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good afternoon so one of the things that happens when mortgage gets mortgages get stupid expensive as people try to find out ways around that or find creative financing and as real estate agents um it's not a shock right now to see listings advertised as either they'll buy down the rate or uh the seller will or they will um do a loan assumption um and while that's great and all in in in theory in practice it's pretty pretty awful so I wanted to go over um something that I saw and then we'll talk about a little bit and that will be it here it is it says mortgage rates fuel buyers remorse create opportunities for loan assumptions oh great right oh great we don't need to get a really high High mortgage we can just assume one so are you giving people are you giving buyers false hope yeah pretty much I mean just but my experience um but you know we'll go over it so let's let's get into it says the current housing market is a mixed bag from home prices to inventory potential buyers and sellers are wondering where they stand and mortgage rates are fueling a lot of uncertainty it says mortgage rates aren't expected to di below 5% again until about 2025 said Erica giovetti loan expert for us news and World Report so let's try to let's try to figure this out so it says the current housing market is a mixed bag it's not really it's not really it's uh still in St Louis a sell's market in other places um it's not so much but even with a sell's market with the mortgage rates hovering around 7 and a half to 8% on a 30-year fixed that's uh not helping things so if people are buying now they're paying an awful lot in interest and uh prices have not gone down at least not in St Louis now other places it looks like there is some easing and that would help with affordability that's the main problem it's the affordability the ability for the buyer to actually get into a home and so like I said when things like this happen you'll find creative financing creative financing comes into play and so let's continue it says the survey found that more than half of recent buyers regret taking out of mortgage when were high and 78% said they were at least somewhat stressed interest rates will remain high for the rest of the year and 84% plan on refinancing to a lower interest rate in the

future it's really it's it's fascinating to me how um you could make a definitive statement interest rates will remain high for the rest of the year I don't know if they will or not I have no idea uh I can Envision scenarios uh where it's it's possible that r could come down quickly that promise of oh you'll be able to refinance down the line while it's true it might just take a little longer than some people initially thought now this has been my concern this is what I've told my clients my my buyer clients the entire time so all these all these lenders are out there I'm Not A lender but I I don't have a problem with lenders but they they say you know uh you'll just be able to refinance later so it'll be fine now to me that's a little disingenuous because we've seen a massive runup in properties so if you buy a property let's say you buy a property that's a half a million dollars okay and then you want to refinance down the road okay well let's say that the property value drops to 400,000 you're probably not going to want to refinance or if you are um you're going to be bringing money to the table which would be bad so um you're in a negative equity situation so I never was a big fan of that now over time over 30 years is there a chance that it's at some point in time you wouldn't be in a negative equity situation therefore refinance at a super low rate would make sense yes but I mean we're talking over 30 years that's a long time or even just to 10 years I mean it's just it's just a uh an issue and so it says conditions in the housing market have buyers and sellers using under the radar benefits to avid higher interest rates including mortgage assumptions now that's true but I but I haven't seen it and can I just offer that there's something fundamentally wrong when you can't get a mortgage for a property with favorable rates and rather than that you have to find some sort of way to creatively Finance the property um that just isn't going to work I mean it's just it's just a bad deal so it says in this market right now you can take over a VA homeowner's mortgage and that includes their interest rate according to the data from jinny May nearly nine and 10 VA homeowners have a mortgage rate below 5% Burke says that buyers and sellers must take these elements into consideration when entering a mortgage assumption here comes the mortgage assumption well what's that well that means you get to take over let's say somebody has an interest rate of three on a property and and you want to take over that mortgage well you can't pretty crazy huh there's rules though right it's not like it's just that simple so you can also do this on FHA um and then so they did some things they said but like pay attention for buyers it says you've got to find a way to put to pay out that home seller's equity and that's the number one problem you have to pay out the equity now that's not something everybody can do but if you do have the cash or otherwise the ability to get that financing it's absolutely a huge opportunity that allows you to take on a mortgage with the kind of interest rate you simply cannot find in today's market I added simply I'm sorry and then for sellers it says unless the person who's taking over your loan is another veteran who's effectively effectively substituting their benefit for years you're putting the future of your VA home loan benefit at risk so this is a whole article okay that says hey here's an idea you can assume a VA mortgage like can't pay the mortgage right can't can't take these rates well you can get a lower rate if you just assume someone else's mortgage as if that's so easy like that's the part that drives me a little bit crazy so I don't know if you know this but FHA Loans are also assumable but it's not like you can just go and say okay well I'm going to get an FHA loan here's some of the FHA mortgage uh assumptions here's some of the things that you have to have credit score must be 580 to make a 3.5% down payment or between 500 and 579 to make a 10% down payment uh debt to income ratio must be 43% or less and monthly mortgage payments cannot exceed 31% of your monthly gross pre-tax income now look right now with home affordability being absolutely awful I wonder if you could even even like it's going to be hard enough to be able to afford a mortgage at 8% now you've got to try and and work it into these numbers here it's not so great down at the bottom here's here's an example because I I wanted to put this forth so so I can kind of be of assistance as let's say a seller's home is worth $500,000 and there's $100,000 left on the seller's mortgage because they've paid off 400,000 which is the total amount of equity the seller has in the home to assume the mortgage you will need to pay back the seller their equity which is 400,000 you Al you'll either pay it in cash with your down payment or Finance it with an additional loan like a second mortgage well can you get a second mortgage that's a big that's a good question also one of the things that's even more horrid about this let's say you bought a home in in let's say you bought a home in 2020 and it's appreciated 10% okay and you sell it you still got those people still have to come up with what they've paid into it and then they're not going to want to sell it at a lower price so they're going to want it for the higher price it's an absolute

nightmare so you know you say well John that's that's kind of a a jerk move they've they've put forth a a thing that solves the problem but it only solves maybe one% of the marketplace the entire homelan Marketplace and I agree with you I agree with you what should have happened okay is that as mortgage rates Rose you should see a cooling of house prices now look I don't I'm a real estate agent I don't want house prices to go down for my Sellers and I and I and I you know for buyers I'd like house prices to go down so I'm I'm I'm conflicted right but but my my my feeling right now is buyers are being shut out of the marketplace at 8% mortgage rates and while I applaud this idea that we're going to um you know we're going to fix it by giving everybody an suable mortgage it's just not likely it's just not likely you got a better shot I mean totally being honest here you've got a better shot of going to a new home builder and getting a getting them to buy points off the mortgage and so I've been seeing some places around 6% people are are paying town to that'd be okay right if you really wanted if you really had to buy a house and you really wanted to get some sort of mortgage uh help that would be the route to go but that's not going to continue forever okay so U and that comes with strings too you're going to probably have to use the Builder lender you're probably going to have to jump through quite a few Hoops with that but if if it's if it's completely down to you know you want to pay a lower mortgage rate that might be the way to go I would not recommend messing around with an assumable mortgage personally um but you're welcome to do what you want to do but be ready for this there's going to be all kinds of stories about um rent to own is going to come back a lease to own is going to come back you're going to get seller financing you're going to get all these creative ways to finance as the um mortgage rate continues to go up and continues to make it more and more unaffordable to purchase a home so with that I'm going to head on out thank you for watching thank you for listening and I will catch you on the next one