Upgrading your most prized possession

When it comes to financing your most prized possession, your home, how do you know where to start? How do you know where to even start looking? Many people think all of the answers lie on the internet, but I'm here to tell you that everything doesn't always end with the internet. It could be a great place to start, but I would say don't let it be the end of the road for you. On today's show, we're gonna jump into financing, guys, and this is not my area of expertise, but it's my guest area of expertise. So today we're going to discuss the importance of picking the right lender when you are absolutely ready to buy your home, the importance of shopping local no matter where you live, and how the cheapest online rates are not always the best avenue to travel. My name is Travia Steward and I'm a performance and life coach. On these episodes, it is my mission to give you the skills and the strategies that will help you create the life that you were destined to live. I publish videos every single week, so please make sure you subscribe to the channel. You can expect videos from the following areas: videos on relationships, your health and your well-being, personal development, and communication. Mastering these 4 categories can lead to living a life on purpose and with purpose, a life that makes you excited every day. So here we go. Today I have a very special guest on my show. I am going to get an education because I have never had to travel this path alone. I've always had these things done for me and I was able to just walk right in. And so today you are also going to learn from a guy who is a branch manager at Fairway Independent Mortgage. He's been a local lender in the Phoenix area for over 22 years, and he's been ranked number one, number one, guys, in the metro market on Yelp with more than 165-star reviews, and on Google with over 345-star reviews. This guy's motto is treat people the way you want to be treated. So ladies and gentlemen, I introduce you to Mr. Jeremy Schachter. Hi, Jeremy, how's it going today?

Thank you so much for the intro. I'm gonna have to copy that. Thank you so much for the opportunity. It's great to be here today.

You know, it's great to have you here. And so, you know, I, I, I hinted around about it, but the, the conversation I want to have with you is like, so it's a little daunting actually for me because it's like There's so much about it that we just don't understand. So before we get into the nuts and bolts, you know, I, I know you, you mentioned that you were a New York native. And so what brought you here to Arizona? Like, why are you still here? It's 110. Why are you not in New York?

Sure. No, no, totally understandable. It makes sense. Um, I grew up in New York throughout my whole life. And then, um, after, uh, high school, you know, my parents are still together. They've been together 50 years. It's always my intention to go to college. It was never a thought that I would do something different. And I had this brilliant idea that I wanted to be an architect because at the time when I was in school, in high school, I saw a little flyer. And I always believe, you know, Deepak Chopra. Yeah. He always says pay attention to coincidences. There's a reason for everything. And there's a reason that you go on a path and, and as you get older, you realize, oh, I made that choice that made this choice that made this choice. And it's sometimes eye-opening and you don't realize that at the time. But there was a, I was taking a computer-aided CAD design class, you know, as a supplement to my education. And on the top 10 schools for architecture, University of Arizona was in the top at the time. I don't think it's there anymore, but at the time. I'm like, Arizona, that sounds so cool. I've never been there before. I kind of want a totally different, like, way of life. I could have gone to SUNY schools, the State University of New York.

SUNY Purchase.

Yep, yep. I have a friend that went to SUNY Purchase, went there many times. You know, I applied to SUNY schools just because a little bit less expensive than going out of state, right? But I just decided that I wanted to be an architect. Did I have a plan in place? No. So I applied to University of Arizona. I didn't get in, and being the pesky New Yorker that I am, I went to my guidance counselor and I said, I want to go to this school. How can we get this? How can I get this into school? How can I get into school? So he called up the administration department. I'm not sure if they even do this anymore. And basically I changed my major from architecture to arts and sciences, which was a little bit less competitive.

Okay.

And then I got into the school. So, um, I just wanted a different change of life. You know, I love culture. I love different, um, different people, embracing different foods. I love to travel. So I just wanted a different aspect of life. So I got into University of Arizona as an arts and science major. Didn't know a soul there, right? You know, and it built my confidence up, and I worked at The Gap in high school, okay, and I transferred The Gap in Tucson, Arizona, so I had a part-time job going through school, and I loved it, you know, I love, I fell in love with Arizona, fell in love with the blue skies and the great weather, and yeah, we have it every day. I love the sun, you know, I, you know, I, I always wear sunglasses, you know, uh, not at night, just like the song, you know, Corey Hart, yes, unless I have a really bad hangover. No, I'm just joking. You know, I just wanted a different change of pace. So in high school, I went to a community college my senior year. So when I went to University of Arizona, I was actually a sophomore when everyone was freshmen.

Okay.

So I graduated and I went to summer school and winter class. I just wanted to get in and out of school. And honestly, I'm not a good, you know, student, so to speak. I'm great at mortgages. I'm very creative, but, you know, sitting in the class learning about accounting, because eventually I got my degree in marketing and business.

Okay.

And I had to take all these other courses like economics. I barely passed.

Oh my God, economics is tough.

Oh, awful. I mean, I deal mortgages. I understand economics that way, but, you know, a textbook version and being in a class, I just couldn't deal with it. So I pushed my way through, um, University of Arizona in about 3 years.

So you caught up.

I caught up and I pushed. Yeah, so I did winter class, summer class. I just wanted to get in and out. And sometimes I even have a nightmare that I never graduated, but then I have a plaque like in my office, so I know I did.

You got to refer back to it.

I have this weird dream I failed because I barely passed economics and I needed to pass to get a degree, and for some reason this always is a resonating nightmare or dream that I graduated, but I did. So I graduated the University of Arizona with a degree in marketing, and then they had a really big retail division, or I forgot, a department at the University of Arizona. And for some reason, I saw an ad for an assistant buyer for a department store called Lord Taylor, which actually unfortunately just declared bankruptcy, and they're closing all the stores. Due to COVID. But Lord Taylor, it's not big on the West Coast, but as far as Colorado, that's where the last store was. But it was huge on the East Coast. So basically, I interviewed, and, you know, I'm not a great student. You know, I'm a great— I'm great at things, but I'm not a great student. So, you know, I got a B's and stuff like that, but this job was very competitive. They went to Ivy League schools on the East Coast, and I got accepted into the assistant buyer department, which is very competitive, because I connected with like my boss, so to speak, that was from Tucson. And we, you know, when you connect with someone, you know, sometimes they overlook other things because they just, you know, like you, so to speak. It's all about sometimes the connections and the people you know and not what you know. So I got that job. I was wearing a suit every day, going on the subway for about 3 years, and I really truly missed Arizona. I missed the friendliness of the people, I missed the blue skies, I missed the hiking. It's just a different way of life, you know. I love Mexico and I love California, and, you know, just— I just missed it. So I decided to move from New York back to Tucson, and I went and got into a manager trainee program called, uh, with a bank that's no longer around called World Savings Bank. Okay, it eventually got bought out by Wells Fargo, but at the time I was a trainee in Tucson, and then I got promoted to a branch manager in Mesa, where, uh, you mentioned that you're close to that. And then, um, I worked there for a couple years, and then went over to Washington Mutual, which got up bought out by Chase. And then I started processing second mortgages like home equity lines of credit and home equity loans. And then I moved over to first mortgages like refinances and purchases as a processor. And a processor deals with like all the paperwork, making sure the file looks pretty for the underwriter, right? Then eventually I turned into an originator, meaning that you come to me, I take your loan application, and I get you the mortgage loan.

Right.

And I've been doing that ever since.

Okay. Okay. So eventually you found your zone of genius because you kept— you, you referred that you were not a good student for a while, but you know, you don't have to be a good student to be great at your job today, right? I mean, to have all of these 5-star reviews. So you came into your own and then you're obviously, you're good at your job.

Sure.

And so just, you know, I'm just honing in on that strength because people wouldn't say these things If they didn't think you were good. So that's cool. Thank you for taking us through that path. So Jeremy, here is the education, right?

Okay, sure.

I am a first-time home buyer and walk me through the process of I'm looking for a home. I think I want a home. Okay. It's in the Phoenix area, blah, blah, blah, blah, blah. Educate me on what I need to do to get pre-qualified. What's the appraisal process, rates, down payments. And I know we can go into an abyss of a hole because, but As, as like to where a 5th grader could understand it almost.

Sure. The only thing I learned, and the only thing I learned in the University of Arizona, but one of the biggest things I learned that stuck to me to this day is KISS— Keep It Simple, Stupid.

Keep It Simple, Stupid.

And that's how I do everything, because in mortgages there's a lot of analogies. Like GFE used to be called the Good Faith Estimate.

Yeah.

And we called something called a CD, a Closing Disclosure. So a lot of times I, I catch myself as well as my staff calling these terminologies and like, you need to— I'm not saying clients are dumb, but you need to dumb it down.

Yeah, we don't know what that means.

Yeah, no one knows what that means. And especially a first-time home buyer. I always joke around and I usually say this, you know, you're not buying a shirt at Macy's, you're buying a house. And it's not like something you can return the next day because it does not fit.

Right.

You know, first-time homebuyers are very scared. They're very knowledgeable. So Google can be your enemy and it could be your best friend.

Right.

But a lot of times there's misinformation out there. So sometimes, you know, a client comes to me and thinks that, you know, they've researched everything and they, they know it. And sometimes I have to correct them. And sometimes I'm like, wow, you did your research, which is great. Um, So being a first-time homebuyer, you know, is a great opportunity to own a piece of, you know, the American dream. You know, there's lots of different programs out there. There's, uh, FHA, um, there's VA for veterans.

Okay.

There's conventional, and then there's something called jumbo, and jumbo loans are over a certain loan amount.

Okay, so, so I know FHA is— is that Future Homemakers of America?

It's, uh, Federal Housing Administration.

See, I think I said— I think that was from high school.

Yes, yes, yes. You know what, Future Farmers of America is probably what you're thinking.

Yes. Okay, okay. Okay, and then define the other ones.

Sure. So FHA and VA are government-sponsored loans, right? Okay. VA is only for veterans. It's a zero-down program with no mortgage insurance, right? So a lot of the programs that I was mentioning, if you don't put 20% down you have something called mortgage insurance.

Okay.

Mortgage insurance is added to the loan of your payment to not protect you, because it sounds like, oh, I, you know, if something happens to me, my house is covered because I have mortgage insurance, right? No, it covers the investor that is lending you the money. So if you fall, there's an insurance policy on the mortgage itself.

Got it.

Okay, so you have FHA, which is geared to first-time homebuyers that maybe sometimes have challenging credit, maybe had a bankruptcy, maybe had a repo, maybe had medical, um, collections, you know, maybe doesn't— maybe they don't have, you know, 20% down or even 5% down, right? You know, very limited amount of money. They're a little bit more lenient on credit.

Okay. Okay.

Then we switched our hat to VA. You have to be a veteran. Okay, so Say if me and you were married and you're not a veteran and I'm a veteran, you can be on the loan.

Okay.

But if we weren't married, you can still do a VA loan, but you still have to put down 25% or 20%. So it really is not advantageous for you to do a VA loan if you have a girlfriend, a boyfriend, or a friend wants to buy a house because you can't do zero down. So with a veteran loan, you know, it's the best loan out there because there's You know, they're serving our country, you know, they're dying, you know, they're risking their lives each and every day. So why wouldn't they get the best loan, right? So it's a zero-down program. So you don't need any money in your pocket. There's no mortgage insurance. Um, so it's a great loan, uh, to have, but it's only selected to veterans who, um, served in the armed services for a certain period of time. You get something called a certificate of eligibility. So just because you served in the service, if that makes sense, doesn't mean you automatically get a veteran loan. You have to have a certain amount of time in the service.

Okay.

Okay. As a lender or even as a consumer who is a veteran, you can get— you can look up and get something called a certificate of eligibility, which will show that you can get a veteran loan.

Okay.

So we have FHA and then we have VA and now we have conventional. And conventional is probably the most popular program for first-time homebuyers. Um, you can do as little as 3% down. Oh, um, it was a little bit less than FHA, which is 3.5% down, but ideally, you know, probably like a 700 to 720+ score with a little, with minimal amount down would make it, would make sense to do a conventional loan.

Okay.

Conventional loans are very, um, strict with credit scores and also something called debt-to-income.

Right, right.

The amount of debt you have, including a new mortgage, divided by your gross income. So your gross income is not like nasty income, it means before taxes.

Okay.

So, um, you have FHA, which is a little more lenient on debt-to-income and credit, You have VA or veteran loans for veterans. You have conventional loans that are a little bit more strict with, um, credit scores, but if you have good credit, you can go in as little as 3% down. And then you have something called a jumbo loan. So a jumbo loan sounds just like it— it's a larger loan. So the magic number is $510,400. It's a weird number. The government comes out with it. Each region, or sometimes each individual city, might have different dollar amounts based on the home values of are selling in the area. So for instance, um, the maximum conforming loan limit for conventional loan in Arizona is $510,400. I'm doing a loan for a friend right now in North Hollywood, California, and their maximum loan amount is $765,000. So obviously it costs more in California than it does in Arizona for a house value. So It depends on the area that you're buying a home and what the maximum loan amounts are. So above that $510,400 is considered a jumbo loan. Okay. Jumbo loans, I say we need a firstborn and then a blood sample and another blood sample and another blood sample. And it's just because the loan amounts are so much higher, there's a lot more risk if you default on the loan. So pre-COVID, um, you know, we can go as low as 5% down on a jumbo loan. Now these days we can do 20%, and then that's just with my company. There might be other companies that are a little bit less risk-averse, right? They might do 10% or 15%. But speaking as of today, you know, 20% down is what we can do on a jumbo loan. Okay. So those are kind of the 4 buckets of loans out there.

Okay. So what's something that came up? So even though you are in Arizona, you can be a lender to someone in California?

Correct, correct.

So I didn't know that.

So doing this for so many years, and I have the gray hairs to prove it, that you have to— I don't even know how many years ago, let's just say 9 years ago, all licensed— all originators had to be licensed.

Okay.

Before that, you can originate loans in any state. It's wild, wild west. You can do loans in, you know, Hawaii, you can do loans in New Jersey, didn't really matter. Your company just had to be licensed in that state, but you as a personal loan officer did not have to be licensed. Now, um, you have to be licensed in each individual state, take, uh, continuing educational courses every year. So I have to take some in Arizona as well as taking some online for California. So me personally, I only do Arizona and California. Okay, other loan officers, but Fairway is licensed in all 50 states. So if someone comes to me and says Hey, I want to buy a house in Seattle, Washington. I can refer them to another person that's my colleague and they can take care of them. And it would just be an easy handoff.

Right. Okay, cool. So thank you for sharing all of that. I want to walk through a very practical example. This is the coach and also the teacher in me who goes, okay, now it's time for active learning. So let's, let's say that I run into you Somewhere like we're, you know, on the street. And somehow I know that you are a guy who lends money. And I heard you talking to somebody else about a house. And so I go up to you and say, oh my goodness, you know, we introduce ourselves. Now we know each other. Jeremy, I'm interested in buying a house in Chandler. You know, I love the neighborhood that my friend lives in. How quickly can you get me a house? Sure, because that's how people think.

They do. Like, they want the Amazon effect. Yeah, yeah, they want to get it right. Anyone who could deliver today, right? You're upset if it actually comes tomorrow morning instead of today, right?

Right. Will I be in my house next week?

Yeah, yeah. So, okay, I wish I was that good. My record, to be quite honest, was closing in 10 days.

Okay.

And that's not the norm. And honestly, you're doing a disservice to yourself if you're trying to rush through the home buying process Okay, because you have to do your due diligence. You go through an inspection period. You want to make sure that—

what am I inspecting? Am I— don't know, I don't know which house. Well, I kind of have a good idea. What am I inspecting?

Sure. So, okay, so you're coming to me as a first-time homebuyer. You say, hey, Jeremy, I want to get pre-qualified. Okay, so pre-qualification and pre-approved, you know, you hear those two terms, everyone has a different definition of it. Okay, this is what I do. I can't say what every lender does, but I qualify you or pre-approve you with everything up front based on your credit score. Well, I, I talk to you and, um, normally we would meet in my office or we can do an online application, which is the most popular, or I can take it over the phone. So I say, hey, you know, you have to take a loan application. So basically a loan application is asking your name, your social, where you worked the last 2 years, where you lived the last 2 years, your income, and your assets. Okay, basically I look at that, I pull your credit, and then I ask for proof of that. So if you're saying that you're making $60,000 a year, I want to see your pay stubs. Okay, so you have $20,000 in the bank, I want to see your bank statements, and then ask for your W-2s. And this is just for like a wage earner or W-2 borrower, right? Self-employed borrowers have totally different requirements. So let's keep it simple for now with like the average person that, you know, is hourly or makes a salary, right, doesn't own their own business. Because that is— that—

I'm sorry, is that something that changed? Like, did you guys implement those, those extra safeguards like in 2008 when the bubble, you know, everybody was buying a house they couldn't afford?

Correct. You know, if you had great credit, literally I didn't need to verify your assets. I just need to verbally verify your employment. I didn't even have to look at you. Oh, and limit amount down. And they were called fast and easy, believe it or not. Remember Countrywide? I'm not sure if you remember the— the Bank of America bought them.

Oh, okay.

It was one of the big companies out there that if you had really good credit, um, you just really didn't have to prove anything. So after that, the Frank Dodd Act— not to give you boring aspects of regulations and government, um, you know, scrutiny as well as laws that passed, they now say you have to prove that you can qualify for this loan.

Yeah.

So, um, which, duh, makes sense, right?

Makes sense. Totally. Yeah.

Yeah. So, you know, slowly but surely some other, um, not— it's called non-QM qualified mortgages are coming out where you can do bank statement programs.

Correct.

You can do asset depletion depletion programs where, say, you had $4 million in assets, we can use X amount to qualify on your loan, right, on your loan as income. But the average person is usually a wage earner, right, hourly employee, and that, and that's what I'm kind of talking about today because that's like 90% of my business.

Absolutely. Yeah, let's talk about a person who makes, like you said, $60,000 a year.

Sure. So you apply online or, uh, you know, in person or over the phone. I pull your credit. I actually ask for your documentation, right? And then I run your loan application through an automated system through either Fannie Mae or Freddie Mac. So they have two different systems. So some are a little bit more lenient than others, um, depending on if you have assets in the bank, you know. So if one doesn't work, sometimes the other does. And then if the other one doesn't work, sometimes you flip it over to Fannie or Freddie. Okay, so as an originator, for myself, and I'm just talking about myself, I look at your file as an underwriter. Because all an underwriter does in lending— you hear all these nightmare stories about lending, and everyone's so scared, and at the last minute you get declined, or you have to run around and go to the bank and get all these conditions right before you're closing, and you have moving trucks. Like, you hear all these nightmare stories. Honestly, it's never happened to me because I do my diligence up front. So, and I've lost clients over this, to be quite honest. You know, you come to me and you want to get pre-qualified quickly, and I say, okay, well, send me your pay stubs, your W-2s, your bank statements. Like, well, I have another lender that doesn't even need that, they'll issue it.

Right. Okay.

And I'm like, okay, no problem. This is how I process my, um, this is how I run my business, right? And obviously, after 22 years being highly ranked, you know, it actually works. And, um, I've had clients come back to me because they got declined with another lender because they didn't do the due diligence and making sure that they're qualified. So I gather all your stuff and I look at it like an underwriter. So if you make $60,000 a year, it should show that on your pay stubs. You know, if you have X amount of bank account, it should show that in your bank account.

Okay.

And all an underwriter does— and I'm not discounting what they do because they're very important in the process— it just validates what the application, what documentation says.

Right. Got it.

Pretty simple.

Yeah.

People just don't know how to do simple because they're quick. They want to get the loan. They're thinking with their commission hat on, like they want to, you know, they're not looking. I always put myself in your situation. It's an emotional process. You know, when you start looking for a house, you see your family here, you see your dogs here, you see— oh yeah, here you see your grandchildren here. You know, you see all this And forget about the, the housing market right now. It's, it's crazy. It's, it's, it's nuts. I feel bad for every single buyer out there. Sellers, you know, you can put your house on the market, right? 30 offers. But buyers, it's very competitive. So getting that pre-qualification form is the next step where you get me all this documentation. I review it and I say, okay, you can qualify up to $300,000 with 5% down. Okay, then I would issue something called a pre-qualification form, where in Arizona it's actually a real estate form that real estate agents and lenders got together and put up this form. And it basically says that I reviewed your income, your assets, credit, you qualified, you know, here's your estimated payment. And I actually sign it with my license number.

Okay.

Because every loan officer's license, okay, has my company name, my website address, and my phone number. So when I put that out there and it's my name and my reputation on the line, that is good as gold. So I joke around that lenders or loan officers issue those like Tic Tacs, right? Worth the, you know, the paper. It's not worth anything on paper at all. For me, I do my diligence up front to make sure that when you find that perfect house, you'll feel confident enough that there won't be any issues. We might need a pay stub, updated pay stub, or a bank statement, or maybe a letter of explanation. But for the most part, the big bulk of your, um, qualifications is already in your file, right? So you got the pre-qualification form, you're ready to go. So hopefully you find a really good real estate agent. Highly recommend, highly, highly, highly recommend. And I always say, picking— I say, I say this too for a few different analogies. Picking the right lender is just as equally as important as picking the right home, right? Picking the right real estate agent is just as equally as important as picking the right home, and they all go hand in hand. Okay, I don't know, it's discounting or dissing real estate agents, but there's 40,000+ licensed agents in the Phoenix metro area. You know, just because you're a licensed agent doesn't mean that that you might be qualified for your particular situation.

Mm-hmm.

Are you full-time? Sometimes, you know, people just do this part-time for family members. How many homes have you sold during this year or last year? And this year might be a challenge due to what's going on in the pandemic, but, you know, walking into an open house, a lot of times those agents are looking for buyers. So, you know, I highly recommend getting a recommendation from a friend Googling, Yelping, looking at what people are saying with real estate agents. But the real estate agent is one of the most important factors in the home buying process. You know, they're there to serve you. They're there, they get a commission off of your sale. You don't have to pay it in normal circumstances. So they're there to work for you. I always say, you know, at the end of the closing table, we don't have a job unless you're involved with this. You're hiring us. I don't get paid unless the loan closes. I'm strictly on commission. So, you know, you're important to this transaction, you know, and you need to make sure that you know that. I mean, you don't have to be cocky and say, I can go with anyone, you know, because sometimes there's not as much respect in this industry, um, thinking that it's easy, or right, people, you know, can't— or not— I'm not committed or loyal to you or to the real estate agent. And I've had that before where I drop everything, I get a pre-qualification over the weekend, they get into contract, and then they go somewhere else. Oh, okay. Sure. Because sometimes they feel like they don't see value in me. Because guess what? You know, a lot of lenders don't work on weekends. So I got you that house because I dropped everything on, you know, the weekend, and now you're not even going to go with me. So that's another story, more therapy that I only want to talk about. But okay, so let's get back to like the flow.

So yeah, and you only pre-qualified me for $300,000. So I got to find a house that's not more than that, right?

If, if you want to go higher, you know, and you can, then we would just revise that pre-qualification form. So if you say, a lot of times people like have it in their mind, they want to spend a certain amount of money, right? And then when they go out there and they're like, I'm not going to live in this neighborhood for $300,000, I need to bump up to $400,000. Then I have to go back to the drawing board, making sure you can qualify for $400,000. Okay, we issue that pre-qualification form.

Okay, so somebody goes in with a number, a number, I would like to be pre-qualified for $400,000.

Usually they have a dollar amount and they have a budget. I don't want to have a mortgage over $2,000. I only have $20,000 to put down. You know, you have a down payment and then you have something called closing costs. Right, title and escrow fees, you have lender fees, you have an appraisal, you have something called prepaids, which are your taxes, insurance. So, excuse me, so if you're coming in with, say, 5% down, the 5% does not include the closing costs. Okay, so you can either have the seller pay the closing costs, sometimes the lender can contribute to the closing costs, you can bring in your own money, you can get a gift from a family member. You can borrow from your 401k if you have that avenue, but just because you have the minimum down payment, you also have additional costs associated with a loan.

Okay, makes sense.

So you're off and running, you have that pre-qualification form in your hand, you find the perfect house. In normal circumstances and not 20 or 30 different offers— like, literally had a client that had 24 offers on one home. One home, 24 offers.

It's a seller's market.

Seller's market. So getting back to— or not going on a sidetrack, but picking the right lender who understands the market, a local lender that understands the market. Not banking or discrediting larger banks, but a lot of real estate agents don't like working with larger banks just because the communication is a little bit lacking and they usually don't close on time.

Okay.

And usually need longer close escrows, longer windows to close a transaction. Okay, so let's just say that you found the perfect house, right? You made an offer. I call it dating. You're the, you're the buyer and I'm the seller. And now we're dating. Hey, I want to make an offer on your property. I'm going to give you $300,000. And then I'm like, no, you know what, $300,000 is a little low. I'm gonna give you $305,000. So I counter your offer and I give you $305,000. Like, you know what, I really love this place, so I'm gonna accept it. I'm gonna accept it.

Right.

Once you accept it, you're in contract. So in escrow, it's called.

Okay.

So basically, you agree to a sales price, the seller agreed to a sales price, there's a date on the contract that you have to close on, right? Now you're in contract.

Okay.

So when you contract on the property, there's lots of real estate lingo in the contract that you have to abide to, or you breach the contract. You have to get a home inspection during a certain time period. So home inspection is not like an appraisal, which a lot of people think they're one and the same. A home inspection, you hire a licensed contractor, and then the licensed contractor, their goal is to make sure that the house is sound. If they're telling you that there's nothing wrong with the house, then it's not a really good contractor because there's always going to be something wrong with it, right? You know, uh, um, an outlet that needs to be, um, grounded. You know, there might be a toilet that might be leaking, right? Something might be on its last leg. The roof might be falling apart. It might be asbestos, mold. You know, I've seen everything and anything in my career. So that's the point of doing an inspection, and you pay that upfront, okay? That you make sure that the house is sound. So while you're doing your inspection, I'm getting your file ready to go into underwriting because Normally it's a 30-day process. So if I get your, um, contract and I wait for you to go through the inspection period, then you request repairs to the seller, and then you go back and forth, it could be 15 days in a 30-day period before you want to proceed with this house. If I have started on the 15th day, there's no way I can close in 15 days in the normal circumstances, right? So we pop your file into the underwriter while you're doing your inspection, making sure everything is sound.

Great.

Communicate with your real estate agent. And then we follow up with them saying, hey, can we order the appraisal now that the inspection's over? So the inspection looks at the house and making sure it's sound. The appraisal and the appraiser make sure that the home is worth the purchase price that you're paying it for. Got it. So the two separate things— the appraiser is not an inspector, and the inspector is not an appraiser. So the appraiser's job is to make sure that the home is worth the purchase price that you're doing. Some of those programs we talked about in the beginning of this interview, like FHA, VA, right, are a little bit more strict on conditions of homes. So for instance, on an FHA loan, the appraiser actually goes on top of the roof and inside the attic to making sure that the roof is okay. They're not a roof inspector, but if there's shingles missing, if there's water leaks, they're going to put that in the appraisal report saying you need to check this out. Okay, on a conventional loan, they're not as strict. They don't go on the roof or stuff like that. But, um, you know, they want to make sure that they have to notate that in the report that, you know, there's no issues with, um, the house. Okay, so you get the file and underwriting, you look for homeowner's insurance. So there's lots of names of insurance— mortgage insurance, homeowner's insurance. They're, they're two separate things. Homeowners insurance is like American Family, Allstate, Geico, Travelers. Um, that protects your house in case of flood, fire, theft, all that. That's required by the lender. So during that time period, you would shop around for insurance. If you have your auto insurance, sometimes you go get a bundle policy with auto and home, and then you shop with that. We get your file into underwriting, we order the appraisal. The appraisal comes back great. We might need 1 or 2 conditions, um, maybe another pay stub. It might be outdated or an explanation of something, but pretty much we have that bulk of your items in that file. So literally sometimes we don't even need anything from you. Okay, so we get your file into underwriting, it comes back, it's called a conditional loan approval. It's called a conditional loan approval because there's conditions that need to be met to get a final loan approval. Okay, meaning that it's all signed off on Sometimes it might be minor things that are internal with the lender, and sometimes it might be major things. Like, I had a client that didn't disclose that they owned another home, and behind the scenes, lenders do all these background checks. So if you think that, oh, I'm not going to mention about my foreclosure, my bankruptcy, I own another home, I own child support— guess what? We'll find it out.

All that comes up.

All that comes up. So, okay. What, what I can honestly say is be as truthful and honest with your lender because you're doing an injustice to yourself by spending $500 on an inspection, probably $500 on an appraisal. You know, in the back of your head that you had this, that, yeah, I'm trying not to, you know, tell that. Mind you, it's mortgage fraud if you're not even mentioning that. So you really don't want to even go down that avenue with the FBI. Just be truthful and honest. It is what it is. You have child support, you know, we're going to need the child support award letters. If you had a divorce and you owe your ex $1,200 in monthly maintenance, we're going to have to include that in your debts, right? So be as truthful and honest with your loan officer because eventually it's going to come out. Okay, so we submitted your file, we got a conditional loan approval, we don't need anything, you know, or maybe we need a pay stub. We then order something called a closing disclosure, or that CD, as I talked about in the beginning. A closing disclosure is— it started a couple years ago, was called TRID, and I forgot even what TRID stands for. Um, it's a— it was a— it totally revamped all of our documents, and at first it was chaotic. No one knew what they were doing, but now we know what we're doing. So we send you off a closing disclosure, which is a pretty finite number of the closing costs, how much money you need to bring in for cash to close, like in your pocket. And you have a— and you get that 3 days before closing. Okay, so once you sign that, we cannot close on your house within 3 days, period. So it gives you a chance to look at everything, because back in the day, not me, but lots of other lenders said, oh, you got a fixed rate at 2.99%, and all of a sudden it's an adjustable rate mortgage. You never got any disclosures. You're at the closing table. You really I want this house, and now all of a sudden you didn't get disclosed that this was an adjustable rate mortgage, or, oh, the rate went up and the cost went up. Guess what? There was no regulation. You can do whatever you want to do. You know, it's not the right thing to do, but that's why they have these regulations. Okay, so we as lenders can't just change a fee with, or a rate, or a loan amount without redisclosing to you, um, on documents. Right, so you find this closing disclosure, which is a pretty finite number. It really shouldn't vary too much from your initial documents you signed when you started the process. You sign that document, you know, it's almost like the Bible, so to speak, right? You have to have that signed. And then we wait 3 business days. We might need some other documentation. We submit the file back to the lender. The lender gives you something called a final approval, or in lending terms, clear to close. Clear to close means that you have The underwriter signed off on everything. You're good as gold with this loan, right? Now you're ready to sign your official loan documents in front of a notary at a title company. And that's the, the almost the last step. You sign the documents, they go back to the lender, you record on the loan, meaning that's official with Maricopa County, which is Phoenix metro area, right? And once that records, it takes the seller out of the house on paper and it puts the buyer in the house and then it's officially yours.

Nice. Wow, that's a process.

It's a process, you know, and, um, there can be hiccups in the process. So a few hiccups that can happen, um, the appraisal doesn't come back at the purchase price, right? You offered $305,000, it came back at $295,000. Guess what? You have to renegotiate the sales price, or you have to come in with money, or you have to meet in the middle, right? Um, Things can— you do something called a walkthrough with your real estate agent. So you have these big, beautiful, new, you know, state-of-the-art appliances in the house, right? Like, you know, I love this kitchen and these are the appliances that I love. Guess what? At the walkthrough, which is usually the day before, sometimes the day of, but ideally as close to the closing of escrow as possible, okay, you want to make sure that you— what you see is what you get when you made an offer on that property, right? Had sellers remove appliances, appliances.

So you have to get in writing?

You, you— I've seen as detailed on contracts the serial numbers of the appliances, or as vague as what's seen in MLS at the time. So every agent has a way of writing things down. But I've seen—

that's a good point—

ceiling fans. I've seen people remove Usually if it's attached to the wall, then it's yours. So a ceiling fan, you know, that's attached to the ceiling.

Yeah, yeah.

You didn't— you shouldn't be walking into a room that has a cap on it if there's a ceiling fan there, right? So some of these things can happen at the last minute that, you know, it's just the way it goes. Either agents don't know that, sellers don't tell the agents that they're removing the stuff, right? Then it can be— it can hold up the closing. Um, but usually the biggest thing is the appraisal.

Okay.

The appraisal is the biggest piece of the puzzle, or it is the biggest piece of the puzzle. So that's out of the lender's control, that's out of the buyer's control, right? Real estate agent's control. If it comes in lower, sometimes the lender can do a rebuttal and ask to reconsider value. But if they can't, then we have to renegotiate the sales price, or—

right.

And then you start over again, right?

So real quickly, you mentioned about federal regulations, right? Everybody's in uproar about it's too much regulation. Regulation. And then you just pointed out some very good examples of why regulation works well in this industry, right?

Sure.

I mean, what is your argument? Like, are you, are you like for government regulation or are you like too much regulation?

I'm in the middle, to be quite honest.

Okay. So how does it benefit this market?

It went from like Wild Wild West to super, super strict. Right. So there's things that can totally delay a closing, like that closing disclosure. Um, if you don't sign it in a certain period of time, it could delay your closing.

Okay.

Another thing, uh, it's really confusing. Uh, there's the— it used to be called the Good Faith Estimate, or the GFE. Now it's called the Loan Estimate. And then the Loan Estimate follows by the Closing Disclosure, called the CD. It's a really— both the documents are really confusing documents. They— I have questions all the time about it. They're not clear. I don't know if they even consulted lenders when they wanted to redo it, but it's a very confusing document. So on one hand, you know, it has a good point where, you know, lenders shouldn't charge different fees at the last minute and change your programs without disclosing to you. So that's a benefit to the consumer, but if a consumer doesn't understand what they're reading, even if they're disclosed it, you know, they— it's— I wish they would redo it a little bit to make it a little bit easier, right? And then, um, maybe not have as strict of a time frame to get all these things done, because right now lenders are just so overloaded. I mean, this, this is probably one of the industries that has benefited from COVID not because of COVID directly, but because interest rates are so low that the capacity of volume all across the board, not just with my company, everywhere, there's not enough people for the volume that is being handled.

Okay.

So, in markets like Arizona and California and the Northwest, you know, there's multiple offers on properties and the most competitive offer gets accepted. So, usually, it's a shorter time window. Right, waiving the appraisal contingency, right? Having your earnest money deposit. Like when you find this house that you love, you put a deposit down on the house and there's lots of outs that you can get. Normally, the inspection— if the house has fallen apart, you can cancel the contract, you get your deposit back. The appraisal doesn't appraise and they can't reach to some sort of agreement, you get your deposit back.

Okay.

Some instances, especially in a hot market, they're asking for that deposit to be hard. Meaning that no matter what, you won't get that deposit back if you don't fall— if you don't follow through on this loan.

Okay.

Appraisal contingency, if the appraisal comes in $30,000 less, guess what? You're coming in with the difference. So people are so adamant about buying a house that they're waiving, in normal circumstances, a lot of these things to get the home, right?

Wow, it's so much to learn. So Jeremy, what makes it like— like, tell me, you know, what What, what makes it a seller's market compared to a buyer's market? Like, what does that really mean? I mean, we know generically, but what makes it that?

Well, going back to me barely, barely passing economics at the University of Arizona and having nightmares thinking I never graduated.

Thanks for the question, Travia Steward.

Yeah, it's, you know, the basic supply and demand. There's a lot of of demand and very little supply. One of my colleagues said there's only 1 month supply of homes on the market right now. So, people think, "Oh, I'm going to get a COVID discount because I'm going to offer $30,000 less because, you know, we're in a pandemic." Guess what? Everyone's moving to Arizona because like we were talking about prior to this interview, we have sunshine, we really don't have that many catastrophes, we have haboos, monsoons, and right, yeah, hot weather. But, you know, and we have some fires, you know, but for the most part, you know, pretty much 9 months out of the year, sunshine and, and, and pretty decent weather.

And so true.

Yeah. So tons of people are moving here. So when you have tons of people moving here and you don't have as much of a selection of homes, right, you know, it just, it drives up the demand. And then when you have too many homes and not as many buyers you know, then you have a buyer's, buyer's market, right? You know, flips. And I've seen instances where it flips within several weeks, where, okay, maybe after this pandemic is over and people feel a little bit more comfortable showing their homes on the market and not having strangers come in, then maybe there'd be more homes on the market and less of a demand for buyers, and maybe we'll turn into a buyer's market. But it's strictly supply and demand. And okay, there's a limited amount of supply and there's a higher demand. I mean, I'll fight someone over for Lysol spray right now. I cannot find it.

No kidding.

And wipes. Yeah, I heard that toilet paper— not toilet paper, paper towels— is sometimes hard to find these days because people hoarding them again. Like, still. Yeah, so, so there was like a meme that said, remember the time when you were looking for paper towels and toilet paper back in March? Well, that's what the housing market is right now. And I thought it was so funny because you keep it simple. It's like, yes, people want the toilet paper and the paper towels and the Lysol spray and the Clorox wipes. Yeah, you can't find it. People want a 3-bedroom, 2-bath house with a pool in a certain area or certain school district, they can't find it. Or if it comes up, there might be multiple offers on the property. So right now, you know, getting your finances in line, getting that pre-qualification you know, with a local reputable lender. I have agents CC me on offers. I call the agents up saying, you know, this buyer is well qualified. I looked up their income, I looked at the income, their assets, I ran a desktop approval, they're good as gold. You know, people write letters saying, you know, I have a family of 4, we can picture ourselves here, you know, during the holiday season, you know, All these things that have happened, you know, a little bit back of a little bit nightmare story with, um, the nightmare of, you know, back in the housing crisis right before the, the bust was the boom. People lining up like it was, uh, you know, uh, amusement park at the new home builders getting tickets and raffle tickets, you know, kind of reminds you of those days. Yeah, I get this all the time. Do you think we're headed for a bust? You know, I'm not an economic major, nor do I ever want to be, right? I only can tell you the facts of my, um, my, my education as well as my years of experience. Okay, these days, um, we have to qualify you on a loan, so you have to be pre-qualified. In the back in the day, you didn't need any income or assets or barely a credit score to buy an investment property, let alone a primary resident. So crazy, you know, so it's different now with qualifications. Of course, the Arizona real— the Arizona market in general, in the past we were so dependent on housing and tourism, you know, and building. Um, and now these days we're getting almost like the mini Austin as well as the mini, you know, um, a tech, uh, center where tons of companies are coming here because the taxes are lower. Home values are lower, it's more affordable. So, you know, we're one of the biggest, um, counties growing these days, right? I think that— I don't think it's gonna— it's gonna be a bust. It might slow down a little bit, you know, appreciation might, um, be a little bit less than 10 or 15%, average 3 to 5%. Gracie, Leo, stop. So I apologize. No problem. Yeah, so, um, But I don't think we're going through a housing bubble. I think we need more inventory on the market for sure. And I think people, um, want to move here, you know, they want— they have a desire to move here.

Right. What kind of interest rates, you know, because everybody's like, oh, the economy's terrible, but like, like for a buyer, you know, because everybody's just really fond of their 401s right now, but everything else is like, it's terrible. What kind of interest rates are people expected to, you know, to pay if they're looking to buy a house and they are coming into Phoenix?

I mean, rates are the lowest I've ever seen, to be quite honest. So I don't like to say a certain interest rate because everything's dependent on so many things— your credit score, how much of a down payment you're doing, if you're buying a condo versus a single-family, primary home, investment home, secondary home. All these things come into play, right? But, you know, in general, 15-year fixed are well below 2.5%.

Okay.

Um, 30-year fixed are just shy or below 3%. So, um, the rates are— and this is with great credit, uh, or decent credit, um, and you don't even have to have that much money down, right?

Okay.

Historic lows. I mean, I never— honestly, I never— I never would think that these rates would be this low for this, this long.

Yeah.

Like, you told me A year ago that, um, we would be in a pandemic. I would be isolated for 6 months and the interest rates would be the lowest ever, and I would have a record-breaking year. Like, literally, I did just as much volume last month as I did the year— the whole year before.

Wow, that was my next question, how your business has been affected.

Crazy, huh? Honestly, I say if I don't have to do another loan until the end of the year and just take a break You're cool. I would love to, but you know, it goes back to the golden rule: treat people the way you want to be treated, right? You know, you come to me, I treat you really well, my goal is for you to tell your friends and family about me, and of course you'll leave a review on, you know, social media. Yeah, and that's how I grow my business. I don't advertise, I don't have billboards, you know, it's just word of mouth, you know. Yeah, treating people the way you want to be treated.

Absolutely.

You call me, I call you back, you email me, I email you back. In the back of my mind, I'm like, doesn't every business do this? I'm looking for a handyman— or not handyman, especially— I have electric gates, um, on my house and they need to be replaced. I went to Yelp and contacted 5 different companies to do a request. Only one followed up after I called them and I said, hey, I did an inquiry on your website, did you get it? This is like 4 days later. Oh yeah, sometimes it goes to my junk mail folder. I'm like, how are you a business owner?

Right.

The 4 others never followed up. Maybe they're so busy that they cannot keep up with the demands, but if you're running a business, you know, you, you should call people back.

Yeah.

I'm not taking new clients. Um, this is what my expectations are. If you can wait 1 month or 2, I'll put you on my list.

Right.

I get upset when people don't treat me the way I treat my clients, right? But I'm realizing that that's not the norm, you know.

Absolutely.

It kills me that when someone calls me and maybe it's a little bit later in the day that I can't call them back until the next day. And people are like, well, that's normal, isn't it? I'm like, it kills me because I want to call back people the same day.

Yeah, the same day.

You know, but I have, you know, my to-do list of people I call, I scratch it off and, and, you know, I prioritize how to call people back, but I call people back. Of course, you know, and sometimes, you know, it's not a good fit with a client, you know, right? Have higher expectations than what I can give. And sometimes I say, you know what, we're not a good fit. And that's okay, you know, usually someone who is a challenge right from the beginning is going to be a challenge from the end.

Right.

I'm not trying to be negative on this story, but we totally get that. We have to treat people with positivity. There's so much negativity out there in the world, and we're all human beings. So texting someone at 10 o'clock at night expecting an answer, which, you know, sometimes people do, and I don't get back to them because I'm in bed because I'm a grandma at 8:30 and I wake up at 5:30, you know.

Yes.

I'll get back to people, but, you know, have respect for the people that are helping you out, right? You know, and, you know, would you talk to your mother like that?

You know, absolutely.

Like that. And, um, when I do have a challenging client and it doesn't work out, I have a little folder in my Outlook for all the positive reinforcements of clients.

Oh, that's so good.

You know, that I do do a good job. I am good at what I do. I might—

right.

Fluffing my feathers, you know, you know, I always say leave the ego at the door. In this industry, as well as real estate, there's a lot of egos, you know, people, you know, make a lot of money and they think, yeah, they're too good for someone. I'm like, leave the ego at the door because I can hold my own, you know, I'm the top 1% of originators in the United States. But I remember that it always goes back to your childhood. And People think, oh no, it doesn't. You know, my parents— oh, it does. It always does. My parents are teachers. My father works summer schools so we can go to Disney World because we were on the East Coast every year. And I remember how hard he worked for us to have an enjoyable childhood, right? And that never leaves me. So yeah, I can make money, this and that, but I'm I'm not going to be acting like a hotshot where it's like, oh, you're only buying a $200,000 loan. I'm gonna— I'm only dealing with a million dollar property, right? I always say I'd rather have 4 $250,000 buyers than $1 million buyer any day of the week. Those 4 people are gonna tell 2 other people, they're gonna tell 2 other people. The web effect, they call it.

Of course.

And, um, I love first-time home buyers. They're the most appreciative, most kind, and it almost gives you a purpose and sense of why I'm doing this is giving that client their first house. Yeah, second homes, move-up buyers, you know, uh, downsized buyers, you know, people who have empty nest homes, right? Everything. But there's nothing that I can say that is more gratifying than helping someone get into the first home. And it, it's honestly the reason why I do what I do.

I love that.

And because unfortunately, this is a thankless job sometimes, you know, talk about dating between a seller and a buyer. And so, you know, we date as a consumer and a lender.

Yeah, yeah.

The most intimate details of your whole entire life, social, your income, your credit, your assets, everything. Maybe sometimes even more stuff than I really want to know, right? You know, and sometimes, you know, after the closing, we don't talk. And, you know, it's just a transaction. I really like to have relationships where if they think about refinancing the house down the line, they can help them out with that, right? About buying a second home or an investment property. So that it's always try to keep in touch with them. But sometimes, you know, you hear from a client, you know, talk 45 days and then never hear again, and that's right. And sometimes I become best friends with my clients.

I love that.

Yeah. And, you know, some— and getting back to the thankless job, sometimes you just don't get a thank you, and sometimes all of a sudden I get a fruit basket. I'm like, that Yes, there it is. And I don't need to be paid back because this is the job that I do, but sometimes, you know, like, thank you so much.

It's nice to hear thank you.

Yeah, and the reviews solidify that I do a good job, right? To take the time to do that, and I do read them. When, you know, we're human, we have bad days, and it solidifies, yes, you know, I'm on the right career path. Yeah, it's the right way. And you know, it just helps me sometimes get through a difficult day time.

Absolutely. I was reading through one of the Yelp reviews, actually, it was a guy from, in June that you work with. And he said you are one of the all-time best lenders he's ever worked with. And I was going to ask you what separated yourself, but you just explained every bit of that. And so if I'm listening to this podcast right now, I'm like, Jeremy's the guy because he's personable. He wants to treat people the way he wants to be treated, and he wants to establish relationships. And I think that's so important because you can always go to any lender who does all the things that you do, like, on paper, but it's that personal touch, right? You can get the same thing down the street, but it's the— it's, it's, it's the care that— it's the compassion that you have. It's the relationship that you're building. So I love that.

Thank you. I know we want to touch on, like, out-of-state or internet lenders. Honestly, this— like, I got in the business a long time ago, and then I seen our— my industry changed dramatically. Like, everyone and anyone does loans these days.

Like, LendingTree is online, right?

LendingTree's online. Yeah, I don't get a lawsuit by badmouthing them, but you put your inquiry in there and you get tons of people calling you. If that's the route you want to go and you have the time and have strangers call you Go, go at it. Go to Costco, but they don't do loans personally, they outsource it to other lenders. I always say you can't get Walmart prices at Nordstrom, and you can get Nordstrom service at Walmart. So I know that you want to be competitive in the industry, and Fairway is a very large lender. We're the second largest private lender behind Quicken and the fifth largest lender in the country. Year to date, we did $40 billion in loans with a B. Wow. So we're not like small potatoes, and we're actually the number one purchase lender in Phoenix, Arizona. So what does that mean for the consumer? Is that when you're making an offer to me and I'm the seller or the seller's agent and it says Fairway on the loan, I'm not saying you'll get the house, but they'll know that we perform. They know that we'll close on time. They'll know that we will communicate and make sure this is a good transaction. So when you go with an out-of-state lender that maybe doesn't even know the Phoenix market, and maybe it's a little cheaper in fees or a little slightly less in rate, you know, do you want to put yourself through that torment, torment and frustration? Because guess what, you know, it's normally 8 to 5, it's a call center. After that time period, you won't get the same person. They won't know you as a person. You know, I give my personal cell phone number out. People can text me at the time. And yeah, that is a little bit of a premium versus going to online lender. You don't get the direct cell phone number, right? Barely get a response. Sometimes you get frustrated. I've had clients go in the middle of a transaction on the purchase and come back to me a week or two later, and then basically I have to drop everything to close this in a time frame. And it's stressful, but I do it. And, you know, and one of the reviews says they went to a bigger lender. They even mentioned the bank And they said that they went back to me and I closed the loan in, you know, 2 weeks.

Right.

But, um, you know, I just try to, you know, the golden rule. It's, it's just very, it's so simple yet so people just don't get it. Right. You know, and, um, I don't know, I've been doing it for 22 years. I'm very blessed and grateful for all the clients have trusted me as well as the relationships with the real estate agents I've had. And, um, you know, for anyone that's listening to this podcast, I'm not saying that I'm the best and that your lender is awful. There's so many, so many great lenders out there. I have lots of friends on Facebook that are my, you know, direct competitors.

Yeah.

You know, and I follow them, I listen to them, I cheer them on, I like their posts. I say that's great information because there's enough business out there for all the people that are trying to do loans.

Yeah.

Um, so I'm not the only one here, and I always, I always try to not to make it about myself. I try to make it that you need to feel comfortable with the lender that you're going with, right? So if you have red flags, like, you know what, this person's not calling me back, or I didn't like how he talked to me, or she talked to me, or, you know, I'm always having a hard time getting in touch with them, listen to your gut, you know, the red flag instinct as a consumer. Say, you know what, I'm not sure if this is the right fit for me, right? And, and it's okay, you know, a lot of times if you're going with a real estate agent, they'll refer their preferred lenders because they know how they perform. They usually give a couple, you know, interview them, Google them, look at their names, you know, right? An educated loan officer in my field, if they don't have a website as well as reviews on them, they're doing an injustice to their business because people are Googling me way before they even contact me. I remember one time someone said, I was fortunate enough to meet one of the presidents, President Clinton. He's like, how did you meet President Clinton? I'm like, that's on my Facebook, and my Facebook page is locked down, you know, with, you know, with privacy settings. And basically, they're like, oh yeah, I saw that. I'm like, okay, well, first I'm going to change my privacy settings because I don't want everyone and anyone who's not a friend of mine to see it. But, you know, people are doing their research way before. To you. So trust your gut. If you don't feel comfortable with the lender, you can always switch. Ideally not in a contract because you're in a timeframe, but ideally, you know, finding the right lender when you find the perfect home.

Wow. Thank you, Jeremy. You know, I feel so much more educated. You are a book of knowledge. I feel like you spent one full year just learning all the terminology. You know, this stands for this.

Yes. And sometimes when he said FHA, I'm like, oh, I hope I know what FHA stands for.

Right.

Housing Administration. Yes. Well, sometimes, you know, you see these terminologies and then you forget what they mean, you know, so, you know, you have to feel comfortable with the person and like I mentioned before, you're not buying a shirt at Macy's, you're buying a house, your biggest investment of your life in normal circumstances for the average consumer. So ask lots of questions. I always say there's no stupid question, you know, when someone says, oh, I'm bothering you, I'm like, you're never a bother, you're the reason why I have a job. Right, you're the most important thing in this transaction. It's not the real estate agent, it's not the seller, it's not the title company, it's not the inspector, it's not the appraiser, it's not the loan officer. It's you. Yeah, you have to realize that you're the reason why we're all here together. And sometimes people don't realize that, and sometimes the New Yorker has to come out in me a little bit. Oh, when, when a client is getting disrespected and I'm like, no, no, no. And I've had to Well, I say yell, how to go up the chain of command with title companies that are not giving good service. I was at a mobile notary service when the notary threw a pen at the client for signing, and I stepped in because I can see my client getting really upset. And I said, this is the reason why we're here, and you should never do that, or we can stop this and we'll get another mobile notary.

Okay.

So I don't put up with any BS from people when it's disrespectful for people, because everyone deserves respect. It doesn't matter if you're buying a $50,000 condo or a $5 million house on Camelback Mountain. Okay. Everyone deserves respect, and if they don't, if they don't have the power to speak up, I'll speak up for them, at least in my, my world.

Nice, nice. Thank you for that. So just one final thing, you just said, you know, some advice that you would give: ask a lot of questions. So let's say it's an average person who has very average credit. I'm talking, you know, 600, and but they have a really good job. Can you 100% put them in a home?

Not 100%. Okay, I don't like 100% because 100% sounds like it's definite. Um, the better the credit score, the better your interest rate, the better the program, the better everything. So, um, for us, at least Fairway, our minimum credit score is a 620.

620.

It used to be a 580.

Okay.

And then COVID hit the CARES Act came out with the president, which had good intentions, but basically people stopped making payments on their mortgages, you know, deferred it, even some people who didn't need that. Um, so I mean, I had people say, hey, I'm not gonna make my mortgage payments so I can save up for an investment property. I'm like, that's not the point of this CARES Act. The CARES Act is for people that lost their jobs, that cannot make the mortgage payment or the rental payment, and they can't get evicted or foreclosed. Okay, so from March, like, March was a crazy-ass month. Pardon my French. Like, it was nuts. It went from we can do this to the next day we can't do this. We went from verifying employment 7 days before close to verifying employment 10, then 7, then the day of employment because people were losing their jobs left and right, right? So getting back to your, your question about credit scores The better the credit, the better the program, the lower the interest rate, right? So if you had a 620, you can still get a loan, but the, the rates are going to be higher because it's a more risk— riskier loan. So got it. I suggest clients— they have like actually like, um, a sheet that I send to clients when they have challenging credit. You go to your utility companies and have your utilities reported to your credit agencies as a trade line, it's called. So if you're making on-time payments to your electric company, that will show up on your credit. You can get secured credit cards, which are like a debit card but is a secured credit card. So you put $200 on, use it for gas, it shows that you can manage your payments. Having a 40— ideally a 40% ratio between your balance and your credit line. So if you have a $1,000 credit line, having a balance of $400 or less so you don't have a huge amount of usage, and obviously paying your bills on time, right? When someone says, I have a 600, or, you know, I have clients like, oh, my credit's perfect, pull their credit, they have like a 580. I'm like, listen, you know, you know, talk to me like, talk to me like a friend. You know that you haven't paid your bills on time, right? Those letters in the mail, you get the collection calls, you get all that stuff. You realize that you were late on a debt because they notify you. So lenders look at your past credit to ensure that you're going to be paying your mortgage on time. Of course, if you can't make your car payment on time, you barely can make your credit cards on time, you have collections, you have judgments, you are maxed out on your credit cards, what do you think is you're going to do with your mortgage? Do you think you're going to pay it on time?

Yeah, you know, past patterns.

So I'm not saying it's fair or not. I'm just saying that if I'm gonna lend $300,000 to you, I'm gonna make sure that you pay it back to me. So, of course, as a lender, I pretend that it's my money that I'm lending. And I'm not saying that I'll deny you because I think that you don't deserve it. I run through my whole automated system. But if it does get denied, I understand why. Okay, you can't manage your credit. So just because you've had bad instances in the past doesn't mean that you can't buy a house in the future. You just need to have a good foundation and, um, get your credit in, in order. Perfect. You can get a free credit report at annualcreditreport.com. It's free every year. You usually get credit reports from your credit card companies as well as some other avenues, you know, and take control of your life. And you have to start somewhere. So if you're not ready right now and you have a lower credit score, doesn't mean you're missing the boat and you can't buy a house down the line. You know, sometimes I have a hard time telling clients, are you really ready to buy a house? You barely have enough money in the bank. What happens if your roof leaks? What happens if you get out— you don't have an emergency fund? You know, these things are really, really important. And maybe I'm a little more conservative, but I, I don't want to see my clients being foreclosed upon. I want to make sure that, you know, they have emergency fund. And sometimes people can barely get that down payment. And there are down payment assistance programs that we didn't even touch on. I'm not honestly a big fan of them just because the rates are higher and the fees are higher. Honestly, if you don't have the minimum down payment for a home and you don't have any emergency funds, you shouldn't really be buying a house. And, you know, that's my avenue. There might be some lenders that like, they'll take any loan that they can get. Yeah, but I can at least sleep at night and have a conscience that I said You know, maybe you're not ready to buy a house and rent for a year and pay off your debt. And yeah, go to another lender and get a loan, and that's okay. You know, I don't have to do every single loan that a client comes.

Absolutely. Well, if I'm a buyer, I certainly appreciate that about you. I appreciate the honesty. Absolutely.

You know, honesty is, you know, is the best policy, and sometimes you don't want to hear it, you know. And, you know, truth, you know, truth hurts sometimes.

Yeah.

So You know, I had a client apply with me. I told them they couldn't qualify. Guess what? They called a counterpart in a different office within the same company, and basically they contacted me saying, 'You did the application.' I said, 'You know what? I don't think they can do anything. I'll pass it along to you if you think you can do something better.' And sometimes people don't want to hear the truth, so they go somewhere else and waste time, unfortunately. And like I said, I have— I can sleep at night. I know that clients, you know, can qualify and know that they're not overburdened with debt. And, you know, that's how I've done it for, for well over 20 years.

20 years. Yeah. Nice. So Jeremy, one final thing. Where, where does your preferred method of contact— somebody's listening to this episode right now, how can they get in touch with you because they want to hire you?

Sure. So, um, I can give them my mobile number, which is 480-703- 8088, or they can email me at Jeremy, J-E-R-E-M-Y, S as in Sam, at Fairway, F-A-I-R-W-A-Y-M-C like Michael Charles, .com. Or they can go on my website, which is mortgage loans with an S, AZ like Arizona, .com. But, um, I have an office number, but my iPhone that is blowing up Perfect. You know, if it's not me, just go with your gut instinct, whether it's a real estate agent or a lender. Yeah, if you don't feel that from someone, then go with someone else. Plenty of people out there.

Absolutely. Well, thank you so much, Jeremy. This has been so informational and educational. I certainly myself, I learned a lot today.

Oh, you're so welcome. Thank you so much for the opportunity. It's been great to talk to you.

If you like what you're hearing And perhaps you're interested in having a complimentary conversation with me. Click the link at the bottom of the show notes. Thank you so much for listening. If you even want to know more about what I'm up to, head over to traviestewart.com. And if you like seeing the videos of the podcast, every episode is on my YouTube channel. Take care, guys.