MLO | Modern Loan Officer | Home Buying & Selling Insights

Is Refinancing to a Lower Rate Actually in Your Best Interest?

May 12, 2020 Season 1 Episode 10
MLO | Modern Loan Officer | Home Buying & Selling Insights
Is Refinancing to a Lower Rate Actually in Your Best Interest?
Chapters
MLO | Modern Loan Officer | Home Buying & Selling Insights
Is Refinancing to a Lower Rate Actually in Your Best Interest?
May 12, 2020 Season 1 Episode 10

Does a lower interest rate actually benefit you? Should you refinance? How do consumer get confused when Brokers/Lenders advise them on refinancing?

Today, MLO introduces the newest member of the team, Christian Kemp. Christian informs us with the details of what to look for in a refinance and how to not to get screwed! Backed by decades of experience, Christian Kemp's insight is definitely one you will not want to miss!

Show Notes Transcript

Does a lower interest rate actually benefit you? Should you refinance? How do consumer get confused when Brokers/Lenders advise them on refinancing?

Today, MLO introduces the newest member of the team, Christian Kemp. Christian informs us with the details of what to look for in a refinance and how to not to get screwed! Backed by decades of experience, Christian Kemp's insight is definitely one you will not want to miss!

Addy Nett:   0:00
ey, thanks for joining in on the podcast today. We have a special guest. Christian Kemp, the newest member to the M L O Team Christian brings in decades of experience as a mortgage loan originator, and we dive into tips and tricks of refinance. What are some of the key components that we need to look for when restructuring our mortgage financing weight around in the show? We have a special poppin from Casey Carpenter to give a veterans perspective on my name is Addy Nett this is MLO.

Addy Nett:   2:34
ey, thanks for joining in on the podcast today. We have a special guest. Christian Kemp, the newest member to the M L O Team Christian brings in decades of experience as a mortgage loan originator, and we dive into tips and tricks of refinance. What are some of the key components that we need to look for when restructuring our mortgage financing weight around in the show? We have a special poppin from Casey Carpenter to give a veterans perspective on my name is Addy Nett this is MLO.that that that that that Ah ah! Ladies and gentlemen, thank you for chime ing. And today I am extremely excited because today we are announcing the newest member to M l o Mr Christian Camp. Thank you. Thank you, Christian, for being here today.

Christian Kemp:   2:34
Thank you, Edison. I appreciate the opportunity to work with you guys. This is awesome. A new platform and totally stoked to go ahead and, uh, help out our clients and educate him and have this digital platform toe, uh, push it out there with Thank you.

Addy Nett:   2:52
My pleasure. And just so everybody knows, like, Christian brings decades of experience and, you know, brings decades of experience. He brings quite a few a k A nicknames, Uh, a mortgage bureau, A k a C K for initial. Okay, campers, I'm sure there's some intoxicated ones in there I'm not aware of, either. I

Casey Carpenter:   3:16
can't wait to get to the first tee box and have that to being announced when I get up there next time, you know, uh, were

Addy Nett:   3:25
no man. I know cushion really well. And a couple of things I respect about Kempers. And it's just like you a the experience. But what comes with that? As you've been through so many different market environments and realistic being a loan officer, you You know what to expect. You've seen guidelines, Titan, open up. Crash not crash. Booming markets, down markets. I mean, ah, pandemic market is is, you know, a first for everyone, but that being said, it's huge because right now, cushion. A lot of people are really reaching out. We saw about 60 days ago Ah, 400% increase in refi applications nationally. And one of the things we wanted to touch on today for the consumer is and there's I break this down all the time. I know you're doing this? Why? I wanted you to talk. Just because the rates lower doesn't always mean it's a benefit in the long run for the consumer. So diving on that No, Christian, what do your initial thoughts and educating our audience regarding is refinancing, right? And what are things to look for? You know?

Christian Kemp:   4:40
Yeah. Addison, that's a great question. You know, in this environment that we're in right now where rates are really low, you know, most of time it's gonna be a right time for people, depending on a couple different factors, you know, Are they gonna be selling their home in the next few years? Are they planning this house to be there forever? Home. So there's a lot of different things that you want to take in consideration. But mainly what we want to look at is like some of the break even points target interest rates that's gonna get you to that. Ah, benefit point. And so what we do is we actually work up amortization table and show him the exact date when that's gonna break even. And if it makes sense, you know, a lot of times it's, you know, even out of this kind of rate environments we're looking at, You know, people have to refinance for so many different reasons out there. And, um, that's why it's important, that kind of use your mortgage advisor yearly or semi annual to kind of talk about what's happening in your life. Is it a a new child college? It could be retirements. There's a lot of different reasons to refinance. Is it gonna be Teoh Big Purchase a second home investment property. So I think for refinances it's always gonna be there. It is going to need it using their number one asset to help them achieve some additional holes.

Addy Nett:   6:00
Yeah, And I think bringing a bag you made some really good points there. Cushion into kind of rallying back home like biggest word you brought to me is break even. So if we're going back to what you just you know, we always like to break this down a lake, distilling it down. Teoh, You know what? The person that doesn't talk about this all day, something that they might be

Christian Kemp:   6:22
able to

Addy Nett:   6:22
understand to take home. So, like when you are refinancing in chime in here like you've got your current balance on the house. So it's something that you owe right now. But then what's not talked about and explain to consumers enough, in my opinion, is what the new loan amount iss. And we're associated with that. So give me a little bit more. Let's talk about that and then go to the break even. Yeah, he hit me with that breakdown.

Christian Kemp:   6:50
Yeah. So a lot of people will, you know, ask for a quote and what are closing costs. What is the new interest rates? They're gonna make a decision. Or am I gonna roll these closing costs into my do alone? What is my new loan amount? Gonna look like? And if I do come out of my pocket, What is that break even point? What? The monthly savings or the a V. R. Or whatever it may be that they're trying to achieve. Um, and we take in a couple different indicators to like debt consolidation. What? You know, some additional savings, but a true rate in term. Yes. We want to go ahead and find out what that savings is. Um, how many years left they have on their current mortgage? Um, you know, and take that away and kind of see the true value points of where that's gonna break even at. And we can, uh, do that with the amortization tables, taking their current loan and seeing exactly where that's at. And, um, you know, kind of rule time. Every says two years is the rule them. I don't know where they got that two years to break even. I think that's just because the average consumer pie refinances their home or cells or home every 5 to 7 years. You know, does something change to their mortgage. And so we want to make Take that in consideration with the averages of you, and that's gonna be, And that's just talking to your your clients and finding out what exactly is going on in their life. What's in the future. I know we don't have a crystal ball, but if we can kind of drill down to some of those short term goals and then come out with some analytics of it's I mean, it's pretty easy decision on. Does it make sense?

Addy Nett:   8:25
Yeah. No, that's really well putting. Um, a I want a We've got an audience question here in the comments. When you skip, do you skip a payment when you refinance? Like when you purchase? Um um And thank you, Mr Will Murphy for chime in in early with the answer. Yes, yes. Your applause for Mr Murphy timing it

Casey Carpenter:   8:52
is, Mr Murphy, for that question.

Christian Kemp:   8:53
Well, you know, no mercy. Give the answer. Well, I

Casey Carpenter:   8:58
want I want to chime in and they're a little bit Yes, three recordings and everything else on your new mortgage. You typically will skip at least one mortgage payment through that transaction. And we kind of use that in our announces if we're gonna be putting that back down on the refinance when you get that first payment, or we're gonna add that towards the principle and we can kind of show you how that looks with getting your escrow back. And I know I'm talking about a lot of different terms, but typically, both clients will have an escrow account with their taxes and insurance, and it's and we are typically setting up a new account for them when they do a refinance. So within 30 days of closing their transaction there, tipped and get some funds back from their current lender. So we come up with strategy are we could pay off some debt with that We're gonna put back towards the principle. So there's a lot of different things that weaken Dio of talking about how we can show that savings in a shorter term.

Addy Nett:   9:49
Okay, Yeah. Okay,

Casey Carpenter:   9:50
I know that's kind of going totally off script there, but oh,

Addy Nett:   9:54
you

Casey Carpenter:   9:54
know, that's something that we could talk to each one of our clients you know separately about

Addy Nett:   9:58
No, it's super awesome. I think, you know, bringing it back to this, you know, stuff. Like, do you skip a payment by? Yes. And I often use that entire ideology of you're essentially buying the house from yourself again. So there's an amount on it. It gets paid off. You got a new one. So yes, you do skip and one note, because I want to do get back, Teoh. The breakdown of the costs. I was the original think. But that being said, um, closing date also is a very big strategy within refinance because it will dictate when your next payment is dio so Christian. In short, could you explain? You know, say we're closing on the 30th Ray?

Casey Carpenter:   10:42
Yep. So because it on 30th Yeah, you're gonna have one day of prepaid interest, typically on your closing disclosure so that we're only in collecting one day interest for the new loan. And then, yeah, you're gonna have one month where it's gonna be recording. And then it would start. Let's say instance, it closes in May. Um, 30th. You wouldn't have a payment in June. Your first payment be July 1st with a 15 day grace period.

Addy Nett:   11:07
Right? So if you cause, yeah, that's a great and amount. So if you were toe maybe close the first week of the year are you might actually have 7 to 8 weeks until your next payment. So to back that comment and will Murphy's Inter to In some situations, you could have 78 weeks before you have a new payment. Actually, invoiced?

Casey Carpenter:   11:30
That's Craig. Typically, we are getting your pay off from your current mortgage that incidents interests to our clothes date. So instead of paying principal and interest that month to your mortgage, your first your current mortgage e, you would be Actually, we've just collecting the interest through the payoff and paying off that months Mortgage to that. So that's how you actually skip some someone of state Skipped two months mortgages. But actually, you're just skipping, paying the principle. We're disconnecting the interest for that month through the payoff.

Addy Nett:   11:59
The a P a p a. Okay, I love it. I love it. I love it. Any more questions? Just guys fill for you. Don't be shocked. All family and community here. No one's trying to sell you anything. We're just trying to give you the straight up answers transparently, which is a big part of the foundations here at M l o modern loan officer. Which, um, we do all of our podcast live streaming here. Um, we're on apple Spotify and I heart podcasts Or go on their subscribes. You get notified for every new episode where can get him out once and twice. Ah, week. And some really, really great stuff. Like the new construction one with Casey Carpenter was a big smasher. Um, and yeah, keep keep updated on those ends. So going back really quick and I got well, Murphy chairman in with another question I don't want to steer too far away from the costs of refinancing. Um, when is the worst time to close. When is the best time to close time of the month I know are just like I think it goes back to what your goals are in the mortgage strategy closing at the end of the month. Obviously, you skip that one payment that we just talked about, but closing out of earlier month might give you a little more spread. However, you do pay what is referred to his prepaid interests. If icing to the end of the current month when you hit that closing day, which, generally speaking it depends on the loan amount, you're looking at 30 to $45 per day of prepaid interest. So in to answer Murphy's question, it kind of depends on the goal. Are you trying to reduce the amount of things financed in your loan that you will be paying interest on over the next 30 years? Or are you really just trying to patch up a hole in the boat and liquid eyes as much as you can reduce your overhead and cushion up your savings account? Anything to add on that camp?

Casey Carpenter:   13:51
Now it's great points, you know. I think it really doesn't matter. I mean, the prepaid interest days. We're going to be what they are. You know, it really depends on if you want to make your mortgage payment and beginning of the month and avoid, you know, the late payment after the 15th. So, yes, I'd say, you know, if we could if you could fund your loan before the 15 so you avoid a late payment, do it if not, you know, going to make your payments and you'll get a refund back from your current lender.

Addy Nett:   14:15
Yeah. Good point on that one. 15. So, big deal guys to everyone out there to know. Because, like everyone, you know, most people pay their mortgage the 1st 2nd or third couple you know of the month. But you actually do have that that grace period without hitting. Um, your credit and showing up is a late to the 14th of the 15th so that Israel

Casey Carpenter:   14:36
actually for me, it will integrate it until the 30 when you're 30 days late. But you will get a penalty from your out of your current lender for having a late payment after the 15th issues. That's again. 5% of your of your current mortgage payments. So and Donata late, mate,

Addy Nett:   14:55
but that you got your just not worth the risk. If you have questions on communicate with your servicer in your loan, officer and Mr Murphy is just comfortable coming to town with accuse. I love it. So let me say when is the worst time we covered that one is the best time. So we covered the are the costs of refinancing comparable lender to

Christian Kemp:   15:16
lender. And this is what I really want to talk about.

Casey Carpenter:   15:20
How is a big question for everybody?

Christian Kemp:   15:23
Everyone,

Addy Nett:   15:24
like, what are the costs? And what pisses me off is when you talkto on officer and it's like, Woo will move and you get a bunch of jargon be us about what the costs are. See it? One question. I get a lot in Kemper's. I'm gonna lean on you, Teoh. Really dive in a little bit area in your arms, mainly because here we both get different questions. Different demographics, different clients. Um, well, question I've been hearing a lot is what's your origination? And I think that's a really confusing term for consumers because a not everybody has not every wonder has an origination fee. There's costs associated with the loan that your lender will cost to do the transaction. So sometimes they're flat rate, and sometimes they're a percentage of the loan, which is referred to then as an origination fee. Please cut me off, Seiko, if I

Casey Carpenter:   16:14
think, uh, you know, date myself a little bit of being in the I think it's April. At 17 years in 2000 and three, I got into the business and we called it. An origination fee is like the up front costs. Everything included is all considered origination fee, and it was the tax deductible, as long was in origination fee. But those those terms have changed a little bit. Now we have a process MP and underwriting fee. That's kind of taken out origination fee. And those are things that are gonna be different from lender to lender. But origination fee is gonna be the, uh, a lender fee. Some lenders will charge a 1% lender fee origination fee on all their loans, and so 1% of what your loan amounts is or 1/2 percent. And it's not a bona fide discount rate, which a bona fide discount rates we could go into a little bit more is actually buying down your rates. So that used to be all lumped up into one totally different now. So origination is what the lender is charging you to do there alone. Um, you can You can maybe call that a processing and underwriting if they don't put that on their butts. That's how we kind of done in the past. And what you really want to be shopping is the bonified discount rate to get that to get the current interest rate. That there you then right in your shopping You?

Addy Nett:   17:29
Yeah. And to bring that bad guys bring it back, Teoh. You know, um, someone that doesn't do this all day long, So you're gonna want to know just what the originations. Fine. But what are the lone associated costs from the wonder directly like we are flat 18 90 processes and underwriting fee. No matter what, it's not a percentage. It's not this. It's not that. So the other depart costs, though which I don't going off communicate enough are uncontrollable costs on our side, his own officers. So examples being you are all those fees that you had again when you bought the house, You have him again on the refinance. So your title County transfer title insurance. All of that crap, the prepaid escrow deposits. You're doing that over. And guys. So you a couple things? No, lenders don't. Don't judge what those costs are. So typically, those hard costs are gonna like roughly be around 3000 for your kind of like, you know, your heart title, county. Ah, appraisal, appraisal. All that stuff. And we're going to get into appraisals and who needs them and who doesn't leader in the show. But you're looking at two different buckets on the total cost. So you've got your title ones, and then you've got a brand new esseker, which Kemper's talked about earlier, which is a brand new escrow account of prepaid, which includes the prepaid interest, but also depending on the state you're in and how often you pay almost a full year taxes and insurance again. One thing to note, you get the balance of your current escrow back from the service of your mortgage in the form of a check that takes like 3 to 6 weeks, depending on the servicer. But super super important to know, um, and bring it back to So you've got the amount owed on your current house, plus the total costs of the new one combined. Give union new your new refinanced along your new loan amount. So yeah, I really sure we hit that for for Mr Murphy, um should hit on. Well aware, you want to take this run camps?

Casey Carpenter:   19:44
Yeah. Should consumers be aware of any cost refrains that may maybe aren't obvious. I think that origination fee is a huge one in there. What is the lender charging? Make sure been going to a PR a little bit, but that's sort of really true. Waited to shop your lender. What is the a p. R. At the end of day? It's lumping all those costs into one and coming out with a total a PR. So if you have a lock in a rate of 3.375 today and you're a PR is three points, uh, you know, 45 with me and you get the same rate from lender be that has the same rate is 3.375 and the A p R. Is that Ah, you know 3.625 That means that there is additional fees that are are in there for the same rates. And that's a good way for a consumer to shop. Uh, one lender to another is shop the A P. R. It's gonna give you the true cost on there. And whoever is gonna be the lowest is the one that's showing the least amount of total ah, fees.

Addy Nett:   20:45
Yeah, yeah. No, I love it. And Murphy's just cranking out these awesome questions I'm gonna bring in. We've got more to adjust here, guys. Um, I'm gonna bring in r V a team member, Casey Carpenter. So if there's any vets watching to, um, that's what's great about Casey, we we do a thana v ailerons and the veterans have some unique advantages to take take, um, unique advantages to take. How do I submit

Christian Kemp:   21:13
that without saying

Addy Nett:   21:14
advantage again? To me, it is to take advantage of, So let's bring in. Ah, K c. Hey, Casey. Welcome to the show, man. I know you've been busy helping clients and you've been cranking. We've got a good show, so thanks for taking the time. Um, let's see, we've got another one. Mr. Murphy is taking the stage really quick. What are rate floats? So Yeah, Great d Great question, because there's a huge difference between a lock trey and a, um, a floating rate. And every lender is gonna have different rollouts on how that they're getting how they're gonna lock your rate and why. So how does I mean? I want to let me just explain, Right? Locked means it's good that usually the locks are gonna pertain for a certain amount of days. Pretty much standard is 30 days. So when you're working with your lender and they say you're rates a lot, you're good to go. Um, you're a can't change, so question I get all the time. Well, what happens if my rate goes down? You know, the interest rates go down and it's locked at Wake with 3.5, and it goes down to 3.275 to get the battery. Now, informer markets there used to be company company thresholds to honor ah lowered rape. But now, with where the markets swung, those were gone. Dude, I haven't even Matt one are talkto one consumer of you guys that are still honoring a float down. I don't think so.

Casey Carpenter:   22:40
No, I haven't seen anybody.

Christian Kemp:   22:42
Anyone? Chenery. Buehler. Yeah, yeah, yeah. Unless it's a I have seen it honestly at some of the bank levels, but it who knows? I mean, you things were changing per month right now. PRA policy. So you all I've seen a lot of those little things go out the window,

Casey Carpenter:   22:59
and I think the margins were so crazy that would, after you'd have to see 150 basis points for it to even make sense for it to happen. So I think it's kind of a mute point at this time with the floats. You know, what we're trying to do is position yourself in the best form to get the best interest rates at the best certain time. So that may mean that will get you through the underwriting process again. All all that the goods together. So that's we can get even a shorter term, a 15 day lock or something a little bit better and pricey. And so each individual we're gonna have our own strategy. Every person's gonna gamble a little difference with a purchase versus re pronounce is gonna be different as well. But floating just means that you're rate rate is floating on the day that you lock us what the term is and, um, the rate and the term it's

Addy Nett:   23:50
Yeah, yeah, for sure. And I think one thing to know to you definitely want to communicate cause everyone has got a different flow. Um, toe how, like I don't want to dive too deep into it. But our strategy is a company is submitting the loan, getting it, they're processing and then locking the raids. Um, primarily because that takes less days on the lock. So say lenders closing refinances in 60 days. Ah, 60 day lock is is worse pricing than a 30 day long because you're securing in that term for much longer. So if you can get a lot of the upfront work, get with your loan officer, um, get into underwriting, get through all that crowd, that it boring whatever, and we're not there. You're gonna typically get a better industry. Um, I want some of these comments again. My wife has been I love her to death. Just chime in and love that Christians on the team. We love you crispier on. And she has been a huge advocate for the team here. Ah, project managing a lot of this back end stuff for us with the streaming the content and managing I getting all of our social media stuff cause we're all super busy taking care of our clients. Thank you. Um, my lovely wife Kristen, also had a really good Q. Here. Do all lenders truly have the best interest in mind when trying to refinance? How do you know if it's actually worth the cost? And I think that's worth reiterating. So ah c k a k a mortgage guru. Would you mind kind of take in that one for us?

Casey Carpenter:   25:29
Yes, definitely. I've consulted with many of my clients and it just, you know, sometimes it just gets a pencil out or it's just not the right timing. So what we typically will do is set some thresholds of where that's even point is or where it makes sense. And no, we do. We put it into our calendar. We have rates, watches for them, and we're keeping them educated. And things may change during that process. Where may make sense or they may not need it down the road. But I think someone officers air may just say, Yeah, I couldn't save you 50 bucks a month, you know, but doesn't really make sense down the road. Probably not. Not on a maybe on a, you know, $60,000 loan. That might make sense. But does that make it make sense on $800,000 loan? No, probably not with the fees long term, which are losing that you have in your current mortgage. So, uh, I'm hoping that lenders air out there doing the right things, and I'm going through the same process that the M allo allo monster does. But, uh, that's why it's so important to pick a true adviser and treat him just like your insurance guy. Beat with them once a year so you could discuss, you know, Are there any changes? Do you have a big purchase coming up? Um, we need to be able to help you be strategic in your next big purchase or refinance or saving for college retirement, whoever it may be. So I think it's different with everybody.

Addy Nett:   26:58
Yeah, and then hey, really well said I've got so much. This is a good up rolling here eyes in Ah, I want to bring in Casey to and Casey from a veteran standpoint because I hear a lot people like I have a lot of veteran clients that have done purchases and refi dances with me. Veterans get hit all the time with with, like, solicitation calls to refinance. And for what I've heard, man is like to get him on the phone. They try to force get him to do the credit poll tone that they're going to say Vaccine Mao, What could you give as a veteran like, Why air the veterans getting hit with so many solicitation calls? And what are things that some of our veteran our boy band ah down and ah, but yeah, Niecy chime in. Just just believe we

Christian Kemp:   27:50
are a perspective and what thing bets can look out for, you know? Yeah, I really don't know what the target thing is. I mean, maybe maybe, you know, information are it's I had almost Hi, I recommended, you know, that's where it's coming from. But really, if you went from a target marketing simple, I did maybe maybe we're just nice guys. After the service and we're easy. Teoh talk to you. But honestly, the veterans need to be aware because there's letters. There's several different, you know, lenders out there that focus on different loans. And there's actually a handful that focus on feeI loans. You probably, you know, maybe come across a couple, But when you're being directly solicit, you know, solicited like that and, uh, I mean, I always I'm coming back like like Christian was just touching on. You know, it's that invite. Is there that relationship status that you know you're trying to add? And you might not as a veteran as a homeowner sit and have that, you know, with a mortgage person. So someone calls you and it's a simple This could be interesting. And that does put you, I think, in a tough SWAT as a veteran or as any home buyer. Honestly, because if if you don't have a m l o advisor for you here to help you an answer kind of some of those questions or talk Teoh, you're trying to make those decisions on your own. Um and then it's just, you know, really, Is it something that's benefiting you? So yeah, I mean, is the lender offering a competitive rate for that veteran? Because I think the rates are great, you know? So it might be, you know, saying how much they can save him, how much they can save. But they have the end of the day. They're offering a higher rate, which wasn't even in the best advantage for that veteran. Yeah,

Addy Nett:   29:34
and I'm gonna hop in really quick is like the questions are just piling up here. And Casey, I think that's your right. You gotta watch out who you're working for. Because one note I was working with my client on the phone. He's like, Oh, so and so said that I could save $200 a month, right? And I'm I'm looking at said another file pretty well. This this guy's off not only become a friend over the years, but I've done multiple loans. Room is a veteran, and I'm thinking there was like, Oh, you're at this rate. I know that for a fact, because I did the last one, and I know where the rates are high right now. That's not really penciling out, and I'm talking to him on the phone like this and this is why you work with someone you know and you trust. It's like, OK, I see Ah, potential rate improvement of this amount, which could affect the payment by 100. And then we're chatting it through. And it's like, Oh, well, if I wanted to structure a quote to a client to demonstrator Ah, $100 more monthly savings. How would I do that? Okay, what I would do is cut the homeowner's insurance and half So us $85 a month now on my quote is $40 a month, which in turn also affects your closing costs in your loan amount. They might not even be counting for the new an amount that we talked about as well, because you're financing it in.

Christian Kemp:   30:45
And then he could be pulling old frickin property taxes from the year prior.

Addy Nett:   30:49
So it's it's unfortunate for like a 1 800 I'm not going to name him, but we all know the commercials to call someone in a cubicle and be, you know, throw a bunch of Bs numbers and that consumers like, 0 $200 a month when really it's like 94 it's not that they might want need or they're gonna move in two years. That person in the cubicle on the phone doesn't give a crap about the veteran or the just the conventional loan and what the best interest is. So ah, couple of notes there on why? To work with someone who who gives a man. It's hard when I get pumped up. I really won't occur. Livestream keeps me freaking honest. I want to go to a few. Murphy, I don't want to miss your tax question, but I will want to throw. Here we

Christian Kemp:   31:38
are. Vegan is throwing out some great questions.

Addy Nett:   31:39
Murphy is great mad. Our boy Matt doing refi with Christian and out He was the best decision. Our wife Hey, like oh, Kushner, all that you say. Thank you. That was awesome.

Casey Carpenter:   31:49
Thanks, man. Appreciate it, But well,

Addy Nett:   31:52
thanks for commenting. We superficially ah, pleasure to work with. And I'm glad they we got you in your life into, um, some even more favorable terms And it worked out for you. Uh, going down, Teoh. I don't want to skip up. We've got other questions from other people. Well, let's hit Murphy. One more time. Ah, ck in the house, you mentioned tax deductibility. Is this still in effect for any portion of the refinance? And let's try to condense the answers you co ck

Christian Kemp:   32:22
And then I've got a note about that on via after you're done.

Casey Carpenter:   32:26
Yeah. I mean, I am not going to be the one to say yes, because I'm not a tax attorney, you know? Um, attorneys, Yeah,

Addy Nett:   32:33
you say that we're not license

Christian Kemp:   32:34
sentence? No, no license. Superior tracks attorneys.

Casey Carpenter:   32:39
Yeah, I think I think it's still like if it's in that origination side of things, that is a But the discount for discounts of pop art is not tax deductible, and I could be wrong on that. But I think anything in the lenders loan origination box that's how it's always been was in the tax deductible side. But I think a lot of that has changed in the past. I don't think there's much, uh, tax benefits on the refinance side of things anymore. So with your tax advisor, bring in your closing disclosure when you go to your taxes the phone year. There may be some items that are, but they will be the best person. So just take in what we call the closing disclosure when you do your taxes for the following year that any time you get a purchase or refinance. And I know that TurboTax ask you, and it prompts you for certain minds on that CD statement, so there might be a few items on there,

Christian Kemp:   33:29
right? Hey, Hey. If your c p a or tax advisor, you know, gives you a couple nuggets, come back and share that with the mortgage of I think these questions all the time, you would not believe how many SEPA and tax questions we do get.

Casey Carpenter:   33:42
What you see is out there listening. Yeah, Simon.

Christian Kemp:   33:44
Oh, yeah, trying because it's, I mean, obviously we're not license. It's not. It's not our cup. It either advised at all on any of that. So we are always open for that information because it is. It comes up a lot in realistic Well,

Casey Carpenter:   33:57
we do know that portion of your interest is tax deductible on your primary residence and some of your second homes and obviously investment properties. You have your own write offs on that too.

Addy Nett:   34:09
So one thing I do want to know before you made to the next question regarding the tax returns. A specific tube at trends If you have any sort of disability percentage, um, check with the county website. Mortgage lenders can't set the stuff when you're buying a house or refinancing it, but you could. Certain counties give significant discounts to veterans based on that disability upwards to 100% relief. Right case here. Correct. A lot of people don't know that, especially people moving here. So look with the county. Whether it's clock commits Washington Clark up whatever it is, look into it because there's a lot of veterans out there right now that can reduce their required property taxes just because of the disability. Without eating a reference, I swear to God guys,

Christian Kemp:   34:54
that is a very, very true comment. Very, very true. Common that it, of course. That's why you'd be surprised, because a lot of veterans don't know. And, you know, after you've closed the home, if you were in a if you're in contract and stuff going through purchase right now, you gotta wait till that home is closed and then reach out to that county. But Thea, it's a real savings. Guys I mean, it's a riel saving

Casey Carpenter:   35:19
because it stood firmly pro program. Is that what it is? Or, uh,

Addy Nett:   35:23
it's a tax relief, the

Christian Kemp:   35:25
tax relief with your disability,

Casey Carpenter:   35:28
what they do for the seniors, that same type of thing that is on the back end,

Christian Kemp:   35:35
that that's a new topic right there. When, Yeah, we'll see him

Casey Carpenter:   35:38
to that on another episode, for sure.

Addy Nett:   35:39
Yeah, you know, another episode. But it's the same like, hey, you know, service members for our country get compensated disability, and they shouldn't be taxed to the same way. Especially like sort of, Ah, or the V alone is it's designed for the veteran to win and have a very well manageable overhead. And they want to help out with that, like someone giving up. Um, you know, years of their life and and in some instances, you know their physical capabilities on other things. So they're going to get a discount on their contribution to property taxes. So anyways, move into the next one. Guys. Um oh, Matt. Oh, Kirsten. Yeah. Thanks. Fab Three Boom. Thank you, honey. I love that she's charming in. Ah, we go back to Matt here, doing ah Well, we edited out. Here's this question. What are the benefits of paying down your principal faster? Oh, yeah, but now we're talking. Spread. We might have to open up 1/3 window on here with a spreadsheet share if we want to get really, uh ah, us three or huge spreadsheets, Nerds, for example. Paying an additional mortgage payment directly toward the principal each year. Um, I don't want to steal the show, but I'm a huge fan of this. I will open up with, ah, letting CK roll. And then I've got ah, personal example, Aziz. Well, Aziz approach on it. So go ahead, camp.

Casey Carpenter:   36:59
I love this question from Matt because we have spent time and efforts trying Teoh come up with different idea ideas and ways to pay off this house sooner and to create s'more equity. I know that they're doing some remodel on different things and they're just trying to find the best value and come up with different ideas. So I think everybody schools are gonna be different, like we've talked about. But yes, adding money towards principal each month is gonna pay down your loan faster, which is gonna shorten the length of the loan, which is going to mean that you're paying less interests. And that's the coolest thing about the mortgage, part of things that the numbers don't like. Everything kind of calculates the same thing. It's so fun to kind of play with the numbers and say, Hey, you know, I really want to retire by this dates. What is it gonna take to do that we could They put it down to the dollar to get to that, to achieve that goal. So you know, yes, tons of benefit is by cutting the interest that you're paying or shaving off years of your mortgage and then having that extra equity at the in the day when you do go to sell your house to put it down on the next future. Big purchase. So tons of benefits. Thanks for the question that I can't attitude

Addy Nett:   38:09
you had add into that like, I think some just easy math like let's just some around easy math. So, like a really huge question, I get all the time. It's like, Well, what if I do? A 15 year fixed was like there's a huge you know, Obviously it's half the terms comparatively Dio 30 right? What I always like is looking at it is like, Okay, a 30 year gives me the lower came in cause it's spread out as twice as many years. However, I can always pay more to the principal every month or every year and cut off the years. So, for example, like personally on our primary mortgage, um, we pay about, um, one month or one extra payment per year. So it's like $300 extra a month that goes directly to principal, not the

Christian Kemp:   39:00
interest Director of

Addy Nett:   39:00
principle. And that shaves off the math that I did on our loan. It was like 5.7 years. So if I were to make an extra payment every year for 24 25 years, I would conclude my 30 year fix at that point. So I'm doing a 25 year X manually, but I'm only being held to the lower payment minimum standards, which I think is a very important thing right now, because all those people that lost their jobs that it like, But if you stop your income doesn't come through, you want to be able to Onley make the minimum payment and on a 15 year that, like, What is? I'm sorry. I was like, It's a lot more. It's not double, but you're gonna

Christian Kemp:   39:41
You're getting close to it. Well, yeah,

Casey Carpenter:   39:43
about 2/3 of it on. And you know, it's funny you say that, Addison, because I'm seeing some my 15 year clients. Now that the 30 year rate is so low, go back to a 30 year with the same mindset of still staying on plan of Afghanistan, often 12 years. But the flexibility, like in a time like this, it's It's usually I like your payment. You know, the minimum payment, Ugo back in those, I'm gonna make us a 30 year fixed, right? That's the very least you're gonna make. You can't get in trouble there. I mean,

Christian Kemp:   40:16
pick your planet. Yeah, but, you

Casey Carpenter:   40:19
know, um, it gives you the opportunity and, you know, people that are in a bonus income or commissioning cub it's great to have that flexibility toe put out big chunks at it. I think that's really really where you see if you can put down, you know, I get a bonus of a couple $1000 put it down towards that because you know you're seeing that principle drop off right away. You know, that's great that you're able to do $300 a month. But, you know, if you could do some of those big chunks, your shave off faster,

Christian Kemp:   40:48
there's there's one all touching on that real quick, and then we can jump onto the next one. There's a strategy and a lot of people I'm so everyone's got. There's different strategies, and everybody has got their own goals in mind setting kind of what they're working with, but clients stuff that we would look at is what's called like an equity position strategy. So you have your 30 year mortgage, right? We always look at him, but it's a 30 year. Just think it's like a bell curve, right? You started, you know, 360 payments later eventually were at zero right. We're starting at the top, and then we just curved back down to zero. But that's when you're making your regular payments, right? So, like you're mentioning Addy, you make your additional principal chopper payment or whatever. So instead of you doing a natural barrier bell curve on your normal payment, you're now doing a little stir step, because each additional payment you're making Chungking down into that into that principal loan amount, right it's is paying it down. So instead of the curve, you're starting to stair step. Well, that equity growth, then naturally, at the top, you have your house that that appreciates, right? Well, I mean, we help self, we hope we hope our houses are appreciating, but your car your house appreciates, and then you have underneath this kind hearted you as we're on the thing. But then you have this bell curve right of your lot's as your house appreciates your belt. But you're starting star steps, you cream the bigger gap. There is really all I'm tryingto trying to picture. And at a certain point, then you go. How do we access that equity? Right? Like we're getting there. But how do we access it?

Addy Nett:   42:19
Your I need a visual for a belt. Well, CEO interest

Casey Carpenter:   42:26
front loaded. You know, at the time. Yeah, we're tryingto go take a slice of that interest out of there by his principal cause any kind of got a new loan. It's It's

Christian Kemp:   42:38
really and I'm your 30 right? When when you were a natural start paying this thing off. Really? On that back half right back asking I mean, from what about on the back half is that I get you is with those clients, is at a certain point like, have you been doing that for 5 10 years? You've created a good equity position. Now what do you want to do? You want to do a cash out? Refinancing? Have some of that. Do you want to change it up? We're gonna look at the terms or some people don't stick in a he lock. Not that there necessarily going to use it. But they're sticking it in there, and they might use it to then access that funds if they need to right away and not change anything and keep them on their own path like you're doing a 300 extra payments. And however you do it. But they have that in place, though, to access that equity. If they do need, they've created, they could created the gap. And now they can access it instantly with the he lock. If they wanted Teoh. What? Again? There's multiple strategies. Maybe cash out. You change your terms we do that said, if you like whatever it is, But you've created yourself now that equity gap quicker than you would naturally I'm paying your regular payment is all I was trying to get you and I've done out. I wanted to get through What what I think kind of hurries up to

Addy Nett:   43:53
everybody watching J. It's like you need someone who cares. I mean, we spent all the time here, the number one thing on our team

Christian Kemp:   44:00
and oh, sorry, there is the

Addy Nett:   44:03
fact that guys, we're going to do what we can dio ah, to break down the numbers. Do you understand what you're getting at? In a lot of time, we spend people spend time with people explaining why it's not a good idea. And, um, we just want you to want everybody to get in the best position that possibly can and understand what they got going on because there's so many different, confusing ways to structure alone. So, going to the next one, can you see a different Can you use a different one program when refinancing do all available programs apply? That's a really good question. Yeah, you can You can use different programs in hip hop. I'd say one thing to note that Ah, you might not qualify for a loan program that you originally enough for, Especially if it like income. Restrict with them. Is there a lot of first time Homebuyer programs getting out there? If your income restricted now you're exceeding that. You can't really take advantage of it. Um, anything else to add guys to try to keep it to a few sentences is worth were role and Ichizo get episode. Anything bad feeler feel there. What's my I've got that crickets one,

Christian Kemp:   45:17
huh? Is not right. All right, all right. That's cool. Thank you. Yeah. I mean, I agree with what you said. That's really it's it. I mean, I get, uh What? I don't

Addy Nett:   45:31
have a sound effect for that comment. Ah, Will Murphy throwing in a ah golf question as we're all frickin golfers. Ah, when you're on the 18th tee box that accompany golf scramble u three plus christian or on a team par for

Christian Kemp:   45:49
dog being

Addy Nett:   45:50
left Hess keep interested. Why do I feel like I'm at Broadway golf course? Just a very entire green is surrounded by a moat. Your skill one shot Who's taking

Christian Kemp:   46:02
the saying that shot? Why?

Casey Carpenter:   46:04
I know, I know. And he's got the long drive.

Christian Kemp:   46:07
Give me your go to trample. I'm pretty squirrely. I'm pretty squarely on a tee off that you might not know that, you know,

Addy Nett:   46:16
get one in the fairy. First you got to get one in the fairway and a scramble.

Christian Kemp:   46:21
I'll take it off the bar in the tree every way I can get it. I don't

Addy Nett:   46:25
know, Christian your lethal with that three would I know, like we haven't played in a stupor. Wrong time, because we've been really busy. But

Christian Kemp:   46:33
a man that could hit a three wood is dangerous, Christian. That

Addy Nett:   46:38
three would big. I'm on. We love you more if you things for participating. Well, we got Emily. Ah says great information. Thanks, guys. Um

Christian Kemp:   46:51
uh, thank you, my sweet wife. You your union episode like everyone

Addy Nett:   46:59
showing the love and I think you know it's Christians first live show. So this is a huge, huge reunion, and once again, any more question guys, really? In all seriousness, even if it's just about Portland Vallone's purchases the market. What's going on out there? Refinances were all year toe help. And I love this comment once again. Gotta let the big dog, uh, that reference to it in golf. And I'll have to share that video we made years ago. Um, but yeah, guys, it's been fantastic. Ah, bringing Christian on and we're gonna do much more of this consistently, so we appreciate all the support. Once again, guys ml Oh, you're listening to the live streaming podcast session with yours truly adding that, um, our newest member, Christian Kemp, a k a c k a k a mortgage guru, a k a cumbers, and are trusted loan officer and veteran Casey Carpenter. Please. All gone, guys. You We've got Apple's apple podcast. Ah, Spotify and I heart radio all cranking. I really appreciate everybody listening to those and special news guys. Can I get a Can I get a drum roll way are about a week away from launching our YouTube channel so we will be big. All right. Thanks so much already and a great day out there. I hope you enjoy this episode of M. L O podcast. If you're ever wanting to see these episodes on video, feel free to check out the live stream content on our Facebook page. Also the YouTube channel, which is just starting modern loan officer, where you can dive in and get all the insights straight up. Transparent feedback on what you need to know about buying and selling in the real estate market next week. I'm super excited for our guest. Tyler Ross, a good friend and colleague of mine, teaches us what we can do not to get screwed over by homeowners insurance, how to get the best rate and things to look for. So till next time this is adding it and I'm out.