4: Learn From Your Lender, with Mortgage Lender Marie Lifschultz

They just want to know what's the most they can do. And you're like, well, it all depends. Like, there's a lot of—

there's a lot that goes into it when you look at it. They feel like it's a test they have to pass.

Right.

And it's not. I mean, this is not something that you learn in school. They don't teach you how to buy a home. Right. If I wasn't in— I always tell people this— if I was not in the industry I'm in, I'd have no clue. I actually had an older couple who hadn't owned a home in quite some time, and I got a text from her the day of closing. She's like, "Oh my God, I'm so glad we have a home again." I have to figure out a way in the corporate world to still feel like I'm serving someone. So hopefully this helps take out some of the anxiety a lot of people have when they purchase a home because they just don't know what's happening.

Right.

And hopefully help them feel like they're making a good decision. We're Erika Radis and Marie Lifschultz, a San Antonio area realtor and lender. But most importantly, we're working moms.

The goal of this podcast is to provide support and a sense of community to San Antonio area working moms like us. So join us in trying to find a balance between career, family, and everything in between. Welcome to the fourth episode of the Working Moms of San Antonio podcast. For this week, we're talking about what a typical initial lender appointment looks like since we're both in the real estate industry. Yeah. So yeah, I mean, I want to know because I, when buyers come, you know, I typically say you got to meet with a lender first because we've got to know what you can spend. And so I want to know what that appointment looks like once I send them over to you.

Got it. So each lender is going to be a little different. So I like to feel— I am part of a large bank, right? But I like it to feel like a hometown, small-town bank. So, um, it's really right now a lot of it's virtual. So, um, ideally I would love people to come in and meet with me in person. Yeah, they get to know me, but that doesn't happen very often. So typically, um, if someone's referred to me or they reach out, um, I like to set up an initial call. Okay, so whether it's a Zoom call if they're comfortable with that, or just a phone call. And a lot of times my goal is to get an idea of what their purchase goals are, meaning You know, yes, I want them to buy a home, but I also want it to be within their budget, right? So a lot of times when a lender is looking at whether you qualify or not, there's a lot of things that come into your expenses that we don't see. Like, I don't know your savings, your savings goals, your retirement goals. We don't take that into account when we're figuring out what kind of payment you can afford. We don't look at daycare costs, stuff like that, right? Private school costs if you have that, and so forth. So initially I want to know, my first question typically is, you know, what's going to— what's the, you know, ideal payment that would fit into your budget? Let's talk about your budget first, right?

So it's not necessarily what's the max you can qualify for, because I know people sometimes want to know that.

They want to know that. Oh yeah.

And I sometimes will call you and be like, you know, buyer, you know, so-and-so, they just want to know what's the most they can do. And you're like, well, it all depends. Like, there's a lot of—

there's a lot that goes into it when you look at it.

So in the— and in that initial appointment, do they need to have some documents ready?

Not necessarily. My first call is just getting an idea, a feel for what their financial goals are.

I see.

Now, if you go online and apply online, you can do that for a lot of people without even having a conversation. There's not going to be someone on that other end keeping you within your budget. So a lot of times with something like, I don't know what I qualify, I'm not sure about my budget, that's okay, we'll have that conversation. Um, so I ask them a lot of questions relating to expenses and what they're, you know, is this going to be your forever home?

Yeah.

Is this going to be— is this, you know, what type of home? How's this home going to work for you?

Yeah.

At the end of the day, I do feel buying a home is a first step in building wealth.

Sure.

It's the biggest asset you'll have eventually. So, and it's a big decision. It's a lot of money. The homes aren't cheap anymore. So having that conversation, at least so at that time, we set you up to have the best possible experience.

Right.

So after that initial call, a lot of times, depending on the situation, but most of the time I will send some kind of electronic link either via email, text, or direct them to a website where they can take their time and apply online. Typically, an application is going to take you 10, 15 minutes to fill out, and the basic information that you're going to be giving to a lender is going to be, uh, where you've lived for the past 2 years, where you've worked for the past 2 years, um, what you feel your, your monthly income is going to be, how much, um, money you have savings and retirement assets, that kind of thing. And if you own any other property, and you'll answer a few questions about your intentions for the home that you're applying for, right? How you're going to use that house. So whether using the home, the house as a primary residence, meaning you're going to live in that home versus, oh, this is a vacation home, this is my second home, right? Or maybe it's an investment property that you're looking to have renters or Airbnb or something like that. So those type of questions will be asked via the application.

And those type of like the use of the home, I know that we've talked about how that makes your interest rate vary. Yep. And that interest rate makes your payment vary. Yes. So you have to know that kind of stuff. And so it's super, super important for the buyers to be very upfront with the lender.

Yeah.

You know, about and, you know, and tell them kind of what's really going on. So, and we've also had this conversation where on the real estate side, we don't always get all of the information. So people are not comfortable talking with real estate agents about like their financial situation sometimes.

I think they're uncomfortable in general. I think if they feel like it's a test they have to pass, right? And it's not. I mean, this is not something that you learn in, in school. They don't teach you right how to buy a home, right? If I wasn't in— I would tell people this— if I was not in the in the industry I'm in, I'd have no clue.

Yeah.

And the rules change, which is not fun. The, the how we look at loans changes on the, on often just because, um, have you ever heard the term of weighing risk? Weighing risk of something, um, that changes over time because time change, right?

Right.

Um, right now, um, we're in, uh, January of 2023. Rates are volatile. Rates have, um, last year rates went up quite a bit, interest rates, that is. And we knew that rates would have to eventually come up. We didn't know it was going to come up that fast.

Right.

And it just changes. And rates are driven by the market, which is government, what's going on in the world. And there's a lot of things you just can't predict.

Right.

So I don't have a crystal ball to tell me.

Sure.

But the way banks say, hey, are you a good risk for me to take?

Right.

They have to be able to measure the ability of you to be able to repay that loan, right? And so obviously credit score falls into that category. It's not my, if I had all the power, it wouldn't be the way I would like to rate a person.

Sure.

Credit score, high or low, is basically the measurement of how likely you're going to be able to repay, right? But it's derived on how much debt you have or how much credit you have available to you, right? Well, if you're a person who has no debt, it's very possible you might not have a lot of credit. You might not have a credit score.

Yes, I've had clients like that where they've paid cash for everything their whole lives. And so they've had no credit.

Correct. You know, so the bank doesn't have a way to measure, right? Measure you, the risk of, you know, the likelihood that you repay the loan. So they have to use alternative methods, which in their eyes feels is an additional risk. So it adds maybe a higher interest rate or the cost for that interest rate will change for that particular buyer. So at the end of the day, when I tell people like, hey, Yes, interest rates are important. Yes, all those things are important. At the end of the day, you have to feel comfortable with that monthly payment, period. Interest rates come and go. Refinances are there. So we can help you and find a way to save money, right? But if you find the home of your dreams, you find the home that you want, a good investment, a great second home, whatever the case is, the home isn't the most important versus what the interest rate is. The interest rate will fluctuate. You can always refinance. We can find— like I said, at the end of the day, you want to feel comfortable with the monthly payment. Can I make this payment on time and so forth?

Yeah, definitely. Yeah, definitely. So, so once they submit this application online, then what happens? You ask for more documentation?

So yeah, so along with that, the way I handle is a lot of times I'll prep them like, hey, there's going to be some documentation that I'll need physically from you. So Typically I'm looking at if you're pay stubs, some tax forms, your W-2s if you're self-employed, your personal tax returns, maybe business returns if you file those types of, you know, tax returns. And so I want to review those numbers for you. It's hard to believe a lot of people don't really know how much they're paid. They know what comes into their bank account. They know what their net is after taxes, insurance comes out of your paycheck. But a lot of them don't know what their gross income is, and that's how your qualified. You're qualified off of your gross income. So I look at those numbers. I then pull— I, so I have to have paperwork to review. So you'll submit those documents. Then you'll also, obviously, you'll give— once you fill out the application, you're giving us, the lender, permission to pull credit. Okay, so I pull credit at the same time.

Now, when you pull credit, is it a hard credit pull?

It is. Okay, so you want a hard pull. Um, And there's a lot of stuff out there where, hey, it's going to affect your credit score. It does. So when you— when someone does a hard pull on your credit, they're pulling all 3 bureaus.

Okay.

So Experian, TransUnion, and Equifax.

Okay.

And what that does is not every debt or account that you have reports to all 3.

Oh, okay.

So like if you have, let's say, I don't know, a Chase credit card, that credit card might not report to every bureau. So that's why, so like a lot of times they're like, you, you use, um, like your credit app to see your credit score. They might use one of the bureaus. Yeah. To help you monitor your credit, which is good.

That's a good thing. No, my credit looks excellent on that app.

Yeah, right?

But really good.

It might not show everything. For example, if you have a, and everybody does, everybody has some kind of cell phone collection of some sort, or they have some medical bill that, yeah, that you never got a bill for that's on your credit report. Now that's supposed to be coming off here soon. But that might report to just one bureau, and that will affect that score. I see. So when we pull a tri-merge, which is all the three bureaus, you have a high, you'll have a middle score, you'll have a low score. So the middle score out of the three would be what we use for qualifying.

Yeah.

So, um, and that's how that looks. Um, but to people, the, the myth— or not myth, but people say, oh, it affects your credit, your credit score. It doesn't affect it when I pull it. Okay, the date that I'm pulling it is being affected by whatever's on your credit report that day.

Okay.

Okay. And it's not current. So a lot of times, you know, the app that you use on your credit, your credit card app or whatever, that's more of a consumer report. And what that does is it's somewhat real time. So as you make a payment, you'll see that score go up. Oh, right. You'll see that kind of bounce up a few points or whatever, because when you make a payment, you're now opening up credit available to that. It's going to be available to you. So that's a positive thing, having credit available that you can use.

Yeah.

But when I pull credit, it's a snapshot in time, so it might not show the most recent payment that you made. It might be a month behind, right? Because it doesn't catch up that fast.

Yeah. Yeah. And honestly, I feel like we could probably do a whole other episode.

Oh, yes.

On credit, about what credit is and what determines if it's good or bad and, you know, risk factors and different things like that. So that might be an episode for a different time if people care about credit. I mean, there's so much to know that I—

There's a lot. There's a lot to know about that. So when I pull credit and you ask about it, because people are like, is it going to be a hard pull? The hard pull, the reason, because you're going to have an inquiry that shows up on your credit report. Now that inquiry typically won't show up for 30 days. So if you were to pull your credit today, and then let's say in March, pull your credit again, that inquiry is now there. So typically, on average, depending on what's being reported, it's about a 2 to 3 point, I guess, hit.

Oh, I see.

To say, so it's not huge, but again, it's also in combination with other things being reported at that time, right?

And I guess if you were sort of on the borderline, um, of qualifying, somebody might have a concern about if that was going to happen.

You know, a couple of points maybe makes a difference sometimes, but in order for a lender to truly see, hey, do you qualify qualify, they, they need to have that. There's really no way to truly understand your finances without seeing it.

Yeah, so no, that's true, that's true. Um, so okay, so now we're at the step where they've applied, you've requested additional documentation, so then you guys review that documentation and that determines if they can be pre-approved or not, and then we get to do the fun stuff on our side. Yes.

Okay, so you'll hear the, the term of pre-qualified versus pre-approval. You want a pre-approval because what that means is an underwriter's reviewed your credit, they review the documentation that you've sent in. And now you have the ability that, hey, this is stamped, we have actual numbers to review. Pre-qualified is great, but it's not stating that we have actually seen the documentation required to know that if you really qualify. So I'm going based off credit score and the information that you've inputted, which sometimes can be right and sometimes might not. A lot of people tend to put a lot less income than what they actually make on paper.

Because they think it won't qualify?

They typically net, like they're looking at what comes into their bank account.

Oh, I see what you mean.

So you might qualify for a little bit more by me seeing your documentation, and I might find different ways of qualifying. It gets— so it's very confusing, but there's a lot of information that we look at, and it's not just— and it takes a little time to get it all done, but for the most part, you want a pre-approval if you just kind of want to see, truly know, hey, I'm going to be looking for a house in the next 2 months, I really want to know what I qualify for.

Right, right.

So it makes your offer, when you do put in an offer, a lot stronger.

Yeah, absolutely. I mean, you need that letter, um, just to show that you're the real deal. When people are letting you into their homes, you know, they want to know— they deserve to—

they bet it—

yeah, they deserve to understand that the people that are going there, um, through their home have the capability of buying that home.

You know, you don't want to go to a home and, oh, I love this home, and then you realize you can't afford it.

Oh man, that's just setting yourself up for some real disappointment.

Yeah, it's not fun. So again, and my goal obviously is to get you pre-approved for what you want to be, but also, um, at the end of the day, I'm also there to help you make financial decisions, right? So help guide you. Um, I'm not here, you know, I'll give you lots of— hopefully, um, my goal would be to give you lots of options. So most people do qualify for multiple types of loans, right? So, um, if I can give you some options like, hey, depending on which home you pick, you might have 2 or 3 options, right? And at the time that you put an offer, we'll figure out which one works best for your budget, right?

No, for sure. Well, you've been doing this a long time.

Long time. Yeah, long time.

So what, what is your— we have asked this of guests now— what is your favorite thing about your job?

My favorite part, I, I'm, I'm a math nerd. I love doing, uh, the math part of it.

That makes one of us because I love numbers.

Um, no, but it's truly like, um, when someone— I actually had a an older couple who hadn't owned a home in quite some time. And I got a text from her the day of closing. She's like, oh my God, I'm so glad we have a home again. So that's a great feeling.

I love that.

It's a great feeling. They went through some financial hardship the last couple years and they moved to Texas. And I mean, it's a little bitty house out in, out in the country. And she's very, very happy. So that, that's the best part of it. The, the playing with the numbers is my other part. It's a big puzzle. What I do is a truly a big puzzle a lot of the time. But helping people, I mean, I have to figure out a way in the corporate world to still feel like I'm serving someone. So hopefully this helps take out some of the anxiety. Yeah, a lot of people have when they purchase a home because they just don't know what's happening.

Right.

And hopefully help them feel like they're making a good decision in buying a home.

Yeah, no, definitely. Every time we talk about it, I learn something new.

So I feel like that's always a good thing.

Yeah. So, okay, well, that was the fourth episode of the Working Moms of San Antonio podcast. We're Erika Radis and I'm Marie Lifschultz. Marie Lifschultz. And we're your friends in residential real estate. So we hope that you found this informative and that you tune in, you know, next week. So we'll just see you then.

And if you have any questions, please reach out to us. We'd love to help.

Definitely.

All right, thanks so much. Thanks, guys.

Thanks so much for tuning in to the Working Moms of San Antonio podcast. Be sure to follow us on social media at our respective Instagram accounts or join our Working Moms of San Antonio Facebook group. Those links can be found in our episode description. If you have an episode topic suggestion or question, please email us at office@radisagent.com. And be sure to subscribe to the podcast and leave us a review. See you next week.