Designing and Building Mid-Illinois: Realtor segment with 1st Choice Realty Pros: All about Loans

Summary

In this conversation, Chris, Kaitlin and guest Lisa Miller discuss the intricacies of the mortgage process, focusing on the role of Brooke Drum, a mortgage loan officer. They explore various topics including the current market trends, common misconceptions about home buying, and the importance of education in making informed decisions. Brooke shares her background, the types of clients she helps, and the various loan options available, emphasizing that many buyers are unaware of the flexibility in down payment requirements. The discussion highlights the significance of understanding credit scores and the impact of market fluctuations on mortgage rates.

Takeaways

• Education is crucial for buyers to understand their options.
• Many believe they need 20% down to buy a home, which is a myth.
• FHA loans allow for lower down payments, making home buying accessible.
• Credit scores play a significant role in loan eligibility and terms.
• The mortgage market is currently experiencing fluctuations in rates.
• First-time home buyers have various programs available to assist them.
• Brooke emphasizes the importance of comfort in monthly payments over just the purchase price.
• Understanding the mortgage process can alleviate buyer anxiety.
• Communication between real estate agents and loan officers is vital for client success. It's important to teach decision-making skills for buyers.
• Buyers should understand PMI and its implications on loans.
• Seller concessions can significantly help first-time home buyers.
• The loan process can be simplified with the right team.
• Pre-approval is more valuable than pre-qualification.
• Building relationships in real estate is crucial for success.
• Buyers should be aware of all costs associated with buying a home.
• Effective communication can alleviate buyer anxiety.
• Understanding loan types can lead to better financial decisions.
• Buyers should not rush into house hunting without pre-approval.

https://1stchoicerealtypros.com/

www.bigdogcc.com

Produced by Big Dog Media group with Big Dog Business Coaching

Transcript

SPEAKER_07 0:00

Welcome to Design and Building Mid Illinois.

SPEAKER_08 0:02

One home at a time with Big Dog Instruction.

SPEAKER_05 0:04

The podcast is how you need it.

SPEAKER_08 0:07

It's good to get more genie. Join us as we explore the stories, expertise, and project shaping the future right here in Mid Illinois.

SPEAKER_05 0:14

Whether you're planning a build, curious about the latest trends, or just a lot of innovative ideas, we've got insights and inspiration coming your way. And some last two.

SPEAKER_08 0:23

Let's go.

SPEAKER_04 0:25

Hey there. I'm Lisa Miller, managing broker and owner of First Choice Realty Pros. We don't just help you find a house, we help you discover home. My team and I are passionate about taking care of your needs, making the process smooth, and ensuring you get the personalized attention you deserve. Ready for the next step? Call us at 217-825-3999. With First Choice Realty Pros, you've got a team that's got your back.

SPEAKER_08 0:55

Hey, welcome back to Design and Building Mid Illinois, one home at a time. We are here with Chris, your host, and Caitlin. Hey! Oh, 14 traders. We also have Lisa joining us today. Hello with First Choice Realty Pro. She is our 10x partner, and we are glad she's here today. And we have a special guest with us today. And her name is Brooke Drum. And Brooke is a mortgage loan officer. And we're going to get a little bit more about Brooke in this episode and what and how she helps First Choice Realty Pros and home buyers and all that good stuff, right? Perfect. So you want to say hello?

SPEAKER_06 1:32

Hi guys.

SPEAKER_08 1:34

That's right. Perfect. Hey, awesome. So what we're going to do on today's podcast, again, we're going to dive into everything loans. Loans. How they work. How they work. How Britt can help. How Lisa can help, how Lydia can help. And unfortunately, for our listeners and followers, Lydia is under the weather today. She is. We wish her well and quick recovery. Yes. Right. But we are going to have her in spirit. Uh Caitlin's going to bring her side of energy up for double time.

SPEAKER_05 2:04

10X time.

SPEAKER_08 2:05

Double time. 10X time.

SPEAKER_05 2:06

Yeah.

SPEAKER_08 2:07

That's right. I love it.

SPEAKER_05 2:08

Gotta get in there.

SPEAKER_08 2:09

Oh my gosh. Well, awesome. Well, I tell you what, you know what? Let's just let's just jump jump in. Brooke, tell us who you are, what you do, and what makes you tick.

SPEAKER_06 2:18

What makes me tick. Okay.

SPEAKER_08 2:20

Yeah. In a good way, not a not a bad, like a ticking bomb.

SPEAKER_06 2:23

Okay, well, that's fair. So my name's Brooke Drum. I'm with Illuminate Bank. Um, I work with a lot of different buyers and people who already own homes with refinancing. Um, a lot of the people that I work with is first-time home buyers, maybe people who need down payment assistance. My husband's also a military veteran, so I do a lot of VA loans. That's how I met Lisa. Yeah, that is how I met Lisa through a really complicated VA loan. Um, but I do everything from you know, people who are wanting to upgrade their house, people who are wanting to downgrade or downsize their house. Yeah. You name it, I I probably do it.

unknown 3:02

Yeah.

SPEAKER_08 3:02

Awesome. Tell us, tell us a little bit about your background. How did you get into what you're doing?

SPEAKER_06 3:08

Yeah, no, that's a great, that's a great fun story. So growing up, my mom was a real estate agent, so I've always been involved in some way. I was the little kid that went to open houses and different things like that. So I've been in the real estate world for quite a long time. After graduating college, I really wanted to dive into the corporate world for whatever reason and bounced around a couple different places in analytics because the job changes and you change through time. I have a history in analytics, uh you know, supporting a lot of different people. But once I had my first baby, I realized that I really love the flexibility of real estate. Um, you kind of get to choose, you know, your hours, when you want to work, where you want to work, that sort of thing. And that really um attracted me to the business. I being more analytical, really fell in love with the mortgage end of things rather than going and seeing houses. And there's a lot of, you know, nuances with mortgage and strategy and trying to find the the best loan for the the individual because everybody's different. So that's kind of what attracted me to mortgage. And I work from home, so I really love to be, you know, here for my babies too. Right. Yeah.

SPEAKER_08 4:18

That's awesome. And and I hear, and I'm seeing it on your business card that's in front of me.

SPEAKER_06 4:23

You're not only licensed in one state, not 10 states, but how many states, all of them, all 50 states and the 51st state of confusion.

SPEAKER_08 4:34

That would be my state. I am fully licensed in the confusion state. For sure, for sure. Well, awesome. We're gonna, we're just gonna kind of pop around and we've got some questions uh to ask that you can help our listeners. And if you've followed the podcast and the realtor segment, Lisa at First Choice Reality Pro's goal is to educate the buyers and sellers out there in our community in mid-Illinois and beyond. Because really, you I mean, what we're talking about here does apply in other states, or maybe a few nuances different, but just the care and that you take in with all your clients, whether it be a seller or a buyer. And so that's what this is another thing bringing Brick in is helping your buyers and sellers, right? This is a great resource, and so with that, you know, who you who do you help in in your position that you are as a a mortgage loan officer, who do you help?

SPEAKER_06 5:30

So, I mean, obviously, I help buyers, that's the key the key here. However, I am a huge support system to real estate agents and anybody who's wanting to also sell homes. So, as far as like maybe sellers who are doing owner finance or more so, you know, for sale by owners, I I can help them. It's it's truly about education. And a lot of people, you kind of know what a real estate agent relatively does. I mean, obviously, you don't know the extent of how much they do behind the scenes, but as far as mortgage, they it's hard to understand a lot of what goes into mortgage. And so being able to educate not only just buyers on what their options are, but also Lisa, for example, on what opportunities there are for buyers that maybe they don't know about, and she can help orchestrate answers before getting me involved.

SPEAKER_08 6:19

Excellent.

SPEAKER_06 6:20

So so you're helping with first-time home buyers, first-time homebuyers, you know, people who are PCSing, so a lot of with my flexibility in different states. So if you know, maybe PCSing. We've PCS, it's basically when uh for layman's terms, it's just when somebody who's in the military transfers stations, so they're moving across the country um or wherever they may be moving, restationing essentially.

SPEAKER_04 6:47

So basically, yes, she was working with a gal that I was working with, well, with a couple, and her husband was in the military, and she had worked with her before. She was buying a house with me, and then she said, I already have a lender, because of course I didn't know Brooke, I didn't know how awesome she was, but I found out very quickly how much she cared for the client and how she worked her magic to get the job done because that is always the point of every transaction. How can we get this done? Right. And that's why we connected so well. And I don't think we ever disconnected after that. She she constantly, when I call, she answers or calls me directly back.

SPEAKER_01 7:41

Excellent.

SPEAKER_04 7:41

And she works all the time, like a real estate. I called her on a Sunday to get a couple, which and she connects with them too, because she just told me about this couple having a baby recently. So she told you that they had a baby. I said, Yes, I did. But I called her on a Sunday and I said, Hey, Brooke, I need a pre-approval. Can you get this done? She's like, Yep, send me some information. They sent her the information, they got pre-approved, they got the house. And that was during the crazy market, right? When we had I was at the park at the time with her kids, and she got the job done.

SPEAKER_08 8:20

Nice, nice. So I I see the similarities here on how you run your real estate agency and how Brooke manages and runs what she does. Yes. Right. So that's that's that's awesome. So, Brooke, are you are you like an independent mortgage loan officer, like a broker, or are you work for a specific lending institution?

SPEAKER_06 8:40

Yeah, no, that's a great question. So I am backed by Luminate Bank. So we close our loans in-house. However, we know we don't have the best pricing all the time. So I can broker. So a lot of times, if there's a unique circumstance, maybe if someone has lower credit or needs, you know, an investment loan that we may not offer in-house, we will broker those out a lot of times. So I kind of have a little bit of the best of both worlds. I can do in-house competitive financing, and then if we're not competitive, I can go find it somewhere else, like shopping for insurance.

SPEAKER_08 9:14

Excellent. Well, what's what's happening in the market right now?

SPEAKER_06 9:17

Oh goodness, a lot of stuff is give us give us the uh overview. Gosh, with you know, everything that's going on overseas, we've seen quite a lot of fluctuation in rates in the last few weeks. Um, it really started probably beginning of April-ish time. Um, it went rates went up for quite a few weeks in a row. They're just now coming back to normalcy, I guess you could say, or not so dramatic jumps from day to day.

SPEAKER_08 9:46

A new normal.

SPEAKER_06 9:46

It's always a new normal. Every day. Once you figured out what's going on, it changes. So it's like you're you're always on the tip of your toes. You wake up in the morning, you check the rates, not knowing what's gonna happen. But for the most part, I mean, as long as I always tell my buyers like the rate not always matters as wild as that seems. It's more about understanding what's going on and getting that proper education of how to make decisions with an like an educated mindset and trying to figure out what's the best move for my family. Because a lot of times, you know, with how COVID was with all the low rates, there was a lot of opportunity back then where you're not getting that flexibility now because rates are higher. So educating people like if you can buy a house now and you're comfortable with the rate and the monthly payment and the terms, pull the trigger on it. But if this isn't comfortable for you and you feel like you need to squeeze for a couple of years and possibly be house poor or whatever the situation is, like maybe it's not the time. So I I mean, my business in general has never been like I need to sell a loan to everybody. Not everybody needs to buy a house. Realistically, it's educating people on their options so that they know moving forward that and they're confident about what they decide to do because things change with mortgage and buying a house, like the you know, the the monthly payment can change from you know year to year with property taxes and insurance. You never know what's going on. Um, and so just education is so important. That's awesome.

SPEAKER_05 11:09

It really is, and and it's a very confusing thing. I I mean, my mom's also a realtor, and that's her main thing with couples is they cannot understand the loan process at all. And I think a lot of them get their hopes up, and Lydia's talked about this before. They might get their hopes up for a certain home. You know, they think they're gonna get this loan, and you know as well as I know that it is harder to get a loan now than ever. Absolutely. With that being said, what do you think that people get wrong about buying as far as the down myth, all that stuff? That's a myth. I didn't know it was a myth.

SPEAKER_06 11:48

Yeah, a lot of people think that you need 20% down in order to buy a home. And that's simply just not true. Um, there's so many options available. Um, there's 0% down programs like USDA loans, which is incredibly popular in your guys' area. And then as far as BA loans are also 0% down. So those are two like very minimal options. As far as conventional goes, first-time homebuyers get 3% down. You don't have to have a conventional loan at 20% down. It can go as low as 3%. Um depending on their credit score. Well, yeah, there's a few disclaimers, I guess you could say. Okay. That's where you want to really get into the nitty-gritty with the lender and talk about your options because not every option is available for every person.

SPEAKER_05 12:28

So if your credit score is lower, you would have to put more than now payment.

SPEAKER_06 12:34

Yeah, let me disclaim that. There's always a but. So like loans. So I mean, conventional loans um technically go to 620. I've actually seen some approvals lower than that lately, with things just changing in um guidelines, but FHA is a really popular option for those who have lower credit scores just because there's more flexibility.

SPEAKER_08 12:58

And FHA, just again for layman terms.

SPEAKER_06 13:01

For the federal housing administration.

SPEAKER_08 13:03

Okay, thank you.

SPEAKER_06 13:05

I sit here and I go, What is the acronym?

SPEAKER_08 13:07

And CS when when we first had we first had Lisa and Lydia all blow my mind. Okay, what is this acronym you're saying? I said, for me not in real estate, what is this acronym? We're so members knows them from her mom being in.

SPEAKER_05 13:20

Yeah, well, not really. And here's the thing. I always knew FHA and and like knew what it meant, but I didn't know what it stood for. So thank you.

SPEAKER_01 13:28

Yeah, you laugh.

SPEAKER_06 13:31

I was like, I have to dig back for that one because it's been a but I just you get into these acronyms that you you don't even know them by anything else nowadays. But but yeah, FHA loans, they will go down um with minimum down, which is three and a half percent of the purchase price to 580. If you wanted to go, we can go down to 500, but you do have to come in with 10% down payments.

SPEAKER_04 13:52

So that's where she's talking about her credit score.

SPEAKER_06 13:55

I was okay.

SPEAKER_04 13:56

I was gonna say credit score songs stipulates that when you know your stuff, you just say it.

SPEAKER_05 14:01

Oh, and I understand, but I'm glad you're doing this because the listeners are gonna have the same questions. This is the point of it. So you're doing a great job. But so when you're talking about credit score, what would be the lowest credit score? Well, hold on. Now let me ask you this. I'm so sorry. No, you're good. Does your credit score like if you say you want a house for a hundred thousand? Okay. Uh-huh. And then, but or maybe you want a house for 400,000. Yeah. If you have the same credit score, would you be able to get the 100,000 one easier?

SPEAKER_06 14:35

No, it's it's a guideline. So basically they look at your credit score more more so your credit report as a whole, and that's what they're basing it off of. It's it's not necessarily like, oh, you're paying less for the house, we don't care as much, or vice versa. Okay. It's it's your credit score is the drive. Everyone meets the same guidelines, so it's a requirement to use the program in general. Yeah. No, I I love all this.

SPEAKER_05 15:01

And you know, you already talked about waiting on rates. You already talked about that. If you're not comfortable, if you're gonna be house poor, so many people fall into that. That sucks, man. Oh, yeah. You can't go on vacation, can't go on dates.

SPEAKER_08 15:16

Oh, you mean oh marry dates? I'm sorry.

SPEAKER_05 15:20

My husband anymore, too busy, you know, breaks my home. But you know, I so the rates don't wait on them. But I think price versus payment, we hadn't really talked about too much. They focus too much on the price instead of your monthly payment, which could be a huge deal.

SPEAKER_04 15:41

Yeah. The scary part of that is that some buyers will say, just give me the bottom line. I just want to know what my payment is. And my question to them as the realtor mom is okay, heaven forbid something was to happen. You lose your job. Can your wife handle this? Can you handle this for say a couple months without and they're like, oh no, you know, right? Yeah, they don't think about what if. And I like to put those what ifs. I'm not just out there pushing and selling because I want them to be comfortable with where they're at. That's why I like working with Brooke is because she also also asks those questions. Look, if you wait, you could do this and you will feel much more comfortable, right? Or you could do it now and feel the crunch.

SPEAKER_05 16:32

And she's very upfront about it. Right. And what I've noticed about you, you, and now Brooke is what you guys, the questions you're asking, the education that you're educating, teaching decision-making skills for the buyers, that is because so many people want to jump, jump, jump.

SPEAKER_01 16:49

Right.

SPEAKER_05 16:50

You're not telling them exactly what to do. No, you're asking them questions to get them to think about the right decision for themselves and their family. So I love it. I love it.

SPEAKER_04 17:00

Because I'll ask her to run, I'll say, run a conventional, run FHA, run if they can, if they can do rural development or USDA. Um, all of those, run those and let them choose which way they want to. You have them up if you have that written down, right? When you see it, makes a difference. If you're talking, it doesn't make it well again.

SPEAKER_08 17:25

People believe what they see, not what they hear. Yes, they need it validated in front of them, right? Yes, and that's that's a key. We talk about it all the time in construction and real estate and anything. When you go shopping into a clothing store, and the salesperson goes, Oh, that's fifty dollars. You still want to see it on a price tag, yeah, right?

SPEAKER_05 17:42

Although this says it's a hundred. All your senses got to be involved.

SPEAKER_08 17:46

Triggered.

SPEAKER_05 17:47

Yeah.

SPEAKER_08 17:47

So back back to real estate and seeing all the numbers and stuff, is is there still such a thing as PMI, the prime mortgage insurance?

SPEAKER_06 17:53

Yeah, there is. Um FHA loans will always have it for the most part. Conventional, that's where the 20% comes into play. So once you hit 20%, the PMI. Right. Yep, yep. Once you hit 80% equity, whether that's buying, so if you buy a house and you put 20% down, it's never on the loan, or if you get the first-time home buyer um three percent down and you live in the home for a few years, let's say the equity gets up to 20%, you can go and get that removed.

SPEAKER_08 18:22

So it's at 20%, I heard you say 80% equity, but it's 80% equity. It's when you're at 20% equity, you drop the oh yes, yeah.

SPEAKER_06 18:29

So I just want to make sure that 20% equity, yeah, 80% financed.

SPEAKER_08 18:34

So Caitlin, this is where we talked about, and I know you probably don't have PMI on your on your mortgage, but if you don't have 20% in there, how we were talking about in previous podcast about paying a little extra or at least trying to pay one more a year, that goes straight to your equity, which helps principle pro increase your percentage of equity you have in the home, which if you have PMI, that will help get that extra money you're paying a month off of your monthly mortgage payment. Correct, Brooke.

SPEAKER_06 19:00

So not everybody has a PMI. No, no, no, I don't have PMI. I'm I'm in a VA loan. I don't have a PMI on my loan. But something interesting, too, as well, and that's one of the many reasons why I love VA loans. But when I helped my neighbor across the street, she did some renovations to her house, and they're in a conventional loan. So they were able to do the renovations, gain the equity through the red renovations, call an appraiser and have it appraised and drop PMI. So there's a lot of flexibility. I have a question.

SPEAKER_05 19:32

My husband is an army veteran. Would a VA loan cover an addition on a home? On a home you already own? Yeah. He doesn't own it, but I do. It's in mortgage. I mean, you have a mortgage. Oh, yeah, a mortgage on it.

SPEAKER_06 19:46

Yeah, there that would probably be a sidebar conversation because we're gonna get into nitty gritty details. There's opportunity there. I mean, we would just it would it would take into consideration, like you'd probably have to refinance if somebody disapproves.

SPEAKER_05 20:01

She knows. Yeah, she will. She'll she'll find it. And VA loans are are complicated. So to have somebody that's so knowledgeable at your fingertips on those, absolutely, you know.

SPEAKER_01 20:12

Yeah, absolutely.

SPEAKER_06 20:13

Yeah, I know them personally and professionally, like we've only ever had VA loans. Um, when we put bought our last song, I'm like, let's entertain a conventional, see what we can do, because we had a higher down payment at the time. And VA loans just across the board. I I prefer them for a long list of reasons. But I would to build off of your story though, something nifty too, is if you do like if you're one of the many people who have a two or three percent rate and they just you don't want to refinance, you can look into doing key lock and accessing your equity without changing your price.

SPEAKER_08 20:47

It's a home equity line of credit.

SPEAKER_06 20:48

Line of credit. Yep, and there's he loans, which is instead of a loan of he gets a prize, nice work.

SPEAKER_04 20:55

Well, oh, and there's a backstory to that because there's something he wants to do to be able to work with realtors and oh yes, and does it work? Oh, by all means, yes, yeah, we'll try to do that a little bit, yeah. But what I also want to go back to, I may have had wrong information. So conventional loan, once you get that 20% paid, that PMI comes off. And FHA, once you get that 20% paid down, that stays on for it stays on. You would have to refi uh and make it a conventional loan to get the PMI off. And the USDA stays on there for the 30 years.

SPEAKER_06 21:38

Well, USDA doesn't have mortgage insurance technically, they have an annual fee that they split up monthly, so it's different, but it's similar.

SPEAKER_04 21:48

Right. Well, people think, oh, I'm gonna get this money for free. Okay, there's always a butt here. Yeah, there's always that big butt in the room.

SPEAKER_01 21:57

But you hey, I'm sitting right here.

SPEAKER_04 22:01

So it's it's not always best to get that free money because it can cost you in the end.

SPEAKER_08 22:09

So FHA, USDA, those are government loan backed loans. Right, government backed loans. So the government's not going to design the BA.

SPEAKER_06 22:18

I mean BA technically is what I was gonna say.

SPEAKER_08 22:21

They're gonna get their money. Yeah. And that's why they they keep that PMI andor the annual fee on there to have that USDA loan. So if you can go conventional.

SPEAKER_04 22:30

And I always try to get, I'll say, hey, talk to your lender, talk to Brooke if if she is the lender, and I'll say, tr see what you can do, see if you can get a conventional loan. Then you don't have to jump through all the government hoops that go along with FHA and USDA, all of the things. Those are great programs, but if you don't have to use them and you can still get three and a half percent down or three percent down, or do three percent down, that's the greatest thing, you know.

SPEAKER_05 23:02

And then it's again all the options, yeah, we'll show so many options.

SPEAKER_04 23:06

Oh, yeah.

SPEAKER_08 23:07

Speaking of that, what buyers don't know as far as opportunities, what what are what are some opportunities that buyers won't know about? I mean, you mentioned a couple of them already.

SPEAKER_06 23:18

Yeah. So I mean, there's seller concessions is a huge thing, especially right now with houses sitting on the market. People are really like sellers really want to jump and get out of their property, move on to something new. Um, and a lot of times that comes with seller concessions. What that means is it's basically the way to get your closing costs covered. So a lot of times, first-time homebuyers, especially, maybe even people who've already bought, they know, okay, I have to come in with a down payment. Like that's an obvious option that needs to, you know, come to closing with, but they don't realize that, oh, I actually have what's called closing costs. Who knew? And that can be, you know, a couple percent, that could be a couple percent more that you're coming in with. So now instead of talking about three percent, you're talking about five or six or whatever it may be, and those fees can't be financed. So, like down payment, there's down payment assistance, there's options there. However, there's no options for your your closing cost. You have to come in with that unless somebody can pay it for you, which would be the seller. So I know Lisa do Lisa does an incredible job of negotiation for one. But two is okay, what does my buyer need? Do they need help with closing costs? Do they need help with possibly a rate buy down, which just means an upfront cost in trade of a lower rate, which means a lower payment. So getting the seller to say, hey, like my my buyer really needs $5,000 to put towards their closing costs, that helps the buyer come in with less money, but it also gives them the opportunity that they may not know about of buying the rate down or with VA loans, you can pay debt off with it if you wanted to. It's it's a wild concept, but yeah, yeah.

SPEAKER_08 24:57

I'm gonna say my my son, Lisa, that's how I first met Lisa, was she helped my son and and his new wife buy their first home. There was the closing costs became an issue because they're starting out, and so she worked out with the seller's agent to get seller concessions. And because the closing costs are something, however, it was different at closing, they walked away with money.

SPEAKER_04 25:22

You can walk away, and they were so happy.

SPEAKER_08 25:24

They thought it was gonna be like $250 in their pocket, and they walked away with $2,000. They came in and said, Dad, here's here's for what you loaned us for the uh the uh health inspection that's paid now. I'm like, yeah, thank you.

SPEAKER_06 25:38

I try. Yeah, I try.

SPEAKER_08 25:39

I wasn't supporting my kids anymore on that one.

SPEAKER_06 25:41

Lisa tries, but she does it almost every time, so she's really great at it. It's not it's not easy, but she does it.

SPEAKER_08 25:47

I love it. Yeah. So what what else? What other opportunities for buyers? Um, you know, that are out there. Anything that that is your main go-to other than solar concessions, which is really on Lisa's part or the real real estate agent's part, right?

SPEAKER_04 26:03

I tell her how you talk to her, yeah. I I call her and say, Hey, what do we gotta have here? One, right, what's necessary? Have we ran all the numbers? And and a lot of times she'll say, I haven't run them all yet, but I'm gonna get back to you.

SPEAKER_05 26:19

And then that those numbers can change. She's so nice to have this relationship between you two or and and Lydia too. Yeah. I feel like if I was a buyer or seller, this would really make me feel less anxious.

SPEAKER_04 26:32

Oh, yeah. You know, yeah. When you when you can talk to your agent and you know that they care, and then you have that agent get you in touch with lenders, and that lender cares, yeah, and then you have the inspection, and the inspector cares, and you have a caring group that settles a lot of that everybody's explored in that year. Yeah, it's provided.

SPEAKER_08 26:58

We all care. Well, Brooke, if we can, if we can just take a couple minutes and simplify actually how the process works. Just bare bones, how does the process actually work in your position?

SPEAKER_06 27:11

Yeah. So usually I love to start off with like an infro phone call, get to know someone, find out what their goals are and what what they the needs are associated with them because everybody's needs are different. Whether it's I want the lowest rate, I want the lowest closing cost, I want the lowest monthly payment, I want to qualify for the most that I can, whatever it may be, trying to dig those out of individuals and see what they actually want usually comes with the first phone call. A lot of people don't necessarily want to jump on a phone call at first. And so then basically what we would need or what what my process would be next would be to send over a loan application. I'm happy to take those over the phone. Usually, um, you know, millennials or younger, younger folks like to do everything online.

SPEAKER_04 27:55

So I just remember the 80-year-old man, Brooke. Remember the 80-year-old man I said across the table, and he ended up he passed away before we got this done. But I said, Brooke, he does not do anything on the computer, and can I just talk to you? Because he he trusts me, he's just now getting to know you. So he gave me the information, I gave her the information, and she worked it out, and he could, but then he passed away.

SPEAKER_06 28:21

So he was the only guy who's ever mailed me his documents, like physical copies of everything. Wow.

SPEAKER_01 28:27

Oh yeah, because he did not do it.

SPEAKER_05 28:32

First of all, that is so precious, but it does come with the responsibility because at least if you lose it, you could type it back in. It's somewhere in there. Right.

SPEAKER_08 28:41

Online, it's in a secure portal.

SPEAKER_05 28:42

Yeah.

SPEAKER_08 28:43

And so that's the big thing there.

SPEAKER_01 28:45

Right. Yeah.

SPEAKER_05 28:46

And you got animals. I mean, there's a lot that could happen to that paperwork.

SPEAKER_08 28:49

So what pre-approval. She's pre-approval. Pre-approval. So are looking at.

SPEAKER_06 28:54

Yeah. So you'll fill out. So the loan application takes all your information, whether it's contact information, your social social security number. For we always start off with a soft credit poll because it doesn't affect your credit, but it also gets you the answers without really negatively. Yeah, just like an any hard pulls are just scary to a lot of people nowadays. Which understandably you're gonna ding my credit. Well, and I hate to do it too if you don't qualify or it's not the right time. There's no reason to drop your points. Yeah, yeah, I yeah. I've usually on average I see like one to five points depending on how much credit history you have. But a little bit, but it is, yeah. I mean, it is it's substantial for some people who may be on the supporter. Right.

SPEAKER_08 29:36

Also, if you're going through multiple lenders and they're each doing a hard pull, if you get denied by this one, you go to another one, they do another hard pull, you do another hard pull.

SPEAKER_06 29:44

Now you're 15 points. Hold on, not necessarily, so it's like a car loan. You can go and shop lenders for a certain period of time. Yes, okay, it'll all show up separately, but it only counts as one pull as long as you're shopping within a certain period of time.

SPEAKER_01 30:00

I love it.

SPEAKER_06 30:01

Me too.

SPEAKER_04 30:01

I mean not so it's not so scary, so you know they don't feel locked in. So can you shop around and find that lender that works with you? Yes, you can.

SPEAKER_06 30:12

And I to build off of that, Lisa, because I can I can get on a soapbox. A lot of people will shop lenders. However, it's so important when you're doing that, and I'm not saying not to shop lenders, obviously, everybody's different, but you need to understand how to shop lenders. So you need to understand one, what you're reading as far as the rate is concerned. So if they send you, if they don't, if they send you an email saying, I can get you a 5% rate, okay, but what at what cost? And they don't give you any details, they don't give you the APR or anything, any details associated, that's a red flag to me. But if they go and give you a loan, like an estimate, um, they break out all the fees, they show you if they're charging you any discount points, which that essentially means it's like that buy down hot word of, you know, I will give you a lower rate, but I'm gonna charge you for it. And so that's where APRs come into effect, because you have your rate associated with the mortgage and what your monthly payment's gonna be based off of. And then you have an APR which will show you what the fees associated with that rate are. And so that's how you really shop rates because if there's a great gap between that, that means you're paying a lot for that rate. And it's it's a more expensive loan, I guess you could say. But read through it. If you have questions, make sure you're teaming with a lender who answers them and will drop a call and pick up your pick up the phone and talk to you and say, hey, these are all the costs, these are the ones associated with the lender, because there's going to be title fees associated, there's gonna be escrow count um fees, so insurance and property taxes that lenders can't control. Um, and if you shop different days too, like let's say you shopped two days ago when the market was really bad, but today the the market's great. I mean, it's an unfair advantage for the person you shop today because the other guy looks like he has really subpar rates, but in reality, that's because that's what the rates were that day. So you want to even the playing field if you're really gonna shop rates and team with someone, and a lot it goes back to what I was saying. Like, not always does the rate matter if what matters is closing the loan. So if you can find a lender who will close the loan, but maybe charges you an eighth of a percentage point higher, is it worth taking that eighth higher knowing for a fact that they will close the loan? Or do you really want to get really skinny and cheap with the closing costs in order to go with someone else or whatever it may be?

SPEAKER_08 32:35

Right. It's basically knowing your numbers, what you can afford. Also, if it makes sense on paying a higher percentage, because now you're gonna be paying less on that principal in the beginning. Is that true? If you're paying more percentage, basically it's a you have higher interest up front with a higher rate, right? Right. Yeah, so meaning the lower the interest rate, the more can go to principal. And so which I know they're all loaded, though. It's kind of different. I'm kind of going off subject there a little bit, but it's it's understanding what you're saying. The the longer you have a loan, the less interest you're paying, and you're paying more principal because the mortgage company is wanting to get their interest up front on a long loan. Right. And so when you hit that 29th year, you're paying very little interest because the bank's got their money. They're happy.

SPEAKER_04 33:23

Right, they're happy.

SPEAKER_08 33:23

Right, they want to go the full 30. Yeah, it's like, hell yeah, take us the full 30, right?

SPEAKER_04 33:28

Yeah, yeah, yeah.

SPEAKER_08 33:29

Money for us. Mo money, more money, home girl.

SPEAKER_04 33:32

Yeah, oh yeah, yeah. We're talking about my shirt.

SPEAKER_08 33:36

That's right. That's right. We'll we'll throw that on social media, the home girl shirt she's got on.

SPEAKER_04 33:40

Oh, yeah, you got all right.

SPEAKER_08 33:41

Lisa's Lisa's got the pretty face for houses, right?

SPEAKER_04 33:44

Oh my brook.

SPEAKER_08 33:45

Well, so the process, it does sound pretty simple, but here's here's, I think, what I my takeaway from that, if I can, on that process simplified, is with the right real estate agent and the right mortgage loan officer, it will make the process seem a little bit easier because you've got the professionals in your corner. So, buyers, listen up. That's that's the key is getting the right agent and the right loan or officer that knows all the options for you.

SPEAKER_04 34:15

Team and communication. Communication. Yeah, if you've got communication, because we communicate, we are always okay.

SPEAKER_08 34:24

We've heard that once or twice, Caitlyn.

SPEAKER_04 34:26

We see this go in a direction that we're like, what are we gonna do? And then we start putting our heads together and we say, We can do this, we can do this, or we can do this. And then we we start doing it, you know, one of those things not just talking about it, we don't put it into play. We put it into play.

SPEAKER_08 34:44

Yeah. Well, Brooke, we've talked a lot today about this process and what you do for so you you are working directly with the buyer.

SPEAKER_06 34:54

Yeah.

SPEAKER_08 34:54

And so you're not really once once Lisa makes that connection, you're kind Lisa's kind of out of it, and you're now dealing with the buyer.

SPEAKER_06 35:02

She tags me in.

SPEAKER_08 35:04

Gotcha. Okay. Tag team. Tag team. I like it. I like the tag.

SPEAKER_06 35:07

Tag you're it.

SPEAKER_01 35:08

Yep.

SPEAKER_08 35:09

Okay. Well, is there anything else that buyers from your standpoint of what you do, anything else that you really feel strongly that our listeners and followers need to hear about today?

SPEAKER_06 35:20

One thing that I guess a misconception with talking with lenders or different things like that is the difference between a pre-qualification and a pre-approval. So that's one thing that I really think would deserve to be mentioned is pre-qualification.

SPEAKER_01 35:36

Yep.

SPEAKER_06 35:36

Yeah, basically, what a pre-qualification is is you tell me information and I run rough estimates and I go, yeah, yeah, okay, that's good. That's good. And it's like, I don't check anything. There's no due diligence there. Where a pre-approval, a true pre-approval, you will get the loan application completed. You will get me all the documents I ask for. I will submit that to underwriting. So an underwriter sees it, clears everything up beforehand, and you have a letter going to the seller saying, Hey, I have been pre-approved, and underwriter has seen everything, like whether that's your assets, your pay stubs, whatever that may be, all the documents, and they approve me right now. All I need to do is find a house. And that's where you get, you know, into contract and win over other people is if you have a hard, great pre-approval that is, you know, bulletproof, and they they they're confident and you're confident that you know it will close, then you know, that's attractive to anyone, any seller. You know, but if you go and have a pre-qualification and it's like Joe Schmoe down the street said he makes a hundred grand a year, I didn't check his pay stubs, he could make 10, you know, you never know. Yeah, yeah.

SPEAKER_04 36:46

And a seller's gonna love to see a a pre-approval with that underwriting that says these people can get you this loan.

SPEAKER_06 36:58

Yep, yep, can get you your money. Well, and pre-qualifications just lead to disappointment, to be honest with you. It's like if you sit there and you promise something or commu communicate a certain way, a lot of times, especially first-time home buyers, they don't really necessarily know all the details. They don't know what they're stepping into. And so when you say, Oh yeah, that sounds good, they may think, oh, I'm pre-approved. Let me go put an offer in on a $500,000 house. Well, okay, you're actually qualified for, you know, $200 or whatever it may be. And, you know, things change too. And, you know, communicating with your agent and your lender is super important too. Cause like, you know, you can find one house down the street that has property taxes and insurance that is much higher than the same purchase priced house on the other side of town, and you might qualify for one and you might not qualify for the other. And so it's that goes back to the pre-approval is like I always say, give me the the addresses that you're looking at. I want to show you numbers for each house so that you're not signing up for a house that you think may be in your budget. In reality, it may not. You may not feel comfortable. Right.

SPEAKER_05 38:00

And Lydia's talked about this multiple times. Yeah. And that's why I think it's good that you guys have this relationship because I noticed too that one thing that's important to you is, and you literally just said it, don't go house hunting before you get that pre-approval. I mean, do you want to be depressed, guys? Like this has happened to me, okay? It sucks, man.

SPEAKER_04 38:23

Like so, well, and how how mad is a seller gonna be at the agent that brought you the highest bid with a pre-quad.

SPEAKER_05 38:35

Yeah, a lot of that from your point of view, yeah.

SPEAKER_08 38:38

In black marks you, black IG.

SPEAKER_04 38:40

Yep, so now if I'm putting in the the pre-approval with underwriting approval, at maybe a little lower, well, I was gonna say we should go with.

SPEAKER_08 38:53

Well, let me ask this be a good question for Brooke and Andor Lisa. So if someone comes in pre-approved, does that give the buyer a little bit more leverage on that price with the seller?

SPEAKER_05 39:07

They're feeling cool.

SPEAKER_08 39:07

They can well, not cool, meaning I'm I'm bulletproof. They're feeling confident. Brooks made them bulletproof. Like, look, I've been I've been pre-approved for $300,000. They're asking $250 on this house. I'm pre-approved. I'm gonna offer them $230 with a pre-approved letter.

SPEAKER_04 39:28

They're probably yeah, they're probably gonna take it. Yeah, yeah, yeah.

SPEAKER_08 39:32

I mean, so that versus pre-qualified and they're pre-qualified for $275, they're like, oh yeah, we'll give them $250. Let's do it.

SPEAKER_04 39:42

Yeah, I will say But the pre-call doesn't really mean anything, really.

SPEAKER_06 39:47

No, it's worth its weight in paper. No, I will say though, um I can't. A couple things that Lisa and I do, a couple things that Lisa and I do that might be unique, I'm not sure, but um I always like to do it is uh regardless of the situation and what they're offering on the purchase price, whether that's low, high, or asking, what we'll do is we always give a pre-approval letter because all of our buyers need it. But Lisa will also obviously, you know, communicate super well with the seller, gain that trust on her side, but then I'll also call the seller and say, hey, like what questions do you have? You know, you may not have worked with me before. I'm you know here to answer the questions that you have, ease any concerns of your seller. Obviously, within limits, I can't go and tell them their whole life story, but I can go and say, Hey, the this is a pre-approval letter. This is you know, hard as a rock. You know, you're not getting through this. And I don't know of other media that do that.

SPEAKER_05 40:38

Well, I I you took the words out of my mouth. I was gonna say that is, I think, 100% unique because you never build a relationship. I never once spoke to my lender, and I mean I was in Florida. I would have loved, and I mean, I'm gonna have a conversation freaking out down there, you know? Yeah, me. I can't even enjoy my margarita.

SPEAKER_01 40:59

So do you or three?

SPEAKER_05 41:01

Yeah, so that's what I I like that you do that, Brooke. And you look, Brooke's got a nice face like you, and this is a a great, unique relationship, an asset is what I think. It is an asset. Asset to have to you and your business, and also you, Brooke, vice versa.

SPEAKER_06 41:18

Yeah, yeah. Well, and I mean, real estate in general is about building relationships, whether that's with sellers, agents, buyers, agents, buyers, themselves, whoever it may be. If you can go get somebody on the call, like call somebody up, introduce yourself, answer any questions they may have, build a rep with them. Like, people are going to gravitate towards people that they like or that they can trust. And building that is so important, especially in today's market. Yeah, and other agents. They can build themselves with, they want to be themselves.

SPEAKER_04 41:46

Other agents will call and say, Hey, I see this pre-approval, but we don't know this bank, we don't know this lender. And I say, Yeah, I I have worked for with her for over a year and a half. She gets the job.

SPEAKER_05 41:59

They were talking about Brooke. They were talking about Brooke.

SPEAKER_04 42:02

Oh, yeah, because she is not from, she's not local. Okay. And so you get these others, you know, and you don't really want to work with Brooke.

SPEAKER_08 42:10

Can can I can I ask? Yeah. Where is local for you? Where is home for you, Brooke?

SPEAKER_06 42:14

I'm in Houston.

SPEAKER_08 42:15

Awesome.

SPEAKER_06 42:17

Yeah, when I met when I met Lisa, I was in um, I was in Washington State. Oh, yeah. Lisa and I, I think we've we've been working together longer than a year and a half now. Yeah, probably so now. Yeah, I was like, I don't know, but yeah, I'm originally from Washington State, hence my 253 phone number that I refuse to get rid of. But I'm in Houston now, so I'm in the same time zone as Lisa and all of our buyers, so I can help at any point. Yeah.

SPEAKER_08 42:40

So cool. Yeah. Well, in closing, then, if you can take one thing away from today, it's this. This market hasn't stopped, right? It's just shifted. The buyers who are winning right now aren't the ones waiting for perfect conditions, they're the ones getting educated, building the right plan with like you, Brooke, surrounding themselves with the right team like Lisa and Lydia and everyone else at First Choice Realty Pros. Because here's the truth your strategy matters more than the market. Whether you're buying your first home, your next home, or thinking about selling, having the right agent and the right lender in your corner changes everything.

SPEAKER_04 43:16

Absolutely.

SPEAKER_08 43:17

So don't sit on the sidelines guessing. Have the conversation, ask the questions, build the plan.

SPEAKER_01 43:24

Yes.

SPEAKER_08 43:24

And if you're ready to make a move, the professionals at First Choice Realty Pros, they are there to help you. Do it the right way from start to finish. So make sure you call them at 217-825-3999. Find them on the interweb. I love saying that. It's your new thing. It's the interweb at their website at first choicerealitypros.com. That's the number one S T Choice Pro Realty. No, first choiceproreality.com. See?

SPEAKER_04 43:57

Wow. That's wrong too. Yeah, they look Yes. He said pros first. He did it.

SPEAKER_05 44:05

Yes.

SPEAKER_08 44:09

So Brooke, thank you for being with us today. And joining us from Houston. Hopefully it's sunny there in Houston.

SPEAKER_06 44:16

Yeah, it's humid today. So waiting inside. I got long sleeves on.

SPEAKER_08 44:21

Long sleeves. It's been rainy. At least the sun's out now, but we we do appreciate that. And Brooke, we appreciate everything you do that you've done for First Choice Realty Pros and what they do for our communities here in Mid Illinois. And I do appreciate you taking the time today. And so thanks for tuning in to Designing Ability in Mid-Illinois, one home at a time. If this episode has helped you, please share it with a friend or someone that you know is going to be buying or selling their home so they can reach out to Lisa and Lydia and the rest of the team at First Choice Realty Pros at 217-825-3999, right? Hey, until next time.

SPEAKER_05 44:58

Bye.

SPEAKER_00 44:59

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SPEAKER_02 45:33

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SPEAKER_07 46:18

Until next time, keep designing the building.

SPEAKER_05 46:21

See you soon!

unknown 46:22

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