funding through Sarasota County, Charlotte County, and Manatee County, when there are funds available, they'll give you up to $20,000. This is money that they collect through intangible taxes, which is part of the tax you pay at closing. They collect this money and it's available for people when they have the funds available, and it's no payback on this.

Steve Martin Smith  04:50

So I'm throwing out a scenario here. I tell my customers, okay, I know you're not ready right now, or at least you think you're not ready, but call Gulfside, let them know what you're trying to accomplish, and to please notify you as soon as they find out that some of those funds are available.

Tony  05:08

What you actually have to do is, you have to get with the county, go through their classes. Then once you're approved for it, they notify you.

Steve Martin Smith  05:16

Oh, okay. So see, I wouldn't know that if I wasn't talking to a lender.

Michelle  05:19

Yes, and it's first in, first out. So you could take your classes in two months, but if you don't have your financing ready and close on time, and the person in front of you does, they get it first. If the program runs out of funds, you could go through the whole process, and then all of a sudden, they don't have the money. It's very, very important, the second they open it up and have money, you have to get in.

Steve Martin Smith  05:43

I'm going to make this really easy for the podcast listeners. If you think that you're going to want to take advantage of free money to go towards buying your house, you can forget everything else you've heard in this podcast, and call Gulfside Mortgage, and ask them how to do this.

Steve Martin Smith  06:01

You will teach them. See how easy that is. I don't have to remember everything, I just have to remember who does know everything, and send them to them. I learned that a long time ago.

Tony  06:01

We will teach them.

Steve Martin Smith  06:13

We're almost halfway through our third episode with Gulfside Mortgage Services. You do not want to miss these final 10 minutes of life changing wisdom. Remember to visit GulfsideMortgageServices.com, and when you call them, mention that you heard this Real Estate Agent Man Podcast.

Steve Martin Smith  06:37

And now our conclusion with Tony and Michelle Moore.

Steve Martin Smith  06:41

I had mentioned earlier that we were going to talk about what's happening in the interest rate world before we were done today. Since we're about to finish up, I figured we better hit that topic. So where are we at on interest rates, and where have we been? Where do you think we're going?

Michelle  06:58

Tony's favorite topic!

Tony  07:01

I study interest rates. It's part of my job. It's like, if you're a financial advisor, you study the stocks and bonds. We do the same thing. We watch them and we have different apps and things that that show us what's happening with rates. The one thing I love to tell everybody is that interest rates have gone down since the early 80s. They've never gone up since the early 80s. Every time we turn around, they say new record lows, new record lows, new record lows, a lot of people want to know where interest rates come from, and how they work in a lot of things within the government: inflation, the deficit. The one thing I can tell everybody is, if our deficit keeps going up, guess what interest rates are going to do, they're going to keep going down. Right now, what we have is, we see inflation is going up. With inflation going up, that means our rates have to go up. By raising interest rates, it slows down inflation. They're thinking that rates right now, which are down in the low threes, if not in the twos, for 30 year fixed with no points that we see in that range. We're thinking that they're going to go up about a half point, maybe three quarters of a point, sometime next year. We don't know exactly what's going to happen, but they have to slow down inflation. If inflation just starts going wacko, the US dollar's worth nothing. Right? We can't have that, we can't have the US dollar worth nothing. So they raised up the rates a little bit, but what does that mean? That means we still have rates in the threes, Steve, which are wonderful. There's nothing wrong with that.

Steve Martin Smith  08:27

I bought my first house in 1987. My interest rate was 12%.

Michelle  08:32

I've heard that a lot. We've been in the business for 20 years, we've never seen that.

Steve Martin Smith  08:36

Well, and you say that they've been going down? And I've heard of people who had like 18% interest rates in the 80s.  I'm assuming that when I got 12, I was doing good compared to the people who might have bought a house in 85.

Tony  08:49

Right. And I'll tell you, you know, just because we're going to see a tick up on interest rates, it doesn't mean that they're not going to continue to go down. It doesn't mean in three to five years, we're not going to see rates in the twos. The one thing that's common that we've not resolved since the early 80s is our deficit. The US deficit is raising year after year after year. As that deficit goes up, our bond market is crashing and going down, and in return, they have to lower the interest rates in order for people to spend money. You know, a lot of people talk about interest rates and what's going on in other countries, and it's not uncommon for them to have negative interest rates. That's not on our interest rate, that's not on the the 30 year fixed mortgage rates. That's on the prime interest rate, which we've seen nearly get down to zero this year. We're down to half point, point 4%. And that that's the rate that we might actually see at some point get to a negative. And yes, that means that they'll pay you to borrow money. That means that the government pays people to take money from them.

Steve Martin Smith  09:47

Has that ever happened in our history?

Tony  09:50

In the US we've never seen under this, just what we've seen this year. This is the lowest our bond market's ever been since the beginning. Over in other countries, the negative interest rate in China has happened. They have people in Iceland, where you borrow $300,000, and you only have to pay back $290,000.

Steve Martin Smith  10:08

How does that make sense in any economy?

Tony  10:11

Well, the reason why it makes sense is because they have people spending their money. If you're not spending your money, it's not helping the economy. They would rather you spend your money at a loss to them, then not spend your money at all. That's what happens. It gets the money into the economy.

Steve Martin Smith  10:24

Yeah, you've spent a lot more time thinking about this than I have. Is this what he does at night, Michelle?

Michelle  10:29

He has a true passion, he lives and breathes that stuff.

Steve Martin Smith  10:33

That's awesome. I can appreciate having that kind of passion for something. At this point, let's do a wrap up. If you met somebody today, somebody just walked in the office that doesn't know anything about getting a mortgage, what would you tell them for them to get started?

Michelle  10:50

If you were to come to me and say, "What do I need to do to get a mortgage?" I would say first thing you have to do is start getting your paperwork together, start getting your pay stubs together, your tax returns, your bank statements, any retirement accounts together, and then give us call and make an appointment. We'll take an application and see what we can get you approved for, we can go over options, down payments, monthly payment options, different programs, that's kind of how you start. It gives them an idea of what their monthly payments are going to look like, how much cash they need to close, what they can borrow, how much house they can get. Being organized with your paperwork is the key. At least start getting your paperwork together.

Steve Martin Smith  11:34

That can seem really overwhelming to people who don't keep track of their stuff, especially in the digital age where people don't even have bank statements coming to their house anymore.

Michelle  11:46

I tell everybody, you might get frustrated, but I promise you, we'll get through it together. We have to have it, no matter what, we have to have it, so we'll get through it together.

Tony  11:56

See, Michelle's a little bit different than me, as you can tell, she's the paperwork person and I'm not. What I would say would be completely the opposite.

Steve Martin Smith  12:05

That's good, though.

Tony  12:06

You don't have to gather any of your paperwork. We're not worried about the paperwork. Even if you're not, let's say you're not in our area. We're in Sarasota County, this is where we do business, we love to work with people here. Let's say you're buying a house somewhere else, the first thing I'm going to tell you is go to the Chamber, go to somebody and find a trusted mortgage company. Find out who you can go to and who you can trust, and let them guide you, and get there as early as possible. We spoke about that earlier, you know, you've got to be ready. If you don't get there early, if you don't find somebody who can actually guide you and get you through that, we have the tools. Guess what, we're in Florida, we have so many people buying houses here that aren't home, we have the tools to help them get their documentation, we do things called account check where we get their bank statements online, they don't even have to have their bank statements. Usually nowadays, we don't even need tax returns. Unless you're a complicated borrower, those things we can usually get around. It's making sure that you have a really good person that you can trust, that you can work with, that can give you the information that you need, and put you on your roadmap to make sure you're ready. As you can see, me and Michelle are quite different because she's on the paperwork side. I avoid the paperwork, and want to just figure out what the best program is for the person and how to help them the best.

Steve Martin Smith  13:17

As Tony is saying, it's not necessary to do all that right away, let's just start having the conversations, let's find somebody that you can trust and sit down with. But for Michelle, I'm translating to the world. What Michelle is saying is if you can get all that done up front, you're going to have to do it sooner or later anyway.

Michelle  13:33

So the only thing they have to worry about is just packing. That's it.

Steve Martin Smith  13:37

Something else that I thought of, you are in Sarasota County, that's where you probably do the majority of your business, I'm guessing? Is that true? Do you do loans throughout all of Florida? Do you do loans in other states for people? How far is your reach?

Michelle  13:52

We are only licensed in the state of Florida. We lend all over Florida. We have a couple loans in Tampa right now. I think we have one in Tallahassee, but it's not our normal,  it's usually a past client that maybe moved away. Yes, we're licensed just in the state of Florida.

Steve Martin Smith  14:10

As much as I do promote the benefit of being able to walk into an office and sit down with a human being, as opposed to being passed around from person to person to person over the phone, it's certainly within your realm to be able to help people who aren't here. I figured there's gonna be people listening to this that are like, wow, I really like those two.

Michelle  14:32


Steve Martin Smith  14:33

They might be in Miami or Jacksonville or whatever. You can completely help them as well.

Michelle  14:39


Tony  14:42

Our specialty is our Tri-County. We like Sarasota, Manatee, and Charlotte Counties. Those are the counties we try to work in, we try to focus on and just for what you said: we want people to be able to come into us face to face and sit down. When it gets stressful, when there's a problem, when they don't understand something, sometimes it's hard to explain over a Zoom call, or over a phone call, so we have them come in.  When we're within an hour drive, it's not so bad to drive in and get everything situated and rectified face to face to make sure everything's okay. On the flip side, yes, we can deal with somebody all across the state of Florida, and we do, we do a lot, but it's not our norm. Our normal is local. Our corporate office is licensed in 13 states also, so we're licensed in the Carolinas and Texas and Georgia and up to Kentucky. We have quite a reach that we can go to, but we wouldn't handle those loans, our corporate office would.

Michelle  15:37

One thing I would like to add to that Tony didn't mention, about what I think makes us better than the banks, is the banks specialize in all different things. They do checking, savings, money markets, IRAs, mortgages, HELOCs, we don't do any of those. We only do mortgages, that is what we specialize in, and that is what we perfect. I think that's a big huge thing that separates us as well, as that's the only thing we specialize in.

Steve Martin Smith  16:04

That that makes a difference. I've tried to do that in real estate too. People have, I was asked yesterday actually, by somebody local here, why I do not get involved in commercial real estate. It's because it's a whole other animal.  I've worked really hard at being excellent at helping people buy and sell their homes that they live in. It might be a Snowbird home or something like that.  I don't even make a habit out of working with investors. I'm not trying to help people find the homes to flip and all that kind of stuff. All of that distracts from what I'm trying to be excellent at, so I can appreciate what you're what you're saying.

Tony  16:42

We're in the same boat. We won't do commercial loans either. We have the ability to, we're licensed to. but we specialize in just residential lending, because they're such different animals.

Michelle  16:53

We want to make dreams happen.

Steve Martin Smith  16:55

Well guys, thank you. This has been absolutely awesome. Let's say goodbye to everybody.

Michelle  17:00

Bye! Thank you for having us.

Tony  17:03

Thank you Steve.

Steve Martin Smith  17:06

Real Estate Agent Man, Real Estate Agent Man. Write down his cell phone number and do not forget his name. (941) 894-9800 SteveMartinSmith.com

Steve Martin Smith  17:25

Steve Martin Smith is a licensed Florida Realtor with REMAX Platinum Realty and Steve Martin Homes Group.

Tony  17:34

Tony Moore NMLS NUMBER 220 640

Michelle  17:38

Michelle Moore NMLS NUMBER 223 691


Steve Martin Smith has sold more Sarasota County homes than 98% of the area’s REALTORS from January 2015 through August 2020. Selling $1,000,000+ estates from Panther Ridge in Manatee County to condos in Punta Gorda, he is truly a tri-county REALTOR. Originally from the Detroit area, Steve discovered Sarasota County in 1983 and then moved his young family here in 1998. In his life before real estate, Steve worked corporate business management positions for 25 years while simultaneously volunteering in youth and family ministry roles with his wife Katrina. Today, along with their adult children, they enjoy helping families to realize their goals and dreams. Steve also fancies himself a song writer and plays guitar whenever he gets the chance.

*as recorded by Stellar MLS for the period of 1/1/2015 through 8/19/2020