It's time for work quite well watch -- Christopher peninsula. Partner and founder of worst point so we'll see. Tired of the same sales pitches disguised as financial advice Crist is a certified financial -- who will give you the real facts about investment. Tax plan at this stage play. A little fun doing now -- first. Good afternoon Austin we're so excited to be here today. And they talk a real estate. -- -- a couple of real estate experts -- -- finance experts who will introduce you to in a minute but. First -- artists might cohost. Scott O'Brien hollow public has -- -- doing -- are about to -- you could think about that about how you -- that mean -- get get an influence -- I -- I think -- and I don't folks this is Morgan Smith and a happy to be here we -- today. Let me -- before forget that you folks can find us on FaceBook Twitter and Linkedin by searching worth point with a -- Or can find us on the web at work where radio dot com. -- -- Give you news items worse than I do we have continuing good news from last he told his mind -- my news. Music. -- remember last week we talked about how the young mr. Herbert I think it. Remember last week we talked about how the manufacturing numbers were were upbeat and there was more manufacturing jobs and we are continuing good but couldn't stop thinking about yeah talk about all we can't -- I went to bed thinking about it at all. He came back -- -- good tankers out on the -- there. And this. What we're continuing good economic news from last week in National Association of Realtors announced that the purchases of previously owned homes. As opposed to new construction of course. Climbed 5%. In the month than when they don't they used -- yes. That's the largest Michael -- cars what do you this the largest monthly gain in three years. And not only that that pending contracts jumped 6% the most in four years you know that dovetails nicely -- our guest today what a Segway well. You've probably look at that look at the hospitality it's like come on like I knew they are going to be here it's like you -- For a fifth -- that stuff that's good news I guess for people -- known existing home. That's right and existing Leo listen up its previously owned homes and in the congress both up. Pretty sharply in -- sort of course the June numbers are out yet but doesn't everything doesn't get as well will that provides an excellent opportunity for me to introduce our guest who are Stephen Johnson and -- hearty ho. These guys are in the mortgage finance business and dumb. They've generously decided to come in the studio today and share their knowledge and wisdom and hopefully some good stories -- Comes a gentleman wanted to say hi hi back if in fact that either didn't that's a good idea that Hannity all right who Gupta got started -- event. All right not to get out the hook yet. You can fit right there. So. Based on the news item you just heard there which you're -- first reaction. That tells me multiple offers and not just here in Austin and probably a coast to coast and now -- coming in our guest today from a Sarasota Florida. -- -- you're shaking his head yes side -- experienced in the same things well in absolutely we're seeing we're seeing prices move up as well enough in the Florida market which -- a good thing. And rebounding quite frankly a nationwide so. It's it's exciting time to be in business again. Yet been allowed to -- Yeah I think I've been excited now for for three weeks with an -- but it's been up better in Austin for quite awhile right now I really. Has there really hasn't and in some ways we were insulated. Vs some of the other markets. Floored Libyan one we got on the sand the sand states weather's like California and Nevada Arizona they were really hit hard. Other governor that the -- well if you ever using him please make sure to mention money and I can't. Penetrate markets high yeah it's thanks. Okay just now have just gotten out on and on hand write it down and I have a couple witnesses no. But really we were any you know is the Austin being as strong as it is. And people wanting to live here I mean that really makes a difference right when you have industry and then the desire to be in a marketplace. Really knew what. Insulated us in a lot of ways from 2008 to 2010. When we really -- our challenges industrywide. Was that we didn't allow on the cash out refinances on your homestead to exceed 80% of the value of your property. In many the other states they were gone 2000510%. Of of fair market value. And when you have a a market. That changes directions. You to see what happens very very quick idea I'll take funny sort might have bought my first home in Manhattan Beach, California. In about 1999. And I'm I'm from Texas right so. I remember talking to the or person said was I don't have a 20% is my first time it was 750000. Dollars and it was a lot of money -- -- back and to promote 20% now. And I told my mortgage broker. That I didn't have the money to -- she's she's just chuckled. Look like what are you left and right I'm a professional financial advisor at this point. Jesus Noah actually we can get you some money back when you close not only do you not have to bring money to close are OK you money for furniture. I'm like wow well that's different. We -- there was there was a time in the 2005 to 2007 -- I would actually bring a mirror to a loan application and I would sit down with and my clients would say and the from -- don't take the wrong idea on this but. I would set it down the -- I thought that this thing 'cause they'll say without legal what did you bring them here SL I just wanna make sure that you can fog because if you could fog this here -- we will give your mortgage. You know what question I had the commitment as a relates to this is kind of volatility price prices going up and down I'm from. San Diego so in California. Beer and -- you see a lot of increase in value in and we hope that they were insulated as you say when the markets went out. Do the real estate bound taxes having to do that you think it and it it's -- -- dampening effect on. They really -- in my opinion it does because in California we use that for the sample they're taxed at 1% of the purchase price of their home. And then after -- then they will hold that property and they can hold it for 102030 years they're still paying taxes at that same tax rate. At that per purchase price of the taxes are going out but -- In Texas. You have the property taxes that are you know play in the range of two and a half percent of the value of your property if you had your property homestead in the making go up a small amount each year. And so what happens is your your payments are affected by that right so. When you have a low tax rate on your property then you have a lot of opportunity for that property to increase in value and people can still afford in taxes. It's more it's. Kids who. It it's more structured I guess in that way that your payment isn't going to be. As a I would translate that as less volatility here. For example in in Austin, Texas. Maybe get greedy folks might not have because of being ten years on the road but well real estate is worth less here now. If the government's taken your pipe if real estate has a total return 567%. Per year in the government gets two and a half of the big jump. It's hard to make money you have to cash -- -- property you're either with your chopper. That using some productive businessmen they were gonna go take a break up but we come back I'll ask you gentlemen. And what area of how realistic and if she specializes in and we can talk about some of the goings on that area. Thanks see folks on the -- Between ramping government spending in uncertainty about our economic future most Texans are having doubts about their own financial future. Are you ready to take a serious look at your financial goals using the experience the only certified financial planner practitioner is it worth point. Would you like a second opinion under current advisor who may be selling you investments and insurance for commissions is -- worth when he radioed I've come to make an appointment or call 8885447760. That's worth point radio dot com 8885447768. Welcome back to work point wealth watch giving you an unbiased people under the hood of wealth management. Investment and financial planning. Once again here's Christopher dance -- Welcome back off and we are talking about real estate real estate finance -- Stevens. And our hearts go to a vote in the real estate finance industry in have generously decided to command and share their knowledge with us today so. We've had other mortgage professionals on the show before. But I understand that you have a little bit different focus then. Everybody what is your focus or what of what niche in the market do you occupy words here. Specific knowledge. Well although will work with with everyone under the sun to for their finance means we really do. Taken interest her idea especially having worked up to this this stage in my career twenty years of doing this. How we work really well with the self employed client this sea level type client that is. A little more sophisticated I guess you could say in their in their approach of purchasing a home. You one of the examples would be that -- someone who's buying. A property in Wesley kills. Might be -- you know spending over a million dollars typically they will now allegedly for the -- right. So they understand the value of an armed product and even though you have low fixed rate loans right now -- one thing here and we don't assume people know what army. Well we've -- anti Akron actually actually I do you have a funny story about that I'm not sure that I played on and valiantly so. Several years back whenever I had my company had a partner that I shared who we had a wonderful -- mortgage brokerage house and down. We had we had reps that we come in from different banks that would try to have -- we would sell them our products right and so we had this. This -- they came in and she had and I forget what it was there when. In the early seventies when when women would have their morning sickness and they would then there was medication that they took -- it actually east stand. -- whiskey that's what it was that was at Brookline I don't buy it actually might want to. It actually affected the the the growth of the body and so you'd have children that were unfortunately born. Where -- their legs and arms maybe didn't developed as thalidomide is that what it was killer -- yeah. There's way before my tempers that depends how ya I see you know what I'm doing my mom taught me about I narrowly avoided. So -- is so we had to stretch they came in and my partner sat down with their and unfortunately she had had this when she was a child so she her her arms were not fully developed. And so when she came and she sat down and in my business partner for a report apartment where he said Terry -- she -- -- does not take away goes I -- you tell me -- marks. And we're talking about their mortgage arm products Wright issue -- -- she was then I you know -- okay here's what happened mum on the morning -- just. Well I'm such an ego that I might that he -- you're getting all of our business -- today. The good stories and drive and you know I think as I just throughout elect what is arm arm means adjustable rate mortgages and into the definition well yet definition of that effort and you lift the real there. There're -- those that you are mortgage geeks like all of us here are that means adjustable rate now and that's basically means that. If interest rates go up or down that the rate. Peter mortgage will -- -- that the. That's exact threats of for example one of our bestselling arm products is our tenure arms so. For example you might be able to even on the Jumbo -- and other so close. Jumbo means that it does the size of the loan doesn't conform to the federal limits yes jumbos the day you you know what you took Georgia right out of mana. It's opposite of conventional open up its anything that they'll loan amount is north of 417. -- in California it's. Yes 625 I think yeah yeah and so. The and that's considered a high cost -- California -- and we may be near that -- soon before we know here and tossed in the way that prices are going here but. Con a lot of folks will she used to go we're all homeowners -- that's -- that's right -- don't go to buy out right now. So so they'll choose to go with a product that maybe think they understand that they are -- live in this house forever which he overall homeowners when most of us have been. Chances are those being there for thirty years is pretty slim. Or we would have paid off by the -- But they'll they'll choose to go with a ten year arm as opposed to a thirty year fixed and I'll say about half from the point on their interest rates so when you extrapolate that savings out. They're saving thousands of dot tens of thousands of dollars a special on these loan size is over the course the first ten years. Yeah how that they funny arms are so Latin arm that I put on my place in California. In about 05. And there actually was six for five years and it floated that it became an hour. And so then. -- market crash in rates went to 1% to 2% so that thing unlocks the break. And at com now my rates 1% my payment went way we were down. And but then everyone's talking inflation only you know they're pumping the economy and they're put all this money out there -- got. Really chicken and locked generate there's quite higher than what the arm was in here we are -- -- -- sold displace it doesn't affect me anymore but. It's funny looking back now the arm would have stayed low the whole time and I could have predicted the last five years rates that you couldn't have won maybe maybe agree money manager. No you don't know if we're good at managing money. But we don't forecast that part of our deal. Had actually arms have outperformed. Fixed rates historically so if you if you if you look over a long period of time. You'll you'll find that arms have always outperformed fixed rate loans it from out perform for the -- -- product for the outlook makes sense because in a fixed rate your paying a premium to fix the -- you're shifting and mr. risk to. Lenders but we have been an 88 declining interest rate environment for thirty years straight so it's been. Are you not not really know in in the eighties the well yeah I guess budget you're showing your age -- -- yeah it. -- only 27 -- you know for the first the first arm loan I did for my dad when I first got in the business. Was easier was it does so it was a week out whether it was as easy setup played out it was well there are no thought of my first -- stick around. Mom and dad mom and take it to get news event you can do that and it's not a so I did the arm of my dad thirteen half percent one year arm. Back in the eighties but -- -- Citizen and we've we've been ended declining industry environment out so that there we really haven't experienced. Arms when the rates are gone up for periods of time to seems like we have an expert experienced. But times -- and when -- -- up with -- arms is that what you're gonna rising rate environment you won't see. You won't see arms up performing fixed. The rest of the -- so be a better bet that's correct so let's it's Sunday night in which has been -- -- thirty years to have rates going down to basically for the last thirty years we've had time to and it's gone up -- that thirty environment so that's I think the danger going forward as. Theoretically people think -- -- go into -- rising infantry environment. Whether we do or knives. Is also an 85 years that's right and here we've middle we've had periods way back in the and -- the fifties or something more people off the returning go up we want to we still and not ten or twelve hours fifteen years -- rate still -- up so. So pull in the -- just live. A bit before the a break here you're talking about the sophisticated -- and and kind of your niche and you -- wrap that up and the next Amanda herself. Yeah just in the next minute OK -- -- -- much talk really -- that had to run over we can -- -- OK very good yes so. The the sophisticated or recognize is the fact that that they that the interest rates has value to what their their current and future needs are going to be. So they know that for example there their children are going to particular school district and they moved to that part of town for that purpose. And they're going to be out of high school in the next three or four years they may not need that larger home that third that there's been in a premium on right now so they'll look at it objectively saying maybe a five verse seven year -- product is gonna better fit -- And you can get those rates in the upper -- the low three's as opposed to a fixed rate that might be in the low to mid force. So yeah I agree we're gonna go break now but after the break we'll talk about that he basically -- the Huntley borrowers. Are less averse to. Changes in their payment frankly they can handle it -- they should be more creative in the -- okay we'll see as a. Between ramping government spending in uncertainty about our economic future most Texans are having doubts about their own financial future. Are you ready to take a serious look at your financial goals using the experience the only certified financial planner practitioner is it worth point. Would you like a second opinion on your current advisor who may be selling you investments and insurance for commissions but is it worth forty radio dot com to make an appointment or call 8885447. 760. That's worth point radio dot com 80885447760. Why. Yeah. Welcome back on them. We're talking real estate and all things real data in particular rules state finance because there in a related -- as you can. Talk to the finance guys and the sales guys and they kind of know a lot of the same stuff. You have your little -- we we have a small room in the corner office that every Wednesday at 2 o'clock in the afternoon we all get together and we talked about everything we know. The sales guys and take on business yeah I didn't take -- yeah. Right and by the time that's over my ears open and I can just go ahead and start my weekend that's right that's right so we shotgun yeah we a lot of these means we actually I do our heads yeah yeah yeah well. I'd like. I'd like an image of that for social media -- -- and yeah. The senate and so where we left it was your making a really good point which is you know when you're. Your payment is 25% year incumbent. It's hard to make that payment or 30% -- come. And if that payment or to go up you know 2030%. You'd you'd have to choose between eating in making the mortgage payment. It's very important you pay a premium to lock in the payment. But when year earning when your payment is 10% of hearing -- 5% or 7% or you have other assets that you can use -- look you have to -- Then it makes sense for a lot of people to be much more creative than thirty year fixed. That's exactly what we Ryan rue -- Didn't you say it's a -- -- it. You wanted people to apply logic to the financing -- seems like. The house buying part of it is is more emotion that is based and the financing part that you department logic your way out of a good emotional. -- and. If you want to know you're exactly right because if we just that you're who you nailed it it's an emotional purchase when you're buying your -- so. The building that we're sitting in today the general manner than the lady who did or the institution that may have purchased this building. They weren't treated as an emotional purchase they looked at the nuts and bolts and it looked at the bottom line is that you can treat your home purchase and as such it's basically and invest it a lot. Don't bring your life but that's that's just a couple of tough on Sunday. Is that enough value of that. Once your wife's -- decades in her backyard or whatever that you -- this house has that you are gonna have a tough time making a rational. Her chickens or. They see that part history and let her have her fun in the sun right let her let her have the kitchen the backyard the pool. But if that's if that's our -- -- my bag be let me try to make the best decision for my family here. That let me try to save some money. I understand that the area called young talent out there yeah Don TI. I I personally have never practiced that -- -- you -- -- -- -- yeah yup yup my my eyes start the whole process of all kinds of rational logical ideas about our budgeted and what we can stand in -- we can finance but it doesn't stop well and I'm to be fair. I fall on what we're sure some of the house do great and I'm the dude I'm kind of a big deal. And yet -- I wish I could be more rational myself I inevitably when I'm by real estate I just close those on the last month. I I have trouble getting emotionally involved. That. So that is the trick and really haven't the finance guy in particular the the -- the sales guys. I find that they just wanna have a cell happen and they're not that good at talking you out of spending too much money if you guys on the finance side. You guys can really be this over. One in the conversation. We can we can be the idea of the words of wisdom from quote unquote non -- did their part obviously were mentioned the transaction coming to fruition -- work. That they lean on us you know that whether you're CPA with it pitcher financial advisor. I take clients -- many many years over -- on their mortgage guy you know and then not only got to lean on. Before during and after the purchase of their home and so. So would that imply good process being go to you guys first to say okay. -- look let me get my budget's set and then if you don't take it from there. We'll have that you one of our one of -- big ticket products that we sell his it's called the onetime close it's a construction products for those that are building a new home a custom home. They want to try to secure today's pricing today's interest rates because the unknown is you know it's going to be a nice custom home it's gonna take twelve to eighteen months to build. So they'll come us ahead of the curve. And we'll set a budget will you get everything taken care about fraud and we'll actually close on the on the loan before the house is everything started. So we can secure today's rates which is which is you know with the -- we don't know where -- rates can't go down -- Path not much now yeah I mean he hit it today as you know they can go up a lot faster than -- construction for you Chris. But I. I thought don't give and I got sick let you go -- very quickly. No are what do you pay for a construction -- and again it depends on if at all and one lone visitor bridge kind of thing and then it recast as a terminal and great question great question -- the majority of the banks out there that off for the construction financing is called a two time close so which do you his. The builder will get the construction financing in their name then you fast forward 1218 months later the home is finished. He says in the the borrower has the income and with what's called permanent financing to replace that construction month construction. Finding NC largely lost their job that's right and I -- -- balance within myself and those filters they're just like where the cells they come and all of a sudden the ring and ever. A bread basket I don't -- that front doorstep -- and so you're you're construction interest rates typically in liken today's environment middle fives right. But with our onetime close product that we offer -- one of the few banks that do. You're interest rate can be in the threes -- force so it's it's it just a wonderful -- again to secure today's race. Now let's say that rates go down at the end of construction no problem will modify you down. To the interest rates that the rich are looking to clear on this -- haven't heard the report that it's you've got. 01. But one product deal where you don't have to go through that to stage construction loan and and convert to. Coming your normal that's exactly right so as cursed in mentioned earlier you could lose your job many life events could take place but. The reality is on the onetime close few close on your construction loan and tomorrow and we qualified based off of what you doing today. And then the day after closing if you wanna go start your own company if you wanted to do and do whatever professionally go do it you've already qualified you've already closed. I don't advise that. Right now this is really interesting topic we're gonna have you end the show today. But fortunately you guys will be coming back next week that's right so ladies and gentlemen. We're going to be back next week talking to Stephen and morrow. About real estate finance and in particular always dive -- this construction financing thing -- lot of lots in my neighborhood that need a house on -- So we will see you folks next week thank you for being with us. Might in some people's. Owners. Joining me. Looking. And you just do okay. They can go -- soon. It. We're below. It's. Please and then. Come see him.