Transcript
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Don't make any assumptions.
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You know assumptions on down payment, assumptions on what you can afford, assumptions that you know you can purchase this particular property or loan types.
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Don't make any assumptions.
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Talk to a professional.
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You know what they say about assumptions yes, they do.
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Yep, yes, they do.
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Hey everyone, welcome to the Sugar Daddy Podcast.
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I'm Jessica and I'm Brandon, and we're the Norwoods, a husband and wife team here to demystify the realm of dollars so it all makes sense while giving you a glimpse into our relationship with money and each other.
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We are so glad you're here.
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Let's get started.
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Our content is intended to be used, and must be used, for informational purposes only.
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It is very important to do your own analysis before making any investment based upon your own personal circumstances.
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You should take independent financial advice from a licensed professional in connection with, or independently research and verify any information you find in our podcast and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
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We are so excited.
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Today we are starting something new with the Sugar Daddy podcast, which is even though we know you guys love us, it's time to start bringing in some guests.
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And so today we have David Cain, our first guest on the Sugar Daddy podcast.
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We are so excited, david.
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How do you feel about being our first guest?
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I am so jacked up.
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Yes, this is exciting.
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This is so exciting.
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I have a huge smile on my face.
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So, you guys, let me tell you about David, because he is a dear friend of ours.
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He is married to one of my dearest, oldest friends that I've known since middle school, which is a long, long time ago.
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That's a long time.
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Exactly, I was in David's wedding.
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He came all the way to the Dominican Republic for mine and Brandon's weddings.
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And I attended their wedding as well, before Justin and I were actually technically even dating.
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Oh my gosh, and I think it was maybe the first or second time I met David and he was like are you coming to our wedding?
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Oh, that's so true.
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I remember, oh my gosh, yeah, you totally put everybody on the spot and I was like, well, I guess you're going to have to come to the wedding.
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Which I mean obviously it all worked out.
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A little foreshadowing, there you go.
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I love it.
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So we've known David and his family now for years and we are so excited to have him on the show.
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But he's not on the show as our friend.
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He is on our show because the housing market right now, as you guys know, is insane, totally bananas.
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And David is a mortgage banker and he has been in this industry for over 20 years, has a ton of expertise and knowledge and fun fact last year he was in the top 1% of mortgage bankers in the United States.
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So David knows his stuff.
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That means that you closed a whole bunch of loans, right?
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That's right, that's what they tell me.
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That's what they tell you, that's what your paycheck says.
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Okay, I don't know if she mentioned it, but David is our mortgage banker also.
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Yes, I was getting there.
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Okay, I mean goodness.
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No spats.
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No marital spats.
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Keep those to a minimum.
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So, yes, so we have trusted David with our loans over the years.
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Refinances His process is so easy, so seamless, and we know that lots of people don't want to do business with friends and they're very much like no, we don't want to mix friendship with business.
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That has never been mine and Brandon's style.
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We always will go to friends in any kind of industry, whether it's, you know, healthcare or our mortgages, or anything where we feel like our friends are going to take the best care of us.
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So yes, there is a little bit of vulnerability that comes with that, obviously.
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you know David sees our bank accounts and knows my social security number and my credit score and all of those things, but what's most important to us is that we know he's going to tell us the truth, be transparent, guide us in the process, especially the first and second time.
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Right, it can be a little daunting.
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I mean, this is, in most cases, the largest loan that people ever take out, and so you really want to work with somebody that you can trust, and so today we are going to talk about a ton of things mortgage related and we're going to hear from David, because this is not our realm of expertise.
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Not at all.
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And so we want to make sure that we are giving you the best information possible.
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So, David, is there anything that I missed in this intro?
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No, that sounds amazing Better than I actually am.
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Oh well, that's what we think of you.
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Yes, thank you so much and I'm very honored and flattered to be selected to be on the Sugar Daddy podcast.
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So thank you so much for having me.
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Absolutely.
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We are so glad that you're here, Babe.
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Did I miss anything?
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I don't think so All right, I mean David would know his stats better than I would.
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Yeah, well, no-transcript.
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Sometimes I feel people throw that word around, but something I was in his wedding.
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Yes, I'm saying, yeah, this is not an acquaintance, it's not a point.
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Yeah, friend, and I feel as though, like there's just that, not that dav David doesn't do this just in general, but just an extra level of care when it comes to the interaction.
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Now, granted, I believe that he does this with everyone, but, like the, thing that maybe we get like a one or 2% more.
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Well, when I text him at six o'clock in the morning and instantly get a response I don't know if he does that with everybody else, but that's pretty common.
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It's pretty common.
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It's the level of service I've come to expect.
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Yes, there's more at stake when you're dealing with close friends, that's for sure.
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Yes, absolutely.
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I know what I forgot, speaking of being in your wedding.
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You guys just had your 10 year anniversary.
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I cannot believe you have lasted this long me either right and my wife would say the same exactly massive accomplishment.
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Absolutely beautiful family, beautiful babies, beautiful Shout out to Sarah Exactly Massive accomplishment.
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Absolutely Beautiful family, beautiful babies, beautiful house, all the things.
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Not a baby anymore, I know Well, okay, that's a whole other episode.
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Time is a thief.
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Okay, david, are you ready for some hard-hitting?
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questions.
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Let's do it.
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Okay, so let's talk about this insane market, which is so timely because our house just went on, the market went live yesterday.
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Everybody send your juju our way for lots of showings, lots of offers, all the things, but we know we're building a new house.
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Interest rates are crazy.
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I text you all the time what are rates today?
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What are rates today?
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Because it's just wild out there.
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So tell us about what's been going on in the last couple of months with these rates and just all of it.
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Yes, this is probably one of the most chaotic years in the mortgage business, at least in the last 20 years, if not ever.
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Wow Rates have more than doubled throughout the year, which is absolutely insane, to wrap your mind around Painful yes very painful and the market in general as far as the economy, inflation, cost of goods, delays and supply chain issues has driven rates through the roof.
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And some good news recently inflation looks like it may have topped out potentially and that is going to be the first step or indicator that rates will stabilize or come down.
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So great news for the housing industry.
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The last few months have been rough as rates have gone up.
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There have been many buyers that have kind of pulled out of the market but there has been more inventory come on the market, which is a good thing for buyers.
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But not for sellers, which is what we are now.
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Yes, not necessarily so, but there are.
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You just have to be creative when selling a house.
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So, for example, offering buy downs um paying closing costs.
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All of these things can help you in a market with rising interest rates.
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So definitely want to talk to a professional you know, a mortgage professional and or a realtor that has experience in this type of market to best market your house and provide incentives for buyers to overcome high rates.
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Now notice how he said work with professional, because I'm of the same mindset.
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You know, I know my lane as a financial planner and when I'm working with David, I'm like David.
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What do we need to do?
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It's not me trying to tell him, like when I Googled or whatever.
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It's like David.
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What is your expert advice?
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And one thing about Brandon y'all he stays his lane like he's.
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Like I'm going to trust the realtor.
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The realtor says we should list at this price.
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Great, we'll list at that price.
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If david says you know xyz about whatever the rates are, or, however, we should be taking this loan out.
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He's going to follow that advice.
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He's he's not just googling things and being like well google said he's always been like that, the whole thing is is that you're going to hire an expert, you should trust the expert knows what they're talking about.
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So therefore, you should lean into what they're recommending, and if you're not going to do that, why work with the person?
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Yeah, absolutely Great advice.
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So we, our current house we have a 2.6% interest rate and right before we started turning on the mics, we were talking about what the interest rates are now.
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And you were like well, we're still in the sixes Dagger to the heart more than doubling what we currently have and you just mentioned.
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As sellers, we could offer a buy down for anybody looking to purchase our home.
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Correct.
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Okay, I thought that only lenders could do that.
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So there really are ways to get really creative.
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Yes.
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So for example, you know, let's say, on a $300,000 house the cost for a buy down may be seven or $8,000.
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Oh wow, you could offer that as a an incentive for a buyer.
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So instead of getting a rate let's say at 6.75, the first year of the mortgage would be 4.75, second year, 5.75, and year three, through the length of the mortgage, it would be at 6.75.
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So paying seven or eight grand for them to have the lower rate is better than dropping your price by 20 grand.
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Wow.
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So you're netting more money when you do that, y'all for the buy down.
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That's really interesting.
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I mean, I see, the incentive from the buyer standpoint because within that two year time frame.
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Essentially that that's the lower interest rate.
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You're hoping that rates drop and you would refinance anyway, absolutely Exactly.
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Yeah, pretty much everybody that has, you know, done any research either believes that we are either in some type of recession or are going to be in one in the near future.
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That's the bad news.
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But the good news is is that after every recession in the history of the United States, there has been a rate drop.
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So people that are getting mortgages now that's not a 30-year mortgage, that's more likely a mortgage you're going to be holding for one or two years and then refinance.
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Yeah, You've been really good.
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Sorry to interrupt you.
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You've been really good with me.
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David, kind of talking me off the ledge right as we're looking at what we're going to sell our house for.
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What are we purchasing our new house for?
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And the interest rates right, the interest rates at this point.
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You said you need to budget $1,000 extra in your mortgage from what you're paying now because of the interest rate, I mean obviously our home price is also increasing.
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but it's really just the interest and you've been really helpful in breaking down the cost for me and helping me understand this is temporary.
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After you've made your six payments, you know you can refinance.
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Let's see what the rates are doing and just thinking of it, as this is not a 30 year mortgage, this is a 24 month mortgage, right, right and like that, that helps me.
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That helps me a ton.
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So I appreciate your guidance.
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I appreciate you uh talking her off the ledge because she does not listen to me at all.
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Sometimes it takes a third party.
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Exactly.
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I agree.
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The spouse is the last one you listen to.
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So maybe get a little bit of context.
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You know, for individuals that are not familiar with you know how.
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What inflation is, how it's occurring and what is being done to fix it is that, when inflation occurs, what that means is that your individual dollar is buying less, so therefore you have to spend more dollars to buy the same goods, which is why things that you're purchasing on a regular basis cost more.
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The grocery store, you're leaving with less bags and spending the same amount.
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Correct.
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So what they do to try to what the Federal Reserve does to try and decrease inflation is that they raise interest rates, and interest rates on.
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You know the different loans that you may have a car loan, a home loan, just a personal loan in general, they're raising the rates on those.
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So you'd be paying more interest with the idea that less people would borrow money.
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So with less people borrowing, money that's going to be less money that's going into the economy.
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So people are buying less things.
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Thus the price of things will drop and inflation drops.
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That's, you know the concept behind it.
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Now the idea is to have what's called a soft landing.
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Brilliant.
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However, that was really I like saw like a visual in my head.
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That was really good.
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But unfortunately what they normally do, instead of having a soft landing where we just kind of ease back into a you know happy medium area, is that we have a hard landing where we go from you know economic peak to recession.
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Oh yeah, nothing happens but, like as David stated, you know, during a recession, there are 100% opportunities available to people.
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Right.
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No doubt, no doubt it's if you were in the market.
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There is more of an opportunity now to purchase uh than there was six months, 12 months ago.
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So that's the positive of the market is that you are able to get closing costs.
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There's more inventory, more options.
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You don't have to just buy the first house that you see because that's the only option that you have.
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We transform a buyer's market to a seller's market to a buyer's market.
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Right, Exactly, and it can also give you the option to.
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You know, if you have some liquidity, then you're still going to most likely get appreciation while you're waiting for rates to go down.
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So you pay a little bit more but you're still gaining appreciation in your house and you're gonna be able to refinance at some point in the near future.
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Yeah, that makes total sense.
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Okay, I think that covers the housing market.
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We know it's been crazy.
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We've all heard the stories, right, people?
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Were putting down 60K in earnest money and buying things sight unseen.
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I mean just bananas right, just wild down 60K in earnest money and buying things sight unseen.
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I mean just bananas, right, just wild, wild west.
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I heard some wild stories.
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Yes, so we know it's crazy.
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Let's just bank on things getting better, being able to refinance and knowing that there are some options to get creative.
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Now, there is one thing that I learned throughout this entire process is Planning is obviously, planning is what I do for a living, but it's even more important because I for myself I guess I didn't personally take into account this- when we first started the process of building the house, we were of the mindset of a certain interest rate.
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Yeah, never in my life would have thought that it would have doubled.
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But now it's something that has occurred to me, so now it's going to be something that's in my forethought from now on moving forward.
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Even in my interaction with clients.
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You know if it might take you a year to build a house.
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You gotta take into account what that?
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Interest rate fluctuation could be and how much more money you need to put towards um your mortgage is going to be yeah, it's so true.
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Great point.
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We put our money down to reserve the lot.
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It was either end of december or very early january, so we're coming up on a year.
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We're probably going to be in our house in January.
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So 13 months give or take, from start to finish, if we get in in January and the rates have more than doubled and you guys just built a house not too long ago.
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We did, we did.
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It was a beautiful house, yes, I appreciate it.
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And what you just mentioned obviously still applies to being a financial advisor as well.
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You know, obviously you're looking long term, not short term.
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Nobody wants to look at their retirement account and see a 25 percent drop, right.
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But you know, in the long run the market's going to win, yeah, and so you have to look at the same thing with housing.
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Yeah, short term it's ugly looking at a, and so you have to look at the same thing with housing.
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Yeah, short term, it's ugly looking at a 7% rate in the face.
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But long-term you're going to win.
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With appreciation, you're going to be able to refinance.
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Long-term You're going to be able to get the payment down.
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So, again, it's looking long-term.
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Whether it's being a financial advisor, the housing market, you have to be able to look beyond the current circumstance.
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Yeah, that's so good Long game.
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We always talk about it, right it's?
00:17:34.530 --> 00:17:35.826
always a long game, yep.
00:17:36.787 --> 00:17:47.276
Okay, let's get into what to do, what to know, before you start scrolling Zillow and Realtorcom looking for your dream house.
00:17:47.276 --> 00:17:50.284
Because David does videos.
00:17:50.284 --> 00:17:57.737
He is getting into the social media game y'all, it is great if you need a laugh, but also information.
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We will link all of his details in the show notes for you so you can tune in to David's videos.
00:18:04.238 --> 00:18:15.189
But he talks a lot about the mistakes that people are making and things that you need to consider and do before you really get out there, start working with a realtor and start putting offers in on homes.
00:18:15.189 --> 00:18:19.767
So, david, why don't you tell us a little bit about what you need to be doing?
00:18:19.767 --> 00:18:27.351
If you're you know, if this is your first home or this is your 10th home, what are the steps you need to take before you go out there and actually start shopping home?
00:18:27.351 --> 00:18:27.711
What?
00:18:27.730 --> 00:18:30.875
are the steps you need to take before you go out there and actually start shopping.
00:18:30.875 --> 00:18:38.469
I always say you need to start with your loan officer, because he's going to let you know, or she or she.
00:18:38.469 --> 00:18:40.015
My bad, my bad, sorry, ladies.
00:18:41.730 --> 00:18:42.664
Not going to let that one slide.
00:18:44.029 --> 00:18:44.592
Yes, I got you.
