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FHFA’s VantageScore Approval: What It Means for Homebuyers (and Why It Matters More Than You Think)

Wed, 29 Apr 2026 09:28:02 GMT

FHFA’s VantageScore Approval: What It Means for Homebuyers (and Why It Matters More Than You Think)

The mortgage world just got an important update—and while it’s not making loud headlines yet, it has the potential to quietly reshape who qualifies for a home loan in the years ahead.

The Federal Housing Finance Agency (FHFA) has approved the use of VantageScore, alongside the long-standing FICO, for loans backed by Fannie Mae and Freddie Mac.

So what does that actually mean for you as a homebuyer?

Let’s break it down.

The Problem: Not Everyone Gets a Fair Shot at a Credit Score

For decades, mortgage lending has relied heavily on one system: FICO.

While it’s a strong model, it doesn’t always capture the full financial picture—especially for:

Buyers with limited credit history
Younger borrowers just starting out
People who responsibly pay rent, utilities, or subscriptions—but don’t use traditional credit much

In other words, there are a lot of financially responsible people who simply don’t “score well” under the current system.

The Shift: A Second Credit Model Enters the Game

The approval of VantageScore introduces competition and flexibility into the mortgage process.

VantageScore is designed to:

Score more consumers, including those with thinner credit files
Potentially incorporate a broader range of financial behaviors
Offer an alternative lens on borrower risk

This doesn’t replace FICO—it adds another option.

And options matter.

The Reality: This Won’t Happen Overnight

Before you get too excited, here’s the honest truth:

This change is going to take time.

Lenders, loan systems, and underwriting platforms all need to:

Update technology
Test performance
Adjust guidelines

That means we’re likely looking at a multi-year rollout, not an immediate shift.

The Opportunity: More Buyers May Qualify in the Future

This is where it gets interesting.

As VantageScore becomes more widely adopted, we could see:

More borrowers qualifying for financing
Fewer “near-miss” denials
Expanded access to homeownership

If you’ve ever been told:

“You’re close—but not quite there yet…”

This type of change is designed for you.

What Most People Miss (And Why It Matters)

Here’s the part that doesn’t get talked about enough:

This isn’t just about a new credit score.

It’s about preparing ahead of the shift .

Because when guidelines evolve, the people who are already in position benefit the most.

That’s why I’m already helping clients:

Understand where they stand today
Identify opportunities to strengthen their profile
Stay ready for changes that could open new doors

What You Should Do Right Now

You don’t need to wait for the industry to fully adopt VantageScore to take action.

Here’s a smart next step:

�� Get a clear picture of your current buying power

Even if you’re not ready to buy today, knowing where you stand allows you to:

Catch opportunities early
Avoid surprises
Move quickly when the timing is right

Final Thought

The rules of qualifying for a mortgage are evolving.

Not overnight.
Not loudly.
But meaningfully.

And in a market like this, having the right guide—someone who’s paying attention before the changes hit—can make all the difference.

Let’s Talk

If you’re curious where you stand or wondering if upcoming changes could benefit you, let’s connect.

I’ll give you a clear, honest assessment—and a plan to move forward when the time is right.

How the Iran Conflict & Rising Oil Prices Are Quietly Moving Mortgage Rates

Wed, 01 Apr 2026 07:24:42 GMT

How the Iran Conflict & Rising Oil Prices Are Quietly Moving Mortgage Rates

Over the past three weeks, something interesting has been happening behind the scenes in the mortgage world—and most homebuyers and homeowners haven’t even noticed.

Headlines have been focused on rising tensions in the Middle East, particularly involving Iran. But what many people don’t realize is this:

Geopolitical events like this don’t just affect oil… they ripple all the way into mortgage rates.

Let’s break it down in a way that actually matters to you.

The Chain Reaction: From Conflict to Your Mortgage Rate

When tensions rise in oil-producing regions like the Middle East, markets react quickly.

Here’s the domino effect:

Conflict risk increases → Oil prices rise
Investors anticipate supply disruptions, pushing oil prices higher.
Oil prices rise → Inflation fears increase
Energy costs impact everything—transportation, goods, groceries.
Inflation fears increase → Bond markets react
Mortgage rates are heavily tied to the 10-year Treasury yield, which moves based on inflation expectations.
Bond yields rise → Mortgage rates follow

That’s the connection most people miss:
Mortgage rates don’t move directly because of war—they move because of what war does to inflation and bonds.

What We’ve Seen Over the Past 3 Weeks

Over the last few weeks, we’ve experienced a subtle but meaningful shift:

Oil prices have been volatile with an upward bias
Inflation concerns have re-entered the conversation
Bond yields have firmed up
Mortgage rates have stalled or ticked slightly higher after prior improvements

In plain English?

Just when rates were starting to feel better… this external pressure hit the brakes.

Why This Matters for Buyers (and Homeowners)

This is where most people get caught off guard.

They think:

“I’ll wait for rates to drop a little more.”

But what they don’t see is that rates don’t move in a straight line —and global events can reverse trends quickly.

Here’s the real risk:

Waiting for “perfect timing” can backfire
External shocks (like geopolitical conflict) can push rates higher fast
The window you were hoping for can quietly close

The Opportunity Hidden Inside the Uncertainty

Now here’s the part most lenders won’t tell you…

Even in volatile environments like this, there are strategic advantages if you’re positioned correctly:

You can lock before markets worsen
You can structure loans with flexibility for future improvements
You can make decisions based on data—not headlines

This is exactly why I operate as a “Debt Manager for Life” for my clients.

Because the goal isn’t to guess the market…

It’s to stay one step ahead of it.

What Should You Do Right Now?

If you’re thinking about buying, refinancing, or even just “keeping an eye on things,” here’s the move:

Get a quick rate and strategy check
Understand your options in today’s market (not last month’s)
Create a plan so you’re ready when opportunity shows up

Because in markets like this, the winners aren’t the ones who wait…

They’re the ones who are prepared.

Final Thought

The Iran situation may feel far away—but its impact is already being felt in your mortgage rate.

And in today’s market, small shifts matter.

A fraction of a percent can mean:

Thousands in interest
A different buying price point
Or missing an opportunity altogether

Why Your Mortgage Should Fit Like a Custom Suit—Not a One-Size-Fits-Allg

Fri, 25 Jul 2025 08:02:49 GMT

Why Your Mortgage Should Fit Like a Custom Suit—Not a One-Size-Fits-All

How a Local Montana Mortgage Broker Can Save You Money and Stress With Custom Options

When it comes to mortgages, most borrowers don’t realize just how much money—and time—they’re leaving on the table by accepting cookie-cutter loan terms from big banks and retail lenders.

Here’s the truth:

**Your mortgage should fit your financial life like a perfectly tailored suit—**not like something pulled off the clearance rack.

As a Montana mortgage broker, I’ve built my business to be more like a high-end boutique than a big box store. I believe in customizing the loan process to fit YOU—not the other way around.

Let me show you what that actually means:

Precision Interest Rate Locks – Down to the Thousandth

Most lenders only allow rate locks in 1/8% increments. That means you’re forced to choose between 6.875% or 7.00%—even if the actual market rate is somewhere in between.

I can lock your interest rate to the thousandth of a point—like 6.937%—giving you the absolute best pricing available. That kind of precision can save thousands over the life of your loan.

Custom Loan Terms – No More Starting Over at 30 Years

If you’re 26 years into your current mortgage and want to refinance, most lenders will push you right back into a 30-year term. That means paying interest again for years you’ve already worked through.

I can structure your loan with ANY term you want—from 1 year to 30. Want a 26-year mortgage? Done. 17.5 years? No problem. This helps preserve your payoff timeline and reduce long-term interest.

Custom Lock Periods – Only Pay for What You Need

Locking your rate for 30, 45, or 60 days is standard—but it’s also expensive. If your loan only needs 17 days to close, why pay for 30?

I can lock your rate for exactly the number of days we need—17, 20, 21—whatever fits the deal. That way, you’re not paying extra fees for time you don’t use.

Built Like a Boutique—Not a Factory

My mortgage practice is built around people, not volume. I take the time to understand your needs and create a financing plan that aligns with your goals.

Whether you’re a REALTOR® helping a client close smoothly, a past client looking to lower your rate, or a first-time buyer seeking clarity—I’m here to be your Mortgage Broker for Life.

If you want a mortgage that’s tailored—not templated—let’s talk.

�� Call or text me at  406-220-0077 

�� Email: woodteam@woodteamhomemtg.com

�� Apply or connect here: https://2535756.my1003app.com/register

Mortgage pre‑approval for Montana buyers 2025

Sat, 21 Jun 2025 08:31:09 GMT

Mortgage pre‑approval for Montana buyers 2025

If you're planning to buy a home in Montana in 2025, mortgage pre‑approval should be your first move. Whether you're searching in Bozeman, Red Lodge, or Billings, getting pre‑approved strengthens your offer, helps define your budget, and speeds up the buying process. Here’s a step-by-step breakdown of what Montana homebuyers need to know—simplified and streamlined for today’s market.

Step 1: Check Your Credit & Strengthen Your Profile

Before applying for pre‑approval, review your credit score and credit reports from all three major bureaus. Your credit history impacts your loan eligibility and interest rate. Aim for a score of 620 or higher, though a 740+ score offers access to the best rates. If your score is low, pay down credit cards, avoid new credit inquiries, and correct any reporting errors. Improving your financial profile before applying increases your chances of a smooth approval.

Step 2: Organize Documents & Assess Your Budget

Start by gathering key financial documents: recent pay stubs, W‑2s or tax returns from the last two years, bank statements, and any documents showing additional income or assets. These records are essential for verifying your financial health. At the same time, evaluate how much you can comfortably spend—factor in your mortgage payment, property taxes, homeowners' insurance, utilities, and upkeep. Lenders typically prefer a debt-to-income (DTI) ratio under 43%. A mortgage calculator can help you estimate a realistic monthly payment range and set clear expectations for your home search.

Step 3: Choose a Local Montana Lender

Working with a trusted local lender offers a significant advantage. Experts familiar with Montana’s housing markets—like those in Billings, Bozeman, or Red Lodge—understand regional price trends, tax structures, and loan products that fit local needs. Unlike large national lenders, local mortgage pros offer personalized service, quicker communication, and insights that align with your long-term goals. Choose a company that values transparency and has a track record of success in Montana.

Step 4: Apply for Pre‑Approval

Once you're ready, submit your mortgage pre‑approval application. The lender will pull your credit report, analyze your financial documents, and determine how much they will lend you. Being honest and accurate on your application is essential—discrepancies can delay or derail the process. Most pre‑approvals are completed within a few business days, assuming all documents are in order.

Step 5: Receive Your Pre‑Approval Letter

If approved, you’ll receive a pre‑approval letter indicating the loan amount you qualify for. This letter shows sellers that you're a serious and financially capable buyer. In Montana’s competitive real estate market, especially in hot spots like Bozeman, having a pre‑approval letter in hand could give you a winning edge over buyers who haven’t taken this step.

Step 6: Maintain Financial Stability

After receiving your pre‑approval, avoid making significant financial changes. Don’t open new credit lines, make large purchases, or switch jobs before your loan closes. Any shift in your financial status can affect your mortgage terms or even result in loan denial during final underwriting. Stay steady to ensure a smooth closing process.

Start Your Homebuying Journey with Local Experts

Mortgage pre‑approval is the foundation of a successful home purchase. At Wood Team Home Mortgage LLC , we’ve helped buyers across Red Lodge, Bozeman, and Billings, MT, navigate the pre‑approval process for over 20 years. Our team brings expert local knowledge of mortgage consolidation and advice , personalized guidance, and a commitment to confidently, helping you move forward. Contact us today to get pre‑approved and take the next step toward owning your Montana home.

Montana ARM vs 30‑year fixed.

Sat, 21 Jun 2025 08:20:13 GMT

Montana ARM vs 30‑year fixed.

Choosing the right mortgage can significantly impact your monthly payments and long-term financial planning. In Montana’s evolving real estate market, the Adjustable-Rate Mortgage (ARM) and the 30-year fixed-rate mortgage are two of the most common mortgage options. Both offer unique advantages but differ in how payments change over time. Understanding these differences is key to selecting the loan that fits your goals—whether settling down in Bozeman, investing in Billings, or buying a second home in Red Lodge.

What Is a 30-Year Fixed-Rate Mortgage?

A 30-year fixed-rate mortgage provides long-term stability with fixed interest and monthly payments. This predictability suits homeowners who plan to stay in their property or value budgeting consistency. Even if market rates rise, your payment remains unchanged. In competitive Montana markets like Bozeman and Billings, securing a historically low fixed rate is a strong financial move. However, fixed-rate loans often begin with higher interest rates than adjustable options, leading to higher initial payments.

What Is an Adjustable-Rate Mortgage (ARM)?

An ARM begins with a fixed interest rate for an initial period—typically 5, 7, or 10 years—then adjusts annually based on market conditions. The main appeal of an ARM is the lower starting interest rate compared to fixed-rate loans. This means lower monthly payments during the initial period, which can free up cash for savings, renovations, or other investments. However, the interest rate (and monthly payment) can increase or decrease once the fixed period ends. This variability introduces some risk, especially if market rates rise sharply. ARMs are often best for borrowers who plan to sell, refinance, or move before the adjustment period begins.

Comparing Payment Impacts

Let’s break it down with a simplified example. Suppose you're financing a $350,000 home.

30-Year Fixed at 6.5% Interest: Monthly payment (excluding taxes and insurance) is approximately $2,212.
5/1 ARM Starting at 5.25% Interest: Monthly payment during the first 5 years is about $1,933.
In this example, the ARM saves you nearly $280 monthly in the early years. Over five years, that’s about $16,800 in savings. But once the adjustment kicks in, the rate can climb. If the interest rate jumps to 7% in year 6, the new payment could exceed $2,300, more than the original fixed-rate option. These payment shifts highlight the importance of planning. The ARM offers upfront savings if you’re confident you’ll move or refinance before year six. But if you’re buying your forever home, the stability of a fixed-rate loan might outweigh the early discount.

Which One Is Right for You?

Choose a 30-Year Fixed if you want predictable payments and long-term peace of mind.
Choose an ARM if you plan to move within a few years or want to maximize your short-term savings.

Montana buyers should also factor in local market dynamics. Short-term investment strategies may align well with ARMs in fast-growing areas like Bozeman. Meanwhile, fixed-rate mortgages may offer more lasting value in stable communities like Red Lodge.

Make the Right Mortgage Move with Local Experts

Whether you’re weighing the short-term savings of an ARM or the stability of a 30-year fixed loan, choosing the right mortgage is critical. At Wood Team Home Mortgage, we’ve helped Montana homeowners across Red Lodge, Bozeman, and Billings make informed financing decisions for over 20 years. Ready to compare your options? Contact us today for personalized Mortgage Consolation and Advice that fits your goals and lifestyle.

Best time to refinance in Montana

Sat, 21 Jun 2025 08:11:22 GMT

Best time to refinance in Montana

Refinancing your home in Montana can be a smart financial move, but timing is everything. With interest rates, home values, and personal financial goals all playing a role, choosing the best time to refinance can save you thousands. Whether you’re in Red Lodge, Bozeman, or Billings, understanding market trends and personal readiness is essential before locking in a new mortgage.

Understanding Refinancing Basics

Refinancing involves replacing your current mortgage with a new one to get a lower interest rate, reduce monthly payments, change loan terms, or tap into home equity. Many Montana homeowners refinance to reduce the loan term or switch from an adjustable-rate to a fixed-rate mortgage. Whatever the goal, success starts with timing and preparation.

Market Timing: Watch Interest Rate Trends

Interest rates fluctuate with market conditions, inflation, and decisions made by the Federal Reserve. A drop of even 0.5% can make refinancing worthwhile. Historically, rates tend to dip during periods of economic slowdown or uncertainty. Monitoring national and regional trends can help determine the best window to act. Montana’s unique housing market can also influence refinance timing. With steady growth in Bozeman and Billings, home values may rise, increasing your equity and qualifying you for better terms. Red Lodge homeowners may benefit from seasonal price variations, especially in vacation-heavy markets.

Seasonal Considerations in Montana

Montana’s real estate activity tends to cool in winter and heat up in spring and summer. Refinancing in winter might mean quicker processing due to lower demand, while summer may provide stronger home appraisals thanks to increased sales activity. Refinancing after home improvement projects or during lower lender traffic for smoother approvals.

When Personal Finances Align

Even with perfect rates, refinancing isn’t beneficial if your credit score is low or your debt-to-income ratio is too high. Check your credit report, stabilize your income, and ensure your mortgage payments are current before applying. A credit score above 700 and a solid financial history can qualify you for the most competitive rates. Refinancing also comes with costs—appraisals, origination fees, and closing costs—so having cash reserves helps. You should ideally plan to stay in your home for at least a few years after refinancing to recoup those upfront costs through monthly savings.

Signs It Might Be the Right Time

Key indicators for refinancing your mortgage in Montana include: current interest rates being at least 0.5% to 1% lower than your existing rate, which can lead to significant monthly savings; an improved credit score that may qualify you for better terms; and rising home values in areas like Bozeman or Billings, which enhance your equity. If you put down less than 20% and are paying private mortgage insurance (PMI), refinancing could waive this cost if your home value has increased. Consider refinancing to shorten your loan term from 30 to 15 years to save on interest or to access home equity for renovations or debt consolidation via a cash-out refinance.

Refinance with Confidence and Experience You Can Trust

When refinancing your home, timing and expert guidance make all the difference. Whether you aim to lower your rate, adjust your loan term, or access equity, a personalized approach can maximize your savings. At Wood Team Home Mortgage LLC , we bring over 20 years of experience serving homeowners in Red Lodge, Bozeman, and Billings, MT. Our team understands the Montana market and is here to help you evaluate your options and guide you through every step of the mortgage refinancing process. Contact us today to find out if now is the right time to refinance your mortgage.

More Than Just Rate

Sat, 15 Feb 2025 08:28:14 GMT

MORE THAN JUST RATE

Hello and Happy Friday!

We've been freezing our tails off here in Montana for the last couple of weeks. The cows are getting ready to calve and we all need a thorough thawing out! I hope you have stayed reasonably warm. We have some interesting things to talk about today.

As a broker, one of the greatest things I get to do is compete investors against eachother. You, as a client, get more options to choose from than the one menu with 4 options like retail lenders and banks. You get to choose from the menu and offerings of DOZENs of investors vying for your business! That means you win! But there is more to compare than just interest rate.

If you put less than 20% down payment on a mortgage in America, you will be required to pay for Private Mortgage Insurance (PMI). This is an insurance policy that protects THE INVESTOR against YOUR DEFAULT in the event you walk away from your mortgage. What PMI is not is an insurance policy that will kick in if you lose your job or don't have money to pay your monthly payment. This is important to note. Mortgages that have low down payments are considered higher risk mortgages because the borrower doesn't have a lot of skin in the game, i.e. down payment. They are more likely to be foreclosed upon because of that. In order to get investors to invest in these higher risk mortgages, they are coupled with the PMI policy. That way, if there is default, the investor will be able to recoup more of their loss.

I always thought the Mortgage Insurance cost was the same across investors but that is simply not the case. When I am comparing investors, I not only look at the interest rate available but I compare mortgage insurance premiums. For example, on a purchase of a primary residence with 3% down, the mortgage insurance premium is $507.55/month with one investor vs. $167.32 with another lender, both offering the same rate. That is a difference of $340.23/month!!! The less expensive investor is able to offer lower PMI because they have undergone the expense of getting their Underwriters certified to underwrite not only the mortgage but the mortgage insurance as well. The higher PMI lenders have to package the file and send it to the PMI provider for THEIR Underwriters to review before approval. This is a time suck and EXPENSIVE!

As your mortgage broker, I am constantly looking for less expensive ways to finance your home. That is on new mortgages and existing mortgages I have written for you! I have your back in managing this long term investment. Please let me know if you have any questions!!

How Can I Buy Before I Sell?

Sat, 25 Jan 2025 05:51:59 GMT

HOW CAN I BUY BEFORE I SELL?

Happy Friday!

One of the biggest conundrums facing homebuyers today is how to manage the transition of buying a NEW home with the equity in your current home as down payment. It's quite puzzling and stressful.

Imagine, you have found the house of your dreams and you want to put in an offer before anyone else steps in front of you, but you haven't even started the process of listing your home for sale, let alone found a buyer. You could put in an offer on the new home with a Home Sale Contingency, meaning you would have to sell your current home prior to closing on the new home. However, that is a big risk for the seller. They have no idea how long it will take for you to sell your home. In the meantime, they have taken their home off the market and they are also unable to move forward to their next step. Sellers are definitely hesitant to accept an offer with a Home Sale Contingency, meaning you could miss out on your dream home.

Let's look at it from another way. You know you have outgrown your current home and would like to purchase a new one, but you need to use the proceeds from the sale of your current home to put a down payment on the new one that has yet to be identified. You ready your house to sell and, within a few days of listing, your current home is SOLD! Great news but, now what? Where are you going to live? You could pack up and move to a rental while you look for your new home but that is very costly, expensive and off putting - who wants to move twice? What if you don't find the right home and you just gave your last home to someone else!? Add to that some small children or older parents and you have yourself an absolute nightmare.

BRIDGE LOAN TO THE RESCUE! We have offered bridge loans for a long while now and they really are a great product. They allow for you to purchase your new home before you sell your old one by bridging the two loans together and accessing the equity in the current home toward the down payment on the new home. However, they are pretty fee heavy and the interest rate is substantial. We certainly use them on the regular but I have been on the hunt for something better for our clients. Enter, Buy Before You Sell by HomeLight.

I am really excited to bring this program to our clients and realtors. The long and short of it is this:

HomeLight will finance 70% of the value of the departing residence minus the current mortgage.

Those funds are used towards downpayment, closing costs, repairs and/or payment cushion on the new property.

This allows you to make a non-contingent offer on the purchase of your new home.

The interest rate on the bridge loan is 0% with a flat fee of 2.4% of the sales price on the departing residence (minimum $9000).

Here's a video explaining more: https://youtu.be/Kg9IaIHZ6Mo

I have attached a couple of flyers, one showing the journey of the process and another explaining more.

Let me know if you are interested in learning more about the program for you or your client!

Here to help!

Triggered

Tue, 21 Jan 2025 08:04:13 GMT

TRIGGERED

Are you a fan of solicitors calling your phone trying to sell you something? Me neither. I love hearing from friends, family and folks in business that I KNOW but I am not a fan of companies I don't know calling to sell me something. I think most of my clients feel the same. Am I wrong?

Have you ever heard of a trigger lead? Well, have you ever noticed when you have your credit pulled by someone that your phone blows up with people trying to sell their services to you? That's a trigger lead. It is against the law for your lender to sell your personal information, but it is NOT illegal for Experian, Equifax and Transunion to sell the INFORMATION that you, at such and such phone number, had a credit inquiry for a mortgage, vehicle, personal loan or credit card. Because it happens so fast after the credit pull, consumers often assume their information was sold by their lender and that can put everyone in an uncomfortable situation. Mortgage Lenders (typically big box, online type) purchase trigger leads and call on them because a person authorizing a mortgage credit pull is a good lead for them, someone that is thinking about buying a home and needing a mortgage. You understand why they would want to do that...

Folks across the industry have rallied against trigger leads and the affect they have on our clients. Petitions have been signed and rulings made recently that can protect our clients against what some feel are harassing phone calls. Opt-outs prior to pulling credit can be done and, in my office, are completing prior to pulling the reports (OptOutPrescreen.com). In addition, adding your phone number to a Do Not Call List can slow down solicitation calls in general. (DoNotCall.gov) A new ruling by the Federal Trade Commission in December of 2023 is now going to require that a consumer OPT IN to each individual lender to receive offers of credit over the phone. This change will go into effect this summer! This is GREAT NEWS for buyers! If you WANT to be marketed to by a specific lender, you can throw your hat in the ring but, if you don't, you won't!

Call me old fashioned but, trigger leads have never been my thing. I won't buy them and I won't allow my clients to be harassed on my watch. We are excited to see the progress made on this front and will continue to keep you informed!

If purchasing your next home or refinancing your current home to access equity or to reduce your interest rate or term is on your to-do list, you know where to find me! Here to help!

Still the BEST Strategy!

Tue, 21 Jan 2025 08:00:39 GMT

Still the BEST Strategy!

As we move into another holiday season and a new presidential administration, home buying is still a bit challenging. Buyers are struggling with monthly payment which has been generated by higher prices coupled with higher interest rates. It has made for a conundrum that has been hard to swallow. However, FEAR NOT!

I put together Seller Buydown Comparisons for my realtors and their home listings. I just completed another one this morning for an average priced home in Bozeman coming on the market. It is always mind-boggling to me just how EFFECTIVE using Seller Credit to buy down the interest rate is compared to reducing the purchase price.

Take a look at this:

If a buyer negotiated the price down from $730,000 to $700,000, it would only drop their payment by $153.42/month and would cost the seller $30,000.

Instead, if the buyer negotiated a 2% of the purchase price seller credit and used it to buy down the rate to 5.573%, that would drop the payment by $390.56!!!! This strategy only costs the sellers $14,600.

For comparison, in order for the buyer to have that same payment as the Rate Reduction column, the seller would have to drop the price by over $76k!!

Strategies like this are putting buyers into homes faster than the "just wait until rates drop" strategy. Yes, rates are forecast to come down eventually but we are not guaranteed a timeline. There are a lot of conjectures as to when this might happen but nothing certain. What IS certain is that when rates do drop, all the buyers that have been waiting on rates will flood the market, increasing demand on houses, which will force prices up.

If you would like to talk further about this strategy for you as a buyer or for your buyers as a realtor, please reach out! And if you know of anyone looking to buy or refinance a home, would you send them our way? We would love to help any of your friends or family get into a home or make their existing one more affordable!

Talk soon

WTHM to the RESCUE!

Tue, 21 Jan 2025 07:57:38 GMT

WTHM to the RESCUE!

Happy Friday, Pam!

I hope you can feel the wind down of the year and are preparing for a lovely holiday season ahead. This time of year makes me think about home and how lucky we are to be a small part of a family's journey to get there.

We just had a really cool opportunity to jump in and save a purchase transaction that had an unexpected surprise right before closing on a new home for someone. They are self employed and were working with another lender to begin with. 2023 tax returns were finally due October 15th and our client filed those for her business and personal return during her escrow period. She had added a new component to her business in 2023 which required additional expenses to get off the ground, reducing her taxable income considerably from the previous year. This new tax return had to be averaged in with the previous year with the other lender and that tanked her income. The file was dead in the water.

I got the call from a dear realtor friend looking for a lifeline to save this transaction. Boy, do we love those! We immediately gathered 24 months of business and personal bank statements and sent them over to our favorite Non-QM lender. We were able to use her bank statement deposit income INSTEAD of her tax treturn income and we were back in business! Off to closing!

It makes me very happy to know this family will be tucking in for Thanksgiving this year in their new home. We love figuring out the puzzles of these files and we love working with the great, outside the box lenders we have in our wheelhouse!

Thank you to the realtor and client who trusted us to take them to the finish line, they know who they are!

If you know of anyone looking to tuck in to a new home before Christmas, reach out! We would be honored to help another family like this one!

But, I thought the FED dropped rates...

Tue, 21 Jan 2025 07:55:11 GMT

But, I thought the FED dropped rates...

Good morning.

This is going to be a common statement this week. The FED dropped the FED Rate by 50 basis points on the 18th of September. The whole mortgage world was supposed to get better, right? Wrong. When my clients and realtors call me and mention the FED dropping rates and how that is going to make mortgage rates better, I always remind them, while SOMETIMES mortgage rates can mirror the FED rate movement, often they do not. Look what happened over the last few days.

This is the Mortgage-Backed Securities Market as of this morning. When you see red bars, that's bad. Red bars mean mortgage rates are going up and they have gone up almost a point in the last week since the FED announcement. MORTGAGE RATES FOLLOW INFLATION, NOT THE FED.

Those who have waited to lock in their rate on their purchase or refinance may have missed the bus this time around. A lot of refinances are going to be put on hold if the rate is not locked now...some purchase prequalifications might fall out of qualified status with the current rate environment.

If refinancing is on your mind, let's get your file and strike rate set up NOW so that the next time a refinance is available, we are ready to hit the button. These opportunities can be fleeting and fast.

Here to support your financial success always.

We Pulled it Off!

Tue, 21 Jan 2025 07:52:10 GMT

We Pulled it Off!

I hope you are well! I am sure loving this sunshine! I'm a much nicer person with a tan. HAHA.

I would definitely say that the mortgage industry is about the slowest to catch up with the times. Sometimes it feels like a grumpy, curmudgeon grandpa that won't consider anything other than "his way or the highway". I have often let out deep, annoyed sighs when we have had lending limitations on tiny houses, family commune and off grid properties as well as alternative forms of income, even if they were consistent and verifiable. This has made me pull my hair out because people are needing to get creative with housing these days in order to make it affordable! One such income is cannabis growth and distribution. That has been a hard stop for a long time. Most investors would allow for income from EMPLOYEES of cannabis industry to be included in the debt to income calculation but NEVER would allow for OWNERS of these businesses to use their income for the file. What was even more crazy was that, most of the time, the income was awesome, there had been a long-standing history of receiving it AND an excellent prospect it would continue.

I had a realtor friend of mine approach me with just this such client and I assured him I thought we could find a home for their loan. We are a newer mortgage brokerage and the options for financing have just exploded in front of me. I promised I would find an investor willing to play in the sandbox with cannabis distribution income. I got a few no's but very quickly found interest with one of my favorite non-QM investors. They were VERY interested! We were able to put together a bank statement loan from a very healthy cannabis distribution business!!! It was AMAZING! The client was incredible and super willing to jump through any hoops necessary.

I was completely FLOORED when everything went perfectly! This beautiful little family was able to buy a gorgeous home in Bozeman using income NEVER BEFORE used! They are over the moon excited and so am I!

What I love so much about being a mortgage broker is all the options. We have investors competing for our business and coming to the table with solutions! No longer are we limited by the same 5 products with their tight little box of requirements! I am a problem solver, I'm really good at manipulating the puzzle pieces until I find a legal and compliant way to make it work! This was a perfect example of that and I'm just smiling ear to ear about it!

If you know folks in the cannabis industry that keep getting the door slammed in their face by other lenders, send them my way! We would love to say YES to them!!

Hope you have a great week!

Houses into Homes

Tue, 21 Jan 2025 07:48:47 GMT

Houses into Homes

Hello, friend. Been busy? Me too. Crazy, actually. Sorry it's been awhile. I’ve been kicking this idea around for awhile in my head. It may come across as controversial but it keeps sitting on my heart and I want to share it with you. We get the privilege to see homes be built and when I say homes, I don’t mean HOUSES. I mean homes, places where families live, grow and find sanctuary. I’ve had the honor recently of being asked for my guidance as a realtor friend of mine navigates purchasing what we hope will be her forever home. She and her family have dreamed about exactly this home. It will be life changing for them; 1900s farm house living in a quiet, small town. Conversations have gone back and forth about sanctuary and peace, oasis, a simple life, gardens, family, picnics, room for farm animals, big family dinners, tree houses, fishing, canning and again, peace…and then lead to resale value, marketability, updated wiring, square footage, comparable properties and bathroom count…It’s hard for a realtor to not be a realtor, but all that almost ruined their dream.

I asked my husband what he thought was required to make a house into a home. He’s a simple man with simple needs. Family, woodstove, comfy bed, beer in the fridge and meat in the freezer.

Teri in my office said, “Homes are about family and gathering. Most of that is spent around meals, so a space to prepare and enjoy meals is a must.”

Angel said, “Oh gosh! I feel like a space where I can see my family having dinner together or sitting in a nice cozy family room talking and laughing etc!”

Did you notice they didn’t say anything about open floor plans and granite countertops, garages and curb appeal?

To me, its about sanctuary. A place to recharge my soul, not just my cell phone. We know as a culture that families that own their home tend to stay together longer. They find security in a place to call their own, where their children aren’t uprooted and knocked off kilter. We all get a sense of belonging to a place that is vital to our Hierarchy of Needs when we build a home. Our culture needs more family security and belonging.

Sometimes, it seems that a house is just used to house your stuff and we hope it will be a “good investment” with a healthy return in the next 3-5 years when you will trade up for the next house. I think we all need more than that. Yes, real estate is a wonderful investment over the long term and I highly recommend that you partake in your fair share of it, however, there’s more to be desired. I get so befuddled in the idea of resale value and designing your home so that the next buyer will appreciate it. Yuck. I know I’m going to offend some when I say that Boring Beige and Realtor White does not scream “Home” to me. It feels sterile and cold. I love rich tones of brown, red, purple, green and gold on the walls (gasp!). I love furs and hides and low lights and cozy, snug rooms with squashy furniture with too many pillows and throws, built ins with books and candles, fireplaces and wood cupboards and even some oak trim(scoff!). I love lots of dogs IN THE HOUSE and unmanicured yards with sporadic plantings and a clothesline. How scandalous! What will the HOA say!?

Why do we want our homes to be trendy and modern? Is that what you really want or is that what you think society or the next buyer will want? Your home should be your family's sanctuary and should look like you and your family have loved and lived in it. Buyers can be stuck on modern updates and open floor plans and landscaping, kitchen and bath remodels and neutral paint palettes built around white and graaaaayyy. In fact, they will walk away from houses that look “dated”. Why? Don’t you want to put your love into it and make it your’s or do you want it to look like everyone else’s? There are some really good bones and history in old houses, maybe even a friendly ghost.

I truly think to each their own, you do you, but these old houses are filled with love and memories. The earth has accepted them and wrapped her arms around them. They aren’t a new build flopped on naked dirt all in a row like dominos. She has stood there for 100 years, do you think she’s going to tip over now? Look past her steep staircase, shag carpet, oak trim, Formica countertops, small bedrooms and short doorways. There’s a lot of love in her and think of how much more there can be with you and your’s there. Don’t rip it apart to make it look brand new and like everyone else’s boring beige house. Make it look like your’s and raise your babies there. Cook some meals and gather with loved ones. Laugh, get it dirty, make it shine, grow something. Make it your sanctuary, not just where you charge your cell phone.

Want to buy a home for your family and put down some roots? I know a gal that can help you with the money part. Reach out.

A Forgotten Option for Buyers

Tue, 21 Jan 2025 07:44:06 GMT

A Forgotten Option for Buyers

Happy Third Winter here in Montana!

The snow is falling again today and it has me thinking about strategies long since forgotten in the mortgage industry. Interest rates had gotten so crazy over the past few years that this arrow in our quiver has been left in the back of the closet, but now, with rates becoming a TINY bit more reasonable, we should probably dust her off again. This strategy is LENDER CREDIT, who would have thought!?

When a lender is reviewing a rate stack, there are a range of rates to choose from. It's so funny to me when people call and say "What's your rate?"...there are so many variables and OPTIONS for each scenario. There isn't just one rate to choose from. Most of the time, when a lender responds to the "What's your rate" question, they look for the rate at par. Par is the rate that doesn't cost anything (discount points) and doesn't come with credit (lender credit). It's the market rate. Often, people ask about discount points, or paying points it's often called, in order to get a lower rate and payment. That works for folks that have extra money to spend or maybe seller credit to apply, but what about folks that are short on cash?

Did you know that you can choose to go with a higher rate in order to get credit from the lender to cover your closing costs or at least a portion of them? Who would go with a higher rate? Someone who doesn't have extra cash to spend and who knows that rates will come down and they won't be stuck with that rate forever; they can refinance! Liquidity is important! We used to use lender credit ALL THE TIME, in fact, when people talk about a no cost mortgage, that is how the fixed fees are covered. There is no such thing as a no cost mortgage. Title companies, appraisers, insurance companies, county recorders...none of them work for free so the fees have to be paid somehow. That happens through lender credit.

Here's an example of what a rate sheet looks like. The rates are on the far left and the cost/credit is on the far right. If it appears red, that's a COST for the rate, if it appears green, that is a lender CREDIT that would come back to the buyer.

Is Broker BETTER?

Tue, 21 Jan 2025 07:40:37 GMT

Is Broker BETTER?

A question I get a lot is "why is a mortgage broker better?"

When Zane and I first thought about buying a house when we were 12 (ok not really 12, it just feels like we were that young from this vantage point), literally the ONLY place we thought about going to get financing was our local bank. "We deposit our paychecks there" was our reasoning. Those folks at the bank knew we got paid, how much and it would be real convenient to make our mortgage payments there. HA! Seems funny now but a lot of people think that way, A LOT. Anything different just doesn't cross their mind.

Going to a bank for your mortgage is like going to an ear, nose and throat doctor to get your knee replaced. They have some basic knowledge and might get it done but they really aren't the experts. Banks typically have access to a small book of investors or in-house options that work pretty good for folks that fit nicely in the box with their credit, assets, income types and debt to income ratios. Banks add overlays or deposit requirements that tighten the qualification box even more. Also, did you know that bank lenders don't even have to get their own mortgage origination license or complete annual continuing education?? They are licensed under the bank. BANANAS! Its also important to note that bank lenders are typically paid a salary, meaning no matter if you are successful or not, they get paid. Banks are trying to do a little of everything, deposits, CDs, safety deposit boxes, commercial lending AND mortgage lending (sometimes)...it's hard to be good at everything at the same time.

Retail lenders or big box lenders are a step up. They specialize just in mortgages, which is good, and they usually only get paid when you are successful in closing a loan. They aren't trying to wear all the hats at once like a bank. However, they are serving the retail lending company and that company has to get paid too. They have multi layers of management and the great, big octopus of people to employ; underwriters, processors, closers, shippers, post-closing etc and that monster must be fed. This can be a good thing in that the lender is always working with the same people which can streamline the loan process but it can also make your loan more expensive.

Working with a mortgage broker is like booking your African safari with a travel agent vs. trying to arrange it all yourself. It's a boutique approach to mortgage. A mortgage broker has access to dozens of investors, all with their own loan programs and niche products. What's cool is that the investors are competing for the broker's business which benefits the buyers! Brokers are not only really good at the basics but they are also the magic makers on outside the box situations and products. My favorite part about mortgage brokerages is they are typically small business, owned and run by local ownership invested in your success; folks that are a part of the community and that are directly connected to their clients on a community level, not just across the desk of a big box store. The profits of the company are invested locally and stays in the community. Cool huh?

I have had the privilege of working for all three; bank, retail lender and now own my own broker shop. I have had success with all three but feel I can take care of my clients at an all-time high level now. I love that. I love being a small business owner in Montana invested in homeownership and building wealth through real estate.

Here to help you as well!

Motivated? WHY?

Tue, 21 Jan 2025 07:37:22 GMT

Motivated? WHY?

This week is my birthday week. In fact, it's kind of a big one. I'm 40 on Saturday. I'm absolutely mind blown and shell-shocked by this event. How could it have gone so fast?!

I had kind of a midlife crisis this winter because, not only am I turning 40 this year, but my baby, all 6 feet of him, is turning 16. How is it possible that I will be an empty nester in just a few short years? Honestly, it's left me feeling like I should have had another baby. After your kids have left, are you still a mama? My mind says yes, but my heart says maybe not.

All this has me reflecting on how the heck this time has passed so fast without me feeling like I have PRESENTLY SPENT the time. I don't FEEL like 40 years have gone by! In truth, I am spent my time building my business and taking care of my clients, which is a good thing! I have kept my head down and continued to swing the bat at opportunities for growth and success for my clients and realtors. And business has been good, SO GOOD, actually. It has provided a life for my family that the 24 year old version of me with a brand new baby could have never dreamed about...but there is always a cost. That cost has been years spent present with my family. I missed a lot.

Motivation is an ever-escaping beast and if you wait on it, you will always be left wanting. Motivation follows ACTION and action takes DISCIPLINE. Motivation never comes first. In order for anyone to lift the weights or put in the time on disciplined action, there has to be a WHY. Why do you do what you do? All of it is hard! Simple tasks on their own can seem like not a big deal, but doing those tasks day in and day out at nauseam can bring the most motivated to their knees. Have you ever thought about what gets you out of bed everyday? Is it enough to keep you going through all the hard?

My husband went to work for the East Boulder Mine in 2012. At that time, it was a HUGE blessing and it changed our lives and we were finally able to get some breathing room financially. For a kid from Livingston, Montana without a college education, the opportunity at a 6 figure income for my husband and our family was a really big deal and it is for a lot of young mining families. In fact, the mine can be a Pandora's box. A family can get really stuck there without the ability to make similar money at another, SAFER, job. That's just the thing, working 4 miles underground is dangerous. I didn't know how dangerous it was because my husband left out the important details of how bad and how often guys got hurt there. And the thing is, most those guys kept it quiet because there was penalty for disclosing it. Anyway, I will leave those details out of this email. After working there for 8 years with a terrible swing schedule, 4 days on, 4 days off, swinging from nights to days, I was finally able to join my husband for the Family Tour Day. They probably shouldn't have invited me. Without going to deep into that, I will just say it left me with tears streaming down my face, HUGE respect for what my husband did to provide for our family and a DETERMINATION TO GET HIM OUT OF THERE. Mortgage is what I do and that was how I would retire my husband from the mine.

In February of 2020, my family and I went to Hawaii on vacation (interesting timing, I know) and my husband quit the mine. He's never been back. He works outside in the sunshine, rain and snow, tending his cows, irrigating, fixing equipment or putting up hay. He's never been happier. That has been my WHY. I will show up everyday and keep swinging for my clients and realtors so that my husband doesn't have to go into that deep, dark hole ever again and so that my son doesn't feel like he has to either. That's my motivation.

I believe we are here on this earth to work and to work hard. If you get the opportunity to put a carrot at the end of your stick, something to run at, a reason why, you are one of the lucky ones. It's very clear to me why I do what I do and, despite some of the harder days, I will never quit.

What's your WHY? I would love if you would email me to tell me.

Happy Daylight Savings Time. It's the greatest birthday gift this cowgirl could ask for.

I've got $, can I use that as income?

Tue, 21 Jan 2025 07:33:24 GMT

I've got $, can I use that as income?

Happy Hump Day from Wintery Montana!

A question I get often might have a different answer than you might expect. Let's imagine you are a trust fund baby (fun, huh?!) or a Kardashian but you don't have a job because, why would you? You have buckets of money that you can live on for the rest of your life and you would rather weave baskets or volunteer or surf or ski most of your days. That would be AWESOME! Who wants a regular J.O.B. (Joyless Occupational Bondage) when you are set for life with money?!

BUT when it comes to qualifying for a mortgage, (yes, even rich people get mortgages) just having skads of cash at your fingertips will not you get you an instant approval on your loan. The common sense in mortgage fell off decades ago, even if you have enough cash in your trust account to pay off the mortgage twice over, it won't work as income, unless you fit in the little box.

Fannie Mae and Freddie Mac require that you be 62 years old in order to use what is called Asset Depletion as income AND they do their math differently, of course. Fannie says you have to take the net total assets and divide it by 360 months while Freddie says you can divide the asset total by 240 months which of course is better for your income calculation.

But what happens if you AREN'T 62? Again, I'm a Kardashian HAHA. Well, we have investors who do their math a little bit better, ok, A LOT better! I have investors who will take the net assets and they will divide them by 120 months or even 60 MONTHS in some situations AND you can be any age! Isn't that crazy!? You and I both know that when you take an asset and only have to divide it 60 ways that your monthly income is going to a lot bigger than if you have to divide it 360 ways!

You would be surprised how many folks nowadays fall into this income type. I love the tools that being a broker offers. We work with investors that are looking for ways to say YES! I just love that. We are personally invested in your success as a homeowner.

Do you have a funky scenario? Let's chat! Not so funky? Give me a call or shoot me an email anyway!

Have a great rest of your week!

HUGE Success for First Time Home Buyer!

Tue, 21 Jan 2025 07:29:17 GMT

HUGE Success for First Time Home Buyer!

Hope you are staying warm and dry out there! Today is a good day to stay close to the fire and send an email to my friends. The snow is coming down in buckets and boy, do we need it. It's days like this that give me a moment to reflect on the successes of our clients, those that are, for the first time, tucked securely into their first home and watching the snow come down.

A young gentleman client of ours came to me with a very strict budget. One question I always ask of my buyers is what is their tippy top budget they would feel COMFORTABLE paying for their monthly mortgage payment. It doesn't matter what your highest payment I can qualify you on if you aren't comfortable paying it. Even as prices and interest rates have rose over the last few years, I have no interest in making my folks house poor. That's just dumb.

Anyway, for what he felt comfortable paying for a monthly payment, we were going to have to put our thinking caps on and combine a few opportunities to make the math work. He was shopping in a very limited price bracket that has a lot of competition. He came to me with a home in mind and said he was going to offer almost 10% lower than asking price and then ask for the seller to cover closing costs AND a rate buydown. I was frank with him and told him that would be a big ask in this market with such limited inventory, especially in this price point. BOY DID HE PROVE ME WRONG! He and his ROCK STAR realtor (who is not yet a seasoned veteran!) were able to negotiate $20,000 off the listing price PLUS A FULL 6% IN SELLER CREDIT!!! 6% is the maximum amount that a seller can contribute on an FHA loan! With the price reduction and all that credit, we were able to reduce his interest rate down to 5.704% AND he only had to come to closing with his required minimum investment of 3.5% downpayment minus his earnest money! This brought his payment completely in line with his budget!

At the end of the day, you won't ever get what you don't ask for. I thought his offer was crazy asking for all that credit but I was wrong! In this market, the worst thing that can happen is the seller telling you no and then you can come back with another offer! Don't be afraid to ask for what you need!

We love what we do. We love supporting folks into their homes, especially first-time homebuyers. This was a good day for everyone involved. I hope you have a good one too.

Where I'm From...

Tue, 21 Jan 2025 07:27:06 GMT

Where I'm From...

Hello friend.

We all have an origin story, a place from where we came. A foundation. I have never believed that where you came from ever limits where you can go but I believe that the lessons you have learned from getting from there to here shape who you are as a person and how you can help others along their journey.

I am one of two twin girls born to quickly divorced parents. The separation left my dad behind in Montana and my sister and I going everywhere the wind blew my mother. This travel put me into 10 different schools before I was 11 and it taught me to be resilient. Mom's life choices brought me back to live full time with my dad in Montana at 10 years old. That was a move in the right direction for me. Montana has always had my heart.

Fast forward through high school, I found myself in love with a cowboy in a High Boy '73 Ford. He would later become my husband. After a stint in college and some poor career choices, I found myself broke and directionless. My raising taught me that you were a nobody if you didn't graduate college. Fate sent me to work at a bank as a bank teller. We bought our first home together. A 1995 single wide trailer house in a trailer park. It was baby pink and baby blue throughout with all the glories of mid 90s decor but it was home to us! We painted and installed a woodstove and thought we could die happy. Zane proposed in our crappy trailer house kitchen and we were married in 2006, the same year I started in mortgage lending. Shortly thereafter, we learned we were going to have a family and we cash-out refinanced our trailer house to pay for our baby (and you thought I was classy). It was 2008 and we all lost our jobs.

After what seems like forever, I was back working in mortgage lending as a Processor. We sold our trailer house at a profit and bought our first real home. It was a railroad house that had been foreclosed on and was sold at a VERY discounted price. We bought it with a Rural Development loan with $0.00 cash to close. It was awesome. In order to move from the trailer house to the real house, I had to take on the power bill. I had $75 budgeted and that was all there was left. Every time the furnace kicked on, it would wake me from a dead sleep, heart pounding. Zane installed another wood stove.

The market appreciated and soon we found ourselves with EQUITY in our home! We sold that home, paid off all our debt and bought our DREAM HOME. It was a beat up rental on a mountain side and a total snow hole but IT WAS ON 20 ACRES! Heaven! It was the first time in our lives that we had our horses on our own property. Mind you, the wind blew 364 days out of the year, so hard we thought the roof would blow off but we couldn't have been happier. 3 bedrooms, 3 baths. We shut off the television service and pinched our pennies, but we were home...

The lending business was starting to put some cushion in our budget so we bought the neighbor's house too. It had 20 acres as well and a house we could rent. Good deal. I used a HELOC on our home to pay for that home. We stuck a renter in there and the property instantly cash flowed.

Years went by and the market exploded. We had put some sweat equity into our homes and they were starting to look pretty shiny. Zane and I thought for sure we knew why people went insane on the Great Plains...it was because of the wind. If there ever was a chance to buy our next home, it would be where the wind didn't blow. But, while we were dreaming, if it had enough acreage to put up our own hay and raise some cattle, that would be heaven on earth for us...

My husband knows that you had better be careful telling me what dreams are on your heart. I am really good at making things happen with mortgages. We found the most incredible property in Red Lodge. I secured a bridge loan on our home and our rental house. I had one year to sell them both but it allowed me to put 25% down on the new place. We financed the rest. I was sweating bullets each month to pay the interest only bridge loan and the new mortgage but we made it. We sold both the homes and paid off the bridge.

I wish you all could see it. I'm not sure how we got so blessed. I included a photo here.

I really love what I do. Real estate and mortgages have been my stepping stones in life to help my family and I realize our dreams. Thanks for being part of my story.

How Long Does It Really Take To Buy a Home?

Sat, 08 Jul 2023 11:57:41 GMT

How Long Does It Really Take To Buy a Home?

You have finally decided to buy a home. Now it's time to get to work. Understanding how long it can take to get into a new home is key to setting expectations so your homebuying journey can be filled with happiness and excitement vs. stress and unknowing. Three components can make your home purchase straightforward and effortless.

Planning and Preparedness
Professionalism
Cooperation

Now that you're on the path to home buying, understanding how much you can afford is the first step. Talking to a mortgage lender to get prequalified will lay the foundation to start looking for homes.

Once you have had the prequalification, the next step is to get pre-approved. This is the most critical component in buying a home. You need to have a pre-approval to make a solid offer that a seller will pay attention to. While you're working through the pre-approval process, you can engage a real estate agent. They can help you narrow down your home criteria, including neighborhood, size of the home, area school, to name a few. Real estate agents can help you understand the pros and cons of specific homes and locations.

Professionalism and Cooperation

Once an offer has been accepted, a buy-sell agreement will be signed by both parties. From this point on, everything follows the agreed-upon terms and conditions. The purchase contract will state each entity's rights and responsibilities to close on the property. The buyer works closely with the real estate and mortgage lender to ensure everything is done on time and correctly.

The Typical Timetable

A signed contract is received by both the buyer and the seller and submitted to the loan officer. The average time for this is 1-2 days.
The loan officer prepared TRID (TILA-RESPA Integrated Disclosures). This will let the purchaser know what to expect for costs and expenses of the property. The average time for this is 3- 7 business days.
The loan officer orders an appraisal. A home needs to appraise for the agreed-upon price for the loan to be finalized. Appraisal times can fluctuate wildly based on location and market needs. Appraisals can take anywhere from 10 days to 30 days on average.
The buyer orders an inspection. The contract allows a certain number of days for inspections to be carried out and repairs to be agreed upon. If you are approved for a VA or FHA loan, the appraiser can require certain repairs to be done as well as your professional inspector(s). Yo
The buyer and the seller's realtors will work together to arrange the inspection along with the repairs. In some cases, the seller will credit the purchase price if repairs need to be done but cannot be completed in the allotted time.
After the appraisal is done, the survey will take place. With enhanced title insurance, surveys may not be necessary, but seek advice before you decide not to go this path.
During this time, your loan officer delivers all lender instructions to the title company, stating what must be completed for the mortgage money to be paid to the seller.
When you know, the appraisal and surveys are satisfactory, arrange for homeowner and hazard insurance through your insurance broker. The broker will liaise with the lender and title company.
The title company will perform appropriate searches to prepare new title insurance policies for you and your lender. This can take anywhere up to 15 days, depending on the property under contract.
Closing documents will be prepared and issued right before the closing date. You can request to review the documents before signing, so plan and make an appointment with your closing and loan officers.
Before closing, you will need to know how much cash you will need to close.
Either attend closing in person or arrange for all documents to be couriered to you for signing before a pre-approved professional and then couriered back to the closing company.

There is a lot that has to be completed before you get to close.

Some things happen simultaneously, while others have a specific order in which they follow. The actual time everything takes to close will vary every time. Planning and communication can help streamline the time to close, and it is dependant on planning and cooperation.

What Can Cause Delays In Closing?

Mistakes and poor planning, and poor communication are the leading causes of most delays. Some delays can be caused by a title search, for example, discovering a problem no one previously knew about. Below are some of the most common delays in closing :

Delay in applying for a mortgage. Not getting a pre-approval letter before submitting an offer.
A buyer going out and increasing their debt (e.g., buying furniture for their new home with credit) resulting in action required to fix the debt-to-income problem.
A low appraisal may need the contract price to be renegotiated. Until a new contract exists, all work stops.
Failing to arrange homeowner or required hazard insurance in time, or where the insurance broker fails to provide the necessary proof of coverage.
The title agent discovered an issue with the title, and the property's title needs to be corrected before the new title insurance can be issued.

How to Avoid Delays

Most delays result from poor planning and poor cooperation. Choosing a professional with an excellent reputation and track record is key to avoiding delays. Realtors, loan officers, title agents with experience are more likely to know each other and how each entity works together to have a seamless transaction.

Call us today at 406-220-0077 to learn more about how you can get pre-approved. Or click the apply button now to begin your journey into homeownership.

How to Purchase Your Home in a Tight Market

Sat, 08 Jul 2023 11:57:39 GMT

How to Purchase Your Home in a Tight Market

We're all well aware of how crazy the market has been over the past year. It's been an incredibly tight market for those looking to purchase. Many will tell you they've never seen anything like it. Demand is sky-high, and inventory is low. But just because the market is tight doesn't mean buying is impossible.

A competitive offer with strong financials can keep you in the running even in the tightest markets. Today we'll discuss some of the key ideas and solutions to help you achieve purchasing your home evening in this challenging market. Let talk about how we can position you for success.

What Location are You Pursuing?

The first step after you have been prequalified by your lender will be to determine where you want to be. Do you see yourself in a home for a long period of time, or is this just a stepping stone for another location down the road? Driving around locations to see what areas you like and don't like will help your real estate agent narrow down the search criteria it will also help you understand and identify which areas you DON'T want to be in. Understanding what are nice to haves vs. must-haves on you your wish list will be an important discussion with your agent. While you're looking around, it's important to make sure you're working on getting all of your necessary documents together to get your preapproval. In tight markets, homes move fast, and only having a prequalification won't be as strong as a preapproval when submitting an offer.

The Importance of Funding for Your Offer

In tight markets, having a larger down payment can help you secure the home of your dreams. Putting down 20% or more can send a signal that you are serious about getting into the home. If you make an offer, but the appraisal comes in low, you as the buyer need to be prepared to make up the difference in cash. This means that you can't tie this into the mortgage loan. You will have to put up cash in order to secure the house and the loan.

Renovation Loans

In a competitive market, sometimes it's better to look into a property that may be on the lower side of your price range but needs some work. A renovation loan can be structured into a portion of your home loan and used for upgrades and repairs. Sometimes this allows you to get in at a price that is just right and still enables you to make it home of your dreams. Sometimes a fixer-upper is the best way to go.

We all know it's the most competitive market that we've seen in a very long time, but it's certainly NOT impossible to get into the home of your dreams. Don't get discouraged if you have to make several offers on different houses; just be as prepared as you possibly can by knowing what it takes and having the right real estate agent and mortgage lending company to have your back. Thinking strategically and being prepared will be the key to your success.

Call The Wood Team to learn more about how we can help get you into the home of your dreams or apply online today to get prequalified.

What is Mortgage Insurance? Why Do I Need It?

Sat, 08 Jul 2023 11:57:38 GMT

What is Mortgage Insurance? Why Do I Need It?

In a nutshell, Mortgage insurance protects the lender in case the borrower defaults on the the loan. It's allows for the lending agent to be protected in case of default on their mortgage note.

HOW DOES IT WORK?

Mortgage Insurance options can function differently depending on the type of contract you have. It has the ability to function as a traditional premium payment, or it can function in a lump-sum payment that is made when the lender signs the mortgage agreement. In order to get to closing, many borrowers don't have a choice and have to purchase mortgage insurance if they have a greater than 80% loan-to-value ratio. Although, PMI can usually be removed from the loan once the borrower pays off 20% of the principal balance.

The four main types of Mortgage Insurance include:

Private Mortgage Insurance (PMI)
Mortgage Life Insurance (MLI)
Mortgage Title Insurance (MTI)
Qualified Mortgage Insurance Premium (QMIP)

Let's dig in to see what each of these provide.

PRIVATE MORTGAGE INSURANCE (PMI)

If a borrow has defaults on their mortgage loan payment PMI protects the lender. PMI is typically required due to a high loan to value ratio. This is the most common of all of mortgages. Once a borrower has reached payment of 20% of their loan they can qualify to have the PMI taken off the loan.

QUALIFIED MORTGAGE INSURANCE PREMIUM (MIP)

If your loan is a US Federal Housing Administration (FHA) mortgage, then you will need to have a Qualified Mortgage Insurance Premium. MIPs are required even if your down payment is greater than 20% of the house cost. No matter what your credit score is, MIPS are fied. There is a 5% increase in price if your down payment is less than 5% of the cost of the home.

MIP have a payment that is due at closing as well as a monthly payment.

MORTGAGE TITLE INSURANCE (MTI)

Mortgage Title Insurance is required when there is an issue with the title. This can happen if the seller did not actually own the property at the time of sale. The insurance is to ensure the borrower will not incur substantial losses.

A mortgage can only close if an advocate performs a title search that will show any liens that could cause the sale to fall through. The search will also confirm that the property belongs to the seller.

MORTGAGE LIFE INSURANCE (MLI)

Morgage Life Insurance protects the lender if the borrower passes away before the mortgage loan has been paid in full. A borrower is not required to pay this insurance but removing MLI can be an ardious process that requires lengthy forms, signing waivers and comes with risk.

MLI rates can either be a fixed rate or drop as the mortgage balance decreases. MLI may pay off the lender or the heir to the loan depending on the policy made beforehand.

Interested in learning more about how the mortgage process works? Interested in learning how you can qualify to get into the home of your dreams? Give us a call today. 406.220.0077 or apply online here.

Contingent vs. Pending - What You Need To Know

Sat, 08 Jul 2023 11:57:38 GMT

Contingent vs. Pending - What You Need To Know

What You'll Learn

The difference between contingent and pending listing statuses

The various types of contingent and pending situations

Why listing status matters when searching for a home

Who else gets excited when it's time to buy a new house? During your search as a prospective home buyer, you may encounter house listings that are either pending or contingent and get confused.

Knowing the difference between the contingent and pending house listings will save you time, energy and reduce your chances of bidding for unavailable houses.

The difference between a contingent and pending status

Simply, 'a home listed as contingent' means that the seller has received payment for the offer; however, the transaction is yet to end as some conditions need to be met.
Also, a home listed as pending' means that most conditions have been met, and the two parties are waiting to close the deal.

Common types of home contingencies

Contingent upon inspection

This means that once an inspector has checked the house and the buyer is satisfied, the home can now be listed as pending.

Contingent upon appraisal

Here, once the house has been appraised and valued at a minimum or higher than the offer price, the buyer may agree to the terms, walk away, or renegotiate the price with the seller.

Financing contingency

If the buyer is able to secure a mortgage or home loan approval on the home, they can proceed with the purchase.

Other contingent offer statuses

In a seller's market, buyers choose from numerous conditional offers of the sellers. In a buyer's market, sellers are eager to close because more homes are on the market.. You may come across the following contingencies:

Contingent Short Sale

Here, if the seller is willing to accept less than the amount on the mortgage, the deal is closed. It takes longer to complete.

Contingent - Continue to Show (CSS )

Here, they may be several contingencies in place. The buyer can continue to view the house till all has been fulfilled.

Contingent probate

If the homeowner passes away and the house is not legally claimed by a next of kin, the government may sell the property, and the home will be listed as 'Contingent Probate'.

Contingent no show.

Here, the seller is confident that the contingencies on the property will be met; hence there will be no showings.

Contingent: with or without kickout clause

Here, there may be a deadline for the buyer, typically 72 hours, to meet his contingencies before the seller agrees to stop marketing their home.

If there is no deadline, the buyer can schedule the appraisal and inspection as he deems fit.

Pending sale statuses

Let's now explore the pending sale status.

Pending Short Sale

This means that the seller has accepted a short sale offer on their home and is waiting for the lender to approve the deal.

Pending: Taking backups

Here, the seller accepts backup offers even when the sale is almost finalized. This leaves the options open in case the buyer backs out.

Pending: More than 4 months

Although rare, negotiations, repairs, and construction can keep a home sale pending for 4 months or more. It can also be that the listing hasn't been updated since the transaction ended.

According to real estate site Trulia, 4% of all home sales fall through. Understanding these concepts will save you the stress, anxiety, and frustration accompanying bidding for houses that are unavailable. A realtor can help you navigate the right steps to take during this journey.

Getting a pre-approved letter from HomeTown Lenders can increase your odds of being chosen as this gives the seller the certainty and confidence they need to grant you the offer.

Five Tips To Prepare For A Refi

Sat, 08 Jul 2023 11:56:12 GMT

Five Tips To Prepare For A Refi

Refinancing can be a challenge if you aren't prepared or even sure of what you are getting into. From your home equity (The true value) to the appraisal visit. Here are five tips to ensure your refi goes smoothly.

1. Determine your financial goal

Before you begin your refinancing expedition, the most important aspect would be to resolve why you would like to refinance. Refinancing your mortgage can be very beneficial in many aspects. It may be more cost-effective in terms of saving money with lower rates and monthly expenditures. However, if you are content with your current payments or aren't bothered with a payment increase, you could use the refinance to fast forward through your mortgage payments. Refinancing can help you merge your debts or get some cash payouts on your home equity to pay for some of those unforeseen expenditures such as medical emergencies or home repairs. Having a clear goal of what you would like to achieve through refinancing can give you a better picture of what type of loans you should be looking into for your refinancing.

2. Do the Math

Once you have pinpointed your reasons for refinancing, you can begin researching what kind of loan can best help you achieve what you are looking for. In essence, if you are looking to save on all your payments, fast-track your loan or just save on all the financial aspects of your loan's lifespan in general, a rate-and-term refinance will probably best suit your needs. If your reason is to merge your debt or get a cash payout, a cash-out refinance would probably be what you are looking for.

Furthermore, you should also pay attention to the kind of loan you want (Adjustable-rate or fixed-rate mortgage), the duration, or if you would like to get merits to counterbalance your final costs or lower your rates. Our convenient tool to help you get a rate quote will make it simple for you to understand how all the figures affect you and the amount you can save with refinancing. After you have created your account, you can generate your own loan estimation for handy explanations and breakdowns of all the relevant information and how it will affect the points you are considering, including all the costs related to your refinancing plan.

3. Clean up your finances

Getting the best refinancing loan out there will largely depend on the state of your finances. A higher credit score will allow for a better refinancing rates plan which can lead to more savings for the duration of your mortgage.

You may want to modernize and trim your savings before you begin to ensure that there aren't any nasty surprises ahead that may set you back. If your credit has been frozen, you may want to address it well before you begin so that anyone concerned has easy access to your scores at their convenience. Making sure that any and all tax claims against you are paid off well in advance will keep you from being rejected. Keeping your refinance lender in the loop as soon as any decisions are made will help them give you the best services possible. For example, if you have a second mortgage, deciding whether or not you would like to pay that off with the refinance should be done fairly soon and shared with the lender.

4. Gather your paperwork

The process for refinancing your house will be fairly similar to that of taking out the original loan and will include a lot of the same documents. Gathering everything beforehand will ensure that your lender will be able to help you in a timely and smooth manner. Examples of the documents are

At least 2 or 3 years of personal tax return forms.
The same amount of business tax forms if you own more than 25% of a business.
2 years of W-2s or 1099s
2 months of bank statements
Proof of alimony or child support payments

5. Prep your home for the appraisal

The lender will very likely request a home appraisal to ascertain the market value of your home, do not panic as this will be like the appraisal for your original home purchase. This evaluation is key to determining the value of your home in terms of how much equity you have in your home. The higher the equity, the better the rates offered to you will be. This appraisal will be of even bigger importance if you are applying for a cash-out refinance. It will affect your eligibility and the amount of cash you will be able to take out.

The job of the appraiser is to take the following factors into account, condition of the home, value comparable to similar homes, as well as the size and features. Taking a few reasonable measures to ensure that your home is in excellent condition can help with the appraisal without breaking the bank.

Making sure that your home is up to scratch with all the current health and safety laws need to be your top priority. Making sure to check all smoke/carbon detectors and legal auditions. Failing to ensure any of the above measures before the visit, will most likely result in the appraiser having to postpone the appraisal. This can be costly, time-consuming, and downright frustrating, or worst case, cause your application to be declined. Finally, making your home aesthetically pleasing will boost your chances tremendously. Consider all unsightly repairs, such as broken windows or dripping taps, prior to the visit. Do a spring clean and set the scene as if you are putting your house on the market. Even the smallest details could up the home's value. Making a detailed list of all the auditions you've added to your home since purchase can help your lender compare the home to related properties.

Refinancing with HomeTown Lenders is an easy and seamless process. Contact us to today to learn more about our team and what we can do for you.

Pre Approval - Why Is It So Important?

Sat, 08 Jul 2023 11:56:11 GMT

Pre Approval - Why Is It So Important?

The first thing you need to know before setting out on your Mortgage journey for a new home is knowing the how and why of getting a Pre-approval and the importance of this step. The Pre-approval will not only give you an accurate picture of what you are looking at financially but convey the seriousness of your offer to buyers.

What is a Mortgage Preapproval?

By definition, a mortgage pre-approval is an accurate calculation by the lending party of how much you will be able to spend on a new home. The lending party makes these calculations by considering all of your valid financial information such as credit history, earnings, debts, and so forth.

Essentially a pre-approval is a formal yes for lending you the money when you find the right home. However, your house will still need to pass the appraisal inspections. Until you finalize your property of choice, all your payments will be based on an estimated interest rate. While the Pre-approval will not ensure that everything is set in stone, it will convey your seriousness and financial capability to the seller.

Preapproval vs. Prequalification

Although these terms are used interchangeably, they do have different meanings. Let us define what each means.

In a Prequalification, the lender will check all your debts and pull your credit scores to ensure that you are not in over your head and ask for estimations of your earnings and assets to estimate your debt-to-income ratio. This will give them a picture of where you fall in the bracket of eligibility.

A Pre-approval can be seen as a more detailed, trustworthy, and accurate approval instead of a pre-qualification. They will take everything from a Prequalification into account while including things like your financial statements and tax returns.

While Prequalifications can get you a ballpark figure, agents and lenders prefer the more accurate and verified numbers of a Pre-approval. Unverified figures pose a potential risk in markets such as the U.S. with low inventory.

The Prequalification Approval is similar to a prequalification in that it operates on estimations and not verified documentation. It is highly recommended to get a Verified Pre-approval where all your documentation is verified and nothing is hidden so that you may have the assurance and confidence of a Mortgage Preapproval.

What is a Mortgage Pre-approval letter?

When you are successful in obtaining a Pre-approval letter, you will be issued with a letter that contains the following aspects:

● The total of your Pre-approval.

● The expiration date of the letter, which is usually 90 days after it has been issued.

● The duration of the loan option that has been chosen.

● And whether or not all of the information has been verified.

It is important to remember that purchasing a new home is a negotiation in which you may not want the prospective seller to know that you have a much higher Pre-approved rate than what they are asking. This information can always be altered once you have been given your Pre-approval to benefit you in your negotiations.

Why is a Mortgage pre-approval important?

The main point and importance is the edge that it can give a purchaser; not only does it convey the seriousness of your offer and give the seller reassurance of your eligibility, but it will also give you the much-needed confidence to proceed. It can give you an advantage over the other bidders on a property. This can be a deciding factor for the seller.

Agents and sellers are also more inclined to take your offer seriously, knowing that the deal will not fall through when you have a Pre-approval letter and thus are not wasting their time.

A pre-approval will also ensure that you do not let your dream property slip through your fingers in a highly competitive market. In a market where sellers are looking for the best offer, home loan security will be your best bet, especially when competitors are willing to pay cash upfront.

Think of having Pre-approval in your back pocket as assurance for you to house hunt knowing and understand what you can afford. Things such as appraisals can halt the process. It's better to have control over the things you can, like your pre-approval.

How to get Pre-approved for a Mortgage-

The first step, now that you understand what Mortgage pre-approval is to get your finances in order.

● Check your credit and be sure of where you stand.

Possible Lenders work with your minimum score eligibility. Using tools that will help you calculate your vantage or FICO scores can help you with this aspect. Attaining your credit scores from a known scoring company will highlight possible errors that can cause issues.

Paying off your debts to the best of your ability will help with your Debt-to-income ratio and give you the best chances of qualifying.

● Secondly, making sure that you have the appropriate documentation accessible will save a lot of time. Normally you will be asked for. All of your relevant income may include, Two-three months of paystubs, two years of tax returns and W-2's, as well as 1099 of applicable. As far as assets go, be prepared to provide the last two months of any bank accounts you intend to use as well as any fallbacks in money should a problem arise.

In the case of self-employment, be prepared to provide two years' worth of business tax returns. Due to the instability caused by Covid-19, you may be asked for audits as well as unaudited income statements.

● Shop around. When purchasing a new home, it is a good idea to look at all the options available. There are two reasons for shopping around-namely, financial comparisons and comfort. When shopping around, you will see two rates; the lower rate is based on your monthly payments. The higher rate takes into account the base rates plus other costs. The higher the difference between these two costs, the more you will pay in the end. As for being comfortable, you should make sure that the place you choose will serve you and proactively act on your behalf to make sure that you are getting the best deal and rates possible. Will they meet all your needs and go above and beyond?

Mortgage Pre-approval frequently asked questions.

1) When should I begin the process?

The second you decide to purchase a new home. Starting the process as soon as possible has many benefits.

2) Why do Lenders Put an expiry date on Preapproval Letters?

A Pre-approval letter is only valid for that point in time. Your finances can change in a short space of time. Your information of three months prior may no longer be relevant at this point and, therefore, will not give an accurate picture.

3) Will Multiple Pre-approval applications hurt my credit score?

No. you should not be penalized for shopping around. Just be sure to complete all of your applications within 30 days of your initial inquiry.

Interested in getting prequalified? The application is easy and seamless. Just hit the apply now button and get started today.

Construction vs. Renovation Loans - What's The Difference?

Sat, 08 Jul 2023 11:52:56 GMT

Construction vs. Renovation Loans - What's The Difference?

When we think about mortgage loans , we often think of the traditional longer-term financial commitment to purchase a home. But many people don't realize that there are specific loans for new construction builds and renovating homes. Below are ways to utilize these loans and how they can benefit you.

Construction Loans

A Construction Loan is a short-term loan used to finance the building of a new home. Once the construction of the new home is completed, the borrower then must refinance and convert the loan into a permanent traditional mortgage. Often a construction loan has a one-year term before they need to be converted to a conventional mortgage. A construction loan is used for costs associated with a home building like land purchase, building materials, labor permits, landscaping, even appliances.

Renovation Loans

A renovation loan is used to finance a home renovation , home repairs, and remodels. Renovations loans are a great option if a home needs significant overhauls, whether updating or a major facelift. There are a couple of options for renovation loans. The two most common are FHA 203 (k) loans and FNMA Homestyle loans. The Federal Housing Administration offers the FHA 203(k).The loan will finance the needed repairs in a single mortgage on a primary residence and will require a minimum down payment of 3.5%. There are two types of renovation loans of 203(k) loans: Standard FHA 203(K) loans that will permit borrowers to finance the repair or rehab costs starting at $5,000 and will not have a maximum. Streamline FHA 203(k) loans will allow renovation and repair financing for up to $35,000. The alternative is the FNMA Homestyle loan which is offered by Fannie Mae. It will enable you to renovate and purchase a primary home, second home, or investment property with a minimum down payment of 3% in one mortgage up to the lending limit.

Is a Construction or Renovation Loan Right for You?

Choosing a construction loan vs. a renovation loan will vary greatly dependant on your situation. Before you decide, there are a few questions you need to ask yourself. When considering a renovation, you need first to weigh the notion of timing. Is this the right time to be renovating? Is a renovation going to increase the value of the home and your quality of life? How much will this renovation cost, and can I really afford it?

If you are thinking about a construction loan you need to consider what you can really afford in the long term. You will need to consider needs vs. wants. Does new construction make more sense than purchasing an existing property? What timeline are you considering for moving into your new home? Discussing your goals with your mortgage lender is always the best way to start any project that you are considering.

How to Get a Construction or Renovation Loan

Now that you have decided on the type of loan you will need, it's essential to evaluate your current financial capabilities. Have you checked your credit score with your mortgage company? If your credit score isn't great, you will need to work on improving it, which can take time, so planning is key to getting a yes to your construction or renovation loan. A key component to getting any loan is a good credit score. Other things that you will need to consider are financial obligations. Do you have money for a sufficient down payment? The amount that you will be required to put down may vary based on your loan type. Making sure you have a sufficient amount is key to closing. Monitoring your debt is also an important factor. Having a debt-to-income ratio of under 36% is ideal for getting approved for a mortgage loan. If you are looking for a construction loan, finding a licensed builder is an important first step. Any mortgage lender will want to know that you have a qualified, experienced, licensed, insured builder working on your project.

Getting prequalified is the key to making your renovation or new build a go. The prequalification will give you a reasonable estimate of how much you can afford to borrow and can help with expectations. Now that you've got your finances in order, let the project begin!

Are you ready to build the home of your dreams? Are you ready to get started on a big renovation? Call The Wood Team at Hometown Lenders today to get started. 406.220.0077

What Happened to Zillow?

Sat, 08 Jul 2023 11:52:55 GMT

What Happened to Zillow?

Colleen Wood:

Hello, and welcome to Leading Ladies of Montana Real Estate, a show about buying and selling homes in Montana, and the power realtors and power lenders that make that happen. We are your hosts, Colleen Wood.

Alicia Rutz:

And I'm Alicia Rutz. Each week, we will discuss the housing market, how to navigate it, and what questions you need to be asking yourself along the way, but that's not all.

Colleen Wood:

We will also dive into how to navigate the ins and outs of being leaders in business, and how to build a robust and dynamic team within that business and navigating the world as a career driven professional, all while raising a family.

Alicia Rutz:

Join us as we share our highs and lows in real estate, business ownership, and motherhood.

Alicia Rutz:

All right. I've got some interesting, weird, good news.

Colleen Wood:

An interesting market update.

Alicia Rutz:

Yes. All right, Zillow, let's talk about it. Okay, so what was happening with Zillow is they were going into markets, buying homes, they were either going to flip them, hold on to them, but their whole plan was to basically change the market in that area when they bought properties, and it was getting realtors out of a job, they were outbidding listing agents, and it was just bizarre.

Colleen Wood:

Yeah.

Alicia Rutz:

And a lot of agents were really worried that our jobs were going to disappear.

Colleen Wood:

Yeah.

Alicia Rutz:

Okay, now you talk to us, what'd you see? What'd you hear? What happened?

Colleen Wood:

Zillow just shut down their property flipping little scheme that they had going on. It was called Zillow Offers, and they actually were losing a shit load of money.

Alicia Rutz:

They were planning on losing money. They knew that was going to happen for the long term goal of eventually all that market, where they had a huge share, it all going up and they'd get that back.

Colleen Wood:

They lost almost $400 million in three months.

Alicia Rutz:

Yeah, $381 million. That's crazy.

Colleen Wood:

That's bananas. And on top of that, they laid off 25% of their workforce. So that's about 2,000 employees as a result of them shutting down this division of their company. And here's my thing about Zillow, I really truly feel like the need to have a personal relationship in a transaction in all kinds of transactions. I don't think that we're going to go artificial intelligence on all this stuff like Mark Zuckerberg is talking about everything going artificial. I think people are always going to want to have a human transaction.

Colleen Wood:

I don't think people love the whole Walmart self checkout thing, but Walmart and some of these bigger companies are choosing to take out the human because they figured it's cheaper for them to lose merchandise through theft because people do steal things through the self checkout. It's cheaper for them to have that than it is to pay real humans. And I think that consumers want to have a human interaction and Zillow trying to come in and trying to control these markets by buying up all these real estate only to just turn around and then flip them to try to push the realtors out and push the lenders out, I think that they're figuring out that that was a bad idea.

Alicia Rutz:

I was worried a long time ago about realtors becoming like travel agents, how they basically just disappeared.

Colleen Wood:

Yeah.

Alicia Rutz:

There's very few of them, they're still around.

Colleen Wood:

Very few.

Alicia Rutz:

But it's for more luxury type of stuff, and it's just too complex. Every single transaction is different. The human touch on it to really understand, you can't really get a value on a home just because of what's happening in the neighborhood. There are some neighborhoods, yes, maybe condos and stuff that you can get a very accurate number.

Colleen Wood:

After a lot of sales.

Alicia Rutz:

Yes, after a ton of sales in that area, but really that human touch is priceless and I think people are going to continue to want to pay for it and they won't be able to get things done. I can't remember what the number was, but I think it was more than 80% of for sale by owners end up losing a transaction if it's under contract with somebody else and end up using a realtor.

Colleen Wood:

Right.

Alicia Rutz:

In the long run.

Colleen Wood:

Right.

Alicia Rutz:

Because there are so many little tiny details that it's not just put it on the market, get an offer, and you're done.

Colleen Wood:

Yeah.

Alicia Rutz:

Keeping an offer, keeping a deal together is a big, huge chunk of the work.

Colleen Wood:

A lot of us smaller companies, smaller groups of people, we end up competing with some of these really big monstrosities like Quicken and the Amazons and the Realtor.coms and the Zillows and all of those types of things. We feel like we have to compete with these people, with their incredible tech employees and all the things that they can build out. They're so fast and they can provide all this data so much faster than a realtor can, but that's not the way to do it. The way to do it is to continue to do what Zillow and Amazon and these humongous corporations, what they can't do, which that they cannot have a real relationship with real people. It's not a genuine relationship. They don't really care about what you have going on. They have too much going on in order to be able to care.

Colleen Wood:

So if you're a smaller company out there, you're a smaller realtor, smaller lender, really, really continuing to hone in on all of those personal relationships, whether it's with other realtors, other lenders, or especially with your clients, care that they're having a birthday, care that they're having an anniversary, take the time to care their dog's names are and send them a dog collar or something. We have a client that one of my team members just told me that they have two Labrador Retrievers, and one of them's name is Margarine and the other one's name is Nutella. And so it's like one is a Yellow Lab and the other one is a Chocolate Lab.

Alicia Rutz:

That's cute.

Colleen Wood:

I love that we know that. I love that we know that and we're going to definitely use that to help get closer to that client. And it's because we love dogs too.

Alicia Rutz:

Right.

Colleen Wood:

And we want to be able to have a genuine relationship with our clients. We look for reasons to celebrate them and to help them mourn too, when they've lost somebody. Amazon.

Alicia Rutz:

We do that too.

Colleen Wood:

Zillow.

Alicia Rutz:

No, never.

Colleen Wood:

They can't do that. They will never have that.

Alicia Rutz:

Exactly. What we started doing is anytime we see somebody on Facebook who lost a dog or family member, had some bad news, what we do is bring them this really cool box of teas. We had a bunch of assortment of teas.

Colleen Wood:

Yeah.

Alicia Rutz:

And it's really pretty and looks kind of luxury for teas, and it also made me feel good. Because what else can you do? There's nothing in those moments., And it's nice to let them know that we do care.

Colleen Wood:

We do care.

Alicia Rutz:

Yeah.

Colleen Wood:

We see them.

Alicia Rutz:

Yep.

Colleen Wood:

And we see them and this is a people business.

Alicia Rutz:

Yes. And so these big ... Yeah, these big companies coming in and doing what they're doing, it just wasn't working. And I'm on a lot of realtor Facebook group things.

Colleen Wood:

Sure.

Alicia Rutz:

And just hearing a lot of the stories, there were a lot of agents that were getting outbid by Zillow to get a listing, and ...

Colleen Wood:

Well, clearly that wasn't working for them if they lost ...

Alicia Rutz:

Exactly.

Colleen Wood:

$381 million in bad investments.

Alicia Rutz:

Exactly. So what was happening too, is Zillow would come in, offer to either buy the house that was listed or sell their house, but when they would offer to buy the house, they'd go in at asking, have an inspection, cut them down probably 25% on the price, and then they had all these extra fees on top of it so that it ended up just not being a deal. But once you're that far down the line if you have to move, a lot of the times, the seller would continue on just because they're like ...

Colleen Wood:

Right. They'd have to put the property back on the market.

Alicia Rutz:

Yep.

Colleen Wood:

And then everybody's like, "Oh, you have such a black eye because your property is back on the market, and everybody is going to want to know why."

Alicia Rutz:

And if they're under contract on something else and have to sell.

Colleen Wood:

Sure.

Alicia Rutz:

Yeah, it was one of those things. But I think this is good news. I'm glad to hear it.

Colleen Wood:

I don't ever want to be ...

Alicia Rutz:

I don't want to see the ...

Colleen Wood:

Excited about somebody having a humongous failure. That doesn't feel like good juju to me but ...

Alicia Rutz:

Right. And the people losing their jobs, that makes me sad.

Colleen Wood:

That's really awful.

Alicia Rutz:

That makes me really sad.

Colleen Wood:

Maybe the people that lost their jobs should come work for us.

Alicia Rutz:

Yeah, you're always hiring. I could use another agent.

Colleen Wood:

Yeah.

Alicia Rutz:

You're always hiring.

Colleen Wood:

I just think that this is a win for smaller businesses. This is a win for smaller teams. Smaller meaning like not thousands of people, right? I have a big team here locally, but we're still focused on the customer. We're still focused on the customer experience and not just through the transaction, but after the experience, what they see going forward. And those handwritten cards and sending flowers or sending teas or knowing what somebody's dog's name is going to make you win.

Alicia Rutz:

I agree.

Colleen Wood:

So keep pounding on that.

Alicia Rutz:

A quick question for you, do you think they're going to come back in some way and try something like this again? Or is this too big of a failure that they learned their lesson?

Colleen Wood:

I think we'll see Zillow coming back at something.

Alicia Rutz:

Yeah.

Colleen Wood:

But I'll tell you what, realtors out there and lenders out there buying leads for realtors, you really need to think about where your money is going, think about what you're supporting, and I know it seems like an easy way for a lender to get a relationship with a realtor to buy their Zillow leads, there's other ways that are more effective. That's just the easy way.

Alicia Rutz:

We've talked about it. It's really a hard struggle, and knowing that the money we were giving them was allowing them to do this.

Colleen Wood:

Yeah, we're funding it.

Alicia Rutz:

Exactly. And it was making me sick to know like, "Oh, we're probably getting ourselves out of a job by paying them.

Colleen Wood:

Yeah, we're paying for that. And so I mean, it's also where do you put your money? Thinking about where ... I mean, are you shopping on Amazon? Are you supporting that big bazillion dollar organization or Zillow? Are you shopping locally for your things that you can get on Amazon and maybe you're going to have to go downtown in order to do it, you're going to have a tiny bit of inconvenience. Or maybe you're choosing to work with a local realtor or a local lender because you're supporting smaller businesses instead of these humongous conglomerates that ... Honestly.

Alicia Rutz:

And it comes back. Truly, every cent, what is it? Every cent comes back seven times, or every dollar you spend comes back seven times within that hour. So it really is worth it if you buy local, it comes back around. It keeps the community strong.

Colleen Wood:

It does.

Alicia Rutz:

It keeps businesses going. And I feel that in Bozeman.

Colleen Wood:

So do I.

Alicia Rutz:

I feel like that is the value here that we do support our great restaurants and coffee shops and boutiques. I think we do a really good job of that, and I think us realtors are pushing almost every transaction we do, we're pushing to use local lenders.

Colleen Wood:

Yeah.

Alicia Rutz:

Because they just get the deal done and they understand the market.

Colleen Wood:

It's really nice that that realtors have ... Not everyone was really on that bandwagon for a long time.

Alicia Rutz:

I think it really flipped when things got so competitive that now people are countering that they have to use a local lender.

Colleen Wood:

Yeah.

Alicia Rutz:

Yep.

Colleen Wood:

Yeah. How do you feel about if somebody goes under contract with say, my prequalification letter and the seller has my prequalification letter and it says that they're using me and the seller picked the offer because it was a local lender, they know our reputation, and the payer of them looked to them to be a strong offer. And then the buyer turned around and goes and starts shopping with some online never going to see them or talk to them type lender that might have a tiny bit, an eighth better difference in the rate or something like that. Do you feel like it's a breach in contract?

Alicia Rutz:

Yes.

Colleen Wood:

Do you feel like you need an amendment to send the seller?

Alicia Rutz:

So I don't think we actually need ... Well, it depends on how it's written. If they say it's pre-approved with this person, I feel like that should absolutely have an amendment because if that happens, if I'm under contract, if I have the seller ... I'm representing the seller, but I see you on the other side and I know, "Oh, she's going to get this done for that buyer, even though I have nothing to really do with that buyer." I'm way more likely to want to accept that offer knowing that they're pre-approved.

Colleen Wood:

Right.

Alicia Rutz:

And so forth. And then if suddenly halfway through the transaction, they start shop. It happened to one of our buyers.

Colleen Wood:

Right.

Alicia Rutz:

Recently where we were about ready to close and he started shopping again.

Colleen Wood:

Right.

Alicia Rutz:

And it's just an absolute breach of contract, and we had to extend it. I can't believe the sellers did extend it for us, and I'm embarrassed. It's embarrassing for me that they went and did that. And yeah, it sucks.

Colleen Wood:

And the seller can say no.

Alicia Rutz:

Right.

Colleen Wood:

The seller can say no, and the seller's agent can coach the sellers to say no to be like, "Hey, they're swapping from a local lender that we trust and we know to some Joe blow in a call center in Puerto Rico."

Alicia Rutz:

Right.

Colleen Wood:

That just because their margins are lower because they're not paying people Bozeman wages, and they're paying ... they're just going to get an eighth better in the rate, and I think it's wrong. I think it's wrong because it's my prequalification letter that got you under contract and we know that.

Alicia Rutz:

Right.

Colleen Wood:

And that's the feedback that I get from realtors. It's like it's because it's your prequalification letter.

Alicia Rutz:

I think our next podcast should just be all about the problems I've had, the crazy story after crazy story from out of state lenders, thins that they've required out of nowhere.

Colleen Wood:

Yeah.

Alicia Rutz:

That I've never heard of before or crazy delays for no reason or ...

Colleen Wood:

Just not communicating.

Alicia Rutz:

Just not communicating or just being ... Yeah, it just goes on and on and on with issues you've had from out of state people.

Colleen Wood:

We should talk about why you should pick a local lender, why it matters.

Alicia Rutz:

Done. Next one.

Colleen Wood:

Okay.

Alicia Rutz:

All right, see you next week.

Colleen Wood:

Okay, bye.

Alicia Rutz:

Thank you for joining us today.

Colleen Wood:

Tune in next week for another episode of Leading Ladies of Montana Real Estate.

First Time Buyer Process/Checklist

Sat, 08 Jul 2023 11:52:53 GMT

First Time Buyer Process/Checklist

Buying your first home can feel both exciting and stressful. There is so much to do, from house shopping to gathering documents for the mortgage application process, that it’s easy to forget things.

This is why our expert Bozeman mortgage lender team advises homebuyers to create a checklist for themselves to help them keep on top of things.

First Step: Review Your Finances

Before you start anything, your first step should be going over your finances, your budget, and your credit report. Your credit score and report will play a big role when it comes to the mortgage application process. So, it makes sense to get your finances in the best shape possible before you start. This is something that you should begin several months before you start looking for a home. It will help give you a better grasp of how much you can comfortably afford so you aren’t wasting your time looking at homes that you can’t afford.

Where your credit report is concerned, you want to look for any errors that need to be amended to start. Also, look at the weak areas of your credit and try to strengthen them. For example, if youbhave a lot of high-interest-rate loans and credit cards, try to get those paid down or paid off completely. It will give your credit score a nice boost and save you money in interest fees, whichbyou can then put towards your down payment.

Know the Credit Score Minimum

As mentioned above, your credit score plays a big role. These are the credit scores that are required for different types of mortgage loans:

Conventional mortgage – FICO score of at least 620
FHA mortgage with a 3.5% down payment – FICO score of at least 580
FHA mortgage with a 10% down payment – FICO score of at least 500
VA mortgage with 0% down payment – while a minimum credit score is not required for
VA loans, lenders who supply them may require a FICO score of at least 580
USDA mortgage – FICO score of at least 580
Jumbo mortgage – FICO score of 700 or more

Debt-to-Income Ratio

Another factor that plays a big role is your debt-to-income ratio, which is calculated using the current number of debts that you have against how much income you make monthly. Lenders typically like to see this figure between 36% to 43%.

Second Step: Getting Your Documentation Together

Every homebuyer’s financial circumstances are unique. However, these are the key documents that all lenders will require for your mortgage application:

Proof of identification: Photo ID, driver’s license, passport, birth certificate
Proof of income – recent pay stubs, PAYG statements, or W-2s for at least 3 months
Tax returns
Bank statements
List of monthly expenses
Statements for other assets, such as savings, cars, and other properties
Liabilities – statements for any existing debts that you have
Credit report/history
Gift letters for your down payment
Rental history if applicable

Learning the Mortgage Keywords

Getting yourself familiarized with the jargon used in the mortgage application process will help you better understand what is happening. Here are keywords to familiarize yourself with:

Term – refers to the length of time that you will be paying off your mortgage. Generally, mortgage terms can be from 10 to 30 years.
APR – this is one that many find confusing. The Annual Percentage Rate is a combination of lenders fees, mortgage points, and interest rates. It reflects the actual cost of the mortgage and is not the same thing as the interest rate.
Fixed-rate Mortgages – fixed-rate mortgages offer you an interest rate that will remain the same throughout the life of the mortgage. This is good if rates rise because yours won’t.

However, if rates drop, you are stuck with your higher rate, unless you refinance. /p>

Adjustable/Variable-rate Mortgages – with this type of mortgage, your interest rate will remain fixed for a short period before reverting to the current interest rate in the market.

This may not be a good option if you have a tight monthly budget, because your rates change, along with your monthly repayments.

Conventional mortgage – refers to mortgages that are not backed by government funds.
Government-backed mortgage – mortgages that are insured by the government and offer certain benefits to the borrower, such as more flexible requirements and down payments that are lower.
Jumbo mortgage – a mortgage loan that bypasses established FHFA limits. Normally used, for expensive homes and can be as high as 1million dollars. Very high credit scores, down payments, and income are required with this type of loan.

Do you have a special circumstance and need to know what is needed to apply for a mortgage? Give our expert Bozeman mortgage lender team a call today!

Finding The Right Mortgage For You

Sat, 08 Jul 2023 11:52:51 GMT

Finding The Right Mortgage For You

Choosing the right mortgage for your needs is just as important as choosing the right home. Many new homebuyers aren't aware of the different loan types and options that are available to them. For example, some mortgage programs, like VA and FHA mortgage loans, allow for lower to zero down payments. To help you decide which mortgage loan is best for you, our Bozeman mortgage lender team is here to go over the different loan types on the market.

Choosing The Right Mortgage Product

Mortgage products come in 5 main types: conventional, jumbo, Government-insured, fixed-rate, and adjustable rate.

Conventional Mortgage Loans

Conventional mortgages are your traditional loans. Conventional mortgages are not backed by the Federal government. They come in two types; conforming and non-conforming. Limits for loans are set by the Federal Housing Finance Agency. Mortgages that fall under these set limits are considered to be conforming loans. Mortgages that do not fall under these limits are referred to as non-conforming, for example, a jumbo loan. With conventional mortgage loans, if you make a down payment of less than 20%, you will probably be required to pay Personal Mortgage Insurance, which protects the lender in the event that you default on your mortgage repayments.

Conventional Mortgage Pros:

You can use them for a primary home, investment property, and second home purchases
Borrowing costs tend to be lower than other types of mortgage loans, even if you get a higher interest rate
It allows you to cancel your PMI once you have repaid 20% of the home's equity. You also have the option of removing PMI by refinancing the mortgage loan
Two mortgage programs, Freddie Mac and Fannie Mae, allow you to make lower down payments, which can be as low as 3% of the sale price of the home

Conventional Mortgage Cons:

You will typically need a credit score of 620 or higher to qualify
The down payment that is required is higher than a government-backed mortgage loan
Your debt-to-income ratio cannot be higher than 45% t0 50%
Conventional mortgage loans require a significant amount of documentation in order to verify your employment, income, debts, assets, and the funding of your down payment

A conventional mortgage loan is a good option for borrowers that have stable employment and income, a good credit score and credit history, and who are able to put at least 3% down.

Jumbo Mortgage Loans

Jumbo mortgage loans are a form of non-conforming loans. This means that the home price and lending of funds are over the limits of what has been set by the Federal government. This type of loan is often used for homes that are in a much higher price bracket.

Jumbo Mortgage Pros:

A jumbo mortgage gives the borrower the ability to borrow funds for an expensive home or property
Jumbo loans have interest rates that are competitive with conventional mortgages

Jumbo Mortgage Cons:

To qualify for a jumbo loan, you will be required to make a down payment of at least 10% to 20%
Your credit score has to be 700 or above in many instances, however, some lenders will accept a credit score of 660
You must have a debt-to-income ratio that is no higher than 45%
You will need to have a significant amount of assets in cash or savings, typically 10% of the mortgage amount

A jumbo mortgage is a good option for affluent borrowers who are purchasing a high-end home, who have excellent credit, a substantial amount towards a down payment, and who have a fairly high income. Qualification for a jumbo mortgage is based on the amount that you require to finance your purchase, as opposed to the overall amount of the home you are buying.

Government-insured Mortgage Loans

The Federal government doesn't take on the role of a lender, however, it does offer government-backed mortgage programs that help homebuyers. The backing can come from one of three agencies; the Federal Housing Administration (FHA), the U.S. Department of Veteran Affairs (VA), and the U.S. Department of Agriculture (USDA)

Federal Housing Administration (FHA) Mortgages

The FHA mortgage program was created to help homebuyers who are struggling to make a larger down payment, and whose credit score isn't that good, be able to qualify for a mortgage loan. To qualify for an FHA mortgage, you need to have a credit score of at least 580 and will need to make a down payment of at least 3.5%. This gives you the maximum financing amount of 96.5%. You can also qualify with a credit score of 500 but will need to make a 10% down payment. FHA loans also have two insurance premiums; an upfront and an annual payment.

U.S. Department of Agriculture (USDA) Mortgages

The USDA mortgage program was created to help families who have income that is low to moderate. The home you buy must be in a rural area and one that is classed as USDA-eligible. There are income limits that you must meet and, for those with a low income, you may not need to make a down payment.

U.S. Department of Veteran Affairs (VA) Mortgages

VA mortgage loans were created to help active duty and veterans of the U.S. Military, as well as their families, buy a home. VA loans have a low-interest rate and are more flexible than a conventional mortgage loan. VA loans do not require a down payment or mortgage insurance, however, you do have to pay a funding fee, which is a percentage of the mortgage amount.

Government-insured Mortgage Pros:

Helps buyers who can't qualify for a conventional mortgage
Credit requirements are more relaxed and flexible
In some instances, you are not requires to make a down payment
These mortgage types are available to both first-time and repeat homebuyers

Government-insured Mortgage Cons:

For FHA mortgages, the insurance premium is compulsory and cannot always be canceled
The cost of borrowing can be higher than a conventional mortgage
You tend to need more documentation for the mortgage process

Government mortgage loans are a good option for those whose credit isn't that good, those who have a limited amount of savings, and those who are unable to qualify for a conventional mortgage.

Fixed-rate Mortgages

A fixed-rate mortgage is one that gives you an interest rate that remains the same throughout the course of the term of the mortgage. It's a good option if you need to keep tighter control of your monthly budget, and have no plans to move in the next 7 to 10 years.

Fixed-rate Mortgage Pros:

Your monthly repayments won't fluctuate as much (they can change over the course of the life of the mortgage as you pay down the principal)
It's easier to budget for your other monthly expenses
If there is a rise in interest rates in the market, your rate doesn't rise with it.

Fixed-rate Mortgage Cons:

In some cases, you may end up paying more in interest fees over the term of the mortgage
It takes longer to build up equity in your home
Mortgage rates are often higher than what you would get with the adjustable-rate mortgage
If interest rates in the market drop lower than yours, you are stuck with the higher rate

Adjustable-rate Mortgages

With the adjustable-rate mortgage, you get lower rate offers. However, the rates can fluctuate with the market, sometimes quite a bit. Most adjustable-rate mortgage products give you a fixed-rate period for a few years. Once that period is up, it switches to a variable rate. This is a good option if you plan on selling the home in a few years, or if your monthly budget can handle the rise and fall each month.

Adjustable-rate Mortgage Pros:

You are given a lower fixed rate to start off with
You can save quite a bit on interest payments

Adjustable-rate Mortgage Cons:

You have a risk of your monthly mortgage repayments becoming unaffordable
There is a risk of the value of the home dropping, making it harder to refinance or sell the home before the end of the fixed-rate period.

Knowing what mortgage programs you can qualify for is your first step towards choosing one that will work for you. If you have questions about your options, give our Bozeman mortgage lender team a call today!

How to Invest in Real Estate

Sat, 08 Jul 2023 11:52:50 GMT

How to Invest in Real Estate

Values of home appreciated at a average of 14.5% in 2021 up from only 4% in 2019 with an average equity gain of $56,700 per homeowner
You can use a cashout refinance to access that equity at a lower primary residence interest rate to put a significant down payment on an investment property or to purchase one for cash
You can turn that investment property into a cash cow, actually EARNING you money each month! The interest on your primary residence is currently tax deductible and the expenses, including interest and depreciation can be used to reduce your tax liability on any rental income you receive from the property!
Remember that real estate has always trended upwards in value over the long-term. Real estate is an EXCELLENT investment and a great way to supplement your income!

What A Difference a 1-Point Interest Rate Change means

Sat, 08 Jul 2023 11:52:49 GMT

What A Difference a 1-Point Interest Rate Change means

Mortgage Interest rates in 2020 and 2021 hit all time lows but they are not there to stay. As of the beginning of the year in 2022, we are seeing a rise in interest rates. The Mortgage Bankers Association predicts rates to hit the 4s by the end of 2022.
Just as recent as 2018, the average 30 year interest rate was hanging out in the mid four’s, mid sixes in 2006 when real estate was surging before the crash and as high as 16.5% in the 80s.
On a $400,000 30 year fixed rate mortgage, the difference between 3.5% and 4.5% will cost an additional $230.56 or $83,000 over the life of the loan.
The good news is that when interest rates go up and affordability goes down, it tends to flood the market with more inventory which in turn could cause home prices to go down. It's simply another example of supply and demand.

Mortgage Minute Video

It's Still A Great Time To Buy

Fri, 07 Jul 2023 12:32:11 GMT

It's Still A Great Time To Buy

Interest rates are still at historical lows, HOWEVER, interest rates are forecasted to go up. Prices of homes are also forecasted to continue to rise through 2022 by as much as 16%.
A home that costs $450,000 today at an interest rate of 3.375% is expected to cost you $495,000 a year from now with only a 10% increase in price. If interest rates rise to 3.75%, that same home will cost you $287.84 more per month just by waiting one year.
In addition, the average cost to rent in Bozeman as of December 2021, was $1800. By waiting a year, you will pay $21,600 towards your landlord's mortgage, none of which builds your equity or is tax-deductible.

Mortgage Minute Video

Conventional Loan Limit Increase for 2022

Fri, 07 Jul 2023 12:28:23 GMT

Conventional Loan Limit Increase for 2022

In 2021, the conventional mortgage loan limit topped out at $548,250 on single-family residences. This meant that any mortgage loan on a SFR that was above that fell into the jumbo loan category. Jumbo loans have much stricter qualification guidelines for Debt to Income ratios, credit, income types, reserves, and down payment requirements. They are just more difficult loans in general.
We saw a ton of jumbo loans in 2021 due to the huge increase in the prices of homes. We even used 1st and 2nd lien mortgages to avoid jumbo loans for many buyers which resulted in higher monthly payments and variable interest rates on the 2nd mortgage.
The new conventional loan limit for SFR in 2022 is $647,200. This will help a ton of buyers in 2022, making it easier to get financing for their homes and reducing the down payment requirement for many.

Mortgage Minute Video

Why Realtors Are So Important

Fri, 07 Jul 2023 12:04:37 GMT

Why Realtors Are So Important

Colleen Wood:

Hello, and welcome to Leading Ladies of Montana Real Estate, a show about buying and selling homes in Montana and the power of realtors and power lenders that make that happen. We are your hosts, Colleen Wood.

Alicia Rutz:

And I'm Alicia Rutz. Each week, we will discuss the housing market, how to navigate it and what questions you need to be asking yourself along the way. But that's not all.

Colleen Wood:

We will also dive into how to navigate the ins and outs of being leaders in business and how to build a robust and dynamic team within that business and navigating the world as a career-driven professional all while raising a family.

Alicia Rutz:

Join us as we share our highs and lows in real estate, business ownership and motherhood.

Colleen Wood:

Hey, Alicia.

Alicia Rutz:

Hello, hello. How are you?

Colleen Wood:

I'm doing great. How about you?

Alicia Rutz:

Oh, I'm feeling very important today.

Colleen Wood:

I think you are very important. I think we should talk about why you're so important today.

Alicia Rutz:

Yeah. Why are realtor's important? I, obviously, am a realtor and going to be biased. Let's hear your quick-

Colleen Wood:

Well, I thought it was hilarious. I think this is what prompted this conversation. I saw a Facebook post. It was an ask Bozeman Facebook post.

Alicia Rutz:

I saw that too.

Colleen Wood:

Did you see that too? That was so crappy.

Alicia Rutz:

I couldn't believe it.

Colleen Wood:

The Facebook post was, is there a realtor out there that'll work for 5% commission or a flat fee? And I was like, "Well, I don't know where you're getting your numbers from to begin with. And nobody would ever work for a flat fee." And I thought, there were some realtors commenting back, "Hey, this is the service I provide. This is the commission that I charge. And this is typically what the buyer side is. What the seller side is. And this is what you get for that." And then some other people came back and said, "You should really try for sale by owner because realtors aren't going to be able to do that for you." And then there were some naughty recommendations of realtors recommending realtors that they didn't like.

Alicia Rutz:

I was also shocked at how many people did stand up for realtors too, though. I actually read through the whole thing. I'm so glad you saw it. And there were a lot of people saying, "Hey, you get what you pay for." And a lot of people who weren't realtors even said, "You will make that back on the sale of your home."

Colleen Wood:

Oh, for sure. I mean, we commonly see that, for buy sells that come in that are for sale by owners, we commonly see the appraisals come in high.

Alicia Rutz:

Yes, exactly. And you left a lot of money on the table. Also, I tell people all the time, there's two really big parts of the transaction. One is getting it under contract. That can be tough. Not as tough in this market, if it's priced right. But two is keeping the deal together. There are so many details and nuances to every single transaction that for people who aren't in the industry, they just don't understand how hard it is to keep things together. And we've talked about every single transaction is different. Something comes up on every single deal. It's not the same as the last. Keeping it together on time and making things happen is also really, really important.

Colleen Wood:

It is. It's really important. And so let's just talk about the listing side. So you're going to try to for sale by owner. You're going to list your property yourself. So you're going to try to take your own pictures with your iPhone. And then you're going to try to stick it on Zillow and hope that somebody will call you. And then when somebody does come, you put this homemade sign in the front yard, or one you get from ACE Hardware. And somebody does show up randomly, because they're going to call your phone number and they're going to want to look at your house. And then here's what I see happen is people will want to buy a property that's listed for sale by owner and they don't have the ability to be able to write a contract that is going to protect them.

Colleen Wood:

And so they'll try to put one together themselves without the help of a realtor. And there will be nothing in it that will protect them in the event that there's a title issue, or if it doesn't appraise, or if there's an inspection issue, or if they can't get financing. There's nothing. They have signed a legally binding agreement that is going to require them to buy the house no matter what. There could be all sorts of contractors' liens. There could be tax liens and everything that are stuck on this property. And guess what? The seller doesn't have to remove them. You're stuck with it, no matter what. It's a huge risk.

Alicia Rutz:

It's a huge, huge risk. And also selling a home yourself if you don't disclose things correctly, if something comes up that you weren't aware of, this does give you a buffer of protection and it's part of our job to help you discover that and figure it all out. And also the marketing of it really is... There's a lot of things that for sale by owner people can do. You can put it on Facebook Marketplace, Craigslist, Zillow, and such. But being able to reach other realtors. So other realtors would have to be so on top of their game to really be scouring every day. And I do look for for sale by owner for my clients. And we do put a lot of them together, but then I end up basically getting a listing on it as well. So I have to have the dual listing on it. And what you're really doing though, is you're just missing out on a lot of other buyers. Realtors are checking our MLS all the time, constantly scouring for their buyers. And there's just a really good chance that they're going to miss it as well.

Colleen Wood:

Something that I see a lot with for sale by owner transactions and sellers is that a buyer will come with a realtor and the owner of the property will say, "Well, I'm not paying your realtor's commission so either you pay your realtor's commission or you don't get to have a realtor." So then these buyers are dropping this realtor that they've been working with for months. And they've been driving them around in their car and helping them find the right property and doing all these things for them. And then they're just dropped like a hot potato. And I don't know about you, but I don't like to work for free. And then the buyer doesn't have any sort of protection, no third party. They literally have to just take what the seller tells them as gospel. You think that the seller is going to tell you what is in your best interest or in their best interest?

Alicia Rutz:

Exactly. Well, what we've been doing a lot with for sale by owners too, is we're just adding that on to the price. So if they're like, "We're absolutely not working with another realtor." We're like, "Well, you're under market or this is really what the value is. Let's add that on to the sale of the home. And then that's going to cover it." We're super honest with the buyer and the seller about it. And every buyer I've ever had is like, "Absolutely. You've been working your butt off for me." Especially with buyers right now in this market where we're running everywhere, 6:00 showings, working on weekends. And they're happy to add that onto the price of the home.

Colleen Wood:

Well, that's really classy. Because some people are not so classy.

Alicia Rutz:

That's so true.

Colleen Wood:

I've seen that happen a lot where they just drop their realtor and they're like, "Well, the seller of the home says, 'I can't use a realtor.'" And I'm like, it's so amazing to me how gullible some people are in the buying and selling of homes and how people just telling them something just suddenly is-

Alicia Rutz:

And HGTV's ruined it for us. All they do is show you showing the house. They see, oh, you get it under contract. They show you what the commission is and think that's all that happens. Really we spend most of our time at our computer trying to get the details dialed in, helping them with inspection stuff, title, like you said, appraisals, getting them lined up with the lender. There's so many little details that come with every single transaction that are tough.

Colleen Wood:

And we often as lenders have to work with the realtors in order to get the things that we need in order to get loan approval. And there are things that a buyer cannot get. And we really lean on you guys. In fact, I had a transaction recently that our realtor was nice enough to help them write a contract, but then should have been able to step away from the transaction. And we had changed the closing date because there was a bunch of things that needed to be removed from the property and the buyer did not want to close until all the things were removed from the property. And the seller, so adding the addendum on there to extend the closing date, the seller would not sign the addendum without adding a whole bunch of restrictions on how the buyer could use the property going forward.

Colleen Wood:

And then there was, everybody was a stale mate, and everybody's looking at everybody else. And there's nobody to explain anything. And so there's nobody to get the seller to sign anything. So we reached out to the seller, phone number given to us by the realtor, reached out to the seller to have them sign it to try to tighten everything up so we could close. And the seller lost their mind because he's like, "How dare you be reaching out to me, to be calling me." And wanted full details about the loan transaction for the buyer. I'm like, "We can't tell you that." And then that made him mad. And so I ended up actually going back to the realtor and saying, "Hey, I know that you just wrote this contract, but I need your help on this because I can't. He won't take my phone call. And so now I need this guy to sign this thing." And this is exactly why we need realtors.

Alicia Rutz:

Yes. Or I had a listing with one of my girlfriends and we've always talked about how Zillow could take over our market, which should be a whole nother podcast what's happening there. And that realtors could maybe disappear because of Zillow. And just we would, it's just been an ongoing conversation with us. And after the transaction, she was like, "There's no way we could have done this without you." And you just need that expertise that it just, again, the expertise is just so important. And finding out who, or knowing who to call, knowing how to get inspectors in, all of that stuff really does add up.

Colleen Wood:

Absolutely. It does. And on the buyer side, trying to navigate it on your own... We have a lot of buyers that think they're going to save money by not using a realtor. So it's a complete misconception. So the seller is the one who pays the realtor commission on both sides.

Alicia Rutz:

In Montana. Yes. Some states are a little different.

Colleen Wood:

Okay. So I've only ever, hanging out in Montana. So you, as a buyer, getting a realtor is making sure that you are having someone who is going to represent your best interests, remembering that the sellers are paying the real estate, realtor commissions. So when you have a seller and a seller's agent, guess who the seller's agent could commonly lean towards the best interest stuff? It's the guy that's paying their paycheck. And so it's really, we do see it occasionally. I know a lot of realtors who don't want to be a dual agent, being both the buyer's agent and the seller's agent. It can just be a little wonky. It's like having attorneys. It's you want your own attorney to defend you. You want somebody that's in your corner, that's fighting for you.

Alicia Rutz:

Dual agency can be hard.

Colleen Wood:

It can be really hard because it comes to question, if you say something for the buyer that is going to help the buyer and it is not so great for the seller, you can have a seller come back and be like, "I don't want you to be my listing agent anymore because you're just campaigning for the buyer." I mean, you can just go round and around and around.

Alicia Rutz:

We have some agents in our office that will not do dual agency. They'll refer one out or the other, depending on the situation. But yeah. They will not do it.

Colleen Wood:

That's smart.

Alicia Rutz:

Yeah. And then you can get in a lot more legal trouble doing dual agency as well. So things can get a little tricky, like you said. And you almost forget who you're representing sometimes. So it really depends on the situation whether that's a good situation or not.

Colleen Wood:

And you have two people with differing interests. And you're trying to make both of them happy at the same time. It's super hard. So, you're not going to save any money by not having your own realtor.

Alicia Rutz:

No, you really don't.

Colleen Wood:

And a lot of times people will go and look at a property and say it's a listed by Alicia. It's a good idea for them to bring their own realtor, and for them to have their own representation, because if Alicia has a listing or a realtor has a listing of some sort, of course, they're going to encourage you to want to use them as well. I mean, they're business people trying to make money.

Alicia Rutz:

Exactly. And the fiduciary duty is to the listing agent or to the listing people because that's who you signed your first contract with. So really you're supposed to be helping representing the seller most and again makes it tough. And on the buy side, it's really interesting because buyers can do so much research on their own with finding the home. With Zillow and realtor.com, oftentimes, they'll send, even though I have them on drips, they will contact me with the home they found or want to see it. And oh, well, I'm doing all the work on it. But then once you get into the transaction and educating them on the area, the pros, the benefits, the covenants, all of that situation-

Colleen Wood:

Boundary lines.

Alicia Rutz:

Yes, exactly. And that can, again, that can be complicated. And it takes a long time to understand whatever market you're in. Big cities are tough where, because when I was in Portland, you have to know every single neighborhood and literally one street over is a completely different world than on the other side.

Colleen Wood:

And two, as a buyer, you don't have any right to step on the property of somebody who's selling their home. It's trespassing. And so having a realtor there with you who's going to make the proper connections that are going to make sure that the folks are ready for you to show up and that you've asked permission. You can get in deep trouble by trespassing on somebody. I know, we've seen that tons of times where people just go on to people's property. They just march up to their door and want to look at their property that day and they're not ready. They're not, you're just standing on their doorstep. You're trespassing. You weren't invited.

Alicia Rutz:

What's really funny about that, so many people here don't lock the doors to their house or don't even have a key. And so we have to convince people when we list, you've got to start locking your door. They're like, "Well, I don't even have a key." And they find the one key that we can put in the lockbox. It's pretty funny. We live in a pretty great little bubble.

Colleen Wood:

We do. And we're not the only place that has that happen. But yeah, it's true. And then people just find an open door and they just start wandering through the house and they're like, "Hello." And you're in the shower and they just come on in and that can be very uncomfortable and awkward. So anyways, real estate agents are here because we need them. They really do put the cherry on top when it comes to doing a real estate transaction. I know that I love working with realtors, especially great ones that communicate and want to get things done that are forward-thinking and want to make sure that their clients are taken care of and that we just get to the closing table on time. So I don't know. I see your value.

Alicia Rutz:

And we spend a lot of money. So even though our commissions look large, there's a lot of money that's involved with taking on a listing. A good higher end listing, I'm working on this really cool new build. We're going to have it professionally staged, obviously, professional pictures, drone pictures. We're going to do the whole virtual tour, all crazy advertising. Postcards-

Colleen Wood:

Multiple websites.

Alicia Rutz:

Multiple websites. It goes on and on. So just to take on this one listing I'm risking probably $2,500 or more on our penthouse that we just got under contract, $5 million one.

Colleen Wood:

Congratulations.

Alicia Rutz:

Going to be the most expensive condo in Montana to ever sell.

Colleen Wood:

Holy shit, lady.

Alicia Rutz:

I know.

Colleen Wood:

She's such a bad ass.

Alicia Rutz:

I'm excited about it. Closing in two weeks. I'm going to keep holding my breath until then. But that one, we put it on TV. We held multiple open homes. We invited all the top people in Bozeman to it. We probably have $20 grand in and we put it in The Wall Street Journal, on and on. Yeah, probably $20 grand in expenses to get that out there. And we found somebody.

Colleen Wood:

Yeah, you found somebody. You did your job. And it costs money to do business-

Alicia Rutz:

And it was not easy.

Colleen Wood:

And the counter of spending money to do business is that you generally get paid to do it.

Alicia Rutz:

And we take on that risk. So some agents will, and this is probably where I should get better, but some agents, they will charge a fee if you terminate or if it doesn't go under contract during that time. I take on that risk 100%. I'm not going to charge my clients what I put into it, unless it's some crazy circumstance. And most of the time, they actually offer to pay my, whatever my fees were, or whatever my costs were on it. But so yeah, that's a risk we're taking on for every single listing that it might not sell. And yeah, we're out a lot of money if it doesn't.

Colleen Wood:

Yeah. Right. No, I get it. Well, I see your value. And like I say, I love working with realtors. And they're just the other part of the transaction. It's just like missing a leg off your chair.

Alicia Rutz:

And one major thing too, is the negotiations where it's not personal to us. It really is business. We do take it semi-personal where we end up caring about our clients on either side and we really want the best for them. But we can negotiate without there being the emotions involved. And I think that's one of the biggest things where the buffer between the buyer and seller, where we really have their best interest at heart, and it's not going to get emotional.

Colleen Wood:

And part of that in not being emotional is that you guys are really great at coaching people and doing counseling sessions, almost. You guys should almost be therapists, because there is a lot of emotion and there's things that you're attached to, or there's a dollar amount that you're attached to. And maybe that's not really the value of your home and hearing that your home isn't worth as much as you thought it was from your husband versus hearing it from your realtor is a completely different reaction. I mean, your realtors are professional. Your husband's just a know-it-all. So, I mean-

Alicia Rutz:

And there's a lot of homes where there aren't good comps. You're just coming up with a number out of, or they're coming up with a number out of thin air. We can usually make a comp work if we use the right amount of land and find similar properties and do our own little mini appraisals. But oftentimes yeah, if you just come up, "Oh, I need this number. I need a million dollars because I want it to sell for a million." But you get 975-

Colleen Wood:

You're going to be okay.

Alicia Rutz:

Yeah, exactly.

Colleen Wood:

But that's the conversation, right? You got 975 and you sold it. You could have had it on the market for another six months trying to get that $25,000. And you would, think of all the payments that you would've made since then.

Alicia Rutz:

Where's the market going to go from there?

Colleen Wood:

Where's the market going to go? Just having those rational conversations with professionals is why

Everything you need to know about HELOCs

Fri, 07 Jul 2023 12:04:36 GMT

Everything you need to know about HELOCs

What You Need To Know About HELOCs

Colleen Wood: Hello, and welcome to Leading Ladies of Montana Real Estate, a show about buying and selling homes in Montana and the power realtors and power lenders that make that happen. We are your hosts, Colleen Wood.

Alicia Rutz: And I'm Alicia Rutz. Each week we will discuss the housing market, how to navigate it and what questions you need to be asking yourself along the way, but that's not all.

Colleen Wood: We will also dive into how to navigate the ins and outs of being leaders in business and how to build a robust and dynamic team within that business and navigating the world as a career driven, professional all while raising a family.

Alicia Rutz: Join us as we share our highs and lows in real estate, business ownership and motherhood.

Colleen Wood: All right, girlfriend, let's talk all things HELOCs.

Alicia Rutz: Okay. So yeah. What are your thoughts? I've heard a lot of people are trying to get them now with rates increasing.

Colleen Wood: Yeah. People are trying to get liquidity.

Alicia Rutz: We have a HELOC on one of our homes just to have it as backup.

Colleen Wood: Line of credit. Yeah.

Alicia Rutz: Yeah. And it's nice to just know that it's there.

Colleen Wood: Yeah. So a HELOC is an acronym.

Alicia Rutz: Yeah. Let's talk about that.

Colleen Wood: Acronym for home equity line of credit. And it's typically only done on a primary residence. I had a gentleman asking the other day if he has an investment property and has lots and lots of equity in it, and he wanted to get a HELOC on it. So typically, no, it's only available on a primary residence. So, but a lot of people are asking for HELOCs right now because they're trying to gain liquidity. They're trying to get options. Inflation is high. People are trying to get access to that cash. So like we've talked before about protecting people's cash and we've talked about why people shouldn't be buying properties for cash right now because liquidity is king, cash is king right now. Having a nice little mortgage, even at a higher interest rate... It's not higher, a normal interest rate of like 6% is still a better use of your money than it is to completely drain all of your liquidity.

Alicia Rutz: Exactly. Okay. So why are you telling people... So what exactly, how much like is interest? How does that work on HELOC? How is that all?

Colleen Wood: So the difference between a HELOC and a normal fixed interest rate mortgage is that a HELOC, their interest rate is attached to prime. So there's prime plus a margin. So prime is that interest rate. When you hear the news out there talking about how the fed has increased interest rates, that is not the fed increasing mortgage interest rates, the fed is increasing prime and prime is the rate at which banks lend each other money. And so when banks lend out money, that is based on prime, they charge prime and then they add a margin. So add a little bit more, and that's what the bank gets paid, is that margin they're going to get that bit. And then that's what the rate is that you pay on your HELOC. However, that number can change because when prime adjusts, which has adjusted upwards twice this year and is expected to do so potentially eight more times this year.

Alicia Rutz: Yeah. I've heard that as well. It was just at a community meeting thing. And they're saying they're meeting eight more times and chances are, they're going to increase it every time.

Colleen Wood: Yeah. Every single time.

Alicia Rutz: And said it's between a quarter and a half percent that they've been raising it. That you can continue to probably see it.

Colleen Wood: Three quarters of a percent. Yeah. When you get a HELOC, that interest rate is not locked in at that number, at that fixed rate, like your normal fixed rate mortgage. It's going to be attached to prime, as prime continues to move. So when prime continues to walk up, guess what? Your payment continues to walk up as well. So suddenly your HELOC that you thought was just this little line of credit that you have-

Alicia Rutz: Which is totally what I have right now.

Colleen Wood: Yes. This is cute little line of credit that I have. Well, if you're using that line of credit and you have anything charged against it, now your payment is going up, up, up, up, up. Because a half of a percent in an interest rate can start to make a pretty big difference in your payment.

Alicia Rutz: Huge.

Colleen Wood: And if it's potentially eight times, we'll just say that they increase it a quarter, eight times, what is that? One, two, three, so 2% higher.

Alicia Rutz: Okay. So I already have a question, because-

Colleen Wood: They've already done it half.

Alicia Rutz: So we don't have anything against our HELOC. We haven't pulled out of it.

Colleen Wood: Yeah.

Alicia Rutz: Can I just close it? I don't even know how-

Colleen Wood: If you don't have anything against it, then just leave it. But if I was to give you advice-

Alicia Rutz: Yes, please.

Colleen Wood: And you were saying, Colleen, I need $100,000 to do a kitchen remodel or to invest into another property. I want a home equity line of credit so that I can do that down payment. And I would say to you, I think that's a very poor decision because you're going to use that money and you are not going to be able to pay it back in a short time. So prime is going to continue to increase. So is your payment going to continue to increase on a home equity line of credit. I would recommend to you that you just do a cash out refinance on your home because you could do a cash out refinance on a second home, investment property, or a primary reside.

Alicia Rutz: And you know what you interest rates are.

Colleen Wood: You know what your payment's going to be. There's no surprises. I'll tell you right now, it's not going to be 3%, but it's going to be... I mean, prime plus a margin, I just priced a HELOC for a guy the other day. And it was 6.25. So what's the difference? That 6.25 after eight adjustments with prime could easily hit 8%.

Alicia Rutz: Right.

Colleen Wood: So where we've used our HELOC before is when we're in between flipping homes.

Alicia Rutz: Yeah.

Colleen Wood: And so maybe one's under contract, but we're trying to buy the other one and we're going to have that cash really quickly.

That's a short order thing.

Alicia Rutz: Right. And so that's where it's been really beneficial for us, but-

Colleen Wood: And that's a good idea.

Alicia Rutz: Right. And it's been nice to have it, especially, because we don't owe much on our home and so forth. It's a pretty decent line, but this is good. Because I need to sit down her husband and check this out a little bit more.

Colleen Wood: Well, if it's going to turn over quickly, sometimes we'll do a home equity line of credit second on something, if somebody is going to sell a property in the next month or so, month or two, even six months. And that money's going to be able to come back and they're going to pay that off. That's an okay thing to do. And that would be a good use of a HELOC.

Alicia Rutz: Okay. I feel a little bit better than we're not effing everything up.

Colleen Wood: Yeah, no, that's a better use of a HELOC. It's when you're not going to be running into that money anytime soon. And you could potentially-

Alicia Rutz: Like a kitchen remodel.

Colleen Wood: Yeah. The kitchen remodel.

Alicia Rutz: Unless you're maybe doing the remodel to put it on the market and sell it.

Colleen Wood: Yeah, yeah. Yeah. So that might not be a bad idea. But the other thing to remember too is, remember last time that we were in a recession and things were interesting. Remember how the banks kept pulling all everybody's HELOCs and calling them due?

Alicia Rutz: Yes.

Colleen Wood: Remember that?

Alicia Rutz: And it was awful. And I know I've talked about this before, but I did mostly listings when I was in Portland during the depths of terrible recession. And so many people were coming to closing with cash because they had a second mortgage or a HELOC or something that they weren't be able to pay off. So they had to pay someone to take their home.

Colleen Wood: Yes.

Alicia Rutz: They'd come with $10,000. I think the most I saw was $75,000.

Colleen Wood: Yeah.

Alicia Rutz: But they were selling their home and had to come to closing with that cash to avoid foreclosure.

Colleen Wood: Yeah. Yeah. And it's because if you go and extend on a HELOC $150, $200,000 and suddenly your bank calls your HELOC due and you don't qualify for refinance to pay that off because-

Alicia Rutz: Someone got laid off or whatever.

Colleen Wood: Someone got laid off, interest rates are higher, blah, blah, blah. You are not in a great position because you can't refinance, you're forced. You're literally forced to sell your house in order to pay that off. What a horrible place to be in. So I would highly recommend for those of you that are kicking around ideas about getting... Just need access to cash, right? The cash is in your home. Everyone's homes right now is worth, are worth a ton of money. Right now we've all seen amazing increase in value on our homes. And you have access to that equity through a cash out refinance, know that the interest rate is not going to be what you probably have. It's going to be higher. But we have a gentleman right now that we're visiting with about a cash out refinance. And by doing a cash out refinance for him and paying off his other debt, we're going to save him $1,400 a month.

Alicia Rutz: Wow.

Colleen Wood: Which is $17,000 a year. He's having a hard time wrapping his head around whether or not that's a good idea because the interest rate is higher and we're like $1,400 a month. It's a mortgage payment. That's a mortgage payment.

Alicia Rutz: That is huge.

Colleen Wood: Yeah.

Alicia Rutz: That is so huge. How cool is your job that you can really change? Someone's life $1,400 a month at different times in my life, would've been absolutely game changing.

Colleen Wood: That was a paycheck in parts of our lives.

Alicia Rutz: Exactly.

Colleen Wood: That's like having a second job.

Alicia Rutz: Exactly. I think that was about what I made my first real job, was about that.

Colleen Wood: Yeah. That was before taxes.

Alicia Rutz: Right, right. And I was pumped about it. I'm rich.

Colleen Wood: I made over a $1,000. So yeah, definitely. I know that people are... We're so attached to these super low interest rates. They're just not on the shelf anymore guys. They're not available. We have to sell what's on the shelf. It's no longer available. You miss that bus. Don't miss the next one.

Alicia Rutz: I totally agree. And just because looking back like, oh, I could have had it there. I still say lock in now. Because it's only going to keep going up. Get in now if you're able to, because it's almost impossible that interest rates are going to go down this year.

Colleen Wood: Yeah. I don't-

Alicia Rutz: And maybe we'll be eating our words, but I would be very, very, very, very, very shocked.

Colleen Wood: Wouldn't that be... I mean, we would be so grateful, but I had a gentleman who went under contract on an investment property and he did not have such phenomenal credit. And so I quoted him an interest rate and it was at 7% and it was an investment property. He wanted to put minimal down. It was not so great credit. And his interest rate was 7% in this current market and that's pretty normal.

Alicia Rutz: Right. And there's nothing you can do about that.

Colleen Wood: There's nothing that I can... It's not me.

Alicia Rutz: Right.

Colleen Wood: I'm not doing it. I just have to quote was on the sheet.

Alicia Rutz: Right. Right.

Colleen Wood: And he decided to back out and of the contract and I asked him, "Why?" And he says, "I'm going to wait until interest rates are back to 5%." I'm like, "Oh honey, mean, that could be three or four years."

Alicia Rutz: Did he hear you, you think?

Colleen Wood: I think he's going to be back.

Alicia Rutz: Yeah.

Colleen Wood: I think he's kicking himself for not moving forward on that property. Because think about the money that he could have made as an investment property, on a property in Gallatin Gateway.

Alicia Rutz: Oh yeah.

Colleen Wood: and he wanted to be able to rent it. Think about all the money you're missing out on and potential income because you decided to not move forward with that. And if things continue to appreciate even a little bit, that's even more money you're missing.

Alicia Rutz: Exactly.

Colleen Wood: So you got to get to your... Stop thinking about the rate and think about the investment and-

Alicia Rutz: Can you make your payments?

Colleen Wood: Can you make your payments, yeah.

Alicia Rutz: Are you comfortable? This is just where we are. So you can't think about the past.

Colleen Wood: Nope. You got to decide whether or not you're going to move forward and you cannot just freeze. So people show up in different ways, right? Especially in times right now when things are difficult, they're going to do one of three things. Either they're going to flee, they're going to run away. Quitters, like we've seen in this industry where people are quitting. They're going to freeze. They're going to do nothing, like guard their eggs.

Alicia Rutz: Yep. Which also is going to keep things more flat. And again, the fear that we're talking about, it's going to create more of a downward spiral.

Colleen Wood: We're seeing a lot of freezers right now. People are just freezing.

Alicia Rutz: Yeah.

Colleen Wood: And then the other way to approach it is to fight it. You have to do something, proactively be doing something to move forward. And that's for investors as people that are wanting to buy homes in Montana, this is not just happening in Montana. But continuing to rent for the next two years while this rides out is absolutely just pissing money down the drain.

Alicia Rutz: Agreed. Well, thank you for all the information. You're the best. Thank you for joining us today.

Colleen Wood: Tune in next week for another episode of Leading Ladies of Montana Real Estate.

How Did We Get Into A Housing Shortage and What Does The Future Look Like?

Fri, 07 Jul 2023 12:04:34 GMT

How Did We Get Into A Housing Shortage and What Does The Future Look Like?

We're all aware that there is a housing shortage by this point. But why is there a housing shortage, and how long can we expect it to last? What does it mean for homebuyers? Here's what you need to know

What is causing the housing shortage?

There are many factors as to why we're now seeing a housing shortage; however, here are a few of the critical points to understand:

New construction of homes hasn't kept up with demand for years. The Great Recession in 2008 led to the end of many construction companies, and the Millennial Generation was expected to be a generation of renters.
Now we're faced with the largest generation of Americans in history, Millennials, who are in their prime to buy homes.
The pandemic has led to labor shortages and supply chain disruptions, which has also slowed the construction market.
There's a low supply of homes for sale. People are staying put for now.
Real Estate isn't just housing for families. Renting out homes is also a revenue stream. Many homes that do hit the market will become investment properties.

How do you buy in this competitive market?

Preparation is key. Before looking at homes, the first thing you should do is to get pre-approved by a lender. Making sure you understand what you can afford and getting pre-approved are crucial to success when buying in this competitive market. The pre-approval process doesn't just let you know how much you can feasibly and responsibly spend on a home, and it also allows your Loan Expert to suggest ways to improve your finances, seek out grants, and go over loans that fit you and your circumstances, and so much more. In a competitive time, you need a team that supports you and can help navigate the challenges and help you put your best offer forward. Rushing into a home loan with the wrong lender can affect your homebuying efforts and may affect your ability to get into a home.

What does the future of housing look like?

Realtor.com recently produced their Spring 2022 Home Sellers Report with their predictions for the rest of 2022

Over two-thirds of homeowners planning to sell in 2022 are likely to list by August. This might mean that there could be some relief in the inventory shortage this Spring and Summer.
80% of homeowners sold at or above their original asking price. This means that it's even more important to make sure you have a handle on your finances and what you can afford.
43% of homeowners planning to sell in 2022 expect prices of $350,000 and below. If affordability is a concern for you, almost half of the homes coming to the market could be just what you're looking for.

Ready to get prepared for your homebuying journey? Call the Wood Team today to learn how we can help you get into a new home.

How VA Home Loans Work

Fri, 07 Jul 2023 11:46:27 GMT

How VA Home Loans Work

As the home market fluctuates, it may be the perfect time to buy with the VA Home loan. If you are currently an active-duty service member or veteran, there may be a great chance you will qualify.

Utilizing this benefit with a 0% down payment home loan to move into your family's dream home may be exactly what you need.

However, VA Loans are not the same as conventional loans, FHA loans, or other home financing options. They have different criteria, eligibility, qualifications, and benefits that other loans do not have. This is because the Department of Veterans Affairs (VA) guarantees them and places regulations so you can purchase a home without default or hurtles other financing products have.

Whether this is your first time buying a home or your second time using the program, it's essential to understand how VA Home Loans work.

What Is A VA Loan?

The VA Home Loan is an affordable program that is designed to help military families that have served or are currently serving.
The VA Loan provides the incredible opportunity to receive a 0% down payment home with less strict credit score requirements. VA loans also offer access to lower interest rates than other home loans because the VA provides financial backing.
While the competitive real estate market continues, the VA Loan gives you an easy foot in the door, and you don't have to worry about bidding on a home.

Who Is Eligible for a VA Loan?

The VA Home Loan has specific branch and service requirements for veterans and active duty service members to become eligible.
Not all who have served in the Armed Forces qualify for a VA loan.

You must meet at least one of the following criteria to qualify:

You have served 181 days of active service during peacetime.
You have served 90 consecutive days of active service during wartime.
You have served more than six years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 consecutive days.

Eligible Branches of the Military

Active Duty Service Member
Veteran
Current National Guard or Reserve Member
Discharged National Guard Member
Discharged Reserve Member
Surviving Unmarried Spouse of a Service Member

Types of VA Home Loans

VA Loans include three types of loans that determine your mortgage rate, mortgage payments, and loan amount.
The Wood Team can help you decide which option is best for you by explaining each option in light of your current finances.
For example, you may not qualify for the VA Jumbo Loan with a $9500,000 home in California. But your 630 credit score could earn you a $652,000 home if it is within your county's VA Loan Limits.

Fixed-Rate VA Loan

The VA Fixed-Rate will stay the same after completing the rate lock. This means that you are locked into that rate, and it will remain the same throughout the life of the loan.
The Fixed-Rate VA Loan offers a 0% down payment and does not require private mortgage insurance (PMI).

Adjustable-Rate VA Loan

An adjustable-rate VA Loan may be a better option in a fluctuating market. Your rate will rise and fall with the current interest rates. The challenge of an adjustable-rate is that you may be dealing with ups and downs of monthly payments, which can make budgeting hard. Payments may rise and fall over the loan life, but a lender cannot exceed your initial terms over a specific period.

VA Jumbo Loan

When buying in more expensive counties where the VA Loan Limit exceeds $417,000, you must choose a financing loan that can bear the cost. A VA Jumbo loan gives you access to higher home prices, but you will have to meet the minimum down payment requirement and a higher credit score.

Partner with a trusted lender

Apply for the loan

The first step is to reach out to the Wood team to fill out an application. You can do this by coming by our office or filling out the online application.

Submit required documents

You will need a Certificate of Eligibility (COE) and other documentation to be eligible for the VA Home Loan. The Wood Team can help pull this information on your behalf.

Get pre-qualified

Once we receive the necessary documents, we will explain the loan amount, mortgage rate, and loan length you qualify for.
The Wood Team will ensure that you understand your options and that you are picking the right mortgage product for your needs.

Bring in a licensed appraiser

Home inspection

VA Loans do require an inspection of the home like other loan programs; it is required by the lender to help determine whether the property is valued at the same price that you are offering to buy it. Lenders do not want to invest in a home that is overvalued. It may cost you both more money in the long term.

VA Appraisal

Veterans Affairs has an additional home evaluation you must undergo for the lender to sign off. The requirement stands as another check for the US government to ensure you move into a home that doesn't fall apart.
If the VA is awarding your family the home you've always wanted, they want it to last for years to come.
Celebrate the loan closing

Closing Costs

You will be required to pay the VA Funding Fee, appraisal, and other costs when closing on a VA loan. Paying the closing cost will complete the sale of the home, and it will officially be closed.

Call us today to learn how we can help you

The Art Of Real Estate Negotiations

Fri, 07 Jul 2023 11:46:26 GMT

The Art Of Real Estate Negotiations

THE ART OF REAL ESTATE NEGOTIATIONS

Colleen Wood: Hello, and welcome to Leading Ladies of Montana Real Estate, a show about buying and selling homes in Montana, and the power realtors and power lenders that make that happen. We are your hosts, Colleen Wood.

Alicia Rutz: And I'm Alicia Rutz. Each week we will discuss the housing market, how to navigate it, and what questions you need to be asking yourself along the way. But that's not all.

Alicia Rutz: Join us as we share our highs and lows in real estate, business ownership, and motherhood.

Colleen Wood: Oh my gosh, Alicia, I just had to be on the phone with this crazy agent that was just like cutting throats and not just invested in getting the deal done. He was just crappy.

Alicia Rutz: Was it more like he was attacking you and not trying to find the solution to the problem?

Colleen Wood: Right. He just was just mad, and I don't even know really what he was all mad about, but it was things changed with the person's income. They did not file their taxes the way that they had said that they were going to and income was significantly less and we had to do restructure. And I'm here to tell you, he just wanted somebody to be mad at. And I just go into full all out negotiation mode.

Alicia Rutz: Exactly. And how you negotiate really truly is such a skill. I've seen people do it different ways. For me, it's truly finding common ground and killing with kindness, because people want to get the deal done.

Colleen Wood: Right.

Alicia Rutz: So where's the solution?

Colleen Wood: And to me, it's super important. And I tell my team when they're in the ones that are having conversations where we need to come to a consensus that it's like, "We have to come as leaders. You cannot go into the conversation meek and mild ready to get run over, but you have to be respectful."

Alicia Rutz: Right.

Colleen Wood: So, I will often, if there's something like that, number one, I will definitely prepare. I will not show up to a conversation with something like that without having educated myself with a solution and figuring out a way forward.

Alicia Rutz: Yep.

Colleen Wood: So I will wait to have that conversation until I'm ready for it. And then when I do come, I come as a leader and say, "So this is what I can offer." Hearing the way that I'm speaking, it's important. "This is what I have to offer. This is what I think we can do. This is what it's going to cost in order to get there. And this is what I'm willing to do in order to help."

Alicia Rutz: Exactly. And sometimes it's putting money into it.

Colleen Wood: Yeah.

Alicia Rutz: And just thinking outside the box and it can be a fun part of it. Sometimes I hate the negotiations. I just want everyone just get along.

Colleen Wood: Yeah.

Alicia Rutz: And there's so many different sides of negotiation for us. It's with our own clients. It's with agents.

Colleen Wood: Yeah.

Alicia Rutz: I don't feel like there's much negotiation with lenders. It's more just communicating with the lenders.

Colleen Wood: Well, I mean, negotiation with the lender could definitely be like, "Hey, things look different."

Alicia Rutz: Yes.

Colleen Wood: "I need your help. These people are short on cash. Can you now go to the seller and see if you can get a seller credit in order to keep this on track?"

Alicia Rutz: And keeping the close date drives me fricking nuts. We have those extra days built into our buy sell.

Colleen Wood: Right.

Alicia Rutz: And they constantly use those. And they'll use that as their argument for, "Well, we had these extra days."

Colleen Wood: You should have been closing on time.

Alicia Rutz: You should have been closing on time. There's no excuses right now not to close on time.

Colleen Wood: No.

Alicia Rutz: Appraisers are coming in. Us, agents, are still putting in about those 45 days. And if it's a really tight close, we call them immediately, say, "Is it possible to get it done as quickly as we're asking for?"

Colleen Wood: Yeah. We just picked up a jumbo loan because somebody wasn't able to get it done inside 30 days. I mean, they only wanted a 30 day close. It wasn't like they were looking for a 12 day. I mean, if it was a 12 day, I mean, we probably would've tried to make that happen too. It's like, "well, it's just going to be a $2,500 appraisal. Let's rock and roll."

Alicia Rutz: Yeah. Yeah.

Colleen Wood: Like they just got to throw money at it.

Alicia Rutz: And you also have negotiations, I mean, negotiations kind of sounds like a tougher word than it is, but within your own team, just figuring things out, what works, what doesn't work.

Colleen Wood: Yeah. We're constantly adjusting.

Alicia Rutz: Yes.

Colleen Wood: Constantly adjusting and when you're negotiating, everybody comes to the table with their viewpoint and what they think needs to happen. And so really identifying, number one, what the issue is. And number two, what all the options are, the pros and cons, what's the most important thing in order to get out of it in order to move forward? And I think that's how it is like when you're talking to your clients about what are your priorities?

Alicia Rutz: Right.

Colleen Wood: Can we negotiate? You're asking for a three bedroom, two bath, and you want an acre lot and you want to be able to not have any covenants or something like that.

Alicia Rutz: That sounds like every buyer in Bozeman right now.

Colleen Wood: I can find you a property, but you're not allowed to have chickens. Can you negotiate on that?

Alicia Rutz: Right.

Colleen Wood: Are you passionate about having chickens or are you just want to make sure that you're able to park your boat on your property?

Alicia Rutz: Right. And so you got to find like where the non-negotiables are, where people are not willing to move.

Colleen Wood: Right.

Alicia Rutz: But also where you can find the middle ground.

Colleen Wood: Yeah.

Alicia Rutz: That's really the skill.

Colleen Wood: And really what it is leading.

Alicia Rutz: Right.

Colleen Wood: It's leading, It's you don't have to, when you're negotiating, I don't have to be right. I mean, there's people with brilliant ideas. I didn't think of it.

Alicia Rutz: Right. And there's also, I think one of the biggest skills is reading people.

Colleen Wood: Yeah.

Alicia Rutz: There is a lot of tough agents out there that have been there for a long time. And I realize the only way I can get a deal done with them is if I'm harsh with them or at least a little bit more curt and a little bit more and a little bit more-

Colleen Wood: Do they think you're bitchy?

Alicia Rutz: Yeah. I rarely get that. But there's some agents that are just straight bitch.

Colleen Wood: They are.

Alicia Rutz: And they only respond back with when you're just more direct.

Colleen Wood: That kind of energy.

Alicia Rutz: And you give them the same energy back. And that's hard for me, but it makes it the deal so much easier than me trying to win them over, trying to get them to like me.

Colleen Wood: Yeah.

Alicia Rutz: I'm like, "That's just not going to happen. That's fine." So what I need to do is just give you the same energy back, read them, and get the deal done that way.

Colleen Wood: Yeah. Yeah. I mean, there's a lot of times like for clients that need to have an out of the box solution. I've got somebody right now who went under contract, golly, in March and for a July 1 closing, it was way too early for them to close, or for them to lock in their rate. Well, interest rates are much higher right now. So we have to negotiate how it is that we're going to figure it out because her interest rate is going to be higher. She didn't really want her payment to be higher than what it already was, but rates are dramatically higher and it's going to cost some money. She has limited funds and she did not want to have to ask for any money from her mom and dad, but we're going to have to come to a negotiation.

We're going to have to come to a compromise. It's like, "Do you want to buy a home? Or do you not? Because if you have limited funds, we have to fill in this blank, somehow. This is what I'm willing to do. I'm going to do this concession for you to make it a little bit more affordable for you. This is what I can do. Are you willing to ask your mama if she can loan $10,000? That's what it looks like."

Alicia Rutz: Yeah. And we're seeing a lot of people that have to borrow from their parents. I would say pretty much-

Colleen Wood: It's gifting.

Alicia Rutz: Gifting, yes.

Colleen Wood: Gifting.

Alicia Rutz: Gifting. But almost every first time home buyer, that's what they're having to do.

Colleen Wood: Yes.

Alicia Rutz: Yeah.

Colleen Wood: Yeah. I mean, we're just seeing a lot of people having to pull efforts together.

Alicia Rutz: Yep.

Colleen Wood: And negotiate a new living strategy in order to make that doable situation.

Alicia Rutz: Yeah. I'm in like some crazy deals right now with all these lawyers are involved, not because of me, but with they have lawsuits happening.

Colleen Wood: Shoot.

Alicia Rutz: And in order to get these deals done, there's like liens on properties, and trying to figure it all out. And one of my deals, we've had to delay our due diligence period multiple times because of our end. We finally kind of get things figured out. And basically they were just kind of snapping at me that this one part of it wasn't done yet. And it was like 12 hours from the time they gave me this paper that needed to be signed, but they have been the reason everything's been delayed. It's been also like another four month close. And I finally had to just be like, "You're the reason that this deal hasn't happened yet."

Colleen Wood: Yes.

Alicia Rutz: It's been all of these lawyers and happenings and you have to keep pushing the due diligence period. And so sometimes, again, standing up for yourself and letting them know where they were wrong.

Colleen Wood: Yeah.

Alicia Rutz: Is really important as well.

Colleen Wood: Yeah, no, we have to talk about where the bear shit in the woods.

Alicia Rutz: Exactly.

Colleen Wood: Literally, that's part of how we have to communicate with people. There has to be accountability. It's not just about protecting everybody's feelings.

Alicia Rutz: Right.

Colleen Wood: We obviously we try to be respectful. That's important, but it is to talk about, "This is where you messed up."

Alicia Rutz: Yep.

Colleen Wood: "This is where I messed up. And this is how we're going to figure it out together."

Alicia Rutz: Yes. And if I mess up.

Colleen Wood: It's okay.

Alicia Rutz: Being accountable.

Colleen Wood: Yes.

Alicia Rutz: Being held accountable is best thing I can possibly do.

Colleen Wood: Yes.

Alicia Rutz: "Oh my gosh. I'm so sorry. I didn't realize that that happened."

Colleen Wood: Yep.

Alicia Rutz: And obviously trying to stay in front of that as much as possible.

Colleen Wood: Of course.

Alicia Rutz: But owning yours is a huge way to also just get past hurdles.

Colleen Wood: Yeah, absolutely. And then you can come to a consensus and then we can all move forward.

Alicia Rutz: Right.

Colleen Wood: And then we've gotten to the goal of whatever the good, well, for us, it's the goal of home ownership.

Alicia Rutz: Exactly.

Colleen Wood: It's like, "What do we need?" That's the most important thing. So if that's our biggest goal, then this is what we need to do. And this is what I'm willing to give. This is what you're willing to give. And then we can come out at the end of it and hug it out.

Alicia Rutz: Yeah.

Colleen Wood: Move on to the next one.

Alicia Rutz: I have a feeling you're really good at negotiating.

Colleen Wood: I'm really good at negotiating. Unfortunately, my husband will tell you that I think it's a downside being married to me. I don't ever lose an argument. And, I don't know, that's not a good thing when you're married. I just adamantly see my side of it and I just keep working and compromising and edging and kind of getting it where it needs to be, into some sort of semblance of happiness on the other side of it. And I don't know, I try to make it work. I just try to make it work.

Alicia Rutz: But good for you though.

Colleen Wood: Yeah.

Alicia Rutz: Because you know what you believe and you stand for it.

Colleen Wood: I'm not a doormat.

Alicia Rutz: You're not a doormat.

Colleen Wood: I'm not a doormat. I just am not.

Alicia Rutz: I've been a doormat and am getting way stronger in myself and understanding my power and what I can do and what I'm capable of. So I've definitely grown a lot there.

Colleen Wood: Yeah. Yeah. It's a humongous growth period.

Alicia Rutz: Yep.

Colleen Wood: I think back like when we were in our early '20s.

Alicia Rutz: Oh.

Colleen Wood: Can you imagine? We were just like little limp noodles.

Alicia Rutz: Well, yes or no, because also when I was younger I thought I knew everything.

Colleen Wood: Yeah. I thought I knew everything.

Alicia Rutz: And like I knew all the answers to everything and now the older I get and the more I know, the less I know.

Colleen Wood: I just remember just being super intimidated by somebody else's status or their accomplishment.

Alicia Rutz: Same.

Colleen Wood: To the point that I would try to talk and my throat would actually feel like it was closing. You know? And then I would just like-

Alicia Rutz: And now you talk to the most important people all around you and you just dominate.

Colleen Wood: I love talking to big, especially high producing women. I just love it. They're my people.

Alicia Rutz: Right.

Colleen Wood: They're my people. I get excited about it. I'm not scared about it anymore, at all.

Alicia Rutz: And I've heard about your public speaking. I can't remember who I was talking to, someone in the industry and saying that you were the best public speaker they've heard in years.

Colleen Wood: Oh my God. You have to think back who that was.

Alicia Rutz: I know, right?

Colleen Wood: Oh my gosh. Oh my gosh.

Alicia Rutz: Because I've never heard you do public speaking, but I heard your absolutely-

Colleen Wood: Oh, that makes me so happy. Thank you. That's all I need. I'm good for a month.

Alicia Rutz: You're done. You're good.

Colleen Wood: I'm good for a month. I'm going to fly on that for a while.

Alicia Rutz: Oh, that's so cool.

Colleen Wood: You know what? The thing about public speaking and speaking in front of anybody or even going and talking face to face to a high producer or anything like that. Number one, folks out there, the high producers are the ones you want to talk to anyways because they're really, really good people.

Alicia Rutz: Yeah.

Colleen Wood: So don't be intimidated by somebody who's a high producer. They're the ones that, number one, know what they're doing. You can learn from them. You should just sit down and shut up and learn when they're talking to you because, and that's the most important thing to do anyways when somebody's talking to you, especially somebody who's been a producer, is shut up. You don't need to explain to them how amazing you are. You don't need to like say, "Yeah, yeah, me too, blah, blah." You just need to shut up and most high producers will literally give you the keys to the castle.

Alicia Rutz: Right. And that's also true with our negotiating. Sometimes just letting somebody else vent, give their whole point out, get it all out.

Colleen Wood: Yeah.

Alicia Rutz: And then just allow that to happen.

Colleen Wood: Yeah.

Alicia Rutz: And then from there, once they've really just spewed all over you, then you can start to process from there.

Colleen Wood: Yeah. Exactly.

Alicia Rutz: And you don't necessarily have to get to your point across to make the negotiations.

Colleen Wood: No.

Alicia Rutz: Let them get it out and then figure out where the common ground is.

Colleen Wood: Exactly. That's a really good point. Yep. Just sit there and listen. We're so frequently when we're communicating with people, we are looking for the opportunity to respond.

Alicia Rutz: Right.

Colleen Wood: Like we think we got to respond really quickly and you can really tell people who are really good listeners because they will actually pause when they respond. Like our husbands are really good listeners, when they pause, and you and I are like-

Alicia Rutz: Oh, 100%. Always on to the next, next, next.

Colleen Wood: We're ready to respond and it's really important just to sit back and listen and process and think about what it is you're going to say. Circling back to public speaking, any one of us that are in this industry or even in any industry, but I only know this one so I'm going to talk on that. It's really, really important for you to hone your public speaking skills. And for me, it was, number one, identifying the fact that I don't do well in a scripted situation. I don't do well with that.

Alicia Rutz: So you speak more off the cuff?

Colleen Wood: Completely off the cuff.

Alicia Rutz: Really?

Colleen Wood: Yeah. I cannot script anything. No, no, no. I can't script anything. I will mess it up.

Alicia Rutz: Okay. Interesting. Or are you just too robotic or are you actually-

Colleen Wood: I don't ever want to read something. The only time I'll ever like prepare anything like that is if I didn't really have much time to prepare, like Prospera speaking or anything. You saw me speaking?

Alicia Rutz: Right.

Colleen Wood: I mean, that was just like, da, da, da, da, da.

Alicia Rutz: Oh, you did do a great job.

Colleen Wood: Yeah. Well, but I mean, I put some things together, but most of the time I work off if bullet points and I'm generally talking about things I'm talking about all the time anyways so I'm well versed on it.

Alicia Rutz: It's easy.

Colleen Wood: But you have to get it out of your mind, the anxiety. I remember just getting pissed at myself, like, "Stop screwing yourself over." Because I would get so nervous that I couldn't speak. I literally couldn't have, the words would not come out of my mouth, and my heart would be pounding. And it was like, "You're literally cutting your own throat." You need to think about public speaking as just having a conversation with one person in the room.

Alicia Rutz: Right.

Colleen Wood: But we have to, especially as leaders, and with you now leading a team, and you have to be able to get up and demonstrate to people, to your team, that it's okay to get up and speak and lead. And I'm responsible for all these people and I am frequently asked to speak in front of people and I have to do a good job of it.

Alicia Rutz: And you do.

Colleen Wood: I really want to know who said that

Alicia Rutz: I'll have to rack my brain. I know it was some like sort of networking business thing. Yeah.

Colleen Wood: Yeah. Well, I have just figured it out. You just have to figure it out. I definitely was not good at it growing up at all.

Alicia Rutz: Well, I'm proud of how far you've come.

Colleen Wood: Oh, girl. Me too.

Alicia Rutz: Yes. Yes.

Colleen Wood: Me too. We just keep negotiating our way higher.

Alicia Rutz: That's right.

Thank you for joining us today.

Colleen Wood: Tune in next week for another episode of Leading Ladies Of Montana Real Estate.

Buying A Home What You Need To Know

Fri, 07 Jul 2023 10:42:05 GMT

Buying A Home What You Need To Know

Homeownership is the number one way for Americans to build wealth. On the other hand, renting creates no equity and subjects tenants to an inexorable rent cost climb. Before looking for a home, it's essential to plan. Six months before starting a home search, check your credit report. Correct any errors and see if you can do anything to improve your score, such as paying off a credit card.

Also, avoid financing big purchases or increasing the balances on your credit cards. As the homebuying season approaches, create a homebuying checklist. This checklist will save time, define a realistic price range and help you find the perfect home.

Here are some critical checklist items:

Set a budget

Many homebuyers become emotionally attached to a home only to discover they can't afford it. Falling in love with a home that you can't afford wastes time and makes the experience unpleasant, causing them to start again from square one. To avoid this, define a budget based on your current income, then use a mortgage loan calculator to determine the price range that fits.

Remember that the mortgage isn't the only cost of ownership. Be sure your estimate factors in other expenses, such as:

Utilities.
Insurance.
Property taxes.
Mortgage insurance.
Closing costs.
HOA dues, if applicable.

Get pre-approved for a home mortgage Never home shop without a mortgage pre-approval. The pre-approval shows the seller you are serious, which gives you leverage in negotiations. It also defines the maximum price you can consider.

Keep in mind that just because a bank approves you for a maximum amount doesn't mean you can really afford it. You have to look at your own budget, spending habits and upcoming potential expenses that the bank has no way of knowing. For example, if you plan to have children and will need daycare, will the increased costs of child-rearing put you in the red?

Hire an engaged real estate professional

the Wood Team at Home Town Lenders can help you find a great real estate agent in Montana, you can be assured of working with an experienced agent who understands the nuances of the

neighborhood and municipality you are considering. Real estate is very local, so you want someone who's plugged into the community.

Define what you're looking for in a home
List what's important, including items such as:
Walkability.
A garage.
The school system.
An extra bedroom.
A basement.
A yard.
A pool.

A column for wants and a column for needs work best.

Take your time

The homebuying process takes time and effort, but it's always worthwhile to find the right house. Shopping online, visiting open houses and reviewing suggestions from your real estate agent should all be part of your checklist.

Buying a home can feel overwhelming at times. Many homebuyers find that getting advice from family members and friends helps them gain different perspectives and identify issues that they might encounter. Organizing important steps in a checklist helps you stay organized and focused on finding your dream home.

Don't hesitate to reach out the The Wood Team to help navigate any questions or confustion you might have when looking to buy a new home. Call us today