Mortgage Insurance Protects The Lender Not You

Mortgage insurance is one of the most common “mystery fees” in real estate, and it quietly inflates monthly payments for years when buyers do not know their options. We break it down in plain English: what mortgage insurance is, who it protects, and why it shows up when you put less than 20% down. The biggest mindset shift is simple: PMI is not there to help you. It’s there to protect the lender, which means you should have a plan to remove it when you can.

We walk through the rules that matter most for real people making real decisions, including the difference between conventional PMI and the mortgage insurance attached to FHA loans and USDA loans. We also get tactical on how PMI removal actually works, from reaching out to your loan officer to using an appraisal and documenting upgrades that can support a higher home value. If you have been waiting for PMI to “fall off” on its own, you may be leaving money on the table.

Then we dig into the more strategic side of loan structuring: single premium PMI buyouts, using seller credits the right way, and why contract wording can accidentally limit what your credit can pay for. We also cover a critical refinance reality: if you pay money upfront to eliminate PMI or buy down your rate, that benefit is tied to that specific loan, and a refinance can put you right back where you started if you do not have enough equity yet.

If you want a smarter mortgage payment and fewer surprises, listen through, share it with a buyer who is trying to make the numbers work, and subscribe so you do not miss what we cover next. After you listen, what question do you still have about mortgage insurance or PMI removal?

Transcript

SPEAKER_00 0:48

Hello, hello, everyone. We are back with Venture with Joe and Cody. I'm Joe. That's Cody over there with Residential Mortgage. What's up, my man?

SPEAKER_01 0:54

Hey, hey. How you doing? We did a little we did kind of a color coordinating today. A little bit of black. So mine has like little little speckles. I'm kind of like a little disco ball.

SPEAKER_00 1:09

You look like um are ready to go on a golf round and then and then do a recording. Yeah. Um we should do the live off. I'm gonna try to golf more. You should. I like I don't have time, but I want to try. Uh Rory's getting out of school next week and goes to Charbonau all the time, you know, uh on the Youth On course. And I think I just want to do it. Like you should. It

Golf Habits And Work Distractions

SPEAKER_00 1:36

can be a bonding experience. Do you have an issue with nine versus eighteen holes?

SPEAKER_01 1:40

Um my only issue is that nine feels like like a teaser for me. Like I get through nine and I feel like, ah man, I want to keep playing. I get through eighteen. Yeah, I get through eighteen and it still feels short, but it feels like, all right, I got a good a good round in. But nine is great. I I'll do nine here and there. Um there's a place here in Vancouver, it's uh it's like in a senior community, and it's a pretty short one, and it's only nine holes. Um, I think. Yeah, I think it's nine holes, and you can just play that twice if you want. But it's like the nice thing with it is you can get through nine holes in an hour, hour and a half. I know. Um so it does, but I hate it. I know.

SPEAKER_00 2:21

Like I just feel like a quitter. I don't feel like I did the round, like yeah, I don't know. And that's just me, like, I don't know, maybe it's my personality, but I just never feel good with a nine.

SPEAKER_01 2:31

Uh-huh.

SPEAKER_00 2:31

Even though when we were growing up, nine was normal. That was okay.

SPEAKER_01 2:35

So I was just gonna say that same thing.

SPEAKER_00 2:37

No, if you did 18, it was like, dude, that's a lot of golf. I know. We did bayou in Riverwood, like and they had nine holes, like that was uh yeah, and um, yeah, now it's like 18 that maybe we're I know the bayou, you know, not to knock them. Well, they're not called the bayou anymore. I don't think they're so I don't think trouble, but they were they were just so rude to us, like as really yeah, just kind of that like arrogant, you know, whatever. And now looking back, I'm like, your golf course wasn't that nice. I don't know, like we weren't a terrible bridge. I don't know why we're why we were being treated as as 13-year-olds and 14-year-olds as like the scum of the earth. I was like, this is the golf course we should be at.

SPEAKER_01 3:17

Like this like yes, uh the bayou to me should have just been happy with anybody out there.

SPEAKER_00 3:22

Exactly, exactly.

SPEAKER_01 3:23

I like I didn't know good golf, especially at that age, right? It was just like what it's cheap.

SPEAKER_00 3:30

Like, there's nothing around the McMahon, Yamhill, Carleton area. Like, there was nothing Riverwood was I loved Riverwood, yeah. Like yeah, over by Evergreen. I don't know what it is now, I think it's Evergreen's property. I don't know what it is. Um golf course. Uh but yeah, we didn't play everything.

SPEAKER_01 3:47

No, I've only ever played Bayou and then Michael Book out.

SPEAKER_00 3:51

Well, you didn't play Riverwood? It's like outside of Dundee. Um, it was outside of Dundee, right off of uh 99. I don't think I did. Um yeah, great golf course.

SPEAKER_01 4:00

Like for our age, like it was really the other one out there uh was Shahalem Glenn in Newburgh.

SPEAKER_00 4:06

Yes, yes. That was that was good. That was a little bougie. That one got a little you know expensive and bougie, and yeah, yeah, but because that was like the first like 18 hole close by. Like you only had nine, yeah.

SPEAKER_01 4:19

Right, crazy anyways, yeah. Gotta love them. Um yeah, you gotta get it on golf more.

SPEAKER_00 4:26

I know, I know. Bonding experience with you. I never feel good about taking that much time golfing. And every time you actually like get your clubs on a golf course, your phone rings and emails come in and everyone needs to talk to you about stuff, and it's totally fine, but it's just like you never feel comfortable. Like, yes, you always see the movies where someone's like doing business on the golf course. It's like that's never fun, it's never funny. No, like you want to be at your computer, you want to be like full attention, everything going well. And it's just I cannot stand it because I always feel like I miss something or I miss like yeah, you know, I missed uh I wasn't even golfing, but I missed a text from you last night talking about one of our deals and about the appraiser. And I was like, Oh, like I just let it when I was texting you about recording. I was like, Oh yeah, I completely ignored that because I was like doing something. It just it's yeah, maybe it's getting old. Maybe this is just old age.

SPEAKER_01 5:18

I I struggle with that at times too. There's something sometimes like, especially if I don't mark it as unread. Like if I read it and I'm not able to respond right away, I have to mark it as unread. Otherwise, because I I go off of those text notifications showing me how many I have, and I'm like, oh, that's right. I gotta I gotta get it.

SPEAKER_00 5:36

And if you've got none, then you're done. And that's I'm terrible at it. And Christina's good about like marking it as unread. I'm I'm trying to get better at it because that is the my that's the problem. Like I look at it, I'm like, yeah, I'll get back to him. And then your life goes on and you never get back to him.

SPEAKER_01 5:50

So yeah, because you can be it, I mean, it's like I I guess that's the the challenging part about using our personal phones for for work is that it's constant, right? Like it could be like you're just at dinner or you're in the middle of a conversation and you see it and you peek at it just to make sure, okay, it's nothing super important. I'll finish this and respond back in five minutes, and then the next thing you know, you're whatever, you're doing something else, and then you go to text someone and you see it. I have that. I kind of like what you were just talking about with with mine that I sent you yesterday. It's like I'll go to text somebody and I'll see that I the last part of our correspondence was them sending me something, and I'm like, oh man.

SPEAKER_00 6:29

Yeah, like dang it.

SPEAKER_01 6:31

Uh yeah, sorry, just now saw this one. Yeah, yeah, sorry about that. I hate it.

SPEAKER_00 6:36

I know, I know. Um hey, uh this is this is a super exciting topic that I think you wanted to talk about. Yes, the world of mortgage insurance. It is such a great thing. Just sitting on the edge of their seat, like you know, you know what I want to learn this week from Cody and Joe is mortgage insurance and what that is. Tell me more. Yes. Um, as much as it sounds exciting, it is an important topic because it doesn't, it is something that I think I find and probably you find is a lot of buyers don't know what that even is. Like, you know, what it is and what it how it affects your monthly payment and how to get out of it, and how to you know, when you have to have it, when you don't have to have it. So we can kind of like get you going, and then I'll ask you questions because even as a real estate agent, I half the time don't know what you're talking about when you say sure that stuff. So right.

Why Mortgage Insurance Exists

SPEAKER_00 7:25

So yeah, what is it? Like what what when someone applies for a loan and they have a certain parameters, you're gonna tell them, hey, you need mortgage insurance, or hey, you don't, and why?

SPEAKER_01 7:35

Yeah, yeah. So mortgage insurance is something that that a lot of people have to have. Um, but if as quick as you can get out of it, the better. Because mortgage insurance, sometimes people think of it as like, oh, this is insurance for my mortgage, in case something like it's a benefit to them, and it is not a benefit to you. It is only a benefit to the lender. You're paying for them to have an insurance policy in case you don't pay your loan and you default, and now the the lender is taken care of. The mortgage insurance company will pay that loss.

SPEAKER_00 8:07

That's a great point uh to start off because I think the majority of people do think that, and that is totally reasonable to be like, oh, that just protects me from something that might happen with my mortgage or something. No, it's protecting the bank that lends you or the lender from you being an idiot and not paying your bills. Yes. Yeah.

SPEAKER_01 8:25

So that's the first thing is you want to get rid of it as quick as you can, not to the point where it's like a major stressor because you just have to have it. Um, but on most loans, you have to have mortgage insurance on there. So USDA loans, FHA loans, um, those two specifically, you have to have those on there no matter how much equity you have. So those loans, you're never gonna get rid of it. On a conventional loan, if you have less than 20% equity, then you're gonna have mortgage insurance. Once you have more than that, right? Yep. Once you have more than 20% equity, you can ask to have that removed. Or if you just put 20% down at the time of purchase, then you're not gonna have mortgage insurance.

SPEAKER_00 9:09

Where it gets kind of automatic. Sorry to be I'll cut you off randomly, but I'm sorry. Uh, because I have these questions of like, is that 20% automatically factors in, or is this the mortgage company being like, eh, 20%, but this home is different? Or is it like a true just like once you have 20% equity in any home that you purchase, they're gonna cut that off?

SPEAKER_01 9:28

Um, so it's a little bit of both, but it is so say you went into it with 10% equity. Um, there's a whole amortization schedule that just shows you, like, okay, by this year, by you making your payments, you're gonna fall, it's gonna fall off.

SPEAKER_00 9:46

Maybe at this point, yeah.

SPEAKER_01 9:47

Yeah. So that's what the lender is gonna base it off of. They're not gonna take into account over the course of those years that your property value went up 50 grand and go, you know, kind of analyze it for you. So what you would do as the the owner of the home is you would say, you'd reach out to me or whoever did your loan, and you'd say, Hey, I want to, I want to try to get rid of my mortgage insurance. And then what we do is we look to see, you know, a rough estimate on what your home's value is plus your your current balance. And if we can, um, the mortgage insurance company will send an appraiser out to get a new appraisal and tell you what your your home's value is. And now if you have 20% equity, then they they will just remove it. So the process is reach out to the loan officer that did your loan. We reach out to the mortgage insurance company to say, hey, they're requesting this, and then we'll list out if there's been work done to the property, we'll list all that stuff out. Painted the house, updated

How To Remove Mortgage Insurance

SPEAKER_01 10:46

the kitchen, uh, made a couple extra mortgage payments, whatever it might be. Um, then they will factor that in and then they will get that removed as long as you have your 20% equity. So it's it's a little bit of a manual process, but if you were just to not ever think about it, eventually it's gonna hit that that mark that the mortgage shows that you have 20% equity, and it will automatically get taken off of there. But that's gonna be like way longer than the reality because you figure if you're gaining, even if you're only gaining 1% per year in value, you're still gonna hit that before the amortization schedule shows you that you're gonna be, you know, 10 years into your your 30-year deal or whatever that number is, but it will eventually go away. Um, but like I said, with FHA and uh USDA loans, those are not gonna go, they're just there.

SPEAKER_00 11:40

So I always tell people generally lower down payment loans, lower, like maybe more risky buyers, if that not to not to sound condescending, but it just a riskier type of loan.

SPEAKER_01 11:52

It is like yeah, yeah. And they're targeted that way, which is which is what makes them good, is it's like they have different parameters, but they're they're really made for the people that have, you know, their credit scores are lower, or they have very little to put down, or and they have shorter time frames on when you came out of a bankruptcy and a foreclosure. So they they target it to be for people that are not in that perfect great credit, lots of money, super clean history. Yeah, so that's just one of the things. But I will say though that like with an FHA loan versus a conventional loan, um, if you were to compare between uh somebody with with good credit five percent down versus bad credit three and a half percent down, five percent down being conventional, three and a half percent being um FHA, your numbers probably aren't gonna look that different.

SPEAKER_00 12:42

Yeah. Okay.

SPEAKER_01 12:43

So it's it's just if if that person with the lower credit tried to go conventional, that's when it's gonna look really rough for them. Um but the mortgage insurance, so another piece on the mortgage insurance, so that's kind of like the basic standard part of the mortgage insurance, where it can start to get a little bit more, I wouldn't say fun, but just kind of on the creative side is if you have say 10% down on a conventional loan, instead of just saying you're gonna have mortgage insurance until you have 20% equity, you can do what's called a single premium, which is essentially just you're you're buying out the mortgage insurance.

SPEAKER_00 13:19

Okay.

SPEAKER_01 13:20

So you're you're taking on an additional closing cost to pay for your mortgage insurance instead of having it as a monthly cost. And so as long as you have that loan.

SPEAKER_00 13:31

I guess why would that matter? Like if you if you have the money to pay off your mortgage insurance, don't you have wouldn't you have the money to put down on a loan that doesn't have mortgage insurance? Or is that or is it is it a different

FHA And USDA Rules Explained

SPEAKER_00 13:42

cost? It's a different cost. Significantly less than probably significantly less. Yeah.

SPEAKER_01 13:46

So so for example, you're putting 10% down, and we'll call that 10% down forty thousand dollars. So in order for you to come up with 20% down, you need another $40,000. To buy out your mortgage insurance, it might only be $5,000. Okay, okay. So I've helped people like that where they don't have the full 20% to put down, but they have a decent chunk that they can use. So we'll we'll take and we'll reduce their down payment by a little bit than what they were thinking, and then just factor in that mortgage insurance buyout, and then maybe do a little bit of a rate buy down too, instead of going, oh, we're so close to 20% down, but we're just not quite there. Well, let's use what you have and let's get the bigger benefit because that that mortgage insurance is is great. Um if you can just get it removed. And sometimes it doesn't work,

Buying Out Mortgage Insurance Upfront

SPEAKER_01 14:36

sometimes it's just you know the numbers don't line up because conventional loan mortgage insurance is based on how much you're putting down and what your credit scores are. So if you've got good credit and you're putting down say 10% or more, the buyout for your mortgage insurance is actually really pretty affordable if you think about it. Um and especially if you can get the seller, you know, if the seller's kicking in, um that's a great way to use um seller credit too, because that's gonna knock off that's gonna knock off part of your monthly payment, um, which you know, in some cases could be hundreds of dollars a month that's gonna be able to just go back in your pocket. So it's where you can get a little bit creative. They do like you can do a little bit upfront, which reduces your monthly as well. Um sometimes, not not in this environment, but I've had it in the past when rates were better, people would take a little bit higher of an interest rate and and use that credit from the interest rate to pay to pre-pay and buy out their mortgage insurance. Okay. So it's you know, you're not getting as much of a benefit there because you're still factoring it into your payment, but it's okay way less, you know. So you can get a little more creative.

SPEAKER_00 15:51

Yeah. As an agent to lender, um, we write when we write for a buyer, we write in generally uh seller will pay, you know, X percent in closing cost credit, you know, blah, blah, blah. Like, and some people get super detailed of like seller will pay $10,000 in closing cost credit, prepaids, rate buy downs, uh points, you know, blah, blah, blah. Like, write it all out. Is it one? I guess my question to you is is that necessary for you guys contractually when you see that, or does it just have to be closing cost credit and you can use it for whatever? I guess on your side of things, because you see agents write it, closing cost credit, ten thousand dollars. Uh some four buy downs, four prepaids. Like, is there a delineation between you guys when you see these sales agreements come in? What what

Seller Credits And Contract Wording

SPEAKER_00 16:39

does it matter?

SPEAKER_01 16:40

Like, or does it it so it in my opinion, I would prefer to see it be just a generalized ten thousand dollar seller credit. Okay. Towards and and a lot of times we'll just see it say towards closing cost, um, which really encompasses anything that the that's being charged to the buyer, closing costs, rate buy down, temporary buy down, all of that stuff. Any of that all inclusive of that. If it was just something that came through and it was more specific of closing costs, um, I mean closing costs really, like I said, encompasses everything. But if it was something to be just say $10,000 credit for temporary buy down, then there's a chance that we might be limited to only using that towards a temporary buy down, as opposed to if it said $10,000 seller credit towards buyers closing costs. We can then do whatever you want as part of the temporary buy down. Okay, because all of it really flows into that.

SPEAKER_00 17:38

So because I did I used to do detail because I like the detail in contracts so that it's spelled out that you know, generally speaking, when we write stuff out, I write it out to where it's out there. But that makes sense. I was always concerned, and I always wrote buyers, prepaids, closing costs, and any other whatever. So I just like kind of all encompassed. But if if closing costs is it, maybe I'll change the way I do things.

SPEAKER_01 18:01

And it and it'll all net out to be the same because it's really there's only a few things, you know, there's not a whole lot outside of closing costs, prepaids, rate buy downs.

SPEAKER_00 18:11

Yeah, you don't want to be going super specific, like you said, of like pay for their rate buy down and then you can't pay for anything else.

SPEAKER_01 18:19

And then they can't exactly then they can only use it for that. Right. Yeah. So then at that point you just might have to do an addendum just to kind of open it up a little bit more. But if you're doing closing costs, prepaids, rate buy down, whatever, um, you're you're really not going to run into any other thing that could be used. I mean, the only other thing that could really be factored in is say the seller is it, the seller credit is paying for everything for the buyer and there's still some left over. We can use that to reimburse the buyers for uh like home inspections, sewer inspections, things that they paid for out of pocket um if there was still some left over. Because otherwise, if we use it towards everything and there's money left over, we can't like we can't apply it towards their down payment or give them cash at closing. So then at that point it's you know, do you does the seller just get it back? Or maybe you yeah, or maybe they reduce the price, but if it's only like 500 bucks, you probably don't want to go through all the paperwork to reduce the price by $500. And yeah, you know, if it's a lot, then maybe that's a different story.

SPEAKER_00 19:24

But so okay, let's go off on a tangent here. If people are if you're a real estate agent or lender, here we go. Um if I was to you said that you could pay use any extra to pay for inspections and things like that, is that totally valid? So if I say, if I say, Cody, what's their closing cost? You're like, hey, it's ten thousand bucks or whatever. Um and I'm using generic numbers. But if I ask for eleven thousand, knowing that you're ten thousand, can you use so you theoretically could use that for the inspection, like reimburse them for the inspection? And there's no legality, no ethical thing, anything like that. Huh, that's interesting. I didn't know that.

SPEAKER_01 20:03

Yeah, yeah, because if it's because they have they have been given this dollar amount to use towards everything.

SPEAKER_00 20:10

And because I didn't know you could use it for that purpose because you're a lender talking about, you know, you're talking about their loan versus like an inspection, you know.

SPEAKER_01 20:19

Yeah. Yeah, it's anything that was paid for the transaction that was paid outside of closing, they are not there's no obligation for anybody else to pay it. But if there's money left over, they can say, well, we already contributed, you know, home inspection. Sometimes I'd I'll see um sellers if there's some left over, they might do like a home warranty for a year. That's interesting. Um, if there's just a little bit left over, but yeah. Yeah, so it can it can cover, like I said, home inspection, sewer scope, um, whatever they've paid for out of pocket towards the transaction, we just get that receipt, and then we just what they tend to do is they will um they will refund, so they'll reach out to the inspector, the inspector will refund the client, their money, and then the and then they get paid through the transaction. So it's kind of like a we're gonna yeah, we're just gonna cancel this transaction, give you your money back, and then you're gonna get paid again here in another few days when this closes. So it's really interesting. That way it's yeah, but yeah. It doesn't happen very often because usually usually it ends up being yeah, usually it ends up being a little uh, you know, we're we're not like exact, but most of the time, unless something weird comes up, we're gonna be within probably five hundred dollars of what it okay what it would come out to be. But um sometimes we'll just get people where they just are they just asked for a dollar amount and it just there's just not enough to cover. Yeah. So interesting.

SPEAKER_00 21:54

Yeah, a little bit of um option since we're on real estate transactions and maybe we're focused on real estate agents. It's not a pet peeve of mine, but they're specifically in contracts. Read your contracts to the agents. So we have counter offers and offers and addendums. Below it in our forms, it says any other, all other items besides the ones that are listed in this addendum are deemed to have been basically accepted. But everyone writes like sales price to be this and a counter offer, and then it's like all other terms and conditions uh accepted. I'm like, sure, it already says that. It's fine to put it on there, but I don't put it on there because the contract below says that. And agent after agent after agent is like do all of the other terms like, are you guys accepting the other terms? Are you just like accepting this and like Read the line below that says all other terms in previous things. So anyways, AJ, read your contract. So if you don't see that, um, that doesn't mean they don't accept everything. That means they accepted everything. Sure. Except they're changing this one thing. Anyway. Uh-huh.

SPEAKER_01 23:07

I see that all the time too, usually on addendums that come through.

SPEAKER_00 23:10

Change of some kind of you know, purchase price at all of them specifically, but I'm almost positive that every single addendum and every single repair addendum or counter offer says in the thing, all other terms agreed to, like in previous addendums are agreed to, except these changes up here or whatever. So it should be. You should never see it. Like all of the terms that would apply. And I I get it. Like I get they're just kind of being clear and wanting everyone to feel good. And I've had buyers and sellers say, Well, you just changed this. Does that mean everything is except you know, like you have there is some explaining to do for sure? But sure, um, it's contractual.

SPEAKER_01 23:46

Naturally, you yeah, you would think that if if the only change was this one thing, that is the only change. So everything else does still yeah. Like I get the the the want or the feeling of the need of like everything else. Yeah, yes, yeah. Let's just make sure that everybody still understands this. But yeah, for sure. I guess I've never really thought about that because I've only probably ever seen all other terms to remain the same. So I just like well, that makes sense. That's just how people do it.

SPEAKER_00 24:14

But this is uh read below, read below, and you're gonna see the print right below that big paragraph where we can write whatever we want, and it's gonna say all the other terms have been deemed to have been accepted in the previous whatever. So uh, I had to explain that. But anyways, that's funny. It's not a big deal. It really doesn't matter to me. I just like it's starting to become like the something that I'm like, okay, the contract says it's redundant to say it again in a contract. Yeah.

SPEAKER_01 24:37

And I've had like you just start to notice it more.

SPEAKER_00 24:40

Well, my like my original person I worked with like really taught me like the contract. One police work, like words matter and contracts matter, and like reports matter and everything you say, but then he like was the same way as like it's redundant to say it, it's almost unprofessional. He almost took it as like unprofessional to write it. Like you're basically writing it, then it's saying it below. So sure, anyways, yeah. Half that that's interesting. That's topic. Right.

SPEAKER_01 25:06

So that's kind of like a it's like a like an attorney type of thing approach with it too, where it's like, oh, well, you need to put that, and you're like, No, I don't. No, I don't like understand the contract.

SPEAKER_00 25:17

Yeah, yeah. Which is yeah, I get it all the time, and it's not a knock to anyone, like it's just uh yeah, it's just what it is. So yeah.

SPEAKER_01 25:25

Anyways, that's funny.

SPEAKER_00 25:26

Yeah, uh yeah, mortgage insurance is awesome.

SPEAKER_01 25:29

Get rid of it, get rid of it as quick as you can.

SPEAKER_00 25:31

Yeah, yeah. Sounds like it's you, and I guess the biggest thing that I took away from this talk is that make sure that you uh follow up on it because I think I would maybe you're you know the actual details, but hearing what you've told me, probably 99% of people just let it fall off naturally and not ever call you and get it off there earlier than you can. You know, like you it sounds like you can get it off earlier than you think. Um if that makes sense. And I bet you most people just kind of pay and then they're like, Oh, my mortgage insurance dropped off. I didn't know that. Like, yeah, exactly. They could have saved a little bit of money by not, you know, by kind of being more proactive, right?

SPEAKER_01 26:08

Yep, yep. And you can also like if you're in the process of refinancing, which I don't there's not a ton of refinances right now, but when you are in the process of refinancing, your your whole loan is reopened back up again. So if you did buy out your mortgage insurance when you purchased, that is only the duration of that loan. So say say you bought it out, say you went in at 5%, you bought out the mortgage insurance, and then a couple years later rates came down, but you're only at like 13, 14 equity. When you go to do your refinance, you're now your new loan and everything is now based on 13 or 14% equity. So you're gonna have to buy out that mortgage insurance again if you don't want it, if you don't have 20% equity. So I always, whenever people are buying the rate down or doing mortgage insurance buyout, I really try to kind of hammer that home of the rate or the mortgage insurance. Whatever you're doing is is for this loan. And if you had this loan for 30 years, it's all going to apply now. But if you refinance or you sell a home, you're sell your house or something changes within this loan, you no longer have this specific loan, you're back to to square one with it, just like you were in the very beginning. So it's usually only

Refinance Risks And Final Takeaways

SPEAKER_01 27:25

if people are like spending thousands and thousands of dollars to buy the rate down or uh get up get rid of the mortgage insurance. Like just so you know, if rates come down next year and you go to refinance, we're you know, you could be all that money that you just spent, you didn't really benefit as much. Yeah. So think of it as think of it as a little bit of a long term, which again in this environment, it's so hard to know what we're gonna be, what is five years from now. Yeah. But if we ever get back down to the you know, the low fives or in the fours again, yeah. That's when I think we'd be looking at like, all right, do your long-term investing in your in your interest rate or your mortgage insurance, because you you're probably never gonna want to refinance after that. For sure. Knowing you know where it might go again.

SPEAKER_00 28:17

Yeah, a lot of complications in the in the mortgage industry, man. Like it's just uh, you know, you'd go through this and you or your you go through it all the time. I don't I go through it in some ways, but um yeah, it's it's crazy. And it's crazy to me that you know people uh pick lenders based on like you know, whatever. I I just yeah, if you think about all this stuff, there's so many nuances with uh this that you could really be screwed or really not, you know, know what you don't know and you just pay and you're like and I I bet you most people just go through their life and don't even think about it. Like, but if they look back and be like, oh, I could have saved thousands upon thousands of dollars if I would have gone with someone that knew what they were talking about. Like sure, yeah. Yeah, it's interesting. Mortgage insurance may seem boring, but it's definitely something that can save you some money down the road if you can get rid of it early and maybe not have to pay it. There's options if you have the options to not even have it. So definitely something to check out with someone like Cody to talk it over. That's right. That's right.

SPEAKER_01 29:13

There's some situations where there's just not a lot of structuring that's needed. It's very straightforward, you know, not a whole lot of ways you can do it. Um, for the other half of those or three-quarters of those transactions, there's usually a way that you can structure it that's probably gonna be best fit for you. But if you just go with the whatever the person tells me, um, you just gotta hope that that person is telling you the best thing for you and not just the easiest route for them.

SPEAKER_00 29:42

Yeah, what I've learned through the years is like how you need like how many tricky things, and I don't say tricky in a in a bad way, but tricky things lenders can do to keep you in a deal or keep you going. Yeah. Like, and that I think is super important. It's like I've learned a lot of like, oh, I didn't know that was a possibility. We thought we were gonna lose this deal. And you guys have an ability to kind of like play with things and numbers and you know, be like, no, we can make it happen this other way too, you know, or we can do this or that. So it's kind of cool. So it's definitely something I think if you don't know, you don't know. But if you do know, you're like, okay, uh, really look into the lender, lender and the type of programs that are available because it it will make a difference. It's not the same lender. Um yeah, generally, like you've said before, the same the rates are pretty much the rates, but there's ways to get into a mortgage payment and a mortgage structure that works for an individual that you can do versus you know, Bank of America can do or someone else.

SPEAKER_01 30:42

So, anyways, yeah, there's not a whole lot of situations where where a loan just doesn't uh go through.

SPEAKER_00 30:51

Yeah.

SPEAKER_01 30:52

Because I mean, unless some unless the person just had something that that was crazy that happened that nobody saw coming, or the loan officer just I don't know, missed something in the pre-approval stage, something that was just like way off. Because usually if there's something that does come up, it's like you know, some debt that wasn't disclosed, or yeah, you know, pay they're they're losing hours at work or something that's crazy. And then you there's usually some form of hey, can we add a cosigner? Can we bump this? Can we change this or figure it out? But it's pretty rare when you get a lot of things.

SPEAKER_00 31:27

Um okay, my man. Well, if you guys haven't already, like and subscribe to this venture podcast with Joe and Cody and Spotify, YouTube, all the stuff. So get on there and pay attention to us. We've got riveting topics like mortgage insurance to talk about and Joe's rants on on contractuals. On contracts, yes. So um, it'll make you look like a smart agent, though. Do that, don't don't put it in there. Yeah, read the contract appropriately and know when to put those terms in there. And you'll and then wait for the wait for somebody to say.

SPEAKER_01 31:57

Yeah, wait for somebody to say are all the other terms.

SPEAKER_00 32:00

If you look at other line there, it already says that. They're like uh so it's a powerful. You're like, oh yeah, I knew that. Yeah, I knew. I just wasn't paying attention. I was driving. Sure you were. Sure you were. Um okay, cool, man. Well, it was good talking to you, and until next week, um, yeah, we'll see you. Have a good week.

SPEAKER_01 32:17

All right, you too. We'll see ya.