Business Innovators Radio - Interview with George Mugerian, President of Give Financing

Episode Date: June 19, 2023

Mortgage broker-owner with over 10 years of experience in the mortgage industry. I am passionate about the power of homeownership and its effects on financial freedom.Learn more:https://www.linkedin.com/in/george-mugerian-b2636831/https://www.linkedin.com/company/give-financing/https://www.givefinancing.comColorado Real Estate Leaders https://businessinnovatorsradio.com/colorado-real-estate-leaders/Source: https://businessinnovatorsradio.com/interview-with-george-mugerian-president-of-give-financing

Welcome to the Colorado Real Estate Leaders Podcast, brought to you by Trailstone Insurance Group, bringing you interviews with Colorado's best real estate and mortgage professionals, empowering you to understand the current trends in the housing market so you can make the American dream your reality. Enjoy today's episode. Well, it's a great day in Colorado, and welcome to the Colorado Real Estate Leaders podcast. Today we have with us George McGarian, who's the president of Give. financing. George, welcome to the program. Hey, thanks for having me. Hey, so I want to learn all about what you do, how you do it, and why you do it. And I love the idea of give financing. So I want to

hear the story behind that too. But get us started with your story, your background, and how did you get into the financing, mortgage financing industry in the first place? Sure thing. Kind of stumbled into it. First job out of college was in mortgage. Literally didn't know what a mortgage was when I caught the job. And I figured it out eventually. It took me a little bit. But kind of stuck with it. You know, really, really loved all aspects of the industry, you know, helping people, you know, buy houses was just, you know, exciting thing, you know, kind of being young in my career. And then as, you know, I, you know, went from, you know, a couple different companies to start in my own company and just kind of the whole journey along the way, just, you know,

I've always loved the power of real estate and what it can do to somebody's financial situation. And, you know, helping somebody along that journey to me is just, you know, really rewarding. And I couldn't imagine myself doing anything else. Yeah. Well, and, you know, I think that's a really huge piece is, you know, member, I think it was attributed to Henry Ford that says, if you enjoy what you do every day, you don't really have a job because it's just like, I enjoy what I'm doing. and I'm serving people and helping them achieve their dreams. So I think that's cool. Where did the name give a financing come from?

Yes. It was my wife thought of it actually. So I got to give her props on that. But the concept was when we started the company was, you know, we want to give back to those who are in need as well rather than just closing mortgages. So, you know, we made a promise to make a donation on every transaction that we do to charity of the customer's choice. So that's kind of, you know, been a part of our mission. And, and, you know, the term give kind of really just evolved to, you know, really giving value to all parties in the transaction.

So whether it's a donation or whether it's providing value to our realtor partners or providing value to our borrowers, it's the whole idea of doing something unique, doing something that actually provides value rather than just being another mortgage company because we know there's a lot of mortgage companies out there. Consumers have a lot of choices. And frankly, there's a lot of great companies out there, right? So how can we be different? So we always kind of want to be on that cutting edge doing something truly unique and different that's providing value. That's fantastic.

How much have you guys donated on behalf of the clients? So since we started, it's around 10 grand. just under $10,000. Worked with, you know, fund to help out in Ukraine back when that conflict started, worked with the Food Bank of the Rockies and then a bunch of other, you know, organizations as well that the customers chose to donate to. So it's kind of cool seeing what, you know, what causes that customers choose to support, you know. Sure.

Yeah. That's awesome. You know, a lot of things going on in the market, right? now, how is home affordability affecting buyers today? And what are some of those solutions that your team can offer? Yeah. So, I mean, obviously a big, big issue is affordability, not just of housing, but frankly, of everything right now. I mean, housing is going to always be somebody's biggest expense. So that, you know, when we have unaffordable housing, we probably feel that more than paying eight bucks in the grocery store for eggs, you know, that hurts too. But, you know,

paying a 7% rate hurts even more if you're in the market to buy a house. Sure. So we've, you know, kind of had this perfect storm in Colorado and, you know, across other states as well of prices rapidly increasing year over year over year. And just now we are in a high interest rate market. So now we have this double-edged sort of high prices, high interest rate. rates. So that's the problem. What's the solution? We have kind of gone back to something that is completely outdated to try to help bridge the gap of affordability. And it's called a loan assumption. So these haven't been a thing in the past 15 years because rates have always been low,

but we see this as a very powerful tool to help buyers get an affordable payment and actually have have a, their cake and eat it too, if you will. Sure, walk us through it. Sure. So essentially what a loan assumption is, is rather than an origination where you go out, you find a house, you call the bank, and they say, hey, you know, we'll give you the $400,000 for the house, it's at a seven percentages rate, here's your payment. What happens with an assumption is you can actually inherit the sellers.

terms of their loan, which based on where we're at with interest rates, that's always going to be substantially lower than what you can get if you go to the bank today. So if the seller has a 3%, 30-year fixed, 4%, whatever it might be, I mean, there's still some 2% loans out there. That's something that can be transferred to the buyer, and that has an immense impact on not only their monthly savings, but the amount of interest they're paying over the life of the loan, it's absolutely game-changing. So we've developed a program to help facilitate the process. The same way we would do an origination, obviously that's what we've done for years. But now instead of doing an origination, we do the same thing for an assumption. A little different process, but same idea. So we're kind

of the liaison between the buyer, the seller, and then the lender to help facilitate the assumption process. So George, in an assumption, it would work if it's a better deal than which you can get currently. So that's great. But if it's way back in the old days and rates were in the 12, 14%, you're not going to want to assume that. So obviously this is, hey, rates have moved. This loan is assumable and you're going to get a better rate than you could today. Talk a little bit about the qualification. So if a new borrower is going to assume a loan, is it the same exact full qualification? of getting the new one as well? It's pretty close, but believe it or not, it's less stringent.

The biggest thing is, is there's no appraisal required on an assumption. So that makes things a lot easier. And then also from the seller's perspective, there's no, you know, there's no question mark on the value because that's, you know, a tough thing for sellers to swallow sometimes. If they got a cash offer, if they got financed offer that as an appraisal, sellers, you know, tend to lean towards cash offers. Now, an assumption is nowhere near a cash offer in terms of timeframes, but with the absence of having to do a valuation check, that's a big, you know, negotiated pool for the buyer, right?

Other than that, the buyer still has to qualify based on that agency's guidelines. So they still need to have the minimum credit score. They still need to have the debt to income ratio that's going to qualify. And so the lender's still going to check those things to ensure that the buyer is. still a credit worthy buyer. I think that it's in any sort of a tumultuous environment, if you can do something and offer something that stands out from the crowd. And I know an assumption is like an old, that's been around forever.

But now it's kind of like if you're bringing it back to Vogue and you can talk about that and that helps people get into something quicker, faster, better rate, that's a huge opportunity. I love that. And yeah, you're not going to just, you know, no one, every single person cannot assume a loan to be qualifications. But I like how you mentioned it cuts the time and appraisals and all of these things are already in place that helps out. I'll bet that also helps your real estate partners with moving properties if it's an assumable loan because now they can get out in front of earning more business as well, right? Absolutely. Yeah.

the listing agents of these qualifying properties because not every property qualifies. So it has to be a government loan to qualify. So FHA, VA or USDA, conventional loans don't qualify. So any government loan that the listing currently has that loan, then that's a great candidate for the listing agent to market this. One, if they have the listing already, say, you know, hey, seller, this could be a great opportunity for us to, you know, actually maximize. what we're going to sell for because we can pass down these savings to the buyer. It's truly a win-win because the buyer is still going to save money. And even if the seller can sell maybe for 10, 20 grand more, that's nothing compared to how

much the buyer can save with the lower rate. Yeah, yeah, for sure. So talk a little bit about have you done that for property and a real estate agent? And all of a sudden, at the back end of the transaction, they're like, this has been monumental. This was amazing. So this is a brand new product for us. We only have two of these in processing right now. So we are still learning as we're going. So far, so good with everything. But it has been a bit of a learning curve for us to roll this product out and start getting it to the market. Because the thing that we've learned, too, is it does take the right buyer, the right? It kind of has to be a good marriage, right? Because it's not going to be perfect for everyone. The biggest cons to these deals. are the buyer is going to need more of a down payment than an origination. So there's going to be less buyers that are going to just be able to do that.

And then on the seller side, these assumptions do take a little bit longer than origination. So they have to be willing to wait a little bit longer to sell. So it takes a seller that's willing to trade time for dollars, right? So if they're not in a hurry to sell and they can market this, sell their property for more than they could otherwise, it could be a great fit. Yeah, that's true. It just gives you another arrow in the quiver of serving your clients with a unique opportunity. What are some of the other loan products that you're finding that your clients are needing, requesting, and that's fitting into today's market? So, yeah, I mean, other than that, I mean, you know, down payment assistance has always been a big product. So, you know, we have, you know, multiple don't plan assistance options. And that's kind of been.

growing in popularity too now because the market's kind of shifted a little bit to be more acceptable to seller concessions. So, you know, in a market where we can get seller concessions on pretty much any offer, down payment assistance loans are a really attractive option for a buyer to get into a house for $1,000. I mean, you can't beat that. So that's kind of been, you know, coming back in popularity. I think when the market was super hot during COVID, that kind of went to the wayside a bit because those buyers unfortunately got, you know, priced out of the market with cash offers. Other than that, you know, we've, you know,

we've had a product called our guaranteed pre-approval for a little while. That's, that's been popular, you know, when the market was hot, when the market softens a little bit, you know, that's not quite as popular, but still a great tool for somebody that qualifies. Essentially with that program, if it's a, if the buyer checks all the boxes, for our requirements, we'll actually personally guarantee their earnest money, allowing their financed offer to compete with cash offers. So that's something that can help give buyers an edge when the market is more competitive

or maybe the listing that they really want has multiple offers on it. Yeah, that's a really good point. And we've mentioned market shifting. Obviously, you can go to whatever day in the calendar and look at the rates and rates you're going to fluctuate up down and all around and it depends on whether it's a buyer's market, seller's market, refine market, so rates do change. What are you finding these days when it's not a refine market and it's more of the purchase market? Are you finding a lot of that percentage being first-time home buyers? Are you finding people are now going to buy a second home or investment

property? In this market now, who do I see as more of the populist buyer? Yeah. I, I, I, say it's unfortunately less first-time home buyers. I think a lot of a lot of them have kind of gotten priced out of the market with prices going up and rates going up. I see it more as the buy-sell, you know, buyers that are doing it for good reason, right? Yeah, they have to. They got a job. They have to move or something like that. Yeah, it seems like it's more of a necessity if you need to buy now rather than a luxury. I think we're seeing a lot of people sitting on the sidelines, seeing what rates are going to do, which, you know, is that a great strategy?

You know, maybe it is, maybe it is. And I don't have a crystal ball. But, I mean, what I do know is when rates were really low, we had one of the most competitive markets I've ever seen. And basically, buyers were competed out of the market then. So now, if you. might not like the interest rate, well, at least you can get the offer accepted. And, you know, the old realtor adage is marry the house, date the rates. So get into the house, get a better

deal than you could have a couple of years ago during the COVID craze and refile when rates go down because, you know, our rate's going to stay as high forever. I would doubt it. Yeah, good point. What do you do with investors? What are you seeing investors doing these days? Because anytime markets shift, you will find people that are positioned well to take advantage of a shift and maybe buying single family residence, buying duplexes, four plexes. What are you seeing in that regard? Yeah, I mean, we're still seeing a lot of investor activity. I mean, there's still, especially fix and flips. I don't think that that has slowed down much. I mean, you know, obviously rates have an impact on that to some degree, but, you know, if that eats into your profit

margin on a fix and flips, you know, five, 10 percent overall, you know, it's the price you pay, I guess. But I still see activity there. I think we might see a little less buy and hold investors out there because it's not as easy to find cash flowing properties. But, you know, the long-term focused investor is still going to do well in this market because, you know, chances are there, the property is going to be valued higher in the future. You know, it may go. down in a year or two from now, right? Nobody knows the future. But if we look 15, 10, 20 years out, you know, it's, you're always going to do okay in real estate, right? So,

absolutely. Yeah, you know, another adage is the best time to buy a house is 20 years ago or today. Right, right. You know, so yeah, yeah. So what are some final thoughts there, George? I think I love your approach to giving and serving. I think that sets you apart. I love your assumption, you know, angle that sets you apart. If someone, what would you say to someone that is either a first-time home buyer or looking to get into their home, what is some of the points that you would bring up to them so that they can be prepared for an initial call with you? Yeah, I mean, I would say, you know, don't have analysis, don't have paralysis by analysis,

right? You know, I mean, see what your options are. And there's only so much Google and you can do and reading articles and watching videos and listen to podcasts like this, you know, really the best thing you can do is hop on a 10-minute call with a loan officer. You know, whether that's me or somebody else, I mean, that's really going to be where you're going to get a lot of education and see what your options are. And if it makes sense for you or not, you know, maybe it doesn't, but I guarantee you're going to leave that conversation a lot more educated than, then you went into it with. You know, other than that, you know,

probably the basics that you want to prepare are going to be your credit, you know, the better credit score you have, the better financing terms you're going to get. And, you know, down payment, shouldn't hold you back too much because, like I was saying before, there are a lot of great down payment assistance programs. So if that's something that you're unsure of, you'd be surprised those programs are, you know, pretty available and pretty easy to qualify for. So, you know, really the biggest thing is, you know, your credit, as long as your credit score is in a decent shape. I think it's worth a, worth a call to see what your options are to a mortgage company. and see what you can do.

Excellent. So what's the best way someone can learn more and reach out and connect with you, George? Yes. Probably the best way to get me is on my email. So it's George at kivfinancing.com. Excellent. And then we'll make sure we have your website

and LinkedIn's hotlinked for the show notes so people can click on that right from listening to this episode. So thank you so much for coming on today. It's a real pleasure talking with you, George. Hey, thanks for having me. Thank you for listening to the Colorado Real Estate Leaders podcast, brought to you by Trailstone Insurance Group. To learn more about the topics mentioned on today's show or listen to past episodes, visit www.com.