EP #3 | Tips and Tricks in Today’s Mortgage Market
Sabrina Schmitt, a lending expert from Prime Lending, discusses the current state of interest rates and the housing market. She explains that interest rates are influenced by bond markets and the decisions of the Federal Reserve. While rates have been increasing, there is anticipation of a rate cut in the near future. Sabrina also highlights the various loan programs available, such as FHA, USDA, and VA loans, which offer different benefits and requirements. She emphasizes the importance of being prepared to purchase a home by working on credit, saving for a down payment, and seeking professional guidance. The conversation discusses the biggest mistakes people make when getting a home loan. The three main mistakes mentioned are depositing cash during the loan process, co-signing for someone else, and taking on new debt. It is important to avoid these mistakes to ensure a smooth loan process. The conversation also emphasizes the importance of getting information and seeking help when considering a home loan. It is important to understand the process and make informed decisions.
Transcription
Chris Hall: So let’s just, like, let’s just hypothetically alk through, no interest rate cuts. Like, let’s just say they get some bad news again. They don’t like it. They don’t wanna do rate cuts. Kinda like what are you doing with your clients right now to kinda make sure that they still don’t sit on the sidelines?
You know? Like, that’s the one thing I’m noticing is a lot of people sitting on the sidelines. And I just think Waiting.
Sabrina Schmitt: Waiting. Waiting for this to happen. Yeah. I mean, one of the big things we have here at Prime Lending is that we have a free rate redo. So when we close your purchase, we’ve got 24 months, so obviously 2 years, to do a completely free refinance for you.
So whether that happens in 3 months, 9 months, a year and a half, however long it takes for this interest rate to go down to a level that makes sense for you to refinance. I mean, if you’re in 6a half and it goes to 6a quarter, let’s not use the free refi to do that. Let’s wait till we get 5a half or 5a quarter where you’re really gonna see some substantial savings. But, yeah, it’s completely free rate redo that PrimeLending offers. It is a one time thing, so it’s not gonna be, oh, I wanna get down to this, and then it dropped to this, and then it dropped to this.
Chris Hall: Hello. This is Chris, and welcome to the Reading Financial Advisor Podcast. Today, I have a very special guest and good friend of mine, Sabrina Schmidt. And so I want to let her introduce herself and tell you a little bit about yourself. So thank you for being on the show, Sabrina.
Sabrina Schmitt: Thanks, Chris. How are you? Yes. I’m Sabrina Schmidt with, Prime Lending and, do home loans and, helping people get financing with their, homes and also refinancing. So thank you for having me.
Chris Hall: Thanks for being here. I really appreciate it. So, you know, you and I are good friends, and we talk quite a bit. But go ahead and tell the listeners or the viewers a a little bit about yourself so they can understand where you’re coming from.
Sabrina Schmitt: So I’ve been with Prime Lending a little over 15 years now, and I’ve been in lending for 20 years. I just love helping people. Before getting into lending, I was in the air force in imagery intelligence. So helping veterans, is definitely a passion of mine. And, yeah, I just I I love being able to meet with clients, see what their need is, and then be able to fit that need with getting them into a home and and figuring out their financing.
It’s been more difficult with interest rates going up. You know? Things were a whole lot easier a couple years ago when interest rates were 2a half and and 2.75, whether it be buying a home or people looking to consolidate debt and and refinancing. You know, that was a a really fun time in this market. Things are a little bit more challenging now, but a lot of the programs we have for first time homebuyers and a lot of the things that we’re doing here at PrimeLending are being able to get lower interest rates than what current market is for those first time homebuyers.
Prime Lending’s come out with some special interest rate programs too to be able to help with this because, as you know, being in the market, it’s out of your control. So, you know, we’re trying to do what we can, to be able to to help families and and help people looking to buy and, you know, just moving forward. So we’ll kinda have to see where rates go, but, they are expected in the next coming months to come down. But that was also said at the beginning of this year. So, I kinda have a I’ll believe it when I see it, mentality when it comes to rates.
I don’t wanna give anybody false hope. You can only pass along the information you have, but it is one of those things that, they are expected to come down. However, right now, we’re offering some great programs and, things to be able to help homebuyers.
Chris Hall: Right. Can you explain to people why rates are so high right now relatively speaking to a couple years ago?
Sabrina Schmitt: You know, it’s a great question. It’s a great question. Really, you know, the interest rates are derived from bond markets. And when, you know, bonds are high, interest rates are low. When bonds are low, interest rates are high.
And, you know, the feds, you know, for inflation decided, hey. We’re gonna, you know, increase the, you know, prime rate, which doesn’t always affect our day to day for the 30 year fixed, but it definitely overall affects interest rates and what the market does. And so, yeah, when they don’t cut rates, it’s not that we don’t necessarily have a couple weeks where rates go down just because the feds didn’t cut rates, but it’s not a big enough move in the market shift to really see those rates, say, go down into the 5 percents or 4 percent. You know, we’re gonna have to see the feds make some rate cuts in order for it to trickle down to our fixed rate market.
Chris Hall: Right. And then you had mentioned that there is a potential rate cut coming. I saw that they talked about something possibly in September, that there might even be a couple rate cuts this year. I know personally, you know, because I’m on the other side of it. Right?
I’m on the bond side of it. So when interest rates are high, our bond prices are low, and we’re also sort of waiting for interest rates to go down so the bonds can recover and and do well. One of the things that’s nice about my industry too though is that we actually can, you know, take advantage of the situation. So what I mean by that is, you know, you can actually go get a single bond right now that’s paying, you know, roughly 7%. And so that’s a pretty phenomenal return on your investment, for, you know, a 20 year, 30 year bond.
And then hopefully, again, as these rates go down, those bond prices will actually go up. And so not only will you get the the good interest rate, but you’ll also get the the growth of the bond.
Sabrina Schmitt: Higher yield. Yeah.
Chris Hall: What I’ve noticed is, like, same thing. We were you just kinda mentioned it that we talk about, having, you know, like, hey. The rates are gonna come down. We were expecting March. Is that right?
Sabrina Schmitt: Mhmm. I was hoping March, April that we’d, you know, see something into the, at least, you know, higher fives by by the, you know, springtime.
Chris Hall: Right. And that didn’t come that didn’t come. And and I know a big portion of that is the inflationary side of things, but, now you you’ve obviously followed this thing pretty closely. So do you you said you’ll believe it when you see it, but what what are your thoughts on September being in a rate reduction at this point?
Sabrina Schmitt: You know, I I think it’s I think it’s going to happen this time, you know, if the feds will it. And I think that it’s gonna be very received, meaning that I I really think we’ll actually see some relief. I don’t think it’s just gonna go, hey. You’re at 6a half. Now you’re at 6a quarter.
I really do anticipate seeing us get a good drop into, say, the mid 5 percents, is is really what our company and and what we’re all kind of anticipating from this. So
Chris Hall: Right. So so let’s just, like, let’s just hypothetically walk through, no interest rate cuts. Like, let’s just say they get some bad news again. They don’t like it. They don’t wanna do rate cuts.
Kinda like what are you doing with your clients right now to kinda make sure that they still don’t sit on the sidelines? You know? Like, that’s the one thing I’m noticing is a lot of people sit on that sideline. And I
Sabrina Schmitt: just think to my point,
Chris Hall: you know
Sabrina Schmitt: Waiting waiting for this to happen. Yeah. I mean, one of the big things we have here at PrimeLending is that we have a free rate redo. So when we close your purchase, we’ve got 24 months, so, obviously, 2 years, to do a completely free refinance for you. So whether that happens in 3 months, 9 months, a year and a half, however long it takes for this interest rate to go down to a level that makes sense for you to refinance.
I mean, if you’re in 6a half and it goes to 6a quarter, let’s not use the free refi to do that. Let’s wait till we get 5a half or 5a quarter where you’re really gonna see some substantial savings. But, yeah, it’s completely free rate redo that PrimeLending offers. It is a one time thing, so it’s not gonna be, oh, I wanna get down to this, and then it dropped to this, and then it dropped to this. So you do kinda have to, you know, pick your timing on what’s gonna make sense, take advantage of it.
And if rates really did continue to drop further, you know, say, you refinanced it 5 a quarter and then they are down to 4 a quarter, well, you know, it might be worth looking at actually paying for a refinance at that point when you took advantage of the free one. But, you know, again, we’ll cross that bridge when we come to it. It would be a great problem to have. Right.
Chris Hall: So I know.
Sabrina Schmitt: So, you know, we’ve got that free rate redo. I just wanna touch on one other thing. Now, with PrimeLending so now I mean, right now, we’re, July 19th today, until August 31st. We are actually offering a whole percentage point off the rate for 3 loan types, which are a VA loan, a USDA loan, and an FHA loan. So those government loan programs, we’re offering a whole percentage point off the rate for buyers who lock in and are in escrow between now and the end of August just to give them a little relief.
Some people have to move, you know, for school. Some people have to move because they’re in a rental and, you know, somebody’s selling. They don’t have time to wait until, really, honestly, September or October or whenever we’re hopefully gonna see this rate drop. So this at least gives them the relief that they need now instead of having to wait if they can’t wait.
Chris Hall: So how long does that rate drop last?
Sabrina Schmitt: So the rate drop that PrimeLending is buying down the whole percentage point, it is a lender paid buy down, so it’s not anything out of pocket from the borrower. That is good for a full 12 months. So if interest rates and this is just an example. If you’re looking at a USDA loan, which is a 100% financing and the rate’s 6 a half percent right now, you’re gonna get 5 a half percent. Okay?
We’re gonna close your loan. For the next year of payments, you are gonna have a 5 a half percent interest rate and payment base. If rates don’t drop, if we haven’t done the free refinance and and take advantage of the rate redo, then year 2 through the next 29 would go to the 6 a half percent. But you would at least would get that 12 months, 1 year of relief at the 5 a half percent, with the PrimeLending special offer that they’re doing.
Chris Hall: Right. Right. Okay. And so, you know, it looks like the market, like, here locally, I mean, it’s obviously different all across the nation. But I know that a lot of the markets have stalled a little bit.
There’s a little bit more of inventory now. Things are lasting a little bit longer. People have been kinda waiting for prices to come down, which doesn’t really seem like it’s happened. But but one of the things I feel like is kinda like we’re on the the cusp of is seller concessions. So what I’m thinking is, like, you know, you’ve got this rate buy down, and then we can get maybe a seller concession that also buys down the rate a little bit too.
I mean, so if you stack those on top of each other, I mean, realistically, what kind of rate could someone get if they could a seller concession and your guys’ rate buy down?
Sabrina Schmitt: You know, Chris, that’s a great question. Kinda like asking what somebody’s rate of return are they gonna get. You know? Oh, so much depends on what we’re looking at for the loan program, the loan type, the credit score, things like that of of truly what their initial interest rate’s gonna be. And then it’s gonna be a day to day basis on truly what a buy down is.
When you talk about a lender paid 1% buy down, it doesn’t matter because we’re actually covering that, but those costs can vary. So if you’re gonna go from, say, 5a half to, say, 4a half, it might be 2 points on an FHA loan, might be only 1 point on a USDA USDA loan, might be 4 points on a conventional loan to get down that low. And so much would be dependent too. Is it a manufactured home versus a single family, maybe a duplex primary resident, credit score 740 versus 680? So all those are gonna be dependent on what actually the cost is to be to to get the buy down, but there’s always a sweet spot on the rate sheet.
And when I say that, there’s that sweet spot that makes sense. It’s like, oh, a point gets you this much. The next point only gets you this much. It’s like, well, then let’s just stay here for cost. You know?
Let’s get it down this huge pay the one point and get it down this huge rate, but to do another point only gets you an 8th or a quarter of a percent. Like, no. No. No. Let’s that that doesn’t make sense.
Let let’s stick here. So there is those sweet spots on the rate sheet that you can see of, you know, just common sense, truly.
Chris Hall: I guess probably the the question that I guess I was asking is, like, those things are stackable, though. Right? We can we can Absolutely.
Sabrina Schmitt: Absolutely. Top
Chris Hall: of what you’re doing.
Sabrina Schmitt: Yeah. Yeah. And so, like, if we’re gonna do that lender paid buy down, and I’ll go back to the 6 a half percent just because it’s even. But let’s say we’re doing the FHA, and it’s 6 a half percent, and you’ve got a seller credit, and we buy it down to, say, 6 a quarter, 6.125. Okay?
And maybe that costs a $1,000 or $1500 out of the seller credit. We got you down to 6.125. Well, now we have the 1% lender paid buy down, so now you’re gonna be at 5.125 for the 1st year. So we can stack it that way. So yes.
Great question.
Chris Hall: Okay. Good. Thank you. So, the other thing is, like, you’re mentioning FHA and, USDA, and and I know that these are, like, acronyms that you know all about. Can you kinda just give us little differences between those types of different loans and, like, what would
Sabrina Schmitt: be the difference between what’s going on? You know what? I I wanna mention there’s truly PrimeLending can do everything. We’ve got so many loan programs. So, yeah, I mean, conventional loans are Fannie and Freddie.
But, yes, what I’m talking about with this specific loan program would be FHA. FHA is Federal Housing Administration, it is. A government loan. Typically, it’s 3 a half percent down. They allow for lower credit scores down to 580.
And, you know, you can buy a duplex, even a 4plex. If you’re living in one of the units, you can get that duplex, 4plex, whatever, with just 3 a half percent down. So there’s some definite benefits for an FHA loan. USDA, again, another government loan program, but they have actually a 100% financing. A caveat to USDA is that you gotta be outside, a large city limit.
So for instance, us being in Reading, you’d have to be outside Reading City limits. Anderson, Cottonwood, Shasta Lake, Palisidro, Red Bluff, Corning. I mean, continue down till you get to Chico and you get to Sacramento. All those areas qualify. So it is a rural housing development loan.
So that’s USDA. And then VA, I think a lot of people know what VA is. So VA is a veteran’s loan. You can be active duty. You can be a veteran, but that’s a 100% financing.
PrimeLending has 0 lender fees on our VA loan, so that is always helpful. Plus, obviously, we’re doing that 1% buy down too. So that’s one of my favorite loans to do. So
Chris Hall: Yeah. I was gonna say, you know, being a former veteran yourself, you know, being in the military yourself, you know, I I know that you really like doing veteran loans. I think it was, you know, probably, you know, after knowing you for, like, a year that I knew that you guys actually did those with no costs. And so Mhmm. What does that what does that look like?
What does that mean no costs? Because I think that there’s a lot of lenders out there, and I don’t think that’s something that’s a program that’s
Sabrina Schmitt: very often No. No. We’re we’re one of the only lenders that offer no lender fees. So our lender fees consist of about 1500 in processing costs, and that doesn’t go to me. So PrimeLending, you know, pays pays me, but the actual loan processing when you go to get a loan through PrimeLending, a part of your closing cost is about 1500 for us to process your loan.
So on a VA loan, those processing costs are waived. You’re still gonna have title and escrow fees, which are part of closing costs, and appraisal fee, which is part of closing costs, But the actual lender processing cost for us to originate and and close your loan and and get everything done for you, those are waived for, VA loans for veterans.
Chris Hall: Okay. That’s great. Mhmm. So, you’ve mentioned appraisals. And so have you seen any major change changes in appraisals?
Like, are most of the the loans you’re coming in for, are they appraising at the value that it was being purchased? Are they appraising for a little bit more, a little bit less? Like, what’s the standard at this point?
Sabrina Schmitt: Yes. You know, it it’s it can be a little all over the board, truthfully, Chris. You know, I’ve seen I’ve seen things actually come in a little lower just because it was a desirable house and there were multiple offers. And so, you know, the value just wasn’t there even though it was a great house. It just you know what I mean?
The the appraiser couldn’t get what the purchase price was actually ended up being because there was so much, desire and competition to get the house. And then I’ve seen it also flip. Yes. A lot are coming in at purchase price value, but I’ve seen it flip too where, you know, it’s a great deal, and somebody’s getting a great deal for the property because people are just wanting to, you know, move on with life and and willing to, you know, take a deal and and willing to get things done sooner than later. And so I’ve seen it come in at value, you know, 15, 20 grand over repurchase prices.
So it can it can kinda go both ways really depending on the property. And in all actuality, that’s typical for any market, though. Where
Chris Hall: Sure. It it at the You know? I guess the reason I was setting the temperature on that was because I remember very you know, right before the 2008, you know, whole debacle with real estate in the market and everything like that. Like, you could purchase a house for almost anything, and they were gonna find a way to make sure that it appraised for it. Do you remember that?
Like, it was like, this house
Sabrina Schmitt: Yeah. They they put some layers they put some layers on appraisers to make sure that doesn’t happen. I mean, once an appraiser submits a report, they actually run it through an automated system to make sure that they have used the most accurate comps for that property, that they haven’t you know? And if they didn’t see one that closed a month prior and they didn’t use it, they’ll go back to the appraiser and say, hey. This one, 4 doors down, you didn’t use.
What what’s going on? Oh, oh, okay. Half of it was burned. We didn’t know that. It doesn’t show up on our end.
Okay. Got it. Thank you, appraiser, for explaining it. You’re right. This isn’t a value you know, a viable comp.
So yeah. But they will go back to them and and basically look over their report with an automated system. So you can’t, you know, necessarily skew things on value so much like it was in in previous years.
Chris Hall: Right. I I thought so. I was I was wondering because, you know, it seems to me like the prices have kinda, like, stabilized, and, you know, I kinda thought that they would continue to maybe even drawback a little bit. That doesn’t seem to be the case for the most part. I mean, I know that there’s some like I said, it seems to me that most of the things that are happening in the market are, like, seller concessions.
In other words, like, the purchase price is the same, but their seller’s gonna give us the money back, you know, for to write down the rate or to put a new carpet or something to that. Right. Right. The the rates the the average price per square foot seems to kinda just be holding steady. And I just wanna know if the appraising was still kind of, like, you know, doing that because like I said, back in the day, you could you could buy anything for anything, and the appraiser was like, we’ll make it work.
You know? And that just seemed, you know, to me, that seemed like an error, and it’s it’s good to know that you guys I mean, that system has fixed that. So
Sabrina Schmitt: Well and and there is the price per square foot, you know, but there’s a lot of other factors that go into an appraisal such as the condition and, you know, the amenities and the property, the acreage, and the location. You know? So there’s there’s a lot that actually goes into value, you know, above and beyond that square footage.
Chris Hall: Right. Right. Nice. Okay. So, let’s ask you this question.
What are the things that people can do to sort of get themselves ready to purchase a home? Because I know that people are way on the sidelines. I’ve often encouraged people if you if you’re looking and you’re thinking that you should be doing, and then, you know, that way you’re ready to jump when it’s time to jump. So what what are some things people can start doing right now to get ready to be in the queue when they’re ready?
Sabrina Schmitt: And and that is a great point. Great question. Even if you’re remotely like, you know, I might wanna buy next year or maybe in 2 years. What should I do? It’s better to sit down and meet with me, or or let’s at least get things together so we can road map and have a game plan and you have the information now.
You know, it’s sometimes people think I need to work on my credit or I’m not gonna be able to until I get my raise or they they’re worried that they’re gonna hear me say no. And that’s not my job to say no. My job is to help you get to where you wanna be. So if you can only qualify for blank amount, but you wanna qualify for this higher amount, okay. Let’s figure out how to get there.
You know, if we’ve gotta work on on credit, let’s not put our heads in the sand and just be like, oh, I’ll wait till my tax return, and I’ll try to do this. No. Get the information of exactly what you need to do. Don’t try to do it yourself. Get the information.
And that way then I can tell you, okay. You know, just do this. Just do this. Leave this alone. Leave that alone.
And and then they know what to do. And and I’m happy to help people be able to structure a 1, 2 year, 1 month game plan of of getting into a home and, you know, just getting a better financial situation, whether they buy or they don’t buy. You know? I’ll help them with credit and and go over income, and, yeah, we’ll just come up with what needs to be done. And it’s just better to do it sooner than later now, preferably, so that that way you know what to do.
Chris Hall: Well and, like, I think you had mentioned, in fact, I know you mentioned that somebody one of the programs had, like, a 580 credit score.
Sabrina Schmitt: Mhmm.
Chris Hall: And so, you know, I’ve talked you know, as a financial adviser, people often will call me and be like, hey. Can I talk to you about my finances? And and that’s not really what I do, but I usually end up talking to them anyway. You know, and trying to give them some guidance and stuff like that. But, I mean, 580 is a is a fairly low score.
So it’s a beautiful
Sabrina Schmitt: So VA VA and FHA both allow for 580. And when and when I say 580, yes. If you’ve got a 580 credit score, more than likely, you know, I’m gonna be able to approve you, and we’re gonna talk about what to do. You just you also have to have compensating factors, though, that you don’t have to have if you’ve got, say, a 620. So at a 5.80, when you’re looking at these loan programs, they wanna see that you’ve got a little bit in savings or they’ve they’ve got an investment account or something like that, a fallback.
Not even that you’re using that money, but just something that’s gonna be there just in case. So if your payment’s gonna be, say, $2, they might wanna see that you have $6 in a 401 k or a savings account or something like that, 3 months of payments to be able to fall back on as reserves. You know, compensating, you know, factors. Hey. Income’s increasing, not decreasing.
So, you know, there’s there’s that too. So, yes, they allow for lower credit scores, but they’re still gonna make you write a letter of explanation of how it got there. You know? Was it a medical surgery? Was it something that, you know, happened to a family member or a child?
You know? And there’s definitely a lot of reasons divorce of, you know, maybe why somebody has that credit score, and then what they’re doing, you know, in the interim to bring that up and and how it’s a onetime event that that caused this, not I just didn’t see the bill. Like, we didn’t want to you know? Yeah.
Chris Hall: Yeah. So what would you say, like, are the biggest, like, three mistakes that people make when they’re doing a home loan?
Sabrina Schmitt: Doing a home loan or before they come to get prequalified?
Chris Hall: Good question. Yeah.
Sabrina Schmitt: I’ll I’ll go with actually, I’ll go with when they’re when they’re in contract. Mistakes people can make is depositing cash, while we’re in the home loan process. You know, they might want to, you know, use some money and go, oh, you know what? I’m gonna go deposit that 6 grand, 7 grand I’ve got into the mattress. Well, it’s gonna show up, and then we it’s it’s unverified.
So if you wanted to use that 7,000 for something on a purchase, it needed to have been done 3 months ago, so we have 2 months of clean bank statements that don’t have a large cash deposit. So that that’s one that comes up. Another one would be cosigning. I think people sometimes forget they’re in a home loan process, and a brother calls or a sister calls or somebody calls and needs their help, and they go, oh, yeah. Sure.
I can do it. Oh, yeah. What do you need me to do? And then it shows up on our end, and it’s like, oh, boy. Okay.
You know? So cosigning, it can definitely be one
Chris Hall: So that so that’s, so the reason that’s bad is reasons why they’re cosigning.
Sabrina Schmitt: So, you know, when you’re getting new debt, it’s not when you’re going through the home loan process, you can use your credit cards. K? It’s we’re not saying don’t use your credit cards, but don’t open up new items. Don’t go to Lowe’s or Home Depot and go, oh, I wanna go buy, you know, new appliances, so I’m gonna get 0% and apply for things. Because as soon as you do, it pops up on our system.
Woah. New debt. And then we’ve gotta go through going, okay. What’s the payment? Do you still qualify with that payment?
So if you just cosign for your brother so he could get, you know, a new truck and he needed you to cosign, and it’s a $600 payment, that 600 dollar payment might be the difference of you closing on a house or not.
Chris Hall: Right. Right. And so, I mean, the thing is is once you’ve closed on the house, go you can go cosign for it.
Sabrina Schmitt: Just Oh, you can do whatever you want once you close. Go buy a yacht. Go cosign. Quit your job. We don’t care, honestly.
Once once once you close, the house is yours. Nobody can take it away from you. So you can do whatever you want at that point. But it’s just let’s get the keys in hand and get it on record, get it closed, then do what you need to do. Obviously, make your payment, but how you go about that at that point, yeah, Where there’s there’s no questioning or or need to dig any further.
You know? Once it’s a recorded document and you have keys, then you then cosign. Yes.
Chris Hall: Right. And then so so we have cash deposits. Like, you know, we wanna make sure that those are what do they call them? Seasoned. Right?
You wanna have you wanna have them seasoned.
Sabrina Schmitt: Correct. Correct. Which we required 2 months of bank statement. So that’s all we have to see is 2 months, your last 2 months with no large deposits. So if you deposited, you know, $9 in cash 3 months ago, it won’t show up, and therefore, then it’s seasoned.
Chris Hall: Got it. Okay. Perfect. Alright. So we have seasoned cash.
We have don’t take on new debt, which seems like a no brainer. But I know I actually, you know, have several friends in the industry, and believe it or not, that’s, like, the number one complaint that I get is someone went on and got a new car right in the middle of the process.
Sabrina Schmitt: Uh-huh. So,
Chris Hall: so, like, you Do you
Sabrina Schmitt: want one more? Another Okay. Yeah. One more.
Chris Hall: I do. I can see you’re excited. Tell me.
Sabrina Schmitt: You know, because because you would think that this would be like well, duh. Right? No. Don’t quit your job. If I it happens probably 4 times a year to me, and I tell people or they’ll even ask me, hey.
I’m thinking about changing jobs. I’m like, no. No. No. No.
No. Let’s just wait. We’ve got another week. Get it closed. But sometimes they don’t listen, or it’s just a matter of, like, I can’t take it anymore.
I walked out. Forget this job. I’ll get a new job, and it’s like, oh, no. Okay. You know?
Or they think that because they signed their loan papers that they’re good. But we have to do a verification of employment. It’s a verbal verification of employment before we send the wire and it goes on record. So I have had people sign their loan papers on Friday morning, quit their job that Friday going, hey. I got the loan.
I’m good to go. And then on Monday, when it’s set to record, we find out that they walked off, and, there’s no loan that’s gonna fund. Wow. Yeah. That’s Yeah.
Chris Hall: Incredible, honestly.
Sabrina Schmitt: Yep.
Chris Hall: Okay. So
Sabrina Schmitt: And I go through this, though. Like, I I really go through these 3 key points with people, but, you know, I think that there’s an overload also of information they’re receiving from the title company, from the agents, you know, from from doing a home loan that they’re they kind of forget these fundamentals sometimes. So it doesn’t happen very often. But I’ll tell you, it it does happen enough that, it can you know? Yeah.
Be difficult.
Chris Hall: Mess up your day. Yeah. That mess up your day, for sure. Okay. So, before we kinda conclude, is there anything else that you’d like to bring to our attention if some people are out there listening to this and they’re like, I’ve never had a loan before.
I’m thinking about getting a loan. Like, what are the things that it should be, like, they should be looking for?
Sabrina Schmitt: And, you know, if to talk to somebody who hasn’t had a home loan or bought a house, I I think the process can be really scary getting started. And I I see a lot of people come in my office, and and they’re nervous. And so what I would tell somebody who, you know, wants to look into it but is nervous, you know, I can’t tell you not to be nervous, but what I can tell you is that, truly, I’m here to help you. And so whatever your situation is, we’ll figure it out, and we’ll come up with a game plan. And so sometimes it’s just about brainstorming and seeing what you’ve got on your plate and then figuring out where you wanna go.
And and so it’s not like I said in the beginning, it’s never a no. You can’t. It’s okay. So here’s what we need to do. Let’s let me help you do this.
Here. Let me get this number for you. You know, I see we’ve got this. Let’s go ahead and do this. So it’s just coming up with alternative solutions so that we can make something work.
And, really, when people end up leaving my office, I get a lot of hugs, which is great. But they’ll hug me just because even if I couldn’t actually qualify them that day, but I gave them the information of what to do. So in 3 or 4 months, they are qualified. And then in 3 or 4 months, what they’re gonna be qualified for, you know, they’re they’re leaving and walking away with the knowledge and the power to make it happen for themselves. And and they loved that.
But they were nervous coming in going, I already know what you’re gonna say. And it’s like, no. You don’t. No. You don’t.
It’s okay. You know? So I would just tell people that it really is good to get the information, and it’s it’s really okay to, reach out to me sooner than later.
Chris Hall: Yeah. Good. I love that. It’s very similar in, you know, my industry. You know, I often tell the story about how, you know, I felt like I was doing pretty good in my financial strategy for retirement, but I didn’t really know.
And I sat down and did my own. You know, when I became a financial advisor 8 years ago, I sat down and did my own first. You know, I did and it was so relieving to go like, oh, like, I am on track for my plan. And so I have, you know, many people, friends, family who, you know, have been saving their entire life and they’re doing things and they feel like they’re doing great, but they don’t know. And then they sit down and we go through the process and it’s like just like you’re saying, like, once they’re through the process, they’re like, oh, god.
This has been great. Yeah.
Sabrina Schmitt: So
Chris Hall: I think just
Sabrina Schmitt: Or they need to do something a little bit, little tweaks. Yeah.
Chris Hall: Right. Exactly. Right? We need to put a little bit more money into the Roth IRA. Exactly.
Mhmm. So yeah. I love that.
Sabrina Schmitt: Cut down on that Starbucks. It’s probably a thing for both of our industries, Chris. Just lay off on the Starbucks. For
Chris Hall: anything else you wanna talk about before we go?
Sabrina Schmitt: You know, I would just like to tell you thank you, obviously. You’re my personal financial planner, and I’m grateful for you. You know, I’ve had several other financial planners before you, you know, and I don’t know what has it been 4 years that you’ve been mine now. But, I just appreciate the time that you took really diving in and sitting down with me and going over everything, to to make me understand because while, yes, I know home loans inside and out, you know, I don’t know the S and P and the, you know, mutual fund of whatever. You know, I don’t know that part of it.
And so I really appreciated you, you know, just treating me professionally with respect and explaining things, and you did such a great job.
Chris Hall: Thank you.
Sabrina Schmitt: I appreciate it. Great job. So
Chris Hall: Thank you. You’re so kind. I really appreciate that. I do. And then, of course, you know, to send that right back to you.
For those of you guys that don’t know us personally, like, we are 2 peas in the pod. So we both super care about people, and we want people to, like, live their best lives. And we’re trying to do the best we can to make things easy for them. And so, I refer people to Sabrina all the time, and she always does a great job with my clients. And so if you are looking for someone to talk to, oh, that’s a great question we can ask till the end.
How many states can you operate in?
Sabrina Schmitt: Oh, so I can lend in all 50 states. So prime lending’s very unique that way that we can. Yeah. Yeah. So so and and that’s that’s nice.
I’ve done a lot of people move into Idaho. They’ve moved to Idaho, and then they’ve come back. People have moved to Texas, Florida, yeah, North Carolina. I’m trying to think of, Louisiana. I closed a condo there.
You know, I do lots in in Nevada, Arizona, and then, of course, Oregon just because those are our neighboring states. But I definitely have helped there. Yeah. I have helped, you know, current people. I’ve I’ve done refinance or loans for that moved or bought a second home.
2nd homes are on the rise right now. So, that’s been a great tool to if you’re looking to get out of California and you eventually want to move to Colorado in 6 years when you retire or when somebody graduates or whatever the case is, you can buy that home in Colorado now, 10% down, second home, rent it out, either doing a short term rental Airbnb for the next 5, 6 years till you can actually, you know, sell the one here and then move there, and you’ve got your home. And then you can vacation there. So yeah. And
Chris Hall: Go ahead. Sorry.
Sabrina Schmitt: Yeah. So, you know, I’ve been doing lots of those too where people are people are thinking a little bit more long term. Like, I can’t leave California right now. I can’t move right now. I don’t wanna move in Reading or in town right now, but they’re thinking, I do wanna go something love, and I love this spot.
So Good. Sorry. My cam my camera fell down. Okay.
Chris Hall: Yeah. Good recovery. Nice, though. Yeah. So, you know, my eyes went up when you had said move someday because, you know, one of the things that I’ve talked about is, my son is, you know, playing football, and he ultimately is gonna go to college to play football.
And so, you know, in state tuition for some places you know, like, we’ll do an example, Texas. Out of state tuition for the University of Texas is $13,000. Out of state tuition for the University of Texas is $49,000. So you’d multiply that difference by 4. That’s a pretty nice down payment on a home.
Sabrina Schmitt: I’m buying a house for
Chris Hall: it. Yeah. You’re right. Trying to buy a house. That’s right.
So, you know, like, for me, you know, because I have a job that I can, you know, do a big part of my job from a different location. I don’t have to be, you know, in Reading even though that’s where I’m, you know, based from. That’s where I was born and raised. But I could I could do that. And I think that, you know, we live in a world now where a lot of people are Internet based jobs, you know.
Like, I know that that’s sort of changing a lot of people coming back into the office and stuff, but, you know, that’s something for people to consider. Like, what you’re saying is, you know, like, hey. Listen. I’m getting close to retirement, and so I want to, you know I don’t wanna get rid of my house now, but I wanna have something there. Well, so I would say, like, there’s other creative ways too.
Right? So for me, it’s like I don’t wanna I don’t wanna get rid of my house. I live here. But the same respect, you know, I don’t wanna pay a $120,000 of extra money to, you know, be out of state tuition when I can literally do my job from a laptop. So so those are
Sabrina Schmitt: really good. You’re gonna need some place to stay. You would have a place. You can make money off of it. You can have, you know, equity increase right now by getting it.
So, yeah, it’s absolutely worth doing. So and that’s what a lot of people are looking at. A lot of people are having and I guess it’s just more so now that I’m seeing it maybe because of my age, but, you know, they’re they’re having grandkids where they’re still working here, you know, locally or wherever they’re at. They’re still needing to work, so they can’t move. But their daughter or son and now they’ve got a new grandbaby, and they’re like, you know what?
It’s not feasible for me to come stay with them. It’s not feasible for me to be in a hotel room when I wanna be there for 2 weeks. You know? So I need a little place that I can have on my own and take my grandkids with me. I can stay at, and then, you know, Airbnb it or I’ll, you know, you know, rent it out to traveling nurses and do that kind of thing.
And, hey, maybe when I retire, I’ll move here. And so they’re they’re, you know, doing those kinda little things too due to grandchildren.
Chris Hall: Yeah. Yeah. One one other creative financing thing that I wanted to throw out there that I just had happened to me recently as well is I have a client who wanted to buy a restaurant. And, you know, the restaurant is x number of dollars. And, you know, if you go to SBA loan, which I’m not an expert on SBA loans at all, by the way, but you go to SBA loan, it’s typically like a 20 year amortization.
And then usually, like, after 5 years, they want to, requalify you. Right? They wanna make sure that you can business can still support the loan. And typically speaking, the interest rates are higher than if you have a traditional mortgage. So in this case, I this person actually did own their home free and clear.
And I had said, you know, I really think you should consider refinancing your house as a person, loaning that money to the corporation. Okay, instead of SBA loaning it, you loan it to yourself, then the corporation pays it to you back in payments. You take that payment, take it back, and pay it to the bank. But now you’re getting, you know, again, a 5a half, 6a half, 7% interest rate amortized over 30 years. No relook.
You know, we’re not relooking that 5 years. You know, if you had a if there was a little bit of a downturn in there, you you know, you listen. If if you had a relook in 2022, you know, or 2020, think about if you had a relook in 2020. Like that, you would have not got that new loan. So that’s so those are just things, obviously, you know, if the business is doing really well and it can afford the debt and things like that, that’s fine.
But I I just wanted to point that out. That’s always an option to, you know, refinance your house, take that equity out. And then again, with the idea that you’re gonna loan it to your corporation, your corporation’s gonna pay you back. So
Sabrina Schmitt: Great. Great idea. Yeah. Exactly. That’s what we do.
Chris Hall: That’s right. That’s what we do. Well, thank you so much for being here with me. I really appreciate you. You’re welcome.
You’re you’re you’re awesome, and I can’t say enough good things about you. And I just, really appreciate taking time out of your day to be on this. And, if anybody has any questions, you know, throw them in the comments and, maybe we can get Sabrina back on and, answers answer your questions. So and and and And if you
Sabrina Schmitt: could find me yeah. Google PrimeLending wedding, Sabrina. Yeah. I’ll pop pop up.
Chris Hall: Even better. I’m gonna have the link to Sabrina’s, business right in the comments, right in the description of the actual video. So you can just click on the link below, and you’ll go right to her website.
Sabrina Schmitt: Cool. Thanks, Chris.
Chris Hall: No need to Google. Alright. Thank you so much for your time.
Sabrina Schmitt: Alright. Take care.