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Boy, we're back to a crazy real estate market. Multiple offers on properties, some cash buyers. And it's our responsibility and our job, any mortgage professional to help you figure out how to win. When times are tough, you got to fight harder to win. We want to help you win.

And I'm going to give you probably the most important tip that you could do to try and win in this market. First of all, you're going to hear this buzzword that means absolutely nothing called pre-approval. I want to talk to you about the loan approval. Now, to find out how much home you can buy and afford and qualified for, you got to give us some information.

Paystubs, 30 days, W-2 for one or two years, potentially tax returns for one or two years,got to pull your credit, I need a month of bank statements and we got to get a loan application. If you do that, the person you're speaking with who's not an underwriter is going to issue a document. It says, Hey, great news, you're pre-approved, which you're really not.

They're just saying they've looked at your information and for some reason, real estate agents think that this is valid, that it's important. It literally means nothing. It means you've spoken to a lender.

What I want to help you do is get an actual loan approval. What's the difference? Well, as you can see, I need the same information. I might need two months bank statements instead of one.

But here's the difference. I'm going to take the same information and I'm going to get it to a lender and we're going to get you a full loan approval. Why do you want that over that? Your offer is going to be stronger because the seller is going to know you've actually been through the underwriting process, not just someone that put a pre-approval letter on a word doc or a PDF.

The second part is it's going to give you a better opportunity to negotiate a better deal. Speak to a real estate agent. Ask them if you should get pre-approved or a full loan approval. I promise you, if they know what they're doing, they're going to say that one. Let me know if there's any question. Thanks.

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I wanted to share with you kind of a public service announcement that is in no way shape meant to say someone else can't do a great job. But I just want you to know what to be careful for, because there's a lot of media talking about some opportunities that are out there. And I've just had two clients in the last three weeks have a bad experience.

Let me just kind of jump into it, and I want to talk about how important it is to go to the source. There are some real estate agents who are also trying to do mortgages. Now, listen, I'm not saying don't. They might be very good at it. But here's the challenge. Where is their focus? Is it helping you get the right real estate deal?

Make sure the inspection reports in your favor. Make sure that they're representing you the best. Are they an expert? How can you be an expert at both during the transaction? It can be really difficult. Are they giving you every mortgage option available? If you're trusting one person to do both, you have to ask yourself the question. If they're not doing it full time.

Should you have some concerns about the availability of what they can do? This one's becoming more and more prevalent. There's a few mortgage companies cross country. They've gone to the large insurance companies and said, Hey, mortgages aren't that tough. You could do on offer. Mortgages will pay a little bit of money and we'll do the rest. And they can.

But someone's getting paid and the cost of that payments coming in your interest rate. If you want to go to your insurances, you get insurance from the insurance agent. Don't come to the mortgage guy to get insurance. Don't come to the mortgage girl to sell real estate. Go to insurance agent to get insurance for your home. Go to your mortgage person to get a mortgage for you.

Why are they a consultant for the mortgage? Or they help you understand all the loan options that are available? Or are they just giving you some sort of code that someone told them to sell? How are they being a financial adviser to you? A mortgage is not just a debt that you pay. It's a vehicle to help you acquire real estate, use real estate to increase your net worth.

And so many other things. I'm not seeing any knock on these industries, but go to the source for the service that you need. Have you real citizens sell you real estate? Have your mortgage on to get your mortgage. Have your insurance agent get insurance.

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Please get off the internet, or at least read the entire page and then still ask questions. If I get one more person who asks me about something that they read on the internet, that's not even close to true, mostly because they didn't read through it, I'm going to lose more hair. I already have.

Let's have some fun with this. Let's talk about a couple Internet myths about the current mortgage market. Chris, I want to get a 40 year mortgage. No, it doesn't exist. The 40 year mortgage was an announcement by FHA that says if you need a loan modification, which means you need help with your payments, you've had financial hardships. If you need a modification, we'll give you a 40 year term to help spread out those payments.It is a really good thing for people who are experiencing financial difficulty. But you can't get a four year mortgage doesn't exist.

Number two, Chris, inflation is coming down, but I hear mortgage rates are going up. No. If you subscribe to our YouTube channel or listen to anything I say, you'll know that mortgage rates fall as inflation continues to dip a little bit. We'll get to experience lower rates. Yes, we could have some market days where the economy's good and rates go up a little bit. But for the most part, lower inflation is lower interest rates.

Number three, Chris. Interest rates are so high, all we have less home sales. No, we don't have lower home sales because interest rates are high. We have lower home sales because we have an inventory challenge as a shortage over 40% of every buyer in today's markets, a first time home buyer. The move up buyers are slowing down the market. They got rates at two and a half, two and three quarters percent. They don't want to buy a new home at six and a half percent. So the higher rates are not slowing down the market. It's a lack of inventory.

Finally, Chris, if there's less home sales, the value should be coming down. No. Econ one on one. Supply and demand. The reason home prices are not dropping, it's because we have a supply issue. There are not enough homes for the amount of buyers. So when there's a low supply and high demand, the prices go up.

If you have any more questions to distill some mortgage myths or anything related to mortgage real estate, please reach out to me any time. Thanks.

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Let me tell one of the biggest challenges my clients are having, whether they're purchasing or refinancing to related a homeowner's insurance. Right now, we're seeing some massive changes in the state of California. A lot of the big carriers are not renewing California homeowner's insurance or at renewal. They're increased their premiums 100, 200, sometimes 300%.

And people think, well, that's just the way it is. Why are the premiums going up so much? Why are people being canceled? Well, we see all the natural disasters and the big insurance claims cross-country. California biggest fears are earthquake, fire and flood. We're coming up on fire season. We've seen the flood season. But sometimes you don't have to be stuck with what they tell you.

When you want to go direct to the big players, Farmers, State Farm, All State AAA some of them, you know the options. You're stuck with one option if you're with Farmers and they cancel you, your canceled. If you're a State F Farm and they raise your premium, they raise your premium. Why wouldn't you consider going with an insurance broker?

Kind of like a mortgage broker. I've got a ton of options. If one of my lenders isn't offering good pricing, I got 29 more to look at. An insurance broker has 50 plus options. So if one or two of the carriers might not want to do insurance in California, they've got a ton of other options. It just gives you more flexibility and it doesn't force you to stick with one single branded insurance carrier. If you need a referral for an insurance broker or you have any questions about your homeowner's insurance, please let me know.

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I had a difficult phone call with a client this morning. I've been talking to his client for three months about loans and buying a home and they've yet to get pre-approved to buy a home. They found a home this weekend. They want to make an offer. Offers are due today at 5 p.m. and they can't write one, why? Because they haven't got pre-approved yet.

They have no idea how much home they can afford. Let me show you something. The top three mortgage related Google searches today are:

- 1: How much mortgage can I afford?
- 2: How much mortgage can I qualify for?
- 3: What type of mortgage can I afford?

People are hungry for this information. But here's the challenge.

ChatGPT cannot give you the answer. Google cannot give you the answer. A mortgage professional can. Allow us the opportunity to help you understand how much home you can afford. If you're looking for a car and you're at the Mercedes-Benz lot, but you should only be buying a Toyota Avalon, we want to help you avoid that.

But maybe you're shopping for a Toyota Avalon and you can actually afford Mercedes and you don't know. Allow us to invest a little bit of time to help you understand what your home buying power is to get you in a position to succeed. Thanks for listening. Have a great day.

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I had one of my favorite phone calls today. First time home buyer doesn't think they can buy a home because they don't have 20% down. And they said, I don't want to have PMI, so I'm not going to buy home. I made them laugh and said, I'd rather have you call and say you don't want to increase your net worth and make more money.

Of course, they paused. They want to know what I was talking about. There are certain circumstances where PMI is of great value and will help you. And let me explain to you what it means if you don't know. PMI stands for private mortgage insurance, it's insurance to the lender. If you're putting on less than 20%. Lots of pretty colors and numbers.

Let me walk you through it. PMI can equal a greater net worth and ultimately more money. Sales price of $800,000. Dow Panel 80,000. 10% of the sales price. Loan amount $720,000. Let's presume a mortgage payment of $4,433, which is a 30 year fixed six and a quarter percent today. 6.378%. APR. The monthly PMI on that, it's about $180 a month.

In three years you'll spend $6,400 on PMI. Five years you'll spend $10,800. And in eight years, about $17,000. The PMI typically falls off automatically in around eight years, $17,000. Let's go to the good math. If you say your home is going to appreciate 3% a year, depending on what statistics you believe, I can run this model at any number in three years.

Your home's now worth $874,000. You've increased $74,000 in appreciation. You're net worth. Five years, you've gone $127,000 net worth. Eight years. $213,000. Let's finalize the math for you. If your home goes up in three years, $74,000 and you spend $6,400 and tomorrow you have a new net worth of $67,000. I don't know why you wouldn't buy a home just because you have PMI.

Stop looking at the Internet. Stop listening to people give you bad advice. Call a mortgage professional. Ask them to run the numbers for you based on your scenario. It's still got to be a fit, but let the math make the decision, not the internet or some archaic rule. Thanks for listening. Have a great day.

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Everybody's heard about this new California program where they're willing to give you 20% for a down payment to buy a home. It officially rolled out today. Let's jump right into this video is going to be just a little bit longer than normal.Cal HSA, if you don't know who that is they are a housing finance authority for the state of California, their role is really to help the undeserved low and middle income people purchase homes. It's not limited to low to middle income people. And this new program is shared appreciation.

And I'll explain to right now, here's the facts. Right now the state's allocated about 300 million in available funds for this program. They have not indicated what will happen after the 300 million is committed, has to be a primary residence, has to be a one unit property, condo or single family is sufficient. Minimum FICO, 680. You have to be a first time home-buyer. You just cannot have owned a primary residence within the last three years.

So if you own home as a primary residence five years ago, you're okay. You just can't have owned a home within the last three years as your primary residence finally got to be California resident. Here's the important stuff. They're going to give you 20% down payment as a loan. You buy a home for $500,000. The state's going to loan you $100,000 for a down payment.You're only borrowing 80% of the home's value. There's no interest and there's no monthly payments for that loan that they're going to give you. Here's what happens when you go to sell that home or refinance it.

They're going to get their 20% back that they loaned you for the down payment and they're going to get 20% of the appreciation.So let's say you buy a home, it goes up 100,000 in value. You sell it in five years, they're going to take 20,000 of that $100,000. So they're going to loan you money, you're going to pay it back and they're going to get a little bit the appreciation. When do you have to repay the money? Well, if you sell the home, refinance the home or change title, they're going to want their money.In Orange County, your income can be as high as $235,000. That's not low to middle income. That's as high income in Los Angeles income, but $180,000. Riverside income, about 173,000. So it's an incredible program.

It's a great opportunity. It's not going to fit everybody. If you have questions about how it may impact you, a client or family member, please reach out to me so we can do a specific scenario based on your situation.
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