BiggerPockets Money Podcast - 121: Should I Refinance Or Wait For Better Rates? How Coronavirus Is Impacting The Mortgage Market with Seth Jones

Episode Date: April 20, 2020

In this episode, Mortgage Broker Seth Jones talks about the current mortgage market. We discuss mortgage forbearance - how it affects your credit and why it's NOT a good idea to go into forbearance if you can still make your mortgage payments.  We also talk about mortgages - how to apply for a new loan or refinance, what lenders are looking for and how to get the best rate on your new loan. We'll also dive into comparison shopping and how to choose the right lender. Lending is tightening up, while rates are dropping. We chat with Seth about what that looks like for a qualified borrower - and how to decide if now is the right time to get a new loan. We also discuss different types of funding, primary loans, second home loans and investment properties. We also clarify what mortgage fraud is - and how that can affect you. While it may seem like no big deal, it's actually a very big deal. Seth even shares a mortgage checklist below. If you need more information about the mortgage process, this episode is a must listen! In This Episode We Cover: The right time to take mortgage forbearance His thoughts on refinancing How a first time home buyer should approach their first mortgage Cash outlay Barriers to closing besides income disruptions Five categories of fees The difference between financing a primary home, secondary home, and an investment What mortgage fraud is And SO much more! Links from the Show Consumer Finance Protection Board Credit Karma Mortgage News Daily BiggerPockets Money Podcast 20: The Simple Path to Wealth—Index Funds Explained with JL Collins BiggerPockets Money Podcast 116: Long-Term Investing: Coronavirus Changes Nothing with JL Collins BiggerPockets Money Podcast 98: Change Your Money Mindset, Change Your Life with Vicki Robin BiggerPockets Money Facebook Page Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen, and with me as always is my comfortably mortgaged co-host, Scott Trench. Oh, what an equitable introduction. Thank you, Mindy. Oh, my God, Scott, that's awful. Bottom line is if you have great credit or if you have the ability to improve your credit to a position where you are 700 or greater, you're going to have a unique opportunity to take advantage of some great rates. Scott and I are here to make financial independence less scary.

less just for somebody else and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can lead your best life. That's right. Whether you want to retire early and travel the world, take out a mortgage, or go on to make big-time investments in assets like real estate will help you build a position capable of launching yourself towards those dreams. This is episode 121 featuring Seth Jones from Movement Mortgage. Seth is joining us today to clear up some of the confused about mortgages in general and the current mortgage situation specifically. We're going to talk about mortgage forbearance and how that can affect you in the future. We're also going to talk about refinancing,

what qualifications lenders are looking for, and how you can make the most of these low rates. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going and more importantly where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning

together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in a needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year.

That's 50% off at Monarch.com code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes. But somehow, every small business owner ends up doing it. Your dreams of creating, selling, and growing get replaced by late nights, racing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off.

Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting. You can set aside money for business goals, control spending with virtual cards and find tax write-offs you didn't even know existed. It saves time, money, and probably a few years of life expectancy. Found has over 30,000 five-star reviews from owners who say, Sound makes everything easier. expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity.

Open a found account for free at found.com. That's fowund.com. Found is a financial technology company, not a bank. Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck.

At this point, I've logged over 229 audiobooks. completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leen or Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indicted.

indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP Money. Okay, huge thanks to the sponsor of today's show. Seth Jones from Movement Mortgage, welcome to the Bigger Pockets Money Podcast. I'm super excited to have you here today because we are going to talk about mortgages and there's a lot we have to unwrap. There's a lot of things going on right now.

We are recording this on Thursday before it releases. which is what April 16th, it releases on Monday. Going to throw out a happy birthday, Anna, because today's her birthday, and we are having a snow day here in Colorado. So it's kind of a less than ideal birthday today. 13 in quarantine. Woohoo. Anyway, okay, Seth, let's jump right in.

If I am eligible for forbearance, I should just take it right. It's kind of a no-brainer. I get three months off of paying my mortgage. So the short answer is no. Basically, forbearance, the most important thing, for people to understand is it's not forgiveness. So this is something for people that really need help that have lost their income. Forbearance, there's a lot of misconceptions out there, and some people think that it's tacked on to the end of the loan. Really, forbearance can be handled in really one of

three ways, but the most common way is that you are given a temporary reprieve from making your payment. However, once that is over, whether it's three months, six months, or a year, you are required to either pay it in full or set up a payment plan. So it could end up putting you farther behind the eight ball than you were to start with. Oh, and a couple other things real quick, if you're going to need to connect with your servicer in regards to what forbearance is for you. So your servicer is who you're making your mortgage payment to. And another great resource is the CFPB, which is the Consumer Financial Protection Bureau, CFPB.gov is a great resource to learn a little bit more about forbearance. My understanding, you know, for me personally, I am still paying my mortgages,

and I intend to continue paying those mortgages. I have a reserve set aside for exactly this purpose, and I'm receiving most of my rent. There's no reason for me to apply forbearance. I don't get any advantage from it. I have to pay it back later. I assume more risk. And it's my understanding that maybe the, doesn't affect your credit per se, but it does show up on your credit report, and it is something

that will be a part of your history, so to speak, on this stuff. Is that right, Seth? Yes, absolutely. I'm glad that you brought that up because a lot of people aren't aware of that right now. Anytime your credit's polled, you're going to see that the mortgage was in forbearance and that there were payments missed. If you're a real estate investor or you're planning on buying another real estate investment or your primary residence in the next year, then you're really putting yourself at risk of not being able to qualify. Right now, lenders look at forbearance as delinquency, even though it's technically not a delinquency. It's technically not supposed to show up on your credit as a delinquency. Lenders view it as that. So if you file for forbearance, just plan on not

buying another real estate investment within one year. If you plan on using conventional financing, or some other traditional mortgage. Yes, not a good idea to apply for forbearance. Unless you really need it, right? And I don't know this, but I would surmise that, look, if you're one of the people who make it through this without applying for any forbearance whatsoever, somehow, some way, some lender, some day,

what a poem I'm constructing here, is going to look back on that and there's going to be a long-term advantage from that, right? You don't want to be the guy who needed assistance one month into this whole thing if you're looking for long-term financing advantages and good relationships with lenders? Is that at all true, Seth? Yeah, especially over the past two years. When a lender's looking at what's happened recently, they're looking at the past two years and payment history is something that's looked at very closely. Mortgage rates are looked at very

closely. So if you want to get the best possible terms, make your payments on time and don't file for forbearance. Yeah. Credit is everything for us real estate investors in a recessionary environment when potentially there's buying opportunities. If you think that's the case at all, make your payments people, right? Absolutely. Yeah. Well, and before we move on to the next topic, I want to note that there's probably going to be some deals out there in the next six to 12 months. I am not a mortgage lender, but I would assume or surmise, as Scott so cleverly used, I would surmise that if I am actively in forbearance, there is no way I'm getting a mortgage. Yeah, there's certainly no way that you're getting a mortgage if you're

actively in forbearance. And then one other thing, and this is really my concern, is if people are in forbearance and then their servicer does not set up a payment plan or ask it to be due, ask the entire payment to be paid in full, a lot of people are going to be putting themselves at risk of foreclosure. So there's a lot of risk here, a lot of things that you want to avoid it if you can. Yeah. Yeah, I'm really hoping that lenders have learned from 2008 and don't just instantly start foreclosing on properties. We're all in this together and you really have to try to make your mortgage payments. And I get, you know, if the whole roof collapses.

But if you don't need it, we're really talking to the people who don't need the forbearance right now. Don't take it as a precautionary measure. Now, you made an interesting point. So let's say I have a $1,000 mortgage payment due in May and I can't make it. So I get forbearance in May and June and July. that's $3,000 that I didn't pay, you're saying that some mortgage servicers will say, okay, now it's all due in August.

$3,000 is due in August. Can you negotiate that with your servicer, or does the servicer really have the power here to say, hey, it's do that, sorry. So the bottom line is the servicers want to work, and you made a great point. They don't want to foreclose, especially in this environment.

And I'm sure the government's going to be putting out additional guidance on that. But with that being said, you're going to connect with your servicer and you're going to figure this plan out before you fall behind. If you're in forbearance, you need to sort this out first, figure out how it's going to be handled by your servicer before you do anything. Otherwise, you're not in forbearance. You're just delinquent on your mortgage. That is a really good point. If you don't set up forbearance with your mortgage servicer, you're just delinquent, which is even worse on your credit score than just being in forbearance.

I love this. Is there anything else we should know about forbearance before we move on to one of my burning questions for you, Seth? No, no. I think we covered it. All right. So I think the question that's on a lot of investors' mind, assuming you're not coming into a liquidity crunch, of course, is now a good time to refinance. Should I take a property that I've got some equity in and should I cash out refinance at a lower interest rate? You know, if I can pull out 50 grand and have the same payment, I have the same exact risk profile I have today with $50,000 more cash. from that after that refinance. Should I consider doing a home equity line of credit? And what are the timelines with those types of things? Can you give us a little walkthrough about how an investor should be thinking through those types of questions? Absolutely. And the way that you just laid it out, if you're an investor and you have that opportunity, then that could potentially make a lot of sense. But it's really about what is your personal position and what are your goals? Too many people right now

hear that interest rates are near all-time lows, which by the way, it really, really depends on the type of mortgage you're pursuing because a lot of lenders are tightening up and some lenders are intentionally pricing themselves out of the market. Bottom line there is you want to shop around a little bit more now than you typically would. But when it comes to figuring out whether or not a refinance is right for you, you really want to think, okay, are you looking to just pay less interest? Are you looking to improve your cash flow or are you looking to pull cash out. If you're looking to reduce your interest, then you have a math problem that you need to sort out. And basically is, what are the closing costs for the refinance? And let's say just hypothetically,

those closing costs are $5,000 to refinance that property. How much are you then saving an interest, but practically, how much are you saving per month on your mortgage payment? If there's $100 dollars difference there from your existing mortgage payment to your new mortgage payment, then you just divide the total cost by your savings per month. And that'll tell you how long it's going to take to recoup that equity loss. And just to clarify, your equity loss, generally that's just going to be stripped out of your property. You're not coming up with that out of pocket.

But if you do go to sell the property, you're going to have $5,000 less equity coming to you. So make sure that if you are going to be. to be holding on to, or excuse me, pursuing a rate and term refinance, that you're going to be holding onto the property longer than it's going to take you to recoup. And if it's even close, if you're thinking, well, this is a property that I'm planning on holding for three years, or, you know, this is a temporary solution for me and I'm going to have an exit strategy, then you really need to look closely at whether or not you should be doing a rate in term refinance, because in most cases, a rate and term refinance is not the

right solution. There's another thing that a lot of people don't think about, and that is, where are you in your amortization schedule? And when I say that, that's just how far are you along in your mortgage? Because when you're starting a mortgage, especially if it's a 30-year mortgage, you're starting by paying primarily interest. In each payment, you actually pay a little bit more principal over time. So if you're 10 years into your existing mortgage and you go to do a rate-in-term refinance, not only are you losing equity? And you may be able to reduce your payment, but you're starting over on a 30-year term. And now the amount that is being paid towards principal, it's going to be greatly reduced. So moving on just real quick from an interest rate rate in term refinance, obviously if you have a good

solid plan for pulling funds out right now, there's a lot of good reasons to do that, especially if you're trying to buffer your reserves or if you have an investment strategy that you're trying to implement. But again, that all comes down to the numbers and how solid your plan is. Really, I think that is the majority of the reasons why you would want to do it unless you're looking into debt consolidation, which right now, that could be really important if you are pinched. If maybe you have an income reduction or a spouse has lost their job and you have a lot of other debt, that could be a solution that would improve your cash flow potentially save you from putting yourself in a position where you're beginning to become delinquent or, you know, fall behind on your bills. But that is a last

resort. And there are other problems if you're looking into that. Yeah. So, you know, just to kind of give maybe some of the listeners a perspective into kind of how I think about it as an investor, right? I've got several properties, right? And some of them, you know, I'm only four or five years into the loan term of one of those properties, right? This is the property of my duplex I purchased back in 2014. But because of appreciation, I've probably got 50% equity, 50% debt versus the asset value of that property. And that's luck, you know, market appreciation and a little bit, you know, I did add a little bit of value to it. But my question for myself that I'm asking here is, should I pull some cash out and get back up to 75% LTV or 80% LTV, pull out,

$50 to $100,000 and sit on that as an opportunity fund or invest that elsewhere. That's a decision I have to make in normal times, right? Because it's all about this concept. I'm getting a little mathematically maybe too deep here. But there's a concept called return on equity. And as I de-leverage, I get less of a leverage multiplier and appreciation on a long-term against my properties. And the way I look at it is, hey, I feel like I've got a stable cash flow right now.

but I could potentially boost my long-term return on equity by cash-out refinancing and still have a fairly low financing cost, which allows me to cash flow. And so those are some of the types of things that I'm thinking about as an investor personally. Now, let me ask you this, Seth, what's the market look like from a refinancing perspective? You just described, I have to go shopping around a lot. Is it going to be difficult for me to go and find a mortgage broker, our rates, what's happening with mortgage rates, and how do I make sure that I get the best financing I possibly can if that's my goal? So the bottom line right now is that it's very cheap for lenders to borrow money. And I don't want to get too deep into that. But with that being said,

lenders right now, and there's a full spectrum. I mean, there's news about what happened with J.P. Morgan Chase and how much they tightened up their guidelines for lending out mortgages, minimum credit score of 700 minimum down payment of 20%. Now, that is not going to be the way that most lenders handle that, but every type of lender is going to have a different risk profile, and they're going to look at how they're going to lend money a little bit differently. And it's based off of their personal financial position. If a lender is servicing mortgages, meaning that they are holding on to the mortgage and collecting payments for the mortgage, they have a lot more risk exposure because of the forbearance issue. So what that means really is that they are probably

going to get tighter than some other types of lenders. But the easy way to sort of think about this is that if you're going to be looking for mortgages, there's just a lot of volatility. There's a lot of different responses. And you want to get opinions from, I would recommend a mortgage broker, probably a direct lender and perhaps a bank, just to see the way that they're responding, because typically lenders are pretty competitive. Most lenders are three months ago, everybody was competing for the same buyers. Right now, that's not necessarily the case. Some lenders do not want to take on more business,

and some lenders are looking to increase their market share. So I thought it was interesting. A couple of minutes ago, you said some lenders have purposely priced themselves out of the market. that sounds a lot like a contractor when you go and you get all these quotes and somebody's 5,000 and somebody's 7,000 and somebody's 20,000. You're like, why would he charge 20,000? Well, if you'll pay it, he'll do it. So with these lenders, if you, like, if that's the only quote you can get is a 9% mortgage,

well, maybe that's what you're going to get or, you know, whatever. I don't know how they're pricing themselves out. I actually just refinanced on Friday. I signed all the papers and I got the check yesterday to fund the refinance. I bought this house that I'm sitting in right now for cash. It was a really gross house. It was the guy selling it needed to sell it. He needed it in a hurry.

And cash was the most attractive thing to him. So I was able to get a discount on the price. And then I had to wait six months to refinance the property to pull out the cash. But yeah, the market at one point, it was like his rates were changing every hour. And it was really, really crazy. It seems that things have kind of settled down a little bit. I really like your comment about shopping around. Can you address the whole shopping around and pulling,

a hard pull on your credit score and that sort of thing, because that's a misconception that I see a lot of people still not realizing that those rules have changed a little bit. Yes, and you can easily source this again on CFPB.gov, but really, if you're looking to shop around, you from your initial credit poll, so from the time that you're pulling your credit specifically for a mortgage, not for something else, you have 45 days from that point to get quotes from other lenders or have your credit pulled from other lenders and it will count as one inquiry against your credit score. You're still going to see those inquiries show up on your credit report, but they're not counting against your credit score. Okay. Let's say I get my credit pulled. What sort of

ding is that to my credit? That is a great question. It's tough to answer because it really depends on how well established your credit history is. If you're a first time home buyer and you have three lines of credit and a really small credit history, or I should say limited credit history, it's going to make a bigger difference than if you have a well-established credit history. But the bottom line is there's six major credit factors. Credit karma is a great resource just to introduce you to what those factors are, regardless of whether or not those scores are entirely accurate. But it is the least weighted of those six credit factors. So bottom line is it's not going to make a huge impact on your credit score, and especially if you have well-established credit.

I think the big question for me that I'm really trying to get around to hear is, I talked to a lender a few weeks ago and said, hey, should I refinance when the Fed lowered their rates? And basically the answer I got was, hey, everybody's trying to refinance right now, and mortgage brokers simply can't handle all of the excess business. So to your point, some mortgage brokers are trying to get out of the market unless someone's going to pay them a silly price, like JP Morgan, right?

I don't know if they're not doing silly price, but they're limiting their price guidelines, right? So somebody might say, yeah, sure, I'll originally have a mortgage at a huge percentage point spread versus what you can actually get on the open market, just because I have so much business right now that I can charge that. And what we're seeing there, in my estimation, is a shift from a buyer's market to a seller's market in the debt industry, right? Previously, all these brokers were competing very heavily for my business as an investor, as someone who wants a conventional mortgage. And now, overnight, because of the lower rates and all the uncertainty, everybody wants a

mortgage, and the sellers of mortgages, mortgage brokers have more business than they can handle. So the burning question I have is, if I wait a few more weeks or a few more months, do I have a good shot at getting lower rates on my refinance? Or should I just go ahead and do it now? And if I shop around, I should be able to find what will likely be as competitive rate as I'm likely to see in the next couple of months. How's that for a question? That's an awesome question, Scott. And that's really hard to answer because there's a lot of speculation there, but I'm going to

do my best. So really, in terms of the rates, there's a lot of variables that are going to determine where the rates themselves go. And for anybody that's in the market and they want to know whether or not they're getting a competitive rate, one resource that I highly recommend is mortgage news daily. They have a daily rate survey that surveys a bunch of different lenders and puts together sort of an average rate for that day. So just a great resource if you're trying to figure out of what you're getting is competitive. But going back to your question, should you wait or should you look into it right now? I would recommend looking into it right now and being prepared right now because we don't know what's going to happen. But if it doesn't make sense for you financially to pull the trigger today

based off of the terms that you're getting or the feedback that you're getting even, because as you both have alluded to, depending on the lender, the timelines for these processes can be extended. If it doesn't make sense based off what you're hearing, I think that there is a lot of reason why it could make sense to potentially wait and see, but you are running the risk by waiting that the dynamics of the market are going to change in a way, that we couldn't foresee, just like they did when all of this started, that the great rates, historically low rates that we're currently dealing with right now will pass by.

Okay. You know, I'm sitting in a relatively strong position, right, where this refinance would only help me by either buffering up my cash position or lowering my payment or a mixture of both, right? So it's not necessary for me either way. It makes sense right now at current rates to do that in some ways. If I want to beef up my cash position, it makes me, more sense the lower the rate is, obviously, because then I can pull out either more cash and maintain the same level of cash flow, or I can reduce my total financing cost, my cash outlay at a monthly basis by a greater degree. So in the context of that, what do you think? Since it makes sense now, maybe it makes more sense later and I don't want to have to close on two loans.

You're absolutely right. But if it makes sense now, I don't think that you should wait and see. I think that's a lot like trying to time the market. Okay. And I think that's sort of a good way to think about it. So if it makes sense now, you may want to really dig into it and see if there's an option out there for you. And just to put it in context, the beginning of March, March 10th, we hit the lowest rates that we've ever seen. And we are near, you know, within a quarter percent, depending on the lender, because some lenders, as we mentioned, are pricing themselves out. Just on a conventional, conventional, and I'm not trying to jump around here, Conventional pricing is better than other types of pricing right now, just because of the risk profile and the general buyer profile associated with conventional financing.

But if you're in that market, I think that you should look at all your options, perhaps do some shopping. And if you find something that really works for you and the numbers work, don't hesitate to pull the trigger. Great, great advice. That's really great advice. I am going to give a little bit of real life example here. we were under contract or locked in at a rate for, I want to say, 3.875. So it's an awesome rate for our owner-occupied property. It's another investment property.

So we were locked in there, but the lock didn't last until the time that we had to close because we had six months and it was like just shy, whatever. So all this stuff came down and we decided we're going to just break our lock with the lender. We couldn't lock in again for another 30 days. So we were kind of waiting around to see what would happen. the rates at one point went up and we're like, man, that was a bad choice. And then they went down for another day and we're like, oh, that would be a really great choice. But we can't lock in yet.

So we continued to talk with our lender. And he was quoting these rates and then like they would just change all the time. And finally we said, okay, we want to be locked in at 3.5. So as soon as it hits 3.5, lock us in. And he was able to do it in the next couple of days, I think. And we locked in, we closed. And that's a great rate. rates go down to 3.25, that's a better rate. But over the course of 30 years, what's that

quarter point going to cost me? At such low rates, it's really not going to cost that much. Yeah, and I'll actually link to an amortization calculator. I'll share that in the show notes so that people can actually do the math on that. But I think you make a great point, Mindy, and that's something that I hadn't necessarily thought about before. If people were in the market right now, they should do the math on what would be a total win for them, just like you did at the 3.5. And if you have a preferred mortgage lender, let's say you've interviewed three mortgage lenders and you got the best pricing with one. They had great customer service, whatever.

I would let them know, here's what a total win for me is. Let me know when it looks like we can do that. Yeah, that's a great point. And yeah, I have used this guy. This is now my eighth time using him. Sorry, you don't lend in Colorado, or I would have called you, Seth. Well, hey, I appreciate it. All right, so we've talked about don't get forbearance if you don't need it.

And we've talked about some of the things to think through around refinancing, which I think was a great discussion. What if I'm considering getting a new mortgage, aside from the rates question that we were talking about, is the market going to get lower or higher rates downstream? Does it make sense an hour later? Can you walk us through how a first-time home buyer or first-time real estate investors should be thinking about their first mortgage.

We know we're seeing credit tightening, maybe a little bit higher down payments, potentially. What other things should be thinking about loss of income or whether future rental income will count for those loans? How should a new investor or home buyer think about that first-time mortgage? Great question. I think there's a lot to sort of cover there. Just one quick example of how this current situation is impacting people.

I actually, just before this call, got off the phone with somebody who found out, yesterday that they are having a 20% reduction in income. Unfortunately, this had a huge impact on their ability to qualify. And because lenders are aware of everything that's going on in the market, the first thing is you need to understand how stable your employment is and understand the likelihood of a change in that employment happening, especially if that income from that employment is required to move forward on your financing. Because right now, more than ever, lenders are verifying prior to closing the day before closing, five days before, 48 hours before, and a day before, just to make sure your employment has not changed. So they feel confident doing that

loan. So that's one thing to think about, make sure that the income that's being used is stable and that you don't see any major changes happening. Otherwise, you'll get the whole way through the process, you'll have some cash outlays, and then you may be faced with something that prevents you from moving forward. But going to somebody who is thinking about getting into the market, there's really two segments because there are the people that are sort of on the fringe of qualifying. Right now, they're going to have a harder time than they've ever had before. People were working to get up to a 620 credit score, a 640 credit score, and they were trying to get a little bit saved for that 3.5% down payment. Now,

those people that were working on their credit, maybe they were at a 580 and they needed to get to a 620 just to make sure that they could take advantage of a low down payment program, those people in many cases are going to be pulled back from. And if you were working on that, it makes sense to talk to your lender that you were talking to. Make sure that you're aware of whatever changes may have happened and how that impacts your ability to qualify. But if you have great credit and you've been working towards this for a long time, right now is really an opportunity to make sure that you're getting a great deal to take a look at a couple of different lenders because conventional financing, again, is really offering exceptional rates. And you can still do low-down payment options. They are out there. You can do 3% down with a conventional loan, with a home-ready or home-possible loan.

There are income restrictions with that depending on your location, but that is an option that's out there. And you can do 5% down. Bottom line is if you have great credit or if you have the ability to improve your credit to a position where you are 700 or greater, you're going to have a unique opportunity to take advantage of some great rates. Let me ask you this. I'm a first-time rental property investor buy it a duplex, right? and I have a good job. And I close on that duplex in the next 30 days,

but a great duplex cash-floating deal. And then I lose my job right after we close, week after we close. Am I better or worse position, in your opinion, than if I had lost my job, I'd waited to buy that duplex or equivalent duplex and lost my job in the middle of that closing process. So it depends on whether or not that was a great investment because...

Let's assume it was a great investment. Okay. So if it's a great investment, you definitely want to lose your job afterwards because nothing's going to happen and you're going to end up having the cash flow from that property. So after you close,

you can lose your job. As long as you're making your mortgage payments, the lender doesn't care. But if you lose your job in the middle of the process before you close on that property, really, you're going to have to wait until you regain employment, and then you have the whole situation of explaining that gap, getting the appropriate amount of time in that new job where depending if it's the same career

field or if it's a different career field, you may need just one month of pay stubs, or you may need six months because it's a totally different career. I hope that answers your question. No, I love it. And I asked, I was a leading question, right? But I want to point out, hey, there's an uncertainty right now, right? Do I buy? Do I wait? Do I see what happens, right? You know, all of that is very real. But there's risk on buying now and the market collapsing, right? And there's risk that the market doesn't really drop by much or stays flat or even goes up over time on average over the next couple of years. And your ability to purchase is significantly delayed because your paycheck is cut, because your employer is forced to do that,

or you're laid off. And you have to get a change careers and make a different change. And so all of those risks need to be factored in here. And I, I think that's an interesting one that you bring up in terms of whether your income gets cut during the closing process or before you're looking to buy here, the short to medium term. Absolutely. And just a quick follow up on that. If you're self-employed, you're not going to likely lose your job. You're more likely to lose income. So if you have a really strong income history over the past two years leading up to this crash, generally lenders are going to look for your most recent two years tax returns, and they're also going to look for a year-to-date

profit and loss. If you're in a strong position right now based on those numbers, and maybe this hasn't dramatically impacted your business at the moment, and you were on the fence of whether or not you should do something, and you foresee potential loss and income, you may want to act now because as soon as lenders can document that income declining, and it's a greater than 20% decline, you're going to have a much harder time getting a mortgage. Yeah, I think what gets lost in some mortgage conversations is I already know that, so I'm not asking that. So I want to plug the show notes for today's episode, which can be found at biggerpockets.com slash money show 121. We're going to clarify some of these terms that

Scott and Seth are throwing out. I also want to clarify, you said something about cash outlays. and that is a very mortgage broker term, but that might not be understood by some people who are listening who aren't constantly getting mortgages. That means a fee that you have paid as the borrower that you don't get to recoup. So let's say you lost your job halfway through. You've paid for your appraisal. You've paid for all these little things. You're paying that and you don't get that back. Your lender is not going to cut you a check for the $400 or $800 or whatever.

So you don't get a guarantee on funding until when. I was going to say until close, but I guess that may be not true. Well, it actually depends on whether it's a purchase or a refinance, because on a refinance, you have a three-day right of rescission. I'm glad you brought that up. Funding doesn't occur on a refinance until after your three-day right of rescission expires. Which means I can say, oh, I change my mind, never mind. I still pay all those fees.

I still have all those cash outlays. Yes. So bottom line is the lender's still monitoring your situation and you also have the ability to change your mind on a refinance. But on a purchase, it would be the day of closing. Yeah. So let's say that I am closing on Tuesday and I lost my job on Monday. You can, as the lender, if you discover that I have lost my job, you can pull funding, even though closing is Tuesday. That's correct. Okay. So I just think that's really important to say to people who, don't always get mortgages all the time for no reason. Or, well, I guess for because they're buying all the time. Not for no reason. Tax season is one of the only times all year when most people actually look at their full

financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going. And more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward. It's to actually make progress. Simplify your finances with Monarch.

Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle.

Achieve your financial goals for good with Monarch, the all-in-one tool. that makes money management simple. Use the code Pockets at monarch.com for half off your first year. That's 50% off at monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need.

That means you can stop struggling to get your job notice on other job sites. Indeed's sponsored jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored posts. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash bigger pockets. Just go to

Indeed.com slash bigger pockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash bigger pockets. Terms and conditions apply. Hiring, Indeed is all you need. When you want more, start your business with Northwest Registered Agent and get access to thousands of free guides, tools, and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the U.S. with over 1,500 corporate guides who are real people who know your local laws and can help you and your business every step of the way. Northwest makes life easy

for business owners. They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs of running a business. And with Northwest, privacy is automatic. They never sell your data. And all services are handled in-house because privacy by default is their pledge to all customers. Visit northwest registeredagent.com slash money-free and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free. In communities across Canada, hourly Amazon employees earn an average of over $24.50

an hour. Employees also have the opportunity to grow their skills and their paycheck by enrolling in free skills training programs for in-demand fields like software development and information technology. Learn more at aboutamazon.ca. Moving on to another kind of area of this, are there any barriers you're seeing to closing loans besides income disruption or credit problems? Like, hey, sure, my income just dried up because I got laid off. Now I can't close in this loan. and that makes perfect sense. But are there things like, are you seeing appraisers can't go to properties, inspections can't take place, notaries can't show up for loan closing documents

or other types of situations like that? So personally, I've been very fortunate to not deal with a lot of that firsthand, but I have interacted with a lot of people in the lending space that have dealt with some of those issues. And some of this is location dependent, so at some locations are impacted more than others. but basically there are a few things specifically what you mentioned, Scott, appraisers and title companies that are having a lot of hardship where I should say a lot of difficulties in navigating

some things that are normally very simple. So appraisers have to go to a prop, they show up to a property, they inspect the property, and then they provide a report. Right now, a lot of appraisers are just opting to remove themselves from the process. They're saying during this pandemic, we're not going to participate in providing appraisals. Well, we're in the middle of a refinance boom, and people are still purchasing properties. So that means that there's far fewer appraisers available in the market to perform appraisals. And I have seen situations where appraisers decide they no longer want to pursue an appraisal. And this can lead to time delays and perhaps significant time delays.

And in some cases, and Mindy, you mentioned a rate lock earlier. We'll probably have to explain that a little bit more in the show notes. But bottom line is for a rate lock, you have a specific rate for a certain period of time. And after that time expires, you're either going to be paying more to extend that rate or you're no longer going to be eligible for that rate. So when these time delays, like from appraisals come up, it can impact other parts of the process. But title companies, the last closing that I attend, They were wearing masks. Some title companies are not doing in-person closings. Some are trying to navigate closings virtually, but there's a lot of red tape there that needs to be cut through.

So that's very difficult. And then the only other thing that I would point out is there are what I call third-party verifications, which we were talking about the verification of employment earlier. And just a quick explanation of this, someone behind the scenes with the lender, is going to be verifying that you're still working where you work. And this is normally something that the borrowers never really pay attention to. It never really comes up. But when everyone is working from home and people are not at their normal workstations, these simple tasks can tend to, they can become issues because maybe that big company

is not responding to those HR emails the way they used to. or maybe the fax number was the primary way that they gave that information. That's no longer working. So bottom line is there's a lot of obstacles or potential for delays. And those potential for delays can put you in a position where you could potentially lose the opportunity to follow through on that financing or that deal. Yeah. And just like the mortgage rates are so volatile right now and they're going up and down.

And when you lock in a rate, that means this is your rate. And it's guaranteed they can't charge you anything else. It's guaranteed for, what, 30 days, 45 days, whatever you decide to lock it in at. So if rates go up, you don't get that. Your rate doesn't go up. You stay in that same rate. So you'll have to, like you said, you might have to extend the rate lock, which costs you money, which is another cash outlay.

Absolutely. Well, the other question I have is, are you seeing any lenders increasing their closing costs? Or, you know, we talked about rates. But besides the rate, is there anything I should be looking out for? closing costs and closing documents that might be priced higher or snuck in there that I should be looking out for. I'm really glad that you brought that up, Scott, because points are something that are really not understood by a lot of people that are sort of just getting into, just starting to understand the way the mortgages work. But points are directly tied to rate. So they are directly

connected. So if there are points on a mortgage, that is directly tied to your rate. So bottom line is, yes, to answer your question, a lot of lenders, and this is the same idea of pricing themselves out. Many lenders are pricing themselves out with additional expense. So if the mortgage was 4%, maybe it's now 4% with a point. And just to define what a point is, a point is one point. A point is one, percent of your loan amount. So if you hear that term point and you have a $200,000 loan, that is $2,000 in additional closing costs. And you also can have a regular points, meaning it's not just one point or two points or et cetera. You can have a 1.5 points or any range from zero to in theory, you know, 10. But yeah, many lenders are charging more. And it is,

directly tied. So, I mean, some people are charging more in the rate. Some are charging more with points. But I hope that answers the question. I can clean that up a little bit if you'd like. No, I just, I'm going to get a card from my lender. And it's going to show me my closing costs. It's going to show me things like appraisal, you know, those types of things. Any points, any lender fees, the rate, all that kind of stuff. Just wondering if, you know, what you're saying is basically you'll be able to spot the lender fees pretty easily, and they'll just be much higher than, and those lender fees by law have to get tied into my AP, APR, APY, right?

Correct. Yes, APR. And so there's really five different categories of fees. And I'm glad that you brought this up because a lot of people don't understand this. And I'm just going to cover this real quick. But when you're buying a home, you're going to be paying taxes. You're going to be paying insurance. You're going to either be paying a title company or an attorney, to close. And then you're going to have your inspections, and then you have what are called your lender

fees. Now, everything but lender fees, the lender has nothing to do with. So when you're getting a loan estimate, it's important to understand that if you're getting side-by-side loan estimates and you're looking at them, pretty much for competitive purposes, disregard everything but the lender fees and the rate, because those other fees are going to turn out to be the same. The lender doesn't control the title company. The lender doesn't control the inspectors. The lender doesn't control taxes and insurance. So make sure you're comparing Apples to Apple's and looking at those costs. But if you're looking at a formal loan estimate, it'll actually be in Section A and it'll say origination charges. And that is where the lender fees will be located and you should be able to spot them right away.

Yeah. And the simplest mechanism to compare all these things. is just your APR, right, which combines both the lender fees and your interest rate, right? Correct. Perfect. Is there anything that as an individual I can do to, if I'm going to refinance or buy a property right now from a paperwork, organizational perspective, making sure my employer, they have the right number for my employer with all this kind of stuff, for example, as you mentioned, so that they can verify my income?

Is there like a checklist or something that we can be thinking of to set ourselves up to have the smoothest possible process here? Yes, I actually have a checklist that I'll share and you guys can put it in the show notes. But the main thing is, you know, are you W2 or are you self-employed? Because they're going to be completely different processes. And if you're retired and you got Social Security income, you know, or you're getting your pension, that's great.

That's much simpler. But if you're a W-2 employee, basically, you just have to make sure that you know who your HR representative is. that would be responsible for handling this and make sure that you have an open line of communication with them so that they know you're going through this process and they know that you're going to need them to be interacting with the lender or yourself at some point. I can just imagine how many calls Alex Fields every month the people in our office are investors and there's, it seems like when you start at bigger pockets, all of a sudden

you want to buy a house. There's one guy that does most of the loans. There's one guy that does most of the real estate agent work there. And it's really kind of funny to watch all these people. Oh, I'm having my inspection today. I'm closing today. And poor Alex. Let's see. I wanted to touch on financing a primary home and a secondary home and an investment home and how this can be different. Yes. So basically, primary residences are going to get the most attractive financing options. They're perceived to be lowest risk by lenders. So with primary residence financing, you're going to be getting lower down payments, generally speaking, and lower rates. With a secondary residence, one thing that I think a lot of people aren't really aware of secondary residence mortgages or how they work, but a conventional loan with a secondary residence, you can do it. 10% down conventional loan with very competitive rates. And the requirement for a secondary residence is that you live in it for part of the year. That's your intention. So a lot of Airbnb investors are people that utilize vacation rentals in some way in their investment strategy. That is

sort of an ideal mortgage option if you do intend to occupy the property for part of the year. And when it comes to investments, really the minimum down payment for a conventional investment, loan is 15% a lot of people think it's 20 but really just you need to understand that if you're not doing a 20% down payment you're going to be paying mortgage insurance which obviously could impact cash flow and could have other implications but i got one here let's say that i live in i'm house hacking right and you know i've done that for a year or two and i want to refinance right now if i refinance using a primary residence mortgage right like hey it's my primary residence Do I have to stay there for another 12 months or can I immediately then move out and buy another

primary with a conventional mortgage? How do the rule, I know if you buy a property using conventional mortgage as a primary, you have to stay there for 12 months or intend to. Is that the same rule for a refinance? Well, and you just said it exactly right. You have to stay there for 12 months or you have to intend to. And there's a lot of gray area there. I don't want to really muddy the water.

But yes, you do have to intend. to stay in that property for 12 months. Obviously, things can change. And if things change, then that's its own set of circumstances. But you have to intend to live there for 12 months. That's right. So people, in other words, if you are living in a house hack duplex or a house hack in general and you refinance with a primary mortgage and you intend to buy another property right away, you are committing mortgage fraud. Don't do that. Yeah. Seth said he didn't want to money the waters. I sure want to money the waters because I totally understand where people are coming from and they're like, oh, well, it's just a bank. What does it matter if I lie to the bank? Well, it matters because it's a

felony. And this is a felony punishable by up to five years in prison, not jail, prison. And if you don't know the difference, prison is worths. I don't personally know the difference. I just watch a lot of TV. But yeah, so this is one of those, oh, well, who does it hurt? It's a crime of no victims. But you're the victim because you're the one doing the five years in prison. And then I see this question so much. I want to just scream sometimes. But people will say, oh, well, how are they going to find out? Oh, you know what? I don't care how they're going to find out. If they find out, I am now a felon forever. Plus, I have to spend five years in prison. Is it difficult to get a mortgage after this after you get convicted of mortgage fraud? Seth? You know, that's a great question. I've been fortunate enough not to deal with that too much.

so I don't know, but I assume it is. All right. And Mindy, I actually want to follow up one thing that you said there because you just gave the legal sort of implications, but there's also financial because in addition to everything you just mentioned, you'll also be forced to refinance, and that will have additional costs associated. Yes, so if the prison term and the felon stamp isn't enough,

it'll also cost you money. So, yeah, thank you for clarifying that. I didn't know you had to refinance. Now, let's go back and talk about your word intent. When you buy a house with the intent of living there and two months later, your boss is like, hey, we're shipping you off to Hawaii. Okay, yay for you. But also, you intended to live there for 12 months.

Your job circumstances changed your mind. That is what I believe to be an acceptable reason to be moving and you still get to keep your primary residence mortgage if you want to keep the property. You don't have to refinance that. And I believe you can go and buy a house in Hawaii with a primary residence mortgage as well. Right. And I want to clarify something. You said your job circumstance changed, but then you also said changed your mind. I think the real clarification is your job circumstance changed. Changing your mind is that can be where it gets a little dangerous. But when circumstances change, that's normally whenever you are.

The example of a change job, a career change, that's a perfect example of when it's okay. Yeah, and the rules I understand them are pretty reasonable, right? You're not going to, like, your mom gets sick and you need to move home and take care of her. Like, that's another example of something that I think is largely covered by this kind of stuff, familial changes, job changes, those types of things. So it's not like you have to be really worried if something comes up and you're forced

to move away or you really, a life circumstance has to change. You have to do that. But it's just if you are, trying to buy your next rental property and gaming the system with that, that's where you get in trouble. Yeah. And the really easy way to think about it is if you feel 100% comfortable talking to an investigator and explaining your situation, you're fine. If you are not, you're doing the wrong thing. Fair enough. Okay. That's a good way to say it. Okay. And when I said change your mind, I meant changed your plans. You intended to stay here forever, but then your plans got changed when your job transferred you to Hawaii.

Okay, well, on this very late note of mortgage fraud and prisoner jail time, whatever, you know, it seems like a pretty good, reasonable stopping point. Unless, Seth, do you have any other major topics that you think would be valuable for someone listening to this or trying to understand the current mortgage climate? I think we covered quite a bit. And at the top of my head, I don't have anything that I think is pressing. Got it. Well, why don't we move on to the famous four then? What do we think? Sounds great. Okay, Seth, back by popular demand. It is time. for the famous four questions. Are you ready? I'm ready. What is your favorite finance book? This one is actually a really hard one to answer, and I tried to get it down to one. I'm sorry,

I have to give three. J.L. Collins book, The Simple Path to Wealth, I think is a must read. Vicki Robbins, your money or your life, I think is a must read. And I'm not being paid to say this, but if you are a young professional and you are considering what books you should be reading, and you have not read Set for Life, you absolutely have to read that book. I'm a big fan of that book, too. Thank you. Oh, my goodness, Scott.

Oh, I'm sorry, Seth. Who's the author of Set for Life? That would be Scott Trench. Well, thank you very much for the plug. That's very nice. And I will say all three of those authors have been on our podcast. That's right. Yeah, we'll link to their episodes on the BP Money Show

in the show notes as well. So you can listen to them before you read those books. All right, what was your biggest money, mistake. Well, let's hear your biggest money mistake and then let's hear what you think the biggest mistake someone might make in the context of the current mortgage climate. Can we do both? Put you on the spot there? Yeah, absolutely. So my biggest money mistake was actually, it's pretty pronounced. I was very fortunate the way that it turned out. But whenever I was in the military and I was trying to figure out investing, I really didn't know what I was doing. I read quite a bit, but I read a mutual

Fund book. And it gave me the advice that I really just needed to evaluate, and I can't remember the book off the top of my head, but it mentioned how to evaluate mutual fund investments. And I ended up putting really all of my savings into a precious metals mutual fund without really understanding what I was doing. And I was very fortunate that I ended up selling once I realized that I did not know what I was doing, but that was a fund that ended up, that was right before 2008. And that mutual fund ended up going from $40 a share to, I believe it ended around $8 a share. And I really, yeah, that was definitely the biggest money mistake I've ever made. So what did you buy it at and what did you sell it at? I was buying it. And this was the precious metals fund that USAA had for a while,

but I was buying it at around $23 a share. And it ended up, I actually sold it at $40 a share. So financially, I ended up doing fairly well with this. But in retrospect, I'm appalled by the decision to do that because I had 90% of my net worth tied up in precious metals. So this goes back to my favorite book, The Richest Man in Babylon, and he says, hey, invest in what you know. Invest your money with somebody who knows what they're doing, too.

So if you don't know what you're doing, the simple path to wealth will tell you to invest in index funds. And that's a really interesting and easy way to invest. So I'm very glad you didn't lose any money. And we get back to the point of, you know, precious metals do not generate cash flow. Precious metals, they're not going to appreciate necessarily in value. They're more of thought of by most people as a hedge against inflation. So it's a very difficult way to build long-term wealth. In my opinion, and I think the opinion of most people who study finance and investing over a long period of time, the way you make money is really by buying low, selling high and their fluctuations of value relative to the dollar or whatever currency you're investing

against, right? In cash flow, yeah, absolutely. You're not going to cash flow, a precious metal, right? Right. I learned that later. All right. What about the second question? What's a mistake someone can make while they're looking for a mortgage in today's environment?

One that's just fresh on my mind because I just dealt with this today is somebody opening up a credit card for all that new furniture that they want to fill their house with before closing. You definitely don't want to open any new debt before you close on your home. You don't want to get the car that matches the house. You don't want to fill your house with furniture before you close. Those are things that you always do your best as a mortgage lender to prepare your clients for, but you just want to make sure that you're not doing that. Every once in a while we get a post on the forums of bigger pockets. I just quit my job and now I'm going to go buy my first property.

And this reminds me a little bit of that. It's like, no, dude, you don't quit your job right before you close your loan. And since we're talking about mortgages, I'm going to throw out there the whole mortgage, wire fraud issue. We haven't really talked about that. Basically, your lender is going to require you to wire your funds for closing, your down payment funds for closing. And you do that to your title company or attorney, and you go into the title company or attorney's office. You physically walk in there and you say, can you give me a printout of your wire instructions? You ask them, will these instructions ever change? They will, of course, say no. It is a leading question,

but the will never change. So sometimes people's emails get hacked. The mortgage lender, the title company, they will send you an email that says, oh my goodness, sorry, I gave you the wrong number. Why are the funds to this number instead? It's a fake email and your money will be stolen. And one just follow up to that, Mindy.

I know a lot of title companies are also right now, in addition to doing the wiring instructions in person. They'll send them to you, but then they'll also require you to verbally confirm them with somebody that you recognize from the process. Oh, good, good. Yes, I was going to add that too. Yes, once you get the wire instructions, you double check them.

And when you give them to your bank, you walk into the bank, you hand them to the banker and you say these are the wire instructions. Because, I mean, you're wiring $10, $20, $50, $100,000. I don't want to lose a dollar. I certainly don't want to lose that much money. And when I'm a real estate agent and when I'm starting to work with somebody, I tell them this. I give them the whole spiel. I am never going to tell you that the wire instructions are wrong. That comes from the title company. Go in there physically, talk to them, et cetera.

Okay. I just, I wanted to say that because it just every once in a while, I'll see a post on Facebook. Oh, I just lost my money and it just breaks my heart. Okay. On that happy note, what is your best piece of advice for people who are just starting out? So I think that it would just be to get connected. I think that the Bigger Pockets money, Facebook group is an awesome group to get started. If you're looking for advice, a lot of people talk about getting a mentor. There's nothing better than BiggerPockets.com or a Facebook group. It doesn't necessarily, you know, doesn't have to be a particular one, but where you can crowdsource feedback.

So you can ask a question, and you're going to get 20 different answers to your question, and you can just, you know, eat the meat, spit out the bones. I love that. But I think a lot of the comments that you get from people make you think, oh, I didn't think about it from that point of view. I didn't think about it long term. I didn't think about it, you know, whatever the question is about. That's a really great eat the meat and spit out the bones.

I can't take credit for that. That is actually, I heard that from Brian Buffini. But yes, basically take the good feedback. You're going to get all kinds of feedback, but you don't need to listen to it all. Love it. What is your favorite joke to tell at parties? And bonus of its mortgage-related. I thought people would absolutely flock to my services whenever I told them that I offered zero percent loans, but there was literally no interest. I love it. I love it. I quit. I'll give you full credit for that one. Okay, Seth, where can people find more about you?

So people can find more about me on biggerpockets.com. I'm on the BiggerPockets Facebook group, and my website is Seth approvesloans.com. Oh, Seth approves loans. I like that. Seth, this has been fantastic. I'm super excited to have you. And thank you so much for your time today to answer all these questions. Because I think there's just a lot of questions about the mortgage process in general. And, you know, in this current weird climate, this was, I think this is going to be very helpful to a lot of people. Thank you guys so much for having me. I'm humbled to be here.

Thank you. Okay. We'll talk to you soon. And I'll see you in the Facebook group. Absolutely. Okay. That was Seth Jones with a mind-blowing amount of mortgage information. I want to just point out that we are going to include links to all of these things that

Seth shared, a lot of definitions to kind of make more sense in our show notes, which can be found at biggerpockets.com slash money show one-to-one. Scott, what did you think about today's episode? Well, I really thought it was a first-rate episode, Mindy. I really thought that he had a lot of good things to say about the current mortgage climate. I learned a lot. I thought it was a lot of fun and really just action-packed with information and tips and tricks. And I think I'm going to take action based on this podcast on my own personal situation

and kind of begin the process of refinancing a couple of my properties. Good. You know, I think that having an idea of what mortgage rate you're looking for is a good choice and can help you really take advantage of these amazing rates that we're having. A couple more links I wanted to share is BiggerPockets has a loans page. You can find that at BiggerPockets.com slash loans. And we have a mortgage calculator. And we will include links to all of those things in our show notes. I thought this was fabulous. It kind of took out a lot of the mystery of what is a lender. are looking for what goes into the mortgage, what goes into your credit score, et cetera. And I think that this is going to, it's, you know, it's important in today's current climate, but I also think that long term, this is going to just be a really great episode for people to listen to when they're thinking about getting a loan. Yeah. You know, just before we depart, I want to do a quick plea for help here.

You know, one of the things that Mindy and I love are reviews of this podcast. So if you've listened this far and you're at the end here, you know, one of the best ways you could help us back is one join the Facebook group and ask us questions. We're always happy to interact and do whatever we can to make the show better for you as a listener. But please leave us a review on iTunes and tell others what you think about the show and whether you enjoy it. Yes, that would be wonderful. Thank you. Okay, Scott, should we get out of here? Let's do it. From episode 121 of the Bigger Pockets Money podcast, he is Scott Trench and I am Mindy Jensen. And I don't even have a cute little mortgage pun. We hope this was an interesting show.

we hope you listen to this show with interest. This mortgage conversation is just really dying alone. Okay. That was a terrible joke. As usual. I will see you next week.