Venture With Joe and Cody
Venture with Joe and Cody is a captivating journey into the lives and stories of business leaders, entrepreneurs, and pivotal community figures, revealing the essence of success through candid conversations. Tune in to discover the setbacks, triumphs, and invaluable lessons learned on the path to making a mark in the business world and beyond.
Venture With Joe and Cody
Unlocking Home Financing Secrets with Joe and Cody
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Mortgage rates are driving today's strange real estate market despite high demand and low supply, creating affordability challenges for buyers and homeowners alike.
• Current mortgage rates are hovering around 6.9%, making affordability the main obstacle for many buyers
• Homeowners with 3% rates feel trapped, wanting to move but unable to afford higher rates on new properties
• Rates may eventually return to the low 5% range, but the timeline remains uncertain
• Down payment amount and credit score are the primary factors in determining the best mortgage type
• VA loans are optimal for veterans, conventional loans work best for credit scores above 700, FHA for below 700
• Service quality is the key differentiator between lenders, with personalized attention often worth slightly higher rates
• Rate locks are tied to specific properties and typically last 30 days, with longer periods available for new construction
• Mortgage rates can change multiple times daily based on market conditions
• The average mortgage currently takes 23-24 days from accepted offer to closing
Join us for future episodes where we'll be bringing on special guests to share their expertise on the mortgage and real estate markets.
Hey, hey guys, welcome to another episode of Venture with Joe and Cody. My name is Joe Skipper, I'm the owner of Skipper Realty Group, brokered by EXP Realty, and I'm with Cody Wilhelm with Residential Mortgage. What's up, my man?
Speaker 2What's going?
Speaker 1on. How are you? I'm good. I'm good Today again with us. I feel like there's always a technical difficulty. We did another recording that was about 20 something minutes long and it was only me talking to myself. I could hear you, I could see you, we had a great conversation and then, when it came down to record, it was just me looking into the camera, laughing at the jokes that you said and then responding to nothing.
Speaker 2And it would actually be really kind of funny to post it. Probably only funny for us, but yeah, you know what I got?
Speaker 1a suggestion of is to do the. We you know what I got a suggestion of is to do the. We need to do one of our live streams. The baby face. Have you seen those?
Speaker 2The AI generated baby face.
Speaker 1Yeah, so I'm going to I think I might try that At least maybe our advertisement for like one of our videos, like one of our podcasts. Maybe I'll just do a 30 second clip of like you and I talking.
Speaker 2Oh, that'd be great.
Speaker 1So I might try that, but those are funny.
Today's Strange Real Estate Market
Speaker 1Yeah Well, I don't have anything crazy planned. However, the rates are still high. There's still buyer demand. This is a weird market because it's not supply and demand at this point to me. Maybe you have a different opinion, but it's not. The demand is still high, the supply is still low, but the rates are driving everything like yes, and so people are like, well, there's less supply, there's no. We can't even go off of the traditional way of thinking like, oh, we just have a ton of supply, so homes are sitting on the market longer, like right, not the case it. It's just a weird market, just a really weird market.
Speaker 1so to even explain to sellers and buyers, it's like it's just so weird. Uh-huh, I don't know it's the same to. It's like it's just so weird. I don't know it's the same to you or what? Totally same, it's just an affordability thing.
Speaker 2I think, there is, if anything, there is a ton of demand, but it's just the affordability piece that when people you know they want to get out of their rental, they want to move, and then they look at the numbers and it's just stretches most people a little more thin than what they want. Or maybe they've just done some quick research and don't even really know what a payment looks like on it, but they love the $500,000 home, so that's what they want. And then they see the payment and they're like maybe we're just going to rent for another year Yep.
Speaker 1And that goes for even homeowners, because homeowners that are in the 3% rate are still wanting to leave. They're just comfortable staying. So you have people not even and I don't even know if that factors into the demand that people are talking about. It's not just renters that are like, hey, I'd rather just rent, and sellers or homeowners still want to move, they just can't. They're like I got a 3% rate.
Speaker 1I want to upsize, but I can't upsize at a 7% rate and I think I'm starting to see that they're not comfortable in that. They're not like, oh yeah, we'll just stay here for another eight years. We're totally cool at 3% rate. They're all trying to figure out this new world of like. I want to get out and if I can get out for six. I'll be happy with that if I can get out.
Home Affordability and Buyer Challenges
Speaker 1And so it used to be. I think right after COVID everyone's like I'm staying in my house. But we're reaching the point of that normal rotation for people, the five to seven years that everyone's like, oh, maybe I upgrade, downgrade, move for a job. And now people are like just can't, like, right, like I can't do it. It's not a choice necessarily, it's just like I can't. So it's just a crazy, crazy market.
Speaker 1But it leads me to my questions that I have for you okay, because as I say in our um, our uh, other recordings, is like everything's based on you. Now, cody, it's not. You know, you're the lender you're dealing with the rates. I am just reacting to your rates, that's it Like. The rates that you give, that's whether I succeed or fail in life and in business. So people are like oh, why don't you ask Joe a bunch of questions Like well, joe's sitting here waiting for Cody to get rates in a in a decent spot you know I can start selling and buying homes yeah, it should be.
Speaker 2I would guess I'll probably bring them down here in the next few days.
Speaker 1Well, hopefully, but we'll see, you've been lying this last year and a half saying that they're going to go down and all they've done is go up just gotta keep people.
Speaker 2It goes through all your friends too, like in the industry, thankfully nobody listens.
Speaker 1Um, well, I guess what I want to start with. Just like I wanted to look up, I just was curious what homebuyers are asking uh lenders in 2025, and so, um little chat, gbt gave me some research and, um, here's some of the top questions. So what are current mortgage interest rates and are they expected to change soon? Like I kind of led into the fact that cody's been lying the entire year like a couple years, yeah, um, yeah, but honestly, like you can tell us the rates and I, I, yeah, what do you think?
Speaker 2what's your from your professional standpoint, knowing that you know we could all be wrong and normally yes, well, so I have felt like that things would improve over the last probably realistically, two years maybe because it felt like that first spike in rates and everything and it was kind of chaos and it was like, okay, this just needs to be a quick little reset here. And then the fact where we're at and where we're going. I I definitely don't anticipate there being and I never really did anticipate there being a big drop, but I think if we've seen anything, it is slow for anything to move down. So I think putting things back into the low sixes, even the high fives, would feel like such a huge win. So I don't think it has to go down very far in order for it to feel like it's a big improvement. And I do think that that's where we will end up being. Probably is somewhere in that low five range, but I don't know if that's going to be in two years, five years one year.
Speaker 2I do think that that's going to be a little more of a healthy number for where we're at and where home prices are at. If home prices were a lot lower than like if you're in a low cost area, a 7% rate on a $250,000 house, honestly it's not that big of an impact. But when you're looking at, most homes that people are buying are five, six, 700,000, that's a pretty big. That's a pretty big number. I think they're going to improve.
Speaker 2But I think we still have to go through the the crap that we're going through in order to get out to the other side. But I mean, it's just. I know historically 7% is not bad at all, but I think there's a little misconception there. Historically we're at a ridiculously high price too. You know, 7% on 150,000, or, like I even just said, 250,000, not that big of a deal. Yeah, it hurts a little bit, but your payment from a 5% to a 7%, that might only be like 150 bucks a month, which you know it's money, but it's not like a four to five to $600 a month difference on some of those higher priced homes.
Speaker 1So yeah, when you're looking at the eight, 9 million, it's like insane that you know that. What a seven percent versus a six and a half versus a six, you know.
Speaker 2Right.
Speaker 1Yeah, we'll just wait and see what are the rates now. Just under seven? Yeah.
Speaker 2Yeah, I think they're like six point nine. Eight today is the national average so okay um not much has changed.
Current Mortgage Rates Outlook
Speaker 1I think, glance over this question because I don't. This is very specific that chat gbd gave me. But what type of mortgages do you offer, your company offer and which would be best for my situation? But I think everyone has a different situation. It's kind of using like the buyers are looking for guidance on whether it's fha, va, usda most the best program for them sure, yeah, I mean, I can, mean, I can, I can jump into that, like I guess, like what you know what.
Speaker 1How do you go about determining what is best? So what do you do Like when someone says, hey, I need a loan. How do you go about determining what the best one is for them?
Speaker 2Well, usually it'll start out with how much, how much they have to put down. I'll ask if they served in the military, because obviously that's going to tell me.
Speaker 1If they can go VA.
Speaker 2that's going to be the best option If not rule it out, how much they're putting down.
Speaker 2If they're going for a more minimal down, then it's going to be kind of a toss-up FHA versus conventional and then the next step is going to be credit score. So if their credit scores are like 700 and higher, I'm going to look at conventional loans first. If they're under 700, then I'm likely going to look at FHA loans first. So what I end up doing is just breaking down side by side. I'll have two or three or four different options for them to say here are kind of the main options for you.
Speaker 2One of them is going to stand out, that is the better one, and then there's others that are going to not look as good. So I ultimately I like to let people decide based on the numbers and I'll explain the differences to them. Like, if you, if, cause there are a lot of people that are right in that low 700 credit score range. So payment wise, a conventional loan and an FHA loan might be almost identical. But then I got to go through with them short-term versus long-term If you keep this conventional loan you can get rid of your mortgage insurance.
Speaker 2If you go FHA you're going to have to refinance out into a conventional loan to get rid of mortgage insurance down the road.
Speaker 2So, sometimes it's a little bit more of planning that goes into it, but initially it's mostly down payment and credit score that are ultimately going to determine which option. And then, if you have, you know, unique situations where they're looking for a, you know specifically want to do a rehab loan or new construction or whatever it might be, those are kind of fit in their own little boxes. But usually that's kind of the main couple of determining factors on which one's going to make more sense.
Speaker 1I have a random one and it's not random, but I had a client ask about it with rates, where, where do lenders differ? And we could go down a rabbit hole? But where, with rates, the being the rates, what would you advise a client? Like you know, I had a buyer like what, who do I go with? The rates were pre-qualified for X. Yeah, who's who's better, like you know. So how do you guys and I don't need a sales pitch from you, but how do you differentiate? Why would working with residential mortgage be better than working with big bank? X? Where do you guys differ in that case?
Types of Mortgages and Best Options
Speaker 2in certain cases, yeah, it's a good question and it is one that does get asked somewhat often, like what makes you any different from this company, and I would say that there's a couple things. Personally, I always sell myself more so than I do the company. I do totally support the company and there's some amazing things that we do, but usually, when it comes down to it, I'm kind of selling myself more on the service. You know, this is a career for me. This is something that I that I will forever do. I'm not in a call center. I'm not. I'm going to answer your phone late at night. I'm going to educate you.
Speaker 2I'm going to walk through things. I'm not just going to send you a spreadsheet and say, hey, pick which one, and then go log in and click this button. It's a hands-on experience. I do think our company, they do provide some pretty amazing support from the loan officer side of it, from my side that probably you know, you or a buyer or anybody, would not see. Just that support and that hands-on approach of you get a whole team of people coming together. And there's some companies that I have worked at with or at and that was partially the case.
Speaker 2But it's coming from more of a mindset of running the business as opposed to like a loan officer mindset. And our company has done a really good job of keeping the loan officer mindset, which is huge for us because we're looking to support our clients and referral partners and for there to be more of an outlook on loan officer focused partners and for there to be more of an outlook on loan officer focused how we run our business. That makes a huge difference because it tends to make a lot more sense on decisions that are made, rather than just like somebody pulling the strings that you can tell they've never done a mortgage before. They're just like well, this is the right thing we should do, yeah, yeah, so it's. It's a lot of just service based what we can do, what we can provide.
Speaker 2We also do have portfolio loans. So there's a lot of lenders that can't do certain things and we can put those in our portfolio because our bank can choose to do essentially whatever loan that they want to do, as long as it's not too much of a risk for them. So we do offer a lot of kind of outside of the box options that we can keep in-house and we service those loans Is there any competitive advantage?
Speaker 1Obviously, I think service is a big issue, especially on the real estate side of things. Being on the real estate side of things, it's critical, but I think it is in lending too, and that's why I think you and I get along really well, as the motto or how we run our business is very customer service oriented. Is there any? This sounds like a dumb question but I think a lot of people have. It is like is there any financial benefit to people? You know, barring any programs? I'm talking like perfect buyer, qualified for $900,000 house, like you know rates you know. Is there any programs that are specific to you or other banks that say, hey, I'll save X amount of money if I went with this person? Or are mortgage rates just kind of what they are?
Lenders: Service vs. Rate Differences
Speaker 2I mean more or less mortgage rates are kind of what they are. You're going to see a little bit of variation with every company, like if you went from, if you looked at five different companies, you're going to get five different fees, base rate if you will, and then you have to add on your margins to run the business. So you're going to see little fluctuations. Here and there you might see lower rates with more of a call center type of online place, because those loan officers are typically just an hourly employee that are just kind of like order takers, as opposed to loan officers like myself and like a lot of loan officers where they're going out and getting the business, so they're bringing the business, so they're going to get paid a little bit more. So there's a little bit of a variation with that.
Speaker 2Brokers versus retail just depends on who is getting the loan and what the overall cost is to run that business. If things are ran really minimal and people are, I mean I hate to say it, but it's kind of like if people within the company are not compensated very well, you're probably going to get low rates because there's less margin, or there's more margin If the employees and everybody are taken care of. You're probably going to see a little bit more. That's why you tend to see online call center type places have lower rates because they get people in and it's just a volume thing, like we're going to pay you 20 bucks an hour and you're just going to process this stuff and you're going to do it over and over and over and over, and it's less of a business, it's more of a job than it is like an actual career. But yeah, you will see some variation.
Speaker 1I think that you know, for anyone out there thinking of, like you know, yes, the bottom line is the bottom line. However, and I tell people, if you're okay being treated like a widget and you're okay with lack of communication, if you're okay with you know an online person that you're never going to get a hold of, if you're okay with that, that's fine, and I'm not scaring them. It's just that's what it is.
Speaker 1So if you're going to get the better rate, you're generally getting a worse employee or either great online lenders. But if you're playing odds and it may be a fit for a buyer.
Speaker 1It absolutely is a fit and there's no one size fits all for a buyer. But people are like, well, I can just get it cheaper at Rocket Mortgage. It's the same as going I could just get it cheaper and for sale by owner. I could get it cheaper going with an agent through Redfin that charges less money. But you have to take the bads that come with the goods and that may work for you. And if you're like, hey, I want to save a couple grand, I'm going to be just turned into a machine online and, you know, pump out my mortgage.
Speaker 1But more often than not, mortgages have issues like more often than not, and when you don't know until you need it, when it's like the rocket mortgage where you can't get a hold of, or you've talked to 15 different people or you're you know, you're past their work hours and now you just have a bot that can't and you have to close in a couple of days. It's that's when you start to see dang, it, maybe should have went with someone else. So totally, but again, not knocking them. It may be worth certain buyers, but I think this is good for people to hear, because I think they do think like well, they're all the same rate. What are they going to do for me? Like, why do I have to pay this one more or this one less? Like, well, you're paying for quality of service, just like anything you know.
Speaker 1Totally, yep, it's it's same thing with everything that we buy Like sometimes the cheaper version works great, because we just need this for just a small thing, or you need it for I go to Harbor Freight. Yeah, I go to Harbor.
Speaker 2Freight and I get certain things that I know that I'm only going to use a few times and it's not worth me going and buying the big name brand. But if I'm going to use a few times and it's not worth me going and buying the big name brand. But if I'm going to use that tool all the time and it's reliable, I'm probably not going to buy the cheapest version of it so yeah. Okay, well, shout out to Harbor Freight.
Speaker 1Yeah, I know, I just think I said a certain company's online lender. I hope I don't get in trouble for it, but I was not knocking them, I'm just saying they're just different.
Speaker 2It is a stigma. Like you can talk to anybody that's used an online lender, and there's probably some that have had great experiences and others that it's just like.
Speaker 1yeah, people that have been like they've commented on my stuff and told me oh, I sold my house myself and it was great I'm like that's awesome. I'm not even knocking it Like if it went great for you, that's totally cool, but you're the exception, not the rule.
Speaker 2Yes.
Speaker 1Right, but you always have. They're the generally the loudest part of the population. They are. Oh, I went with an online lender. It was so great. I sold my house myself and it was so great.
Speaker 2No one ever needs anything you know it's like okay, cool, cool, yeah, thanks, Keep it to yourself.
Speaker 1What I get asked a lot is and this is really important because I think there's a lot more contingent offers and people trying to buy and sell and closing at the right times and keeping their rate Obviously, you can lock in your interest rate and what are the terms of the rate lock Kind of walk people through. Basically, what this means is you're asking your lender to find we enjoy this rate that you have right now. Let's lock it in. What?
Speaker 2are some.
Speaker 1What are some of the rules associated with that? Timelines and things like that.
Rate Locks: How They Work
Speaker 2Good question so typically you're going to be able to lock in? Well, not. Typically you're going to be able to lock in your interest rate once we have the purchase contract for the home. So once we know that it's under contract, we can put an address in our system, the lock goes to the property. So a lot of people don't realize that that it's like you know, like you go buy a car and they get. They get you an interest rate and that's for you to go find any car that you want, whereas on buying a home it is locked to that property. If you, you know, backed out because of inspection, well, now you're no longer locked in at that rate because you got to find a new property to get locked in. Typically it is a 30 day lock. That's kind of just the standard defaulted because of home purchase usually takes somewhere right around 30 days.
Speaker 2You can do 45 day, you can do 60 day, you can do 90, like you can go. You can stretch it way out, and the the way that you would do that, or the reason that you would do that, is because maybe it's new construction and you know that you're four months out but you want to get it locked in because rates are looking worse. You're essentially, you're locking in that rate and you're hedging for that amount of time. So locking in a rate farther down the line like that is going to cost more than it would if it was just a 30-day, because you're guaranteeing that rate over the course of four months.
Speaker 2And who knows what might happen in that timeframe. Typically they're done in 30-day, 45-day, maybe sometimes 15 days, depending on when you want to do it. But you're going to want to lock in right away, unless you're in a market where rates tend to be getting better and so we call that floating. So you can either lock or you can float and there's a disclosure that goes out that you acknowledge, that says my rate is locked or floating. And then it's just a matter of keeping your eye not you as the buyer so much, but me as the loan officer keeping an eye on the market and figuring out when the right time to lock it, in kind of like buying and selling stocks where you're just there's the risk, for sure, in floating and waiting, but there's also can be some really good reward.
Speaker 2And then to kind of flip it. The other way too is you can lock in and then, if interest rates get better, you can do what's called a float down option, which just means that if rates get usually it's a quarter percent better, so which is a pretty big shift. But if you were to lock in and then, over the course of your loan or your the time getting your loan, rates got better by, say, a half a point, like it was a huge, drastic change, we can do a float down which just means that even though your rate is locked, we can make an adjustment to get it down to where the market is now. So typically, once you're locked, you're locked, you can't change anything. But if the market moves enough, we can do a float down option with that.
Speaker 1So you're kind of asking about that.
Speaker 2Yeah, I tell people like once you're locked, you're locked. I want to make sure that you know, and I let people determine whether or not they want to be the one to pull the trigger on it. Or if they say, hey, I want you just to get me the best rate you can, and so it's like there's no time that they have to lock it in. No, you can wait till the, so you make the offer it gets accepted, you could still be floating around.
Speaker 2Totally. I've had some where I have literally the last condition that underwriting needed for us to be able to get documents out to sign was to lock the rate because the rates just kept getting better and better and better.
Speaker 2So we just kept writing it out until we couldn't write it out anymore and it was like, all right, now we have to lock because we need to close the loan, but there is no set timeline. The underwriter does have to have that, because that obviously determines what your true payment is, but no, there's no set timeframe. I think in this environment and how it has been over the last handful of years, I'm most of the time encouraging people to lock right away. And if we happen to get under contract when we're in a good swing of rates, then I might say, hey, let's keep an eye on this for a day or two and if it seems to like it's going to get worse, let's lock it in. But yeah, I'm always a fan of locking it as quick as you can, unless the market, unless you're in a good swing of the market where it's just steadily improving, then there's no rush, in my opinion, to lock it in.
Speaker 1And do rates change? When do buyers need to know when rates change? Is this a daily? Is it an hourly? Can they watch it by the hour, or is it like every other day, or what is it?
Speaker 2It is daily and it is multiple times a day.
Speaker 1Okay, so it's literally. You can watch it through the day.
Speaker 2Yeah yeah. There has to be enough movement in the market for it to actually change for most lenders throughout the day. If there's a big enough swing then they might reprice during the day. But a lot of times, if it's just a fairly normal day, it's really not going to change throughout the day. But we have seen plenty of times where there's been multiple reprices for the better or for the worse. So it's like you get in and rates come out at eight o'clock and then two o'clock they're worse.
Speaker 2So it's it definitely changes. I mean you can there's some stuff you can look at, like I like to go to market watch and then type in the 10 year treasury note and that'll give you a really good idea on why the rates change so quickly, because that you know that 10 years going up and down and up and down, and if it goes up for long enough or down long enough, then you know you're you're probably interest rates are going to change based on that.
Speaker 2So it's, it is definitely a daily, multiple times daily checking.
Speaker 1Okay, so it can be done.
Speaker 2Yeah it can be done and most, in my opinion, most good loan officers keep an eye on that stuff so that they know to go. Hey today's not looking good. Let's. Let's lock this in.
Speaker 1Let's not ride this out, and I know this changes as the busyness and the economy changes as well. But how long does a mortgage process normally take from the time you get an accepted offer? How? Long are you guys currently taking to get to close.
Speaker 2Yeah, right now I think our average is like 23 or 24 days. As a company, we always I mean kind of it's at least ever since I've been in it it's kind of always just been like we plan for 30 day closing when writing up an offer but, we will move it up quicker.
Speaker 2Sometimes it's a little bit, you know. Sometimes it's might be 40 days, 50 days, based on what the seller needs or buyer or whatever it might be. But I would say, on average you're realistically looking at from the time that you get started until the time that we're done with underwriting. You're probably looking at two, two and a half weeks or so of time. And then there's, you know, and then you got to get the closing disclosure out and then doc sign and everything. So there's a few more days that get added on there, but overall it's usually, as long as there's not a bunch of crazy moving parts, we can get you into underwriting in a week and then get everything cleared, appraisal, back everything by the end of the second week and usually you're sitting pretty good.
Speaker 2So obviously a lot of variables. But if it's a clean loan and they're a salaried W-2 borrower that has money in the bank and there's not a lot of variables, I mean you will knock that thing out in a week.
Closing Thoughts and Next Episodes
Speaker 1Yeah, yeah, cool. Well, those are my questions for you, man, for this week. It was good to talk to you.
Speaker 2You as well.
Speaker 1We're going to try to have some guests on, kind of switch things up a little bit.
Speaker 2We've got a couple of good guests that I need to get scheduled in for our podcast.
Speaker 1Anyways, like and subscribe to Venture with Joe and Cody, that's right. Yeah, it was good to see you. You as well, until next time, we'll chat with you later. Yeah, that sounds like a plan. Okay, see you, man. All right, see you.
