Hi, everybody. I'm Mary Meyer, the host of Healthy, Happy, Wise, and Wealthy. And this
is Podcast two. And as I'm doing, I am just
starting. I'm doing the whole example of let's start a podcast
and figure it out as we go. And I'm only doing that because of
Erica. Otherwise, it's a really bad idea. But
for this one, it works. Today, I'm so excited because I did
ask three people, wonderful ladies that I know in Reno,
Nevada, to help me discuss everything that
you would need to know when you're buying your first home,
including how to find a home. Can
I afford a home? And all of you, touch on, can I
afford a home, honestly? So Angie Salcido
is the owner of Premier Credit Solutions.
Angela Kluck is a Realtor with many years in that, and Jill
Blessing Bonnet is a mortgage lender. So I do have
a little history with real estate, because when I was in Atlanta, before I
came to Reno, I was a Realtor and of course, got my
real estate license in December of 2019, right before everything
crashed. So that might really be a good place. Not
crash, Covid. It felt like a crash. Prices went up, the
ability to sell a property went down because no one had anything on the market.
So that's what I guess I meant by that in terms of being a Realtor.
But these. These industries are super challenging, in my opinion.
I think there's. I've heard a lot of
stuff about how, you know, it's easy to be a realtor or a
mortgage lender. And I don't think people understand credit repair to know what to say
about that. So I don't think it is. I don't think. I think they're very
difficult industries to be in. And when you use any of
these ladies, you better be nice to them, whether it's
anyone else in the state, because this is not easy stuff.
So if we can start, I just like you guys to kind
of go and introduce yourselves and say what you do in summary,
a little bit, how long you've been doing it. So, Angie, you're at the top
of the screen. I'll have you start with credit repair. Well, hello there. I'm
Angie with Premier Credit Solutions, and I've been in the business for
about 14 years repairing credit, and I've
helped over probably about 2, 500 people in Reno
achieve home ownership. That's amazing. And you
are national. You can work with anyone nationally also. I can. Yes.
Yeah. Yeah. Okay. Awesome. Jill, introduce yourself for
us. I'm Jill Blessing Bonnet. I work with Gateway Mortgage. I have
been in the mortgage business for about 30 years.
I like to say that I've seen the good, the bad and the ugly
because it is somewhat of a roller coaster ride, this industry,
but it's very rewarding and I love what I do. I love helping, putting.
Putting people in homes. Yeah. And so where is your. Are
you just in Reno or you can also. My office is in
Reno. Yes. But we can lend in 40 states.
Amazing. Okay, so pretty much almost nationally.
Jill. Angela. Hello. Hello. I
am Angela Kluck. I'm with ReMax Professionals here in
Reno, Nevada. But my license allows me to
cover the whole state of Nevada, but I specialize
in northern Nevada. I've been in the industry off and on for the
last 17 years. I was just adding up the
other day. I've been in the back end
doing transaction coordinatings for big teams. I've been a solo
agent. I've been on teams, big teams.
And now I'm back as a solo agent and I'm happy and I'm
helping people with buying and selling homes.
And that's what I love to do. Amazing. Well, I'm gonna
keep you on for a second. So when you have a client who's maybe they're
a young couple, so, so. And they want to buy a home,
where do you, what do you, what's your initial like? Give me just a few
top tips that you give them. So a majority
of my clients that come in are online
leads. And so initially
I get them, they want to look at houses right away. And
so it's kind of the back way to do things. But I honor that because
I know that's where people start. That's what they want. They want the shiny object.
So we go out and we look at homes and I show them one or
two and then we delve into some questions,
you know, financing, what's your goals with
buying? And we just get into that whole gamut. And then
I start switching them over to a lender,
a great lender like Jill here, and we start going through their
finances, what can they afford? And then if they need a little bit of credit,
repair, a little bit of help, then that's where Angie comes in. So this is
a whole team that's geared to help
especially first time home buyers
navigate buying a first time home. Yeah. So
Jill, tell us, when you have a first time home
buyer, what are some of the things that you would let them know
about? What would you do?
Well, what I do is
initially, usually it starts out with a Phone call. I
really like to get them in the office or do some kind of
zoom where we can be face to
face. I can show them some numbers. They get to know
me, I get to know them. It's really important for me
to, when I talk to them, I want to know what their financial
goals are. It's not just necessarily about buying a
house, but what are their long term goals, you
know, how long do they think they're going to be in the house? What kind
of payments do they feel comfortable with? I
obviously have to talk about their credit and a lot of times
that can be a hard stop if their credit score, you know,
isn't where it needs to be, which is where Angie would come in.
So we go over a whole gamut of things before they
even start looking. Preferably just because I want to make
sure that we're all on the same page and that they felt comfortable with
everything. Because that's really the bottom line is that they have
to feel comfortable regardless of what I say they qualify for. They're the ones
that have to make the payment every month and they have to feel comfortable with
that. Yeah, for sure. So, Angie, you get a young
couple and there's some credit issues, like
maybe what would you do? What's your first steps? And it might
not be a young couple. Let's be honest. You know, plenty of people in their
40s and maybe even older are still trying to buy their first. So it might
not even be young. But yeah, yeah. So what I do is I
get them on the phone, get them scheduled for a credit consultation. I'll pull a
soft pull credit report just to kind of see where they're at with things
and what needs to be worked on and then come up with a game plan
if they need to remove inquiries or late payments or anything
like that. Also, like pay down credit card debt.
Just, you know, abcd, what, what we
can do to get the scores up as fast as possible.
Yeah. So how does that work with you? Like they have an initial
consultation with you and then kind of. And you see there's some things to do.
What's the next step? Next step is get them signed up with me so
that we can work on any collections or inquiries or
late payments they may have on their credit report. And then their homework will
be to pay down their credit cards down to
30%, which is 30% of the
revolving limit. So, so say, I'll give you an example. So say
there's a $500 credit card limit and they're
maxed out usually that will like, decrease
the credit scores anywhere from 50 to 80 points.
So I advise them to pay it down to 30%
so that it's not affecting the credit scores. And
that will be kind of their homework. And if they need to establish
credit, we can have like the husband or wife.
Like if it's a husband and wife and one of them has stronger credit
scores, we'll have the husband add his wife
to the credit card as an authorized user. There's so many different
scenarios that happen in my office where it's just, you know,
looking at different things to raise the credit scores as
soon as possible. But that's, that's where the initial
consultation is, where it's just, yeah, this is what we need to
do, you know, make sure the balances are below
30% and, you know, keep it there. And then we'll go
in and start removing collections, late payments and
inquiries. Yeah, and that's so great. And I know you
guys, you know, I've seen you, of course, you know,
different. You're a favorite among realtors and mortgage lenders because it's
like you're kind of the avenue to make it happen for everyone. And I think
most people don't even know that is a thing you can do to repair your
credit. I don't feel like that's as much of public knowledge as maybe it
ought to be. So it's a very good service and anyone in the US
can, can use you. So there you go. Get that credit
repaired. Jill, so what it. So if someone comes to you
and their, their credit's good, the
money's good. Maybe they don't have a down payment enough
money for that. Like, what are some. I know that's kind of a
super challenging thing is like, I don't, I want to buy
a house, but I don't have money for a down payment. So what, what would
you say to that? Well, there's lots of options that people, even
if they don't have money in the bank, there's other things they can do.
There are down payment assistance programs here in Nevada.
We've got some great down payment assistance programs
where they can get money for down payment
and closing costs.
Statewide. Or are those federal? These
are state programs here in Nevada that I'm talking about. They
do have to have some of their own money, though. And I tell people that
because you're going to have to have some money once you make an offer on
a home, the realtor is going to want an earnest money
deposit and that money is used to open escrow, that could be
$1,000. And so they do have to have that
money. And then a lot of times we have to collect for the
appraisal that's paid, and that's another five to six
hundred dollars. So they do have to have some of their own money just to
kind of get the ball rolling, because they don't. They wouldn't get the down payment
assistance funds until the end, until the closing.
Right. Just in case someone doesn't know
what an appraisal is, can you explain what that is and how that an
appraisal. Is required on most loans? And that
is a way that we, as the
lender, we want to just make sure the value, what they're paying for the house
is worth that. So the appraiser is going to go out, they're going to find
comparable sales for, like, properties that have sold,
preferably in the last six months and
justify that the purchase price is supporting
the value so that they're not overpaying. Or if they're
underpaying, that's a different story. But basically
just to justify the value of the property. Yeah. And it feels like that's also
a little bit of protection for the consumer because if they put in an
offer for 400,000 on something, but other properties
maybe only sold for 350 or
375, that would be where it would be like you
have to come up with a reason why it's actually worth that extra,
extra money. But, Angela, what do you have to add to that in terms of,
like, appraisals and getting that.
Yeah. So from my end, what we see with appraisals
is that reopens negotiations during the
terms of the contract. Now, we know the lender is only
going to lend on what the appraised value is.
If there's a gap, you know, there's. In certain markets, the
seller can say, I want the price that you
offered. So the buyers, they're asking the buyer to come
in with that difference. Not a lot of buyers have that. So
that could, you know, that could kill a deal.
Or, you know, the buy, the seller
says, okay, this is what it appraised at. They can, sometimes they
can contest that and say, here's the comps that we
show supporting that value. And so
sometimes the appraisers will look at that, and sometimes they don't.
But we try. We try for our clients. And then
that's the time when, if both parties cannot agree,
then they. We part and we go our separate ways.
Yeah. So we might even Be skipping ahead a little bit. I know we jumped
into appraisals, so I asked about that. So I think once you.
But that's like critical. So like there's this whole process, right? You got
if your credit's not good, we need, you need to fix the credit.
And then hypothetically the next step. Normally you're looking for properties
and talking to a realtor first, but the next step is probably to find the
mortgage lender and to make sure that
you're really understanding if you have like a
can't go above a 2000amonth budget, for example, that all
the different things in that is only going to add up to
2,000amonth. And then you talk to a realtor who's like,
okay, for that amount of money, we have to look in this price
point. And then, and then we kind
of. You kind of go from there. But Jill, could you kind of talk to
them about what might be some things in terms of like when they have their,
their monthly payment and just maybe talk a little
bit about like, you know,
the other things. It's not just the mortgage, what's included. Yeah,
yeah, yeah. And I wanted to touch back a little bit about down
payment. They can also use
401k funds if they have a 401k and
gift money. If they have a relative, a family member that's willing to give
them money for a down payment, that can be used as well.
So there are some other things we can accept
besides the down payment assistance programs. With regards
to the mortgage payment in a mortgage, we as the lender are
looking at the property taxes, homeowners insurance, like for fire
or flood and then mortgage insurance. And
when I am pre approving people, I'm estimating those three things because
the property taxes and the homeowner's insurance is
tied to the property. Basically it's going to depend on the property.
But what we do is we take when the mortgage payment's made, the
taxes and the insurance are included in that
payment and then we take the taxes and the insurance and we put it in
what's called an impound account. And then the taxes
are paid and the insurance is paid for the borrower.
And lenders prefer that because then they know those things
are getting paid and they're being taken care of. You know, if someone doesn't keep
the insurance up on the house and the house burns down, well, then that's the
lender's collateral for the loan. Right. If the property
taxes aren't paid, the county can then foreclose on the property
and the lender's at a lect. And so they
prefer to have those things impounded because then they know that they're getting taken care
of and getting paid on time. So I don't know,
people might not understand the word impounded. That doesn't mean they pay a
bunch of tax up front necessarily. Well, yeah,
we do. In escrow. We do have to collect a few months of taxes
and insurance when we close
escrow because we haven't been collecting from them all year.
We have to make sure we have enough in that impound account when we close
escrow to pay that next installment of taxes, let's say.
So is it usually just like a year? Like they don't have to pay.
Like, I just want to. I'm like, like
I've, you know, bought and sold homes that I know you guys have and you're
in this business. So it's like I want to kind of make sure it's so
broken down for people that just have no idea. I remember trying to explain this
to my teenagers before, way before, and
they, they could not even. They're like, is
smart and they're like, they, I think they just looked at me like I was
crazy. I'm like, you
guys have to understand this. They did not. I mean, so, but, but yeah, so
there's like, you know, the property taxes, which are. You can find out what the
property tax is, if it's an. In a, in a homeowner's
association, which most are, then you can find out how much the monthly fees
are. And that's just some kind of part of your planning. And then when you
go to closing, it's going to be probably a few months or that
year or something like that. You pay ahead of time for your closing cost. So
usually your homeowner's insurance, you pay a year in advance.
And then we're collecting every month. Right. And then next year we would
pay it because we've got enough in the impound account of escrow account to pay
it as far as the taxes go. Now in Nevada, the
taxes are paid quarterly. Every state's little
different. You know, some states you pay them twice a year. So depending on when
the next installment is due, that is how we determine how
many months we need to collect. But it could be like three months of
taxes. It's not going to be, you know, they're not going to be paying years
in advance or anything like that. So it's just enough to
make sure that when that next installment comes due, there's enough to pay
them. Yeah. So like it's just included in your, your monthly
payment then for the next. You know, when I lived in, in Georgia and in
Tennessee and I think in Wisconsin, which is the places I've owned
homes, I think it's annual. Oh, okay. Wow.
It's. I don't think I even knew that. But Angie, back to
you. So like, let's say they are like, okay, someone, they're in
college, right. Or whatever. I don't know, they're young. What can
you do, what can you do to build credit from the
start? So it's kind of risky if
we do unauthorized user. But I'll give you a scenario for
my son. He was only 16 and I
put him as an authorized user on my credit cards
so that he could build some credit. And then essentially when he
turns 18, we're going to start some credit cards. But he already
has established credit history because he
was piggybacking off of my two credit cards.
So it gave him about a 10 year history because I
put him on two credit cards. And now we can
probably get him into a lower interest rate
credit card because he already has established credit.
Now if they don't have a parent that can, you
know, add them, then what they can do is start a secured card and I
have one on my website and you put $200 down
and it's a 19.9 interest rate and then it reports to the
credit after three weeks. So it's not score
driven. But that's just a easy way to
start building credit. And why do, I mean, you know,
there's, there's people out there, of course, who say do all cash and never
use credit, which can be a thing. But why, why, why do we need
credit? You guys
too? Well, so
we have a report card when we're in high school and college. So
like we get grades. Right. That's pretty much
our, our history for as adults.
That's like our report card. Credit is, is our report card. That's what I
explained to my high school kids, what I'm teaching to them. I'm like, you
are, are still going. To get a report card. This is your report card and
it's tracking all of your payment history. It's tracking the, the
years that you've had credit, all that stuff. So if you don't
have anything on the credit report and you're, and you're showing like
a zero, then you don't exist in our,
in our world. And it's, it's, you can't rent an apartment,
you can't get a car, you can't get
college funds, all that stuff. So you,
you have to exist on the FICO score. So
isn't that crazy? Jill, is there a certain amount of time
with mortgages they need to have a history of credit before you
can give a mortgage? Not really. In fact, I recently had
somebody who had, he
had only just like a couple years and he had been told by another
lender that that was a problem. And I said, I don't think
so. And so I ran it and
I got it into underwriting and we got him approved. So usually as
long as there's a score, you know, because everything's real autom
as far as underwriting goes, which is underwriting is the loan approval
person. And the system that we use is automated. Everything's
very credit score driven. So as long as there's a credit score
that we should be fine. There usually isn't a necessary length of
time. Yeah, that's very. Unless it's
derogatory credit. Then we have bankruptcies and
stuff. Then there has to be a certain length of time as far as how.
Old they are, how old the bankruptcy is.
Yeah, how old does a bankruptcy need to be? Usually
depending on the loan type. So government loans, it's two years
from discharge and then conventional loans is four years.
Okay, so two years to four years.
So Angie, anything to add to that? If
someone has a bankruptcy, is there a way that you can speed it up to
get it off there record or they just kind of have to wait it
out. So I have worked with a lot of
bankruptcies, have a lot of attorneys that work with
me. So once they file the bankruptcy,
can I kind of elaborate like what the attorneys do on my
end? So they just basically file the
bankruptcy and sometimes they will list the
accounts individually on the credit report included in
the bankruptcy. Well, that's not how it's supposed to appear on the
credit. It's supposed to be attached to the public records,
which would be bankruptcy. And then the account
should be completely attached. So each, each account that was filed
in the bankruptcy is a good, probably about 10 to 20 points
depending on the year. But if they're, if they're
individually on the credit report as included in the
bankruptcy, it can hurt their credit score. So I can go in and
remove that stuff. And a lot of attorneys file the bankruptcy and they're like,
here you go, Angie, fix this. Because that's
not, that's not a part of what they do. They don't work on the credit
side. So that's, that's why I work with a lot of local attorneys here in,
in town. So you remove different accounts from
the, from the bankruptcy? Is that what you said? And then. Yeah,
so it's listed on the credit report as included in the
bankruptcy. Um, legally they should all be attached to the
bankruptcy, which is a public record. And that's a good about 30
points on their credit score. Wow. Okay. And a lot of times
my bankruptcy attorneys will refer me clients because
they don't have enough debt to file
bankruptcy. So it's usually about,
I would say, 10 to $20,000 in debt.
But some people will go in and say, oh my gosh, I'm so overwhelmed. There's
so much stuff reporting on the credit that I don't know what to do.
And you know, it'll be a couple accounts and I'm like, I
can help with that. I can help settling on those debts to where
it's off of your credit report and you're not having that
7 to 10 year bankruptcy on your, on your credit.
Yeah, that's great to know. So if you're overwhelmed, you can call you to help
with credit cards. Yeah, I would love to take a look
at anybody's credit. I mean, anybody can use
help. Yeah. Yeah, for sure. All right,
let's circle back to Angela and kind of, we'll just kind of shift a little
bit. So you have someone that comes to you and they're
like, we think we can
afford 500,000
house. Can you show us some houses? So you
might. At that point, you kind of did answer. Like you would go and you
would, you would show them a few houses and then you would look at numbers.
So then they come back, okay, I'm going to give you a scenario. So they
come back. They've been looking online at houses that are 500,000,
which is a reasonable amount. It seems like nowadays that used to be so much,
but not anymore. And then it comes back that they can do,
oh, close, but only 425.
So they had their heart set on an
area and there's nothing in that area that's at 425. So
like, what do you say to them? What do you do? Yeah, I had a
shopper like that a couple years ago, a young couple. They
were techies and they worked from home and they love the
whole idea of a big acre lot that their dogs could roam on.
And we were looking in, looked at a house and in the 500
range. And then we talked to their lender
and their lender said, well, this is what you qualify for,
425. And that was their max. And they said,
no, we really want our payment to be X. So that even
shrunk it down a little bit more. And so there were some properties
that we looked at, but it happened to be a time when we were
seeing multiple offers and just kept getting bid out
and they decided that was too overwhelming for them
and they took a backseat and waited
a little bit. But that's what happens too.
Well, let's say in a scenario though, they do want to move forward. I mean
like, what kind of other things might you look at? Like, I
mean, do you try to talk them into something that they can fix, like
a fixer upper or a different part of the city or
the idea of this is just your first home, it doesn't have to be your
life. What kind of conversations might they, what kind of things might they
consider if they can't get into the house they actually really want to get into?
So there's a couple things that we can look at. I am great at
looking at. I have the ability to say, they say they want a four
bedroom. Okay, well how about if we see this
three bedroom plus a den, maybe that works for their
scenario. So I'm good at thinking outside the box and finding
something that they didn't think would fit
and then they end up loving it. So we can do things like
that. And
right now what we're seeing in our market is maybe
a buyer says, I only want to go up to 400, but I always
look just a little bit over 410 because maybe
that's getting a good deal. If it's been sitting on the
market for a little bit, maybe it's getting some credit
back from the seller so that we can pay for some
closing costs or pay down the interest
rate, which Jill can speak on too. But those are little things
that we see and that I'm helping with buyers right now.
Yeah, thank you for that. And if any, I know you guys have all bought
and sold homes. So like, you know, and you know, kind of. I
know for me, like one things that I like to do
when I, when I've either helped people buy a home and it's the tough. And
it was the tougher market where there wasn't a lot on the market. One thing
I did for a client once is there was a property they liked that was
not on the market. It was just. But it was, had
been listed and it's kind of like off market. For a little bit. So I
called them and they were just trying to make some repairs to make it
prettier. And so my. You know, and you can. And then
I. I've done the same thing with myself for like the thing. The property's been
on the market for a really long time. I get excited about that. For me,
I get excited if it's been on the market for a long time because
maybe that maybe they're hard to work with, but maybe also they're ready to lower
the price and you can get in there and if it's off the market, but
they're just making some repairs, maybe you can get the deal when no one else
is there, or maybe just horrendously painted,
you know, or has some just topical things. If people can
look past that. I do feel like that's something that. Where they can maybe
get the deal. But Angela, what do you think on that or anybody
else? Absolutely. Absolutely. I've sold.
I've helped buyers look for homes that weren't on the market, like
for sale by owners. That's a great little niche that
people don't think about. And as long as the
for sale by owner is willing to work with the realtor on the
buy end, they don't want to be represented. But I can represent the
buyer and still make things work. So things like that.
I'm always. If I see a house that
is in contract, but maybe they're still allowing
showings, I'm calling them up and I'm asking, how's that
escrow looking? Is there a chance for us to be, you know, put
in a backup offer? All those little things can
help a buyer get in where they normally, you know,
wouldn't? Yeah. Do you. Have you noticed. Are there.
Do you have people who are like, show me
the one that's a little more run down so I can get a deal so
I can fix it. Does anyone come to you saying that or is that. From
what I hear, everyone wants to kind of turnkey, but is there for anyone
who is like, I'll take the deal. There's
always investors out there looking. They reach out
constantly. All day. I get text messages from
investors that want that. You know, they're looking for that off
market or something coming up soon, property
that they can, you know, get a good deal on, fix it up
and then put it back on the market. You know, I feel like it's
like it's almost a thing of the past, but I just feel like that's something
that I wish first time home Buyers would think about, especially if
they know anyone who's handy or can find someone. Because it's
like you can get into a home that needs some work done on it and
then do the work. Yes. And I just feel, is
that, does that feel like to you guys like a thing in the past too?
Like. Yeah, I don't
really hear that very often. But I do want to mention there are rehab
loans that people can do if they do want to buy a fixer upper.
Okay, tell us about that. They're a first time home buyer. I mean,
FHA has them. Conventional loans have them where they could put.
With FHA, they can put as little as 3.5% down.
They can get the, they can get the cost for the repairs
financed into the loan. Okay. They would
have to have a good, you know, a good cost breakdown. Know what they want
to do, know what kind of materials. Like let's say they want to redo the
kitchen. You know, they'd have to know like what kind of countertops, what kind
of appliances, stuff like that. Have to have a breakdown, have to have a
contractor because the appraiser will go and give it a
future value with all those repairs or improvements being done.
So the appraiser needs to know, you know, what kind of quality materials
are being used. But that's a great program.
And back in like, you know, 2008, when there was a lot of
foreclosures and things like that, those loans were actually
a lot more prevalent, you know, because a lot of people were
taking the cabinets with them when the home, their home got foreclosed
or taking out the plumbing.
2008, the crash, kind of when that was going on. Isn't
that. Oh man, it's been a ride
these many years, right?
Yep, yep. But those ones were more prevalent back then
and we do offer them now. And it's a
great program. I honestly don't know why more people don't.
Don't take advantage of it. Maybe they don't know about it. So
FHA Federal Housing Authority, is that right? Yeah.
Administration. Okay. And then I think there's. You have
mortgage. They have explained that to
them. The FHA versus Conventional. Let's do
that. FHA is basically the government's backing the loan.
They're insuring the loan for the lender. Okay. Same with like va, that would be
veterans. Veteran VA has a rehab loan as well.
So basically the government agency is ensuring the loan for the lender that if
the borrower doesn't make the payments and the lender has to foreclose.
FHA would come in, pay off the lender, they
would foreclose on the house and sell the house. So it really
helps alleviate the lender's risk for the
loan. FHA is a more lenient when
it comes to credit scores, debt to income ratios, things like
that. They do require
mortgage insurance, which again is an insurance for the lender, but the cost
goes to the borrower. That's included in their monthly payment.
But it's a way to help people get into homes that maybe don't have that
A plus credit, you know, or maybe they're
pushing their debt to income ratios a little bit higher.
FHA will allow for those types of
situations. Yeah, that's good to know.
And lots of different situations. So like, honestly, like when I
divorced and my credit was great, but like the,
all the stuff it had, it had to be an FHA loan, which made me
crazy or I had to wait and it was just, it's
just like. So life change can cause those issues
too. So. Okay, so people need to know you're going to pay whatever the,
whatever the mortgage is, and then you're going
to pay an HOA fee monthly and then you're going to
pay property tax insurance monthly,
which usually the mortgage lender or the company, not the lender
yourself, but the company will collect that and then for
you when it's time, and then you will have also.
Is it called PMI Mortgage Insurance?
Yep, yep. What does that stand for?
Well, PMI would be private mortgage insurance, and that would be
with a conventional loan. Okay. Fha, it's just
mortgage insurance. Okay. And so then they'd have a fee for that.
And what is that? Maybe $200 a month?
150. It's based on the loan amount, it's based on the loan amount, how
much they're borrowing. And it's a
little, little complicated in that there is an upfront mortgage
insurance fee that they pay, which usually gets financed into the loan and
then they pay it monthly. So it's just a percentage of the loan
amount? Basically, yeah. So there's all these things we don't. I mean, you know,
there's. And then there's electric bills and, and the repairs are on you.
Like if you've been running for a while and now you own. Now if there's
a roof repair, you get to do it. Right. Some have
inch. Property insurance too. Those things sometimes
that's. Is that usually required too? Is property insurance? Yeah.
So the HOA dues, like if you're buying a condo or a
planned unit development, and you've got HOA dues. Those are paid
separately. Your homeowner's insurance would
be included in the mortgage
for fire or for flood. I feel
like in this. In Georgia, they were. Because I had an hoa, I felt like
it was rolled in. I think it was. But that's
interesting. Maybe different states do it different ways, but.
All right, everyone jump in on this question because they're all
women with opinions.
Do you buy in an HOA community or not? What do you think?
Angela, we'll start with you.
Yes. Sometimes those are
starter homes. They're more affordable, even though they have those
HOAs. And you have to really look at those
amounts so they don't throw off a buyer's
budget. But those are great places to start.
My daughter, she's 33. That's where we started her. She got into
a townhouse. She was there a few years, and
then we traded her up into a single family
home. And now she's a homeowner and she's
33, and she's doing it all on her own.
Yeah. Anyone else have an opinion on it?
I live in a property that has HOA dues.
Ours is really more of, like, a landscape maintenance, so they take care of
the common areas, you know, that kind of stuff. They're not
real strict. They don't enforce, like, parking, you know,
and things like that. But I think I
don't. I like them personally. Yeah. Angie,
any opinion from you? Yeah. So my first house was
In Sparks, no HOA. So I think the
HOAs really protect your property. Like, the value,
it increases the value because I went
from, you know, not having an HOA
to where people around me would not take care of their yards and stuff.
So that kind of, like, decreases the value. And then, I mean,
people don't want to live in a bad area. So when I bought my second
house, I have an hoa, and they really maintain all of,
like, you know, the yard work, all that stuff, and it looks so
clean and pretty. So I really think it
increases the value because, like, when. When people are
looking in the surrounding area, they want to see that it's clean and neat and
their property value is going to go up. So I really. I really like
being in hoa and it's. And it's a set
amount, so. But that's what I like
versus not having an hoa, because my rental was
not hoa and that my neighbor didn't keep
up their yard. And, you know, some neighbors did and some Neighbors didn't.
But in an hoa, you have to keep up, like the weeds and stuff
like that. We are notorious for having weeds in Nevada.
So even though it's a dry state, but when it gets
sunny, all those lovely weeds come out
for sure. Well, yeah, so I've had, I've had different
opinions on this too, because, well, and I've owned places
in different states, but when I bought in Georgia, that was the first time I
had bought into a townhouse community. So I feel like everyone, like if you're, if
you're brand new at buying, the thing to know is like, you have to
really actually ask for the hoa, all the covenant and
restrictions. So that's what you ask for, the covenant restrictions, and your realtor will know
this stuff. But you, you look at it and see
what's being paid for and what isn't. So you might have
a pool, you might have a gate.
It might, they might do the landscaping, they might not do the
landscaping. So then you, you kind of, you roll it in. So for the townhouse
community, it was the most expensive. I think I'd lived in one that was only
like in Wisconsin, maybe $25 a month. And they
didn't really do anything except for maybe send
out notices if someone had too many weeds, right? If
their lawn was too long, their grass was too long, then they got
a notice. But then the one in Atlanta, which was an
ho, which is a townhouse community, that covered
exterior paint gutters, roof
the streets because they, you know, the street repair. So if they had to make
repairs in the streets, it covered the lights, cover the, the gate,
it covered the pool, the tennis courts and the
playground, right? So that was 400amonth. And so I
think people look at that. And then of course, in Atlanta, too, there's a lot
of high rises where people buying condos, and those can be up to
800amonth. But single family homes, it depends on. If there's not a
pool, then it might just be 25amonth, you know,
so it's. I think that that's good to know too. Is there a lot of
different levels and, and what that entails the most is going to be
a condo. And these aren't really, I don't think, a thing in Reno, but they
were definitely a thing in Atlanta. So. And those can be tricky
because they, you know, you're. It
can go up exponentially if not enough people have bought. So those can be a
little bit scary too. But when with the
townhouse one, people were saying that's way too much for
a townhouse. I'm like, but I paid that on a single property when,
if I had it repair my own roof now and
do my own painting, you know, and that kind of thing. So,
Angela? Yeah, I just wanted to touch on something that
you just brought up is the covenant and restrictions, the
CCNRs, the way that a
plan, development or HOA
maintains or the health of their.
How they maintain the funds is very important. And they have to do reports
on that every couple of years. And so
when you get a copy of those, it's hundreds of pages and
most people don't read it. But you should look at the
financials in there that say
how much reserves that community has, because that's very
important. If they don't have the reserves to
maintain the outside of the structures, it's a condo
unit or the roofs, then
you could be looking at an HOA hike, which we've just
seen in the last couple years. HOA's for
condo and townhouses nationally, but also here
locally, they went up double, if not triple in some
places. And so they just had to keep that
reserve so that they could do those. Those
items that the HOA takes care of. So most people don't
look at that. They don't know to look at it, but that's very important is
the health of hoa. So do they do. Because I do.
They do special assessments for that kind of stuff in, in Nevada, because I
know it's called like they gotta do this one big project
and re. Re dig the gutters or something. I don't know. And so
there's a special assessment. Is there something like that in Reno too, or no. Or
Nevada? Oh, yeah. Sometimes there's special assessments that
they'll do that they'll add on. A lot of times
they'll say, you know,
we're going to increase the HOA by X amount to cover this.
Or it's just going to be for five years. That X
amount is going to go up just for five years to cover this project.
So different things like that. And you can. They
can. If they're, if they're going to sell within that time frame,
they can choose to pay that assessment off at a
closing or pass that on to the next
buyer. Yeah. So a lot of stuff to
consider for sure in all of this.
Angie, let's go back to you. So
what would you. You have a son who's, you know, how is he?
16? He's gonna be 18 this month.
He's turning 18 on the 21st.
So I kind of. And you guys all have kids, so like for your
kids, you're like, why,
when should they buy? Like, is it a, when is a good time to
consider purchasing? Like do the, do the mom angle
for me. Well, I mean I look
at, well, Jill's perspective
would be, you know, try to get them prepared as soon as
possible because you know, once they get into the market, they're
constantly building equity for themselves.
But they do have to have like, you know, some time, time frame
on the job, you know, make sure they have at least two years
history and got some stuff saved up, a bank account,
all that stuff. I just went through all this with my son, got him set
up with a bank account, made sure he's getting direct
deposit just so that it's just so much smoother for
Jill to do her job, track
everything thing and, and make sure that they, you
know, are having all their income go into their account
and stuff like that. And they can do student, student accounts
which, you know, their, their parents can co sign for, which I did
for my son. And then just made sure he had
Social Security, his, you know, just preparing him for
life. And you just,
just got a car. Yeah, yeah. So you just put the word
equity. So equity is something that is. Explain,
explain. Angie, I'll let you do. Since you're doing this. What is
equity and why does it, why does it matter? Why do we buy
versus rent? Like why, why would you. So,
so if we're renting, everybody's renting. And where
is that money going? Not to
you, not going to you. It's either paying,
you know, the rental companies, you know, if
you're, you're paying for an apartment, but if you are
just basically paying somebody, it's
not, you're not building equity in anything. You're just basically
throwing your money away. I know everybody's got to start somewhere,
but if you were able to build equity in a house
and you're making those mortgage payments on time each year,
that property value is going to go up and Angela will attest to this.
Reno's growing. A lot of
people, a lot of my clients should have got into the market a long time
ago, but they didn't. And now they're seeing the rise.
You know, I bought my first house at 2,
260,000 and then I bought my, my second house at
619,000. So there's the difference.
2016 to 2022, look how
much equity was gained in, in the first property and, and
now the second property and, and we're just, I mean, I went
to EDAWN and they said that they're. We're gonna just grow. We're like the
fastest growing city, 80 percentile
in all of the United States. So,
yeah, it's huge. It's huge. We're becoming a major
tech company and we have no state taxes.
So I moved here from San Diego and I gave myself a raise when I
moved here. So no state, California
taxes. But yeah, I mean, that's. You're building
constant equity. Even if it's a condo, a townhouse,
you know, you're not paying essentially somebody else's mortgage.
You're. You're actually putting value into
something that you are paying for. Yeah. And
EDAWN is the economic development of Western Nevada, I've heard.
So we do get a lot of people coming from
California because of the tax rates. And of
course, everyone's just trying to save, you know, to live.
But. So, Jill, could you talk a little bit?
So also. So start with saying as a mom, what you would recommend
for your child and when to do it. And then also maybe say something
about like how they would do it now because it's gone
up so much since 2020. Well, I have
two children and I would say, you know, when
they were established with their job situation and their
income and they could afford the monthly
payment, I would encourage them to do it as soon as they
could. If I was able to help
them with the down payment, I would, because I think it's so
important to what Angie
said for them to start building equity. You know, equity
is the value of the home minus what you owe on the
mortgage. The difference is your equity. And once you get
that first home under your belt, which I tell
most of my first time homebuyers, the first home is going to be the hardest
to get, you know, because you're usually scraping every penny for that
down payment. You're scared about that mortgage
payment, but once you get that first one under your belt,
it's a stepping stone for the next house, you know, because you built
that equity, you could sell that house and use that
equity now for your down payment on the next house and so
on. Or maybe you keep that first house as a
rental property or something and you use your
own savings for a down payment on the next house. But once you get that
first house, it really opens up a lot of doors
for the next one. I would encourage
both of my children, when I felt like they were settled with good
jobs and could make the payments,
to do it as soon as. They could yeah, that's great.
Angela, what do you have to say on that? You've been through it. You said
yes? Yep. My. My oldest daughter.
That's what we did. I planted that little seed and I said, you need to
be a home buyer, a homeowner.
And it took her a couple years, and then she finally said,
okay, Mom, I think I'm ready. And we delved in. We got her that starter
home. And I tell buyers this,
buy what you can afford. If it's a smaller home,
if it's a fixer upper, if it's a condo,
get in, get your foot in, gain that equity, and then use
that as a stepping stone. And we did that for my daughter
and my other two kids. I'm just getting them
ready, making sure. Getting their credit going
and making sure they are able to be financially
responsible before I put them in that situation. But
again, I'm planting the seed.
It's not, you know, it isn't the, you know, easiest thing when,
when properties went up in value so fast. And it's also
not easy for me, looking back at the price I sold it at
versus the price they are today. There's, you know, there's that, too.
I have that. But I have a son and his wife are trying to, you
know, they're thinking about getting their first home, too. So it's like, I. I know
the. The pain of that and how challenging that can be.
So, okay, another mom question. And plus, all your experience.
So they've been renting, but they don't have skill sets. They don't
know how to fix a leaky faucet or a
toilet. They have no idea what to do if a roof starts leaking.
They've never put their hands in the dirt to. To do, I don't know,
you know, any landscaping. I
mean, you know, all that kind of stuff. So let's. Angela,
I'm going to go back to you. So what would you tell
them would be, first of
all, how do they find. Okay, I'm asking you this. How do they find
people? What do they do? Can they do some stuff on their own? What do
they do? What do you think? They can definitely do some things on their
own. I mean, YouTube is out there. You
can find a million things on YouTube that help people
fix up and do things. Now
look for that home they, you know, we have. We're a resource for
them. They can lean on us to say, hey, who do you know that does
landscaping? Hey, who do you know that can help me fix my
roof? And also when I'M helping a buyer.
I suggest sometimes a home warranty and home warranty
helps with some minor repairs for that
first year. And I think it's totally worth it to get a home
warranty for a first time buyer. And they're already,
you know, scraping pennies to get in. That home
warranty can be a lifesaver and help them get some repairs done.
Yeah. Can you explain a little bit more like how much that would cost, how
they find it, what it covers, that kind of thing? Yep. So their realtor
is going to help them with different. They're. There's about a
handful of home warranty companies out there.
I like to use ones that have local reps in town.
So if we have questions, we can go to them and ask
them, hey, what does this cover? You know, can you help my
clients with this? And so I like to use those kinds
of home warranties, but basically they're a one year
insurance that you can add into your loan
fees and it covers, it can
cover roofs, it can cover appliances, it can
cover leaks, things like that. So your
H vac system, a lot of them would have rekeys
in there and they cost anywhere from 500
to 700 depending on. There's different tiers
of options that they, that they offer
per year. Per year. It's for the first year
most of the time. They'll allow you to renew it if you haven't had too
many claims. I just want to make sure they knew it wasn't per
month. No, no. Yeah, it's a one time
fee. Yeah, the one time fee for sure. Okay,
Jill, so your kid is in a house and they're
like, ah, the rim is leaking.
Mom, what do I do?
Call a roofer.
Get a bucket.
Let me call Angela and find out who she recommends for a roofer.
Oh, that's so true. That's so true. Like any. Do you, what did I mean,
you have any advice for that? Kind of like the transition between
you're renting and you just call the office versus you own.
And now you, you call.
My own self. When I, when I was,
well, I was married before we bought a house. He was very handy. But then
I got divorced and I had a house and I used my home warranty a
lot. I had, I
had a bathtub once that was leaking from the second story down into my
kitchen. I had toilet
problems, a dishwasher. I mean
I've used my home warranty a gajillion times. So I
personally recommend them because I feel like for Someone like me
who's not handy. It's kind of like a savings account almost. It's
like insurance that if something goes wrong, I can call
them. So I highly recommend home warranty.
Now, I don't know if a roof would be included in a home warranty.
Angela might know better. Yeah, you
can add that. Oh, okay.
Yeah, add on. So I would probably
recommend to my kid that they had one and keep it,
you know, especially after the. Especially for the first year, until you get
to know the house and make sure that it's, you know, running okay and
everything's running okay. I have one currently on my current house as well,
so. Yeah, that's great. Angie, back to you.
So I'm going to ask a question like. Okay, so at least three of us
here as single women have bought homes. And, Angela, I don't know if you've ever
done that. Yes.
Okay, single woman. What do you. And you're like,
I'm gonna buy a house. I don't need no man.
I'm just kidding. That's
right. I'm a boss
man can fix this and move the furniture.
And then, you know, life is like. No, life is. Life is
lifing. So go ahead and put a blanket underneath
your furniture, and then just pull the blanket and then.
And I don't know all the things we do with women,
but, Angie. Okay, so when you're buying a house as a single
woman, what were the most important things you looked at? Like, what was
on the top of your list for what you needed? What I needed
was low maintenance yard. I hate doing
yard work, so I. I went with
the already scaped yard. And
I did get a home warranty, too, because I did not know how to
fix anything. I did a lot of YouTube, so.
And I. And I had handymen. Like, a lot of my.
A lot of my clients are handymen. And so I just
made sure I knew who I could use and trust because
I was a single woman. So you don't really want, like,
anybody in your house. But I did use my home warranty
a lot, too. So, you know,
I just. I just made sure that I had the resources to
make sure I was able to repair things. Yeah. So
I luckily have a lot of people in the industry. I know a plumber. I
know electrician, so. And then, you
know, I know a lot of realtors that are connectors, too, as well.
A lot of. A lot of good people, too. Resources.
Yeah. Which is another thing. Especially if you're moving to a new city, which
I've done that so many times now too. So you do. This is another
reason why you want a realtor. And they're, they should get paid
probably three times as much as what they get paid
sometimes. I don't know. You know, be nice
to realtors. Okay. And, and lenders, like, they do not get
paid until there's a sale. Like, you know, how many months and years they
can work with you. And you're might not even be nice to them. And they're
not, they're doing that for free until they get, you know, the sales done. And
then they just have one chunk of money. And this is tough. These are tough
businesses. Mortgage too. And then, you know, Angie over here running her own
business. Listen, right? None of
this is easy.
I don't know. Okay, Angela, tell us, for the people
that have not bought a home yet, what are the most pricey
things? And so they're, they put an offer. First
of all, can, let's just do all the terminology. So they're looking for a home
and then they make an offer. So let's, we haven't talked about
that. Go tell them what happens when you make an offer and what that means.
So when you find a home, you locate it. You've got the lender,
you got the pre approval letter from the lender, you're ready to rock and roll.
We start shopping. You find a house that you like
and your realtor is going to help you put an offer together.
It's going to have a lot of different components in it,
but that's where your realtor is kind of walking you through the
steps and you put your offer in. If you're the only
offer, you're just kind of negotiating
terms with the seller and the other
agent. And then hopefully you get into contract.
That means the seller and the buyer have agreed on terms and
you are in contract. The contract goes
to the title company. The title company opens an escrow,
and then the buyer says in the terms
of the contract they put in how much they were going to
put in their stake. That's their earnest money
deposit. The earnest money deposit is part of your down payment.
So your realtor helps you put all that into place.
And within a couple days of the contract
being accepted, that earnest money has to be deposited to keep the
contract going. Then
you're ordering inspections. The lender's doing their part
in getting the appraisal going and making sure
all the other documents for the loan are
put together. And so a lot of working
pieces that go in in the background that the Buyer doesn't
always see, but the lender and the realtor are working hand
in hand to get the ball rolling.
So you order those inspections and you see what is the integrity of the
house. Everything looks good. There might be some minor
repairs. And then once those inspections are
done, you're asking the
seller for some repairs, for some
credits for those repairs, or you say, hey, everything looks good.
These are little things I can handle. And you move to the next step.
Next step would be appraisal, making sure the appraisal
comes back, the lenders ordering that and getting that ready for the
buyer. And maybe there's some CC and
rs, the seller's ordering the CCNR package
so that the buyer has enough days to
look at those documents and make sure they agree with all those covenant and
restrictions and what the HOA does.
So a lot going on. And that's just the staff.
So there's a lot I want to, I do want to break it down a
little bit farther. So, you know, the thing about, I think people do need to
know is this whole thing is a legal process. So when, when you say
you go through and you put in an offer, the offer is a legal
document. So if it's accepted, then you're
legally bound to the terms. And the earnest money
is, if you break those deals, you lose the money. So, and they're going to
require so much, they might, they might say, well, there's no way we're going to
take your, your offer and turn it into a contract
without us knowing. If you break it, you're not out something so
that you're not just putting in offers and contracts on four or five different
homes and just maybe you'll buy something. So this is all a
very legal process. So when you, when you put that offer in, if they
say yes now you're bound. And you said, we will give you $3,000
tomorrow to ensure it's usually right. That. Isn't that right around
there? We like to see about 1% of the purchase price is
what we tell buyers. Okay. Some more than usually nowadays.
Okay. So, you know, it might be, you know, but maybe
it could be less. It just depends on, you know, what. Whatever they do. So
you have to have that money available and ready the next day to, to put
in for a down payment or not a down payment, but the. Earnest
money, we call it your skin in the game.
Yeah, yeah. So it's just, And
I guess that is the money. You certainly do need that up front
in order to make sure that, you know, and maybe they don't. If they have
no money and it's a zero and there's a zero money down, do they
still question. Do they still need earnest money?
Yep. That's what I was saying before is they do have to have some money
up front for the earnest money and for the appraisal
sometimes too. Okay. So earnest money is the money that you
say, I am bound to this. If I change my mind, I lose this money.
So skin in the game, your earnest money. This is a contract. It's
legal. So I think I was asking that.
There's other. Let me go over the legal stuff then. So the appraisal isn't.
Isn't legal. The appraisal is information. Right. So you.
Information. And the lender can look at the appraisal too, right? The
lender gets the appraisal. Oh, yeah, yeah. We. We order the appraisal. We order it
from a. We have approved appraisers that we use that we will
accept appraisals from. We rotate who we order them
from. The buyer gets a copy because they paid for it, and
of course, we have a copy because it's. It's for the loan.
Yeah. So the appraisal. So the, The. The mortgage lender
is looking to see if there's something that would cause it to not
be worth what they think it's worth. And the. The
inspection and the appraisal both. Right. So the inspection
would be, oh, you have termites, and
the whole house is about to fall down, so.
Or there's a crack in the foundation. Or shoot.
Oh, that's one of you guys whose battery is low.
Who dares?
Okay. This is good, though. This is good stuff. So. So they might find
something that's expensive, you know, that they're. They're like, this has to get. And then
they might say, this has to get fixed before we close. Yes,
correct. And so all of those things, your.
The appraisal, the loan, your
inspections, those are all what we call contingencies in the
offer. And there's a lot of contingencies built into the
offer on top of those things. And it's to safeguard
the buyer and the seller, too, but mostly the buyer, so
that if something comes up, the loan doesn't come in the way
they want, or I'm sorry, the appraisal doesn't come in the way you want it
to. There's repairs. Something comes up with the
inspections, and both parties don't agree
on who's fixing it, how much, what the actual
damage is. Then that's where
buyer and seller can say, okay, we can't agree here.
Let's back out. And the buyer's able to walk away without losing
their deposit. Yeah, that's
great. We're slightly losing, Angela. So
listen, if anyone, if you guys have
questions and you're, you're wanting to buy something and you have
more questions, we want to give some information, call one of these ladies and they
could maybe refer you to someone in a different state if they can't help you
or just, you know, these are, this is good information. You need all of these
people to make it happen. So
I think to sum up, give everyone, give like one little piece of
advice for someone. Like, like
why, why do this? Why, why go buy a house? Is it
going to make you. I'm going to go back to the podcast name. Is it
going healthier, happier, wiser and wealthier?
Yes, yes, all the above. Well, why,
why though? Why does it make you all those things? Because you're building
equity and you're setting up for your future
and you're, you're not throwing your money away. You're actually building
equity in a home and, and able to upgrade
houses. You know, family, families grow and all that
stuff. So get out there and buy a house. Yeah.
If you can, we'll get you prepared.
All right, Jill, Angela, any, any thoughts on that? Last minute thoughts. I agree
with Angie. I think, you know, you're building your, you're building
wealth and whether or not you keep that house and use
it, you know, as a stepping stone for the next house or whatever, I mean,
real estate is an investment that is proven for years
that it continues to go up in value. It may not be a straight line
up sometimes. It may be, you know, more of a roller coaster
sometimes, but it consistently goes up. Yeah.
And then, yeah, you can get so much back when you sell it then.
Yeah. Angela, I say get your foot in the
door. Can you hear me? Yeah, I'm here. Get your
foot in the door. Pictures going in and
out. So we're going to enjoy that. You're
like, listen, I'm over this. There's sunshine and I'm basking
well. And I agree. And I think it can make you like, you know, healthy
and happy because you, you have control over, you know, filtering your water
and filtering your air and you know, what you use for,
you know, non toxic, you're not gonna. Get, you're not gonna get rental
increases too. That's, that's a big thing in Reno. A lot of
people get those rental increases as soon as their contract is
up. And you know, your mortgage is going to stay the same
payment as long as, like, the taxes are, are still the
same in this, in the area. Don't quote me on that. So. And
when it's your house, you can make your own. You know, you can paint
the walls lime green if you want to. Right. Right.
It's your space. It's your yard. It's yours to do what you want to
do. Yeah. Go be fancy with it. For sure. Well, you guys are all very
wise women. Thank you so much for being here tonight, and
I love you for having us. Yeah, you're welcome. And I will see you
guys all again very soon. So. All right. Love you.
Bye.