.png)
Key Factors RealEstateAF
Educational Podcast for Consumers, Mortgage & Real Estate Industry Professionals. We'll Talk About It All! Key Factors podcast, powered by https://ReviewMyMortgage.com . Your Host Mark Jones invites Industry Pros to help uncover & educate on the key factors of various topics. There’s something for everyone so let us be your guides and get educated. Subscribe & Follow on Spotify, Apple Podcast, Facebook, Instagram, & all other podcasting platforms. Host : Mark A Jones Founder of ReviewMyMortgage.comProducing Branch MangerSr. Loan Officer. NMLS ID# 513437NMLS Consumer Access: http://www.nmlsconsumeraccess.org/Powered by ReviewMyMortgage.com
Key Factors RealEstateAF
Debunking VA Loan Myths: Insights from Mortgage Experts
Ready to uncover the truth about VA loans and shatter some long-held myths? Join us as we toast with Don Julio and celebrate our birthdays alongside John Hurd of the John Hurd Team. John shares his inspiring journey from his roots in San Antonio and his service in the Marines, to becoming a respected mortgage professional. Our conversation underscores the critical role of honesty in setting expectations, a principle that has greatly benefited our clients and careers.
Are you confused about VA loan eligibility, especially for spouses and active duty members? This episode is your guide to understanding the intricacies of VA loans. We tackle common misunderstandings, such as the myth that VA loans can only be used once, and explain the unique Tidewater process for VA appraisals. You'll also learn about recent changes tying appraisals to veterans rather than properties, and how these developments ensure a fairer home valuation.
Curious about the current mortgage market trends and how they impact you? We delve into refinancing options like the IRRRL and the benefits of switching from conventional to VA loans. We dispel the notion of hidden fees and highlight the advantages of VA loans, such as potential exemptions from property taxes for veterans with higher disability ratings. Don't miss our discussion on the resilience of the Texas real estate market and our predictions for future interest rates. Join us for a heartfelt celebration of our first podcast episode and gain invaluable insights into the world of VA loans!
Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.
And you knew this you wouldn't be listening otherwise and welcome back to another episode of Key Factors Podcast Real Estate, af and the AF stands for and finance, and I'm your host, mark Jones, and we are powered by ReviewMyMortgagecom, the largest index of mortgage programs in the nation. And lately, guys, we have been gaining some traction on YouTube. I want to quickly throw that up on the screen, if you could, jc. We are just under 6,000 subscribers. I made the announcement of hitting 5,000 subscribers at the beginning of last week, so that's 1,000 new listeners in less than a week. I'm super proud of that and, as mentioned in previous episodes, I did not intend to do this to make money, anything like that. This is more so cheaper than therapy. So, without going too far in depth into my situation here with the podcast, I want to introduce a guest, and this guest, gosh, I look up to. I think he's a great dude and also a military veteran who specializes in VA loans. So, without further ado, let me introduce John Hurd of the John Hurd team. What's happening?
Speaker 1:Thanks, mark, thanks for having me. Heck, yeah, man, this is a cool setup. You guys got here, not bad, huh.
Speaker 2:Yeah, we've come a long way. We started with cell phones and worked our way up. Didn't want to spend a lot of money because we weren't making any money. We still aren't. Technically, this is just to showcase other experts in the industry, to give you a platform and showcase everything that you can give to the listeners. So, that being said, we're going to be talking about VA loans, myths and misnomers that are out there in the industry. You may see them on social media, things of that nature, but we've got a couple of things to do before we get started. So the first thing, mr John Hurd brought us a fresh new bottle of Don Julio and we are definitely going to hit that right now, just in celebration of my birthday and John's birthday. So today is the 18th that we're recording this. It's my birthday and then tomorrow is John Hurd's birthday. So, in celebration of that, cheers my friend. Happy birthday brother. Happy birthday to you, mm-hmm. Oh, that's smooth, that's real smooth. Yeah, absolutely, that's not tequila. Yeah, that's smooth, that's real smooth.
Speaker 1:Yeah, absolutely that's not tequila, that's just tequila. I like it. I think that's what tequila should taste like, right.
Speaker 2:Amen, very smooth, okay. So now that we're warmed up, john, tell us about yourself, man, tell us what did you do before you got into mortgage.
Speaker 1:Before I got into mortgage, I've been a San Antonio resident nearly my whole life. Okay, you know, grew up, went to Alamo Heights High School, class of 96. Went straight into the Marines right after that, okay, and did my service with the Marines. I got out, went to school, I went to Trinity, okay, and so I've been here just about my whole life, except for my time in the military. And so I've been here just about my whole life, except for my time in the military. And once I wrapped up school I thought I wanted to be an options trader. Okay, okay, yeah, derivative securities fascinated me.
Speaker 2:Yeah, man.
Speaker 1:It is a fascinating sector for sure, and around that time Lehman Brothers was recruiting and I was kind of excited because they were the largest investment banking firm in the in the world.
Speaker 1:Okay, and it was a mortgage recruiter for Lehman Brothers you remember Aurora I don't know if Aurora was a wholesale lender back then and they kind of basically showed me what I could possibly make in the mortgage side of things, versus starting out in options. And so I was like, okay, I'll learn mortgages. And it kind of spun from there. And so I'll learn mortgages. It kind of spun from there. I worked in mortgages ever since Holy cow.
Speaker 2:You've been in mortgage for what? Now? 15 years or so, I think, going on 19. 19 years Okay, very good, dang, got a couple of years on me, a couple of years on me. It definitely shows, man, you know your stuff and I know when we worked together back at Directions, I saw you as somebody that was upper echelon, somebody that always gave it to your customer straight, gave it to your colleague straight, and that is something that I resonated and related to, because I'm the same way. In regards to no sugarcoating, let's not come up with a way that we can tell the customer around what the truth is. Just give them the truth, set the right expectations, and it has done a good, a fair amount of good, for you, your family and your team.
Speaker 1:Truly, Absolutely, absolutely. I like to under promise and over deliver. Truly, absolutely, absolutely. I like to under-promise and over-deliver, yeah, kind of vice versa. There's so many people out there that try to over-hype and over-sell, yeah, and then they can't end up delivering. It's true, and that's not my MO.
Speaker 2:Yeah, I mean, in this space of mortgage we've got a lot of new the business loan officers that don't quite yet know all the guidelines and ins and outs of mortgage loans, and there are a lot. The reason why I jumped into mortgage was I was fascinated with being an attorney and when I went through all the real estate classes it was like, eh, this is not for me. When I jumped over the mortgage side, it's like whoa guidelines, regulations, all these things and different programs with their nuances I felt like I was like a mini attorney going to find the way to help my customer succeed in their journey. It felt really good and that's why I've continued and done a great job, and I'm sure you as well. So, in your military background with mortgage, would you say that there's any correlation or anything that you have brought from being a Marine going into mortgage? Is there any type of how do I say it? Have you pulled any of the traits that you not necessarily learned but went through into the mortgage side of things?
Speaker 1:I would say willingness to get the job done. Okay, you know, when I set, when I set out to to do something you can ask my wife, you can ask my friends, I'm going to do it, I'm going to find a way it's going to get done Absolutely. So I think that's a big part of the Marine culture, right? You know the Marines, you know they have a, they kind of have a motto it's, you know, mission accomplishment above all else. I like that, right, and so actually, I think they even place it above troop welfare. Okay, okay, mission accomplishment is the number one thing. And so when I set my mind to do something, I want to do it. Right, if I tell this customer, hey, we can help you, we're going to help them, yeah, right, no matter what, I definitely agree with that and with you.
Speaker 2:I believe that you work with your wife, Norma. How difficult is that? Because I work with my wife, but on a completely different side of things. She's on the real estate insurance side, I'm on the mortgage side. I met my wife at a bank that we both worked at, so productive but not very productive at the same time. How does that work for you guys?
Speaker 1:It works good because we kind of separate ourselves from each other. She has a different style than myself, of course, and so she does things her way and then, you know, I can kind of do things my way, you know, sometimes. You know we have a daughter and so sometimes she's. You know, that takes a lot of her time, sure, and so sometimes if she gets a client or a lead, they ask the client if it's okay if I help them. Yeah, and never has there been a time they said, no, your husband can't help me. Yeah, the only really time is if they're a complete Spanish speaker. Okay, and Norma excels at that because that's her first language. That's right. But other than that, we kind of separate ourselves a little bit on. This is your stuff, and once a file goes into processing, then maybe I'll I'll back it up, you know, and I'll help push it along and keep it moving. But but yeah, other than that, we kind of we kind of separate ourselves a little bit.
Speaker 2:Yeah, it makes sense, and I do want to eventually talk about today's market and what's going on, what you're seeing out there and we'll. We'll save that for the end, but I think we can get into this concept of VA loans and what consumers are seeing, what they're faced with and what misinformation is out there. There's a lot of things that, in my opinion, are myths that are being spread and unknowing to the person that's spreading it. It's affecting veterans, their ability to qualify and, more importantly, their ability or want, desire to move forward with even utilizing their VA benefits to build an empire, so to speak. So, that being the case, I mean you do quite a few VA loans. I do. You know your ins and outs of that? Most of them, yeah, I mean you do quite a few VA loans. I do. You know your ins and outs of that? Most of them, yeah.
Speaker 2:I mean I tell you what one thing that is very certain in our industry is change, and there are things that are always constantly changing. The VA loan guidelines is one of them that we've got to kind of stay on our toes to make sure that, oh, did that change? Similar to what was it last year, the year before that they changed the VA funding fee and it was like, okay, this, this might be for the better. Oh man, it went up and you're like, okay, well, let's just articulate it, or or educate our borrowers to let them know that, hey, if you want to put some money down, we can shrink this VA funding fee, et cetera.
Speaker 2:But there's I've got a list of myths that I want to go over and just kind of chat about each one of them and hopefully, by way of this discussion, there's veterans out there that can either get off of the fence, have a better understanding of what they could possibly not necessarily qualify for, but what they're currently able to do with their VA benefits, you know. So the first one on here is VA loans are only for veterans, and when I read that at first I went wait a minute, yes, they are. Oh, this is kind of a gotcha moment. Do you know why they're not only for veterans?
Speaker 1:I can take a stab at it. Go for it. Well, you know, a spouse can be on a VA loan, that's true, and a spouse might not have served, that's true. So you can have a surviving spouse. I'm trying to think of the other.
Speaker 2:Matter of fact, I'm doing a surviving spouse right now. Matter of fact, I'm doing a surviving spouse right now and that her husband, who has passed away, did not die during battle or anything like that, but when he passed away, they were able to tie it back to something that originated in while he was in the military, connected to his disability. That's right, absolutely. So, just like me, I think you're having the same conundrum. I'm going wait a minute. And yes, it is, I totally forgot.
Speaker 2:Active duty members are not veterans yet. They're active duty, so they absolutely can utilize their VA loan, absolutely. Um, and some of the guides for that matter of fact, maybe I can look that up here, jc, if you could throw on the screen. Um, let's see here. How long does does it take a veteran to earn their COE, to get a VA loan? And there are a bunch of different qualifications. It's like 90 hours for this, okay, so here we go Online application, mail-in application Maybe I should have been more specific. How long does a veteran or active duty member have to serve to obtain their VA entitlements?
Speaker 1:For some reason I'm thinking like two years active duty time.
Speaker 2:I think it's like 180 days of wartime or so. There we go. Okay, here we go. So for those of you listening that are wondering how do I get my VA entitlements, We've got it right here for you.
Speaker 1:We've got- 24 months of continuous active duty. There you go For active duty members.
Speaker 2:So between World War II okay, so this may or may not still pertain to anybody this top line that I'm highlighting here, that was 90 days of active wartime. And then you've got Gulf War, which is, just like John said, two years, at least 90 days. And I believe that's if you're active duty or out what do they call that Deployed in deployment. Then during peacetime, it is 181 days of continuous active duty, current service members or current service requirements, and this was after September 7th of 1980. Let's see here 24 months continue of active duty. So you're correct on that for sure.
Speaker 2:And then National Guard. This is one that I get quite often, and anytime somebody says I'm in the National Guard, I slow down a bit because at times they believe that they already have their entitlements and this one's kind of nuanced, and this is at least six years in service. But they also can get called to active duty for a certain period of time, sure, and earn them that way, sure. So, yeah, that's just those of you out there. There's many different ways to earn your certificate of eligibility and that's what we refer to as a COE. That's what we're looking for in order to gain those entitlements. So let's go to the next one here We've got. You can use a VA loan only once. What are your thoughts on that? Not true, not true at all. Right, tell us more about it.
Speaker 1:So the VA gives every qualified veteran a certain amount of entitlement right and you can use that entitlement to buy one, two and now, with the entitlement increase with the loan limit increases, sometimes three. Now, once you pay off a VA loan, your entitlement increase with the loan limit increases, sometimes three. Now, once you pay off a VA loan, your entitlement's restored and you can use that over and over and over again. So there is really no limit.
Speaker 2:I like that. Yeah, I mean and that's something that is a huge myth because I've got current homeowners that will come to me and say I've got to use the conventional loan or can we use this other type of loan? And my first question is I'm looking at your credit report and you've got a VA loan right now. Why would you want to do that? Well, I can only use my VA loan once. Well, guys, you can also utilize your bonus entitlements and, just like John said, with the new increase of those limits, in the past, just about every time you utilize those bonus entitlements, you had to put down 25% of the difference of the sales price or the loan amount and your entitlements amount. Right, and now, with that increase, chances are you won't have to put anything down in using those uh, uh bonus entitlements, right?
Speaker 2:Uh, I've got a guy right now that is buying he owns a home for three hundred thousand and he's getting ready to start investing and came to me and said, hey, how? And shout out, will I know you might be watching this. He wanted to leverage that entitlements, buy himself a duplex, live in one of the units and rent out the other one to start and then rent the current that he was already in. He asked me is that possible? I said, why not? If that's what your MO, that's what your motivation is, who's to tell you otherwise? You've got the entitlements. So he sends me the property and it's $490,000. And I went oh man, we might need a down payment. Plug it into the equation that we use, right, sure enough, no money down. Um, so, surprised to him and surprised to me, cause, like we said, things change, you know, absolutely. Uh, it's pretty cool. So let's see here, let's go on to the next one. Va loans have high interest rates, and this is something that I do hear quite often. Um, what are your thoughts on that?
Speaker 1:Throughout my 19 years in mortgage, most of the time they've been lower than conventional because they have a built-in guarantee from the VA. So the VA is not an actual lender, it's a loan type. The VA is actually guaranteeing 25% of that loan. The banks are the ones that are doing the lending right, that's right. So it's a safe investment for the banks when they have a 25% of that loan guaranteed. And so because of that, va rates are typically a little bit lower because they do represent a little bit less risk, correct, correct. There was a little bit of a time, I would say last year, where you saw conventional rates in VA neck and neck, maybe an eighth of a point lower on a conventional. But we've since corrected and now VA is firmly below conventional rates right now, definitely.
Speaker 2:And there is a loan called a tax vet loan, ladies and gentlemen, that I like to use as a benchmark for the rest of the market. So when you've got somebody let's say you're shopping around for mortgages and you've got some bank representative that says, yes, today the mortgage rates are five and a quarter, and you're like, wait a minute, everywhere else is at 7%, 6.5%, how is that right? One thing I like to do and, jc, if you want to throw the reference up one more time, I'm going to go to this thing tax vet TVLB. There you go, tvlborg Boom, we're going to pull that. Oh, nope, I probably typed it.
Speaker 2:Tax vet loan rates Boom, and it's going to be that one right there. And we're going to go to home loans and right now it's sitting at a 6.4% rate and that is their posted rate. This changes weekly. And then if you are a veteran with more than 30% disability, you get 0.5 or a half a point off of that rate, so your rate would actually be a 5.9. 5.5 or a half a point off of that rate, so your rate would actually be a 5.9. So if there are lenders out there that are offering you way less than this rate here, chances are you're going to be paying a substantial amount of points, and that is any time in the market, because this kind of keeps up with what's going on in the market. I mean, it's stand pretty pretty accurate throughout my career thus far. Now, not every lender offers it, but at least you know kind of where the basis is for what someone's offering you in regards to your mortgage financing. So yeah, higher rates is something that is all relative, in my opinion.
Speaker 2:We are seeing rates all over the place. Different mortgage companies are pulling the lever up and down depending on their month and overhead and production, et cetera, Because, let's face it, that's how we make money in our industry. We don't do this for free, but at the same time we want our customers to have the best if they possibly can. So it's a tough one. And those of you out there shopping for mortgage rates, I mean you got to find a trusted advisor that you know will give you the accurate information. They're not there. Now, mind you, we don't make any extra money charging you more or a higher interest rate on a loan that hands down.
Speaker 2:That changed before I got in the mortgage business. John. You know what. Let's take a pause. What was that like back in the day? Because you were in the business at the time when you were able to charge more for the rate, just based on their credit score, things of that nature. I got in in 2012. So it had already changed and I would have veterans coming to me like man, if you were in the business back in the day, you'd be retired, and I'm like I don't even know what you're talking about, how. I don't know any different, if that makes sense. What was that like?
Speaker 1:It was good and bad in a way. Some people took advantage of it, oh for sure, which are some of the rules. Those of us that you know oh for sure could actually select almost any rate you want, and whatever the yield spread premium was, you would split with your bank, Wow yeah. And so were there people that would take advantage of that or maybe push somebody that would easily qualify for a conventional loan into an FHA because there might be more revenue. There was some of that and fortunately, I think a lot of those people got out.
Speaker 2:I was going to say the same.
Speaker 1:Yeah, the new rules.
Speaker 2:And from what I have gathered over the many years that I've been doing, this is the talk about prior to these changes. Most, if not all, of the loan officers that were taking advantage of customers are no longer in the business, and I believe it has a lot to do with the adaptation of how do you do business the right way versus how do you do business that only benefits you as the loan officer. Right, you know?
Speaker 1:Yeah, but ethics is a huge thing in our industry and it can be a little still to this day. But you know we cannot be paid on interest rate, we cannot be paid on loan rate and we cannot be paid on loan program Right Period. And then the story is we're we're pretty much uh, uh, our, our compensation is based off loan amount. That's right, that's it.
Speaker 2:And I like that change. I mean, I don't know any different. I don't know any different. Um, so let's see the next one here. You need a perfect credit score in order to get a VA loan.
Speaker 1:Is that true? Absolutely not. Why is that? Well, technically, and I don't like when other people say that the VA doesn't have a minimum credit score, but they don't.
Speaker 2:But the VA is also not lending the money- Boom, I was getting ready to write it down, but you just said it Good.
Speaker 1:So the VA doesn't have a credit score requirement, but the banks are the ones lending the money. So the banks are going to come in and say, okay, well, our minimum. One bank might say my minimum is 580 or another bank might say my minimum is 600. So, to answer your question, no, you don't need a perfect credit score for a VA loan. However, the banks will imply some kind of standard for as far as credit score to let you participate with the VA with them.
Speaker 2:Right, and I mean well put and I want to kind of break that what you're saying down for the listeners in almost a layman, because that was beautifully articulated on our side of the tracks. When it comes to that scenario, you've got a how do we call it? It's a investor that is purchasing these loans. They're, more times than not, lending the money to the banks, or lending the money to the originator so that they can originate that loan according to their guidelines, and then they end up buying that loan.
Speaker 2:The VA and John mentioned it a bit ago they don't actually do loans. They are the ones that guarantee 25% of that loan in itself, but they're not the ones lending the money. So, when it comes to the VA guidelines, no, the VA guidelines don't even require a minimum credit score in order to get a VA loan. But the person that's loaning you that money guarantee there's going to require a minimum credit score in order to get a VA loan. But the person that's loaning you that money guarantee there's going to be some minimum credit score requirement, whether it be 580, 620, whatever the case, and they can set those own parameters for their institution. And typically they're called overlays. So when you hear the term overlay, not orale overlay. That's just kind of what we use lingo-wise in the industry to say you've got additional layers that in order to sell this loan you've got to meet before that investor will purchase it. Absolutely.
Speaker 1:Yeah.
Speaker 2:Yeah, Okay. So now that we've gotten through that, let's see here. Va loans take too long to process.
Speaker 1:What are your thoughts on that. I don't know why they would take anything any longer than an FHA or conventional Same here.
Speaker 2:I mean, that is a myth that I hear quite often from listing agents that will call me and say, hey, I've got your approval letter here and it shows that they're using a VA loan. Have they considered going conventionally? And my response to them quite often is no, not at all, because the VA loan is the best loan for them. If you'd like to fill my shoes, come on over and sit in the seat. But as of right now, if you'd like to accept the offer, these are the terms, Get with the buyer's agent so that you guys can hammer that out. But on our side we've got a solid veteran who served their country and they're wanting to buy your home. Right, you know.
Speaker 1:So there's been a lot of misnomers and I've actually had, in the last probably month, I've had three veterans not get their offers accepted because they were using VA financing, which was really frustrating. That you know. You have somebody who has taken the time and served his country honorably, earned this benefit, and then just to try to buy a home using his benefit and the seller says no Because he was being given bad information, maybe by the listing agent or maybe he read it online, whatever the case. But some of the misnomers are there's a lot of non-allowable fees that a bank might charge that the seller would have to pick up, and that's generally not the case unless we're talking about a super small loan amount, generally maybe under maybe $140,000, which is well below the average the loan and it's such a nominal fee that most lenders will pick it up and or maybe split it with the buyer's agent. And because it's not a big, it's not a large sum of money, but it doesn't apply in 95% of the purchase transactions. Another misnomer would be like they're too strict on the appraisals right and then generally they are not.
Speaker 1:I haven't had a lot of issues with the VA appraisals. There are some caveats that they look for, maybe more so than on a conventional loan, but there are not very many of them, that's right. So, like wood rot, they don't like wood rot. They, you know they want you to, you know, sand it and paint it. So they're, you know termites can't get in there and stuff like that, that's right. They generally want it to conform to the neighborhood and they want to make sure there's no health or safety issues similar to just about every other appraisal out there.
Speaker 2:That's exactly right and I'm glad you mentioned that, because a lot of folks out there believe that conventional is the same as cash when it comes to an appraisal, and that is not the case. I think the overall goal in an appraiser two things, and you can correct me if I'm wrong or if I'm missing anything but number one does it adhere to the value of the other properties around the area in recent time? Typically six month period. Number two is the home safe and livable? Is there anything that is going to cause this new homeowner to go? Okay, I can't live here anymore because it's not safe, thus putting the lender or investor at risk of foreclosing.
Speaker 2:Other than that, yes, there are little things. Like, if the house should have a water heater, put the damn water heater in there. Like, if the house should have a water heater, put the damn water heater in there. If there is a missing window, you got to have a window, and I hear it quite often. Well, there's some wood rot or there's floorboards missing on the stairs leading up to the master bedroom. We need to go conventional. You're still going to get those requirements on an appraisal from an appraiser that says, hey guys, this doesn't fly, absolutely.
Speaker 1:Yeah. If there's wires hanging out of the ceiling from a ceiling fan that's not there, no longer there, you're going to get flagged on a conventional appraisal too, right? Absolutely, that's a safety issue, right? If you have a electrical panel that has, you know, wire shooting out of it or spark shooting out of it, right, you're going to get called for that, yeah.
Speaker 2:Yeah. And then the last thing when it comes to appraisals and VA and misconceptions is VA appraisals are always short. In my opinion they've actually been the higher ones that come in, simply because most of the time they have closing costs that they're contributing and that veteran typically is a veteran appraiser Number one in their trade and their craft of being an appraiser for a while certified to do VA loans but most of the time they're also veterans themselves. That in itself is something that they're looking out for the veteran. They don't want to put them in a situation to where they're upside down in their house more than the funding fee that you get to roll into the loan.
Speaker 1:Right, no, absolutely. I think most VA appraisers want to do what's best for the veteran and, like you said, they don't want to put them in a situation and we've seen it before where both of the agents are pushing the envelope hard on value, it's true, and there's absolutely nothing, no comps to support that value and they're like well, if somebody's willing to pay it, that's what it's worth. Yes and no, that's exactly right. Not to a lender.
Speaker 2:Go ahead, yeah go ahead and elaborate on that, because I think this is something that number one we can probably clip out and make you a badass reel or something, because the idea behind what's happening in our market on appraisals and once the appraisal comes back short, from a lender's perspective and then from a buyer and, I'm sorry, buyer's agent perspective and listing agent's perspective what I've seen too much of is the buyer's agent fighting for the sellers to get this price that they can't really justify based on the comparables. What drives me insane is when a realtor and I'm going to say it realtor comes to us and says this appraiser sucks. They don't know what they're doing. This thing should appraise $20,000 more, but instead it's $20,000. Short, instant response. What is your response?
Speaker 2:Typically, do you have any comps to support your value? Boom, where are the comps? Because before you took this listing, before you put it out there, I'm hoping that you ran comps to make sure that this wasn't a hope and a prayer or what the seller believed it was worth, based on their feelings of how much they've put into it and the memories that they've had. And oh yeah, we put a hundred thousand dollar pool, so we should get a hundred thousand more back. It's just not the case, right? I mean it's going to $100,000 more back.
Speaker 1:It's just not the case, right, I mean, go ahead, it's going to happen on a conventional as well. I had a situation, I don't know, several months ago where a VA appraisal came in $30,000 short. We kind of got a heads up by the appraiser ahead of time, before he finished his report, and we asked for some additional comps from the listing agent and possibly the buyer's agent. Well, the comps that they had sent me I looked this up in MLS and the comps they sent me just were not comps. They were the highest-priced sales in the neighborhood. They all had extensive upgrades, whatever subject did not, and there was just no way to use those as comps. And in reading the appraisal report, that appraiser tried to get as much value as he could. That's right. But at the end of the day, the comps that they were supported or were given by the agents, they were not comps and it kind of showed a little bit of naivete on the part of the agents.
Speaker 2:Definitely. I mean, I got two things here. The first thing goes with exactly what you were saying is when that agent is utilizing the comps that they believe that are actual comparables. Are they within a certain mile radius? Is there one that is better to use versus not? Was it this year or was it 2020? This year, was it 2020? Right, there's just so many little nuances to the concept of that. But the biggest thing that gets me is we'll send them the appraisal, and that's typically the only time that we'll send out the appraisal to all parties is when it's short, so that, hey, go ahead, read it, examine it and give us any kind of errors that you see. Right, because they're still human. If they messed up on the square footage which is, in my opinion, the biggest reason as to why it would be short or not and most of the time they don't read it. Why? Because they don't know how. They don't actually take the time to read the appraisal study. It understand what a comparable is why they're making the adjustments, right, you know what I mean.
Speaker 1:Right and in this particular case the appraiser used five comparables within 400 meters of our subject as square foot, within 50 feet of each. You know of all the constants. So there was really no justification to say this appraiser was wrong or to go outside the neighborhood when there were so many comparables within such a a short distance of our subject property. We can't, you know, can't, you don't use another um a comparable in in three neighborhoods over when there's there's literally five on the same street.
Speaker 2:Right, right and that and that, how and why is it so difficult for us to have to articulate that and fight for that every single time? You know? Um, in addition and I mentioned the buyer's agent in this uh little debacle, uh conundrum, when it comes about is why are you fighting for the sellers at the end of the day? One thing that you guys should know is that when you do or accept a VA loan, that appraisal stuck for the property for at least four months. So it's not like they're going to go and put it on the market and think that they can order a brand new appraisal unless it's conventional. Hey, you want to list it for conventional or cash only?
Speaker 1:I think that's recently changed. Oh, is it? It's a couple of years. So VA appraisal used to say at the top, any qualified veteran, okay, and that appraisal would stick with that house for a period of time. Yep, that has since changed. Now the VA has the appraiser put the specific veteran's name on the appraisal report. Oh, wow, and if for some reason, the deal, the transaction did not go through and the veteran walks away, the deal, the transaction did not go through and the veteran walks away. Hypothetically, if another veteran came and made a new offer on that same house, they would order a new appraisal, really, yes, so it's not stuck with the case number anymore, correct?
Speaker 2:Oh, wow, okay, we'll have to research that. But there you go, guys. I learn something new every day, especially from John Hurd Boom. And the last thing that I wanted to mention on the appraisal situation is appraisers for the VA or certified that have their SARs. They will typically call what's considered Tidewater before they give you a short appraisal which gives both agents enough time to come up with the comparable so that they can put their numbers together, before they just say, hey, it's short, right you?
Speaker 1:know, yeah, that's the generally. An appraiser is going to do his research prior to going out to the property and if he's having a hard time finding comps, he might. He might reach out to the agents and say, hey guys, I'm having a hard time finding value here, can you help me? What comps did you guys use? And so on and so forth. So and say, hey guys, I'm having a hard time finding value here, can you help me? What comps did you guys use? And and so on and so forth. So, and it, help us out. You know, help the appraiser out. These are the comps I use. This is what I use to support the value. Share that with the appraiser, you know, make his job a little bit easier, because if you just want to throw your hands up in the air and say, oh no, I'm not going to help this guy.
Speaker 1:Well you might, you know, get the result. That's exactly right.
Speaker 2:Get out what you put in. Yes, and the VA loan is the only one that calls Tidewater. All the others will just say, nope, it's short. Here you go, figure it out or dispute it and paid it to fill out the grid, et cetera, et cetera. But I think that that is very admirable and at the same time, they're looking out for their veteran in that regard, because they don't want them to lose the deal because they couldn't find the right appraisal comps. There could be situations where there's off-market properties that they don't have access to and the realtor maybe has that they could provide, as long as they show that it closed. Okay, that makes sense. Let's update that value?
Speaker 1:Yeah, absolutely, and you know a lot of good veteran real estate agents. When they do their listings they know when the appraiser is going to go out and inspect and a lot of times they'll put their comp sheets that's right, right there for the appraiser to see and said, hey, but yeah, I think you know that's a sign of a good professional realtor that that will do a comp sheet for an appraiser when he comes out.
Speaker 2:I agree, I agree and and I've heard this a couple of times that don't you think that that's unethical for the, the realtor, to put the comps there for the? Okay, tell me how that's unethical if the appraiser already has the purchase contract and knows the amount that they're trying to hit? I mean, essentially, if they went into it blindly, who knows what they would get? As far as value, value is what's that word that I do not like, jc, it is subjective. I can't stand that word. Anywho, okay, let's move on. We are here, let's see. Take longer. Okay, va loans are only for buying a home Myth or true Myth? Okay, why is that?
Speaker 1:You can refinance a VA loan. They have what's called an EARL or interest rate reduction loan. Okay, which is no credit qualifying. As long as you've made your mortgage payment on time for the last 12 months, we don't have to verify income, we don't have to verify assets. We can lower the rate and get that veteran into lower payment Absolutely. There is a full credit qualifying VA loan for people who might have been in a conventional loan for a period of time and they want to say you know what? I want to use my VA benefit and switch this into a VA loan and lower the interest rate Absolutely. Now are you going to do a full credit qualify? Yes, but you can go from a conventional and refinance it into a VA loan.
Speaker 2:That's right and then is the URL is something that I have been educating a lot of veterans on lately, just because of rates being where they are. I'm not going to say they're high rates, but they're where they're at now, deemed by the market essentially letting them know that, hey, once, as long as you're OK with this payment that we're at right now, it can only get better. I'm not saying that rates are going to come down for sure. I guarantee my crystal ball says exactly this time. Who knows right, but when they do, it's a lot less of a challenge for a veteran to tackle a refinance than it is for anybody else Because, just like you said, no appraisal. As long as you're making your payments on time for the last 12 months and as long as there is a tangible benefit for that borrower, slam dunk.
Speaker 1:Absolutely you don't even need an appraisal. No appraisal and we do what's called a mortgage-only credit pull.
Speaker 2:There you go.
Speaker 1:So we're only pulling the mortgage history on the credit report, nothing else. We're not going to see the credit cards or student loans or auto loans. We're going to see none of that. We're going to see a credit score and the mortgage payment history and that's it.
Speaker 2:That's right. I mean, those are beautiful scenarios for our veterans. That gosh. It's just more work and more trouble for them to keep up with that because we're talking about. I don't know what the statistic is, but I'm sure half of them have some type of disability from serving, and this is not their lane. This is not what they do for a living. They're not financial gurus, so they rely and depend on folks like you and I to help guide them through this process. And when you're going through a refinance, it can be pretty daunting for the most part, but if you're going through an URL, it's like sit back, relax. We got this Exactly.
Speaker 1:Yeah, no income on the application, no assets on the application, it's just a no credit qualifying. You've made your payments on time and we can lower your rate a certain amount. Now the VA is going to stipulate that we're not going to lower you from a six and a half to a 6.3, right, because there's not enough financial benefit. There's still cost associated with the refinance, you know, setting up a new escrow account, title policy, things of that nature, and so there's got to be a benefit to the veteran. You got to be lowering the interest rate a certain amount or making the payment be reduced by a certain amount. It can't just be a refinance, just to refinance be reduced by a certain amount.
Speaker 2:It can't just be a refinance just to refinance. Yeah, and that's a beautiful thing right there. That is a precautionary measure that is put in place so that loan officers can't take advantage of veterans that don't know any better. You can't close on a VA Earl unless there is a tangible benefit to you as the borrower. Simple, I love that, okay. So let's see here. We already talked about appraisals. We skipped a couple of these things when we went off on our tangent. I love it. Okay, here's a good one. You can get a VA loan with no money down. True, true, yeah, is it possible?
Speaker 1:every time, yeah, trying to think of a situation where it's not possible. Maybe about no closing cost? You're using your bonus entitlement Well. Closing cost is different from down payment.
Speaker 2:That's what I wanted to touch on, because a lot of folks uh will put on social media and uh, matter of fact, john Hudson and I talk about this a lot in these discussions. It's the misguided marketing, the, the, the intactical marketing that people put out there, which is uh, use your VA loan and won't pay any money out of pocket. Well, that's not always the case, because if you, as the realtor, don't get them closing costs, the lender is not going to pay all of their closing costs for them, um, and if that is the case, it'll be in the rate some way, shape or form. So when people believe that there's zero money down, matter of fact, I had it probably a week ago.
Speaker 2:We were going over the. They just received a contract and I was the second lender and essentially they said well, I thought I didn't need to pay any money out of pocket and I'm like well, was it discussed with your agent that you needed closing costs, things of this nature? Luckily, we were able to raise the sales price, get them closing costs and get it to where it should have been from day one. But the idea that a VA loan requires zero money is a myth to a certain extent. Do you have to put money down. No, but you're going to have closing costs.
Speaker 1:Well, a seller's going to want you to put at least earnest money down.
Speaker 1:There you go, yes, sir, so that's something right. Even if the closing costs are being paid for by the seller or another party, you still have to put that earnest money down. Now you may get it back, right, but there's a lot of, there's a lot of people involved in a mortgage, right? There's a title company, there's appraisers, there's surveyors, and, unfortunately, they don't like to work for free. Yeah, and so the costs associated with a VA loan are very similar to that of other financing. That's right, and they're required. Lenders are required to have title insurance. That's right. They're required to have an appraisal most times Right, most times, not all the time. They're required to see a survey, or the title company will require a survey to ensure the title.
Speaker 2:And that's just the cost of obtaining financing, it's true. It's true the cost of getting money. You know it's funny. I have a lot of times people will say when I'm talking to them, I request all the documents up front, and all the loan officers here do the same thing, as a matter of fact, before we even meet with them via Zoom to give them their options. And a lot of times they will say well, why are you asking me for so much? And my instant response and it's intended to get them to laugh I say why are you asking me for so much money? They're like oh yeah, ok, I get it, I get it. They laugh and then we go on about it. But I explained to them that you're asking a substantial amount of funds with no money down right now on your VA loan. So therefore, I've got to make sure that you can pay this back. I've got to make sure that you're stable. Matter of fact, you're at a 580 credit score, so just making sure everything lines up.
Speaker 1:You know, I know Absolutely, and a thing that you and I hear a lot lately is about the interest rates right.
Speaker 1:Yeah, and you said something earlier in the show it's all relative, yes, and so people are not liking the fact that they have to pay, you know, six and a half% or whatever the case may be, to borrow money. But they're not complaining when you can get 6% on a CD or getting a high-yield checking account at 2%, which was unheard of, oh, my goodness, for a long time. Yeah, and with the Dow hitting what? Almost 40,000 this year, they're not complaining when they're seeing their 401k balances rise Very true, it's very true.
Speaker 1:You don't get any of that when interest rates are at 2.75, 3%, that's true and it is a balance.
Speaker 2:That's exactly right. And folks believe that rates are up because somebody wants to punish them or something like that, and that's just not the case. That's literally the only lever that can be pulled in order to slow down inflation, to our knowledge thus far. Policies, of course those can change, presidents, those can change, but we do what we do with what we got.
Speaker 1:Yeah, in an inflationary market, bond prices are going to suffer because bonds are debt instruments. So these big institutional investors, they sell off bonds, which is debt, to raise money to buy more mortgages. That's right. And when the dollar is worth less via inflation, that bond is going to be worth less unless they raise the interest rate. That's right. They got to keep attracting buyers of their bonds so they can buy mortgages. But if they have to keep paying, the price of the bonds go up. Interest rates have to go up. That's exactly right.
Speaker 2:That was very well articulated there. You must know your options in trading.
Speaker 1:I think I messed all that up, no, it was good.
Speaker 2:Do you still dabble at all, or do you dabble at all? I know, during COVID 2020 through 2022, at all. I know during COVID 2020 through 2022, I made and lost my ass all in the same breath of fresh air. It was like, yeah, let's go crypto, let's go six flags and then sell six flags Shit.
Speaker 1:I lost over here in crypto I don't dabble too much. I, you know, we you know, try to max out a 401k and then, you know, I give a little bit of money to another institution for an IRA and just let them handle it. I'm pretty conservative in that regard. I did want to get into crypto a little bit. I'm kind of glad I did. I'm glad you didn't too.
Speaker 2:Man, it was a fun ride and it was cool to see certain things happen as quickly as they did, because that was unheard of with any kind of stock, to be honest. As quickly as they did, because that was unheard of with any kind of stock, to be honest. And was it a stock? Kind of not really. Only on what is it called? What was that thing that I used? Robinhood, oh yes, oh my God, it was just too easy, like swipe done, I just bought a whole bunch of them, just sold a whole bunch, and then I get from the IRS like you made $270,000. I'm like, no, I didn't. Did you guys not put the baseline? So we got to put an amendment in for that. But yeah, that's interesting stuff and it's cool to tie the market to mortgages and how they can relate on the back end, because a lot of folks don't understand that they are, um, totally tied together.
Speaker 1:Yeah, absolutely. Uh, you know, mortgages are traded on the secondary market like stocks, or you know a commodity, or, or you know any bonds, so um, their prices can fluctuate daily and sometimes clients will get frustrated because they're looking at a house, uh, you know, one day, on a Monday, and then, and you, you quote them an interest rate and they don't maybe contract until Thursday, well, that that rate might've changed an eighth of a point or a quarter of a point, and and and. They're like well, you told me this, I'm like well, you know, just like the stock market goes up and down every day, the bond market, you know, also can change every day. That's right, and that certainly affects the interest rate.
Speaker 2:A hundred percent great way to put that. And it allows me to say the following For those of you out there, first-time buyers. Second-time buyers don't care how many times you bought a home before. If you're out there shopping for mortgage rates before you're actually under contract, you're doing yourself a total disservice. Why? Because you can't lock it in until you're actually under contract. The idea behind locking in an interest rate for a certain amount of time is you are reserving X amount of funds under whoever investor is going to purchase those funds. There's penalties if you break that lock. There are penalties for going over the allotted time that you have locked this period. So the idea of shopping I know when you go to real estate school they they tell you to tell your customers make sure that they shop for interest rates. And then you've got big banks Wells Fargo, chase that say shop for your mortgage rates, no problem, but wait till you're under contracts. You're not spinning your wheels. Come to find out that 5% rate that they gave you miraculously went up to 7% in the last two days. No, they knew that you couldn't lock it, so they got you to send their documents and everything else. And now all of a sudden you're stuck with the bag, you know. Yeah, it's true.
Speaker 2:Okay, jc, how are we doing on time? Okay, we're almost there. Let's do a couple more of these. And then I want to talk about today's market with you. Sure, what the hell's going on? Let's see here VA loans have hidden fees. What?
Speaker 1:Depending on when you look at hidden fees. Okay, there might be a couple fees that are not required on a conventional loan, ie termite. Conventional loan does not require a termite inspection that VA does. But we're talking about a $100 fee here to send an inspector out there to go inspect for wood-destroying insects. It's pretty easy, pretty standard, and a lot of agents even do this on their conventional inspections as well. That's right, and so is it a hidden fee? I wouldn't say it's hidden. Is it an additional to what conventional requires? Maybe, right.
Speaker 2:So matter of fact, let's replace hidden with additional fees. Right To make that a true statement, simply because nothing is hidden when you're buying a house and using a mortgage to do so. We are heavily regulated We've got to disclose and then disclose and then disclose. So nothing in the regard is hidden. Matter of fact, we have to disclose fees that may or may not even be charged in the end. It's just if we don't disclose them and it happens to need to be charged, we're going to have to eat that if we didn't disclose it up front. Correct, you know? And again, we're not in the business of giving away money.
Speaker 1:I'm trying to think of another fee that might be required by the VA. That's not required by other loan programs, but that's the first one that comes to mind.
Speaker 2:I mean, example, if someone's using a tax vet loan, there is a 1% participation fee and the lenders can charge a 1% origination, correct, but again they're disclosed. These are things that you as the consumer, you as the realtor, should be talking to your lender beforehand to go over. How much closing costs is it going to take to get this deal done? Why? So that I can possibly get some from the sellers in that regard and have the expectations, just like John said in the beginning, over under promise, over deliver every single time, absolutely yeah.
Speaker 1:And you'll have happy clients. Absolutely Repeat clients. Yes.
Speaker 2:That's how you build your empire, you know, with people that know that you're all about staying on the up and up with everything. Staying on on on the up and up with everything. Let's see here I'm going to find one last one. Do VA loans are the last resort? I don't even like that. Va loans are more expensive in the long run. That is a. That is a uh right on the line of could be but couldn't be.
Speaker 1:Want to talk about it for a bit, sure, um. So, generally, when you're looking at which is more expensive, you got to look at the interest rate, uh, and the you know, and the closing cost. That's right. And so the closing cost and the interest rate generally can be reflected in the APR, correct? But the APR is only for what, the first five years, correct? Most mortgages in this day and age are not made to term, meaning you get a 30-year mortgage. You pay back only what you're supposed to pay every month for 30 years, right? I think the average life expectancy now is what? Eight, nine years, five to eight, yep, okay. And so does a VA charge, what's called a funding fee? Right, and that's basically a fee to keep the program going. That's right. A lot of veterans are exempt from it because they have at least a 10% disability rating or greater. That's right. And so you just kind of have to do the math, work it out on an amortization table.
Speaker 1:You know, you say okay, a conventional rate at 6.75 and a VA versus at 6.5%. You know, look at the total cost of interest over the life of the loan and you know, is the difference going to exceed that funding fee? If not, then they're not more expensive, that's perfect.
Speaker 2:And there's one thing that definitely, from a monthly payment standpoint, that stands out to me on a VA loan, that is not the same on any other program, especially compared to the amount of funds or lack of funds that you're putting down, which is the mortgage insurance. Va loans do not have mortgage insurance related. They do have the upfront funding fee if you're not more than 10% disabled or more Right. But try that with an FHA loan, try that with a conventional loan, try that with a USDA loan. They've all got some bit of upfront or monthly mortgage insurance, private mortgage or both. That's right. So the idea of a VA loan being more expensive in the long run, I think it is also relative. You've got to look at the big picture, not just comparing apples to oranges in that aspect.
Speaker 1:Right, and we've had a 20-year war in Afghanistan that ended a couple years ago, and so we have a lot of veterans and a lot of them have disability ratings and I would say most, I would say, out of 10 VA loans that I do, nine will have a disability rating of 10% or higher, and I think that's probably why the VA funding fee has increased.
Speaker 2:Yeah, that makes sense so many.
Speaker 1:We are at war for so long and so many people were injured and they're coming back and now they want to use their benefits and so they weren't getting the funding that they needed to support the program.
Speaker 2:Man, I've never thought about it that way or even in that perspective. You just made me take a bird's eye view and go, oh, ok, that does make great sense. Yeah, I mean, we have been at war. There's plenty of veterans that have, since retired, been awarded their benefits and, like you said, because most of the VA loans that I do same thing, they have some at at least 10%. Now, mind you, if you're a hundred percent veteran, you don't pay any property taxes and that's nice, that's very nice. You know, I've got my neighbor next door a hundred percent veteran. I mean, we pay $30,000 a year in property taxes alone and I'm like dude, a year in property taxes alone. And I'm like, dude, do you want to adopt a grown man? But yeah, okay.
Speaker 2:So we were able to go through quite a bit of myths and misnomers that the VA loan itself have, and I'm glad I got to have that conversation with you because you knew, you know your shit, you know, and I think that the people out there, um, listening, viewing, want to be told the truth, not some sugarcoated salesman act, and that's not what we got here today. Uh, and I definitely appreciate that Everything, most of what we talked about, wasn't very opinionated, it was total facts. Uh, and then giving our perspective on it? Right, let's talk about some opinions. What the hell's going on with the market today? What are you seeing out there?
Speaker 1:Within the last couple of weeks, what I'm seeing is bad news is bad news and good news is good news. So for a long time when we would see financial news that would hit the market and generally that would actually help interest rates, it didn't help them. Or we would see news that would hurt interest rates, it didn't hurt them. The Fed last year, toward the tail end of last year, in December, said they were going to make what about three or four rate cuts? Right, that was in December. And then in January they basically said, well, hold my beer, that's right. They said, well, we maybe jumped the gun a little bit on that. Yeah, whoops. And we got to February and March. It's like, okay, well, we'll be lucky that we don't raise them again.
Speaker 2:Insert foot into mouth.
Speaker 1:That's right. But in the last couple of weeks there's been some economic data to support this economy is slowing. The jobs number came out today. It didn't meet expectations, which is good for interest rates, for sure. The people that lost their jobs absolutely not Right. But it is good for borrowing purposes, and so what I'm thinking? I'm going to make a projection that the Fed will do one rate cut this year. My guess will be maybe September timeframe or somewhere along those lines. That will help. The market's kind of already priced that in. So we'll kind of see. But I think that we're heading to a place where rates are going to dip a little bit. It might not be this year, it might be 2025. There's a little anxiety about the election and stuff like that. Sure, that always has, you know, traders anxious on, on who's which outcome that's going to go. Traders and traders.
Speaker 2:Just kidding. No, you're right in that the, the, I guess I picked the same concept. I thought there was going to be at least one rate cut prior to the election and that is hopefully not due to political reasons and it is due to helping people get into homes. Based on the economy and what's going on. I mean, obviously there is a lot of unknown for the next several months that we're going into. But one thing that I have to kind of hang my hat on is that we live in Texas and real estate is always local, and what I mean by that is our values historically have withstood the testament of time. Historically have withstood the testament of time. Taking a snapshot back, we've at least got a year over year, 5% or so increase in our value. Over the last several years it's gone to 30%. Now, when we see prices dropping, I don't think that people are taking that the right way. Values are dropping. Are values dropping or are they adjusting to what they should be based on these higher than normal, higher than average list prices, right?
Speaker 1:You know what I mean. Or you know, during 2021 and 2020, 2021, when home prices skyrocketed 20% and now they're making a 5% correction, Like well, did you lose money? No, you didn't. You know you still. You still realize that appreciation, um, but we haven't seen a lot of uh values go down per se. Um, you know Texas has insulated itself with the bar.
Speaker 1:You know they have pretty strict uh borrowing laws.
Speaker 1:You can't you can't pull equity more than 20% out or, excuse me, you can't have a loan to value more than 80% if you want to pull money out, whereas, like some other states, you can pull cash out up to 100% of the value of your property.
Speaker 1:That's crazy, which is really crazy, and I remember in the 2005 and 2006 and all that I think California has, californians were able to do like 105%, 110% loan to value because their property values were going up so fast. Some of the areas that we're seeing a little bit of, or I've noticed a little bit of a slight decrease, is Austin. You know, because of COVID, you had so many influx of new people coming in from out of state in California, up and down the West Coast and East Coast. They're moving to Texas because we had less restrictive laws because of COVID, and so you had a tremendous influx with Tesla moving here and Hewlett Packard and a whole bunch of these big, huge companies, so the prices just shot up through the roof. Bunch of these big, huge companies, so the prices just shot up through the roof and it was very difficult for an average person to afford a house.
Speaker 1:A modest house might cost $600,000 in Austin and we're seeing a little bit of a correction right that prices have come down just a little bit. That's right. But in San Antonio we were pretty insulated.
Speaker 2:Yeah, and I think you're on the money in regards to that. Matter of fact, a lot of the folks that were going to purchase in Austin, seeing what that market was doing and kind of being priced out, ended up purchasing in San Antonio in that kind of corridor there, which is what's keeping those prices not only steady but also rising. I mean, you look at Sakine, you look at New Braunfels that area is consistently increasing in value. I'm still seeing multiple offers, if they're listed properly. So those of you that live in Austin, have no fear.
Speaker 2:I don't think that the bottom is going to fall out because, number one, we still have plenty of people from California, new York, washington that are coming here Matter of fact, out of the country, coming here. They're paying cash for stuff, but the good news on real estate is, as long as you hold the real estate, or as long as you can hold the real estate, you'll get your money back, and I don't think we're in a situation to where we're even close to being upside down in a home, substantially to where you've got no choice. Now, austin was one of the ones where I did, for the first time ever, see somebody go like $200,000 over and get excited when it was only $100,000 short on the appraisal. I'm like, okay, so you're going to put a hundred grand cash Bye-bye Cool.
Speaker 1:Let's go yeah. Today's market, I mean, we all make qualified mortgages, right, and so we. We verify the income, we verify you know where the assets are coming from and we verify the value one way, one way or another, so you know when the crash back in. You know 08, 09, if you could fog a mirror, you can get a mortgage. All you needed was a 700 credit score and state your income, and then you got a mortgage with no down payment, which is kind of crazy if you think about it. And so, of course, when you know that's going to send prices up across the country and something's got to give right, and when those mortgages started defaulting, that was that was the breaking point.
Speaker 2:That's definitely how it went down. Um, even though I wasn't in the industry then, um, I was still in the um financial world. I was a banker, business banker, for chase seeing it. I mean didn't really know exactly what was going on because I hadn't delved into that sector all the way yet, but man, it was like holy cow. That's happening. I'm glad we put the regulations in place and I'm glad there's people like you still around doing what you do best. You know it's true. Thanks, mark, absolutely Well. Um, john, is there anything that you'd like to let our listeners know? I mean, this is your time now. If you want to let them know anything, by all means the floor is yours, because they don't want to read one of these cards.
Speaker 1:The only thing I could think of is is you asked me a question at the very beginning is like can a non-veteran get a mortgage? Yeah, and a VA loan. And we discussed the spouse or surviving spouse. Technically, if I was not married and my sister and I wanted to buy a house together, she can be on a VA loan and we're not married. Now the VA says we'll have to put down 12.5% but she will still be on a VA mortgage. Boom, because the VA guarantees 25%, but only half of us are veterans and we're not a spouse, and so we'll say, okay, there's only one, so we'll do 12.5%.
Speaker 2:You know what? You're 100% right, and I think that's only come out one time in my entire career. But that is accurate as all can be. Wow, there's still no mortgage insurance.
Speaker 1:That's right, and still get that lower rate.
Speaker 2:That's exactly right. Wow, well, you heard it here, guys, you may have to run that back to make sure that you understand what he just said, but it is totally possible. Holy cow, I totally forgot about that. Yeah, wow.
Speaker 1:You don't see it very often.
Speaker 2:No, you don't, but it's still there, absolutely, and that's what's important. The other thing that's important is that you guys out there are still tuning in and I'm really hoping that you got something out of this VA discussion or learn something about John Hurd and his team, but we are going to continue to give you guys good discussions transparent, honest, upfront from those that have integrity and are willing to share their experiences and their values with you guys. So, as always, john, thank you for joining me today. Pretty good job on a first podcast, brother. Thanks for having me. Man. Absolutely Happy early birthday. Happy birthday to you, brother. Boom Guys, we will catch you on the next one. Lamborghini here's my Lamborghini. Here we will catch you on the next one.
Speaker 2:Thank you.
