Latest / The Jon Sanchez Show / The Bank Of Mom & Dad: Smart Ways To Help Your Kids Buy A Home
Transcript
- Jon G. Sanchez: Good Tuesday afternoon, too. Welcome to the John Sanchez show on News Talk seven eighty KOH. It's a pleasure to be with you and a pleasure to be with my co-host. And I'm proud of myself because I didn't say Monday. How can I? The boys are with me, right? I've wanted to say Monday. Feels like Monday. Corey Edge of Vid Reality, how doing, Big C? Dwight Millard: Are you enjoying? Are you enjoying? Cory Edge: I'm doing fantastic, sir. How are you? Jon G. Sanchez: Good. Fantastic. Thank you. Dwight Millard Q Home Loans. How are you, brother? Good. Glad to hear it. Glad to hear it. Love it. Everybody have a good ⁓ Labor Day? Dwight Millard: I'm doing great, John. Cory Edge: Relaxing. Yeah. Jon G. Sanchez: Good, good. Yeah, we we were just chatting before the show. Good good football ⁓ for for s some of the games, some of the games, but I still don't like how they just play w it's a waste of time. Why do you play all these no names? I I just I don't get it, Corey. Yeah, exactly. Dwight Millard: Mm-hmm. Yeah. That's what, yeah. Cory Edge: money. It's money. They gotta fill out their schedule. The little schools get their money. And then you'll see I mean at least now they sprinkle in some big games, obviously Clemson LSU, and then you got Ohio State, Texas this week. But it used to be three weeks of like nothing. So Jon G. Sanchez: Yeah. Dwight Millard: . Jon G. Sanchez: Yeah, yes. No names. I know. Yeah, can't wait. Four four thirty, the Texas ⁓ Ohio State game. That is going to be a good one. I cannot wait. ⁓ football in Texas this weekend, Dwight? It has a high ⁓ Cory Edge: Yeah, that's gonna be a monster. Dwight Millard: It was hot. was hot. you know, we yeah. Yeah, yeah, just get it's funny John. They had a yeah, not anybody knows, but there's Alan Texas against DeSoto Texas High School. They've won like DeSoto's won at five. Jon G. Sanchez: Dwight, we've got some technical. I'm sorry, brother. We got some technical issues with you. I'm sorry. Yeah. Go ahead and restart or something there. We'll come back to you in a second. All right. me tell you what we have lined up for you today. Like this title, guys? The Bank of Mom and Dad. The Bank of Mom and Dad. Smart Ways to Help Your Kids Buy a Home. Now we've touched this over the years, right, Corey? But we're going to down into some really nitty-gritty details on this subject because As Dwight will tell us when ⁓ when he ⁓ rejoins, this is of course becoming almost a a norm now where we're you know kids are having to get help from mom and dad. And we'll throw grandma and grandpa in there sometimes also. But you your adult child, they want to buy their first home. But between home prices, mortgage rates, and the down payment, they're struggling to get to the point where they can do so. So the question is, should you, as mom and dad, help? Well, today Corey Dwight and I are gonna look at The smartest and potentially dumbest ways to help kids become homeowners. just real quick before I get to the stock market side, I've I've been dying to ask you this all day long. So I'm gonna just do it real quick as we wait for Dwight ⁓ reconnect in. percentage wise, what what percent homes that you sell or you're involved with, buy and sell, are involved, ⁓ have one side of the, you know, the the buyer side having mom and dad involved? What percent? Cory Edge: It's it it's hard to say because so again, most of my business is on the listing side, a lot of estates and and divorces and you know, all different kinds of stuff. So I don't see a ton of the buyer side. And from my vantage point, I wouldn't know if there was help or not. so I looked into it, you know, based on the topic to because I I assumed, blindly so, and I've been doing this a long time. I assumed maybe ten, twenty percent. Jon G. Sanchez: Right. Cory Edge: They're saying Gen Z is upwards of 50, 60% that get help. And when you start thinking about it, maybe this isn't an apple to an apple, but I bought my first house. The price was, you know, I think I paid $100,000 for it. And it was, you know, however many years ago. I also had a good paying job, or you could go out, get a good paying job that probably pays the same today that it did back then, and you could have ⁓ income to afford the house. Jon G. Sanchez: No kidding. Fifty to sixty percent. Yes. Cory Edge: So now if you think about it, and this is just me, you know, off the cuff, if you need two incomes to afford a house, then by default that Gen Z single person has to have help because their singular income can't afford the normal house. And it's kind of a kind of a bummer. ⁓ say you got to wait to get married and have a spouse or whatever, or you have to have the help. Jon G. Sanchez: Right. Right. Right. Right. That's Yeah. Yeah, exact or income of two people. One person has the income of two people. Cory Edge: Or yeah, work multiple jobs or have a very, you know, high paying job. Well however you want to cut the cookie, but it's just ⁓ it it's interesting. And I can I'm it's very frustrating. I do see that, at least from my vantage point, is very frustrating for the younger generation to figure all this out. And a lot of them I think end up just putting their extra money in your world, rightly so. Cause why do I need the headache if I can create a portfolio that's gonna kick off some income and pay my apartment rent, then who cares? Jon G. Sanchez: Right. ⁓ yeah. ⁓ yeah. No doubt about it. Mm-hmm. Sure. Sure. Yeah. Yeah, exactly. Dwight, welcome back. ⁓ question we Corey and I were talking about again on this topic, the bank of mom and dad. I asked Corey, I said, you know, roughly what percentage of of clients of real estate deals you're involved with involved with, ⁓ excuse me, some type of help from mom and And he says, you know, from his vantage point being more focused on listenings and more sophisticated strategies, he looked it up he said fifty to sixty percent. So you're the lender. What do you see? Dwight Millard: John, I think it's i w in that group and that range is higher than that. I I I'll bet it's seventy or eighty percent where you're deal ⁓ absolutely. They're just I mean, I but John, it's not even now limited to the young folks. I I'm dealing with some right now, I've got to bring on co borrowers, you know, just the cost of living so high. So, I mean, this is a good topic. It's we it's relevant. We've been talking about it, but it just doesn't stop at the young people in these da unfortunately, you know. Jon G. Sanchez: No kidding. Wow. Cory Edge: Well. Jon G. Sanchez: Right, right. That you know, I'm glad you brought that up, Dwight, because yeah, the lay people, we ⁓ we think it's just the young kids, you know, going back to that. but yeah, that's that's a that's a great point to bring up, I guess. Cory Edge: So Dwight, I'm curious. You know, we've all been doing this a long time. You did my first loan on my first house. So over your years, I'd say the past 30 years, was it like 30 years ago compared to now? It couldn't have been that high of a percentage, was it? Dwight Millard: Never that. No, no, not at all. I th well yeah, quite a bit lower. we didn't have the automated underwriting system, which good or bad, right or wrong, but you you had to just present the case. But I yeah, I don't remember the co borrowers being I we had the the term kitty condo back in probably the nineties. So it's been around for a little while just to help. But yeah, Corey, I don't remember it it's it's difficult right now. I mean, John, look a car payment's nine hundred bucks. Jon G. Sanchez: Mm. haven't heard that team. Yeah. Yeah. ⁓ yeah, if you're lucky. Yeah. Yeah. Yeah. Yeah. Yeah. Absolutely. Dwight Millard: You know, you throw that that that that I mean that just that doesn't help anybody's debt to income ratio. You know, I mean, so it's it's it's but it there's more more co borrowers, more bank of mom and dad, bank of grandpa and grandma, ⁓ I think today than I've seen in a long, long time. Jon G. Sanchez: Yeah, yeah. Absolutely. Well, great insight, boys. So some of the things we're going to be talking about is do we just give them the money, right? That's that's one scenario. Not always the best one. We'll talk about the hundred thousand dollar down payment example and what happens there. don't give it to them, loan to them. That is a third option that we'll discuss. mom and dad buy the house, fourth option that we'll discuss. And let's see, buy together, right? That's another one that ⁓ that we all experience. And so Yeah, we're gonna go through the pros and cons of all that because again, it's obviously very, very common. It sounds like it's absolutely the majority versus the minority. we want to make sure that, you know, it's a good deal for for both of you, right? And and you know, I'll tell you guys, you know, in the world of financial planning and and and now estate planning that I'm dealing with, what I'm seeing a lot happen is because, you know, to your point, you know, we've got struggling Gen Zers, and to your point, Dwight, struggling Gen Z Gen Zers. But the baby boomers are doing just fine, right? They they they seem to really be doing well because of the strength of the market, the housing market, et cetera. what they're looking at now is they're going, look at why do I want to wait for, you know, who knows when I'm gonna die, 10, 20, 30 years down the road, and not see the satisfaction on my son's face or my daughter's face helping them out. let's give it to them now. I can afford to whatever you number you want to use, 50,000, 100,000. I can afford to do it now. I can see the smile on their face. And as all discussed, you know, there's really no, there's no absolutely no pros, no cons from an estate planning standpoint. There's a couple of things you need to do, especially if you're helping them out with a lot of money. but you know, they're getting that satisfaction. And, you when I was doing the research on this topic, I thought about both of you because, you know, you guys did my son's first loan and and Corey, you did the house. And and remember that satisfaction sitting sitting over at Tamarack Junction that Saturday morning after we just looked at the house and ⁓ You know, you you send over on his phone ⁓ the offer and he signs it digitally and and then Dwight takes off from there and you know everything is is is great. and and I think I I gave him I didn't lend him, I gave him $10,000. I is what Dwight required as the down payment. And that me was one of the most rewarding things I ever did as a father, right? Because who, you know, and Dwight, you've you've helped your children out. I know you can speak for this. It it is an incredible thing, and I'm so glad I was able to do that while, you know. I was alive to be able to see it and and not, you know, obviously in an inheritance. Dwight, how do you feel as a father helping your kids out? Dwight Millard: Yeah, well, yeah, we've tried, you know, sitting on at the same signing table with your son, you know, and he still lives in the house today, right? I mean, and you know, gosh, I really could get in trouble here, but they're pregnant. So he's gonna have his first, you know, I mean, child in that house. How can you not, how can you not feel great about it? You know, so yeah. Jon G. Sanchez: Yes. Yeah. I like that. Yeah. Exactly. And now it's got a nice roof over his head. Right. Right. Right. Absolutely. No, it's it's good stuff. Good stuff. we'll ⁓ we'll definitely explain all that. But first when we come back, we gotta get into the stock market side of things. Not a fun place today. Got problems go that happened today, and then of course, some things that happened this afternoon. gotta bring you up to date on. So a little bit of tough day on the street, but we'll get through it. I promised you that. continue our discussion when we get to going on the bank of Mama Dad with Corey and Dwight. First let's turn it over to Jack Saban. He's got right now Traffic. Jake or Jack. Dwight Millard: Am I extending okay? I restarted my computer. I okay, I got full bars and everything. No. Now I got just a I just restarted it. Like remember how Aaron said that one time when I couldn't. I just restarted it. Yeah, yeah. I don't know what happens. I got all the bars and Jon G. Sanchez: Yeah, you sound great now. Yeah Cory Edge: Yeah, now you're fine. Jon G. Sanchez: What did you do? Yeah. I would just do that every day before the show. Yeah, it's weird when or when you come back, it's like really loud. I noticed that each time. Yeah. And then it normals normals up. No, you're you're perfect now. Yeah, it's perfect. Yep. Cory Edge: Hey, do I Dwight Millard: Is it? Cory Edge: Yeah, traps. Dwight Millard: Do you want me to move the mic away? ⁓ I am fine? Okay. Okay. All right. Cory Edge: No, no, it's fine now. Hey Dwight, there was an article I think in the Wall Street Thursday or Friday that Hulti's gonna force Fanny and Freddie to start using Vantage Score. Does that ⁓ you did? Does it does it do anything, Dwight? Jon G. Sanchez: Right. I covered that Friday. Yeah. Yep. Dwight Millard: Mm-hmm. That's that f that's a the not to my knowledge. I don't see any I don't see anything. It it's allowing for, okay, so now they're coming out with non-traditional credit approvals. And that's kind of what that is. It you it's it's a it's a bigger, better scope than just the FICO scores. Cory Edge: Okay. Dwight Millard: So it's gonna it probably could help some people that just haven't been able to establish or for whatever reason didn't establish credit. So Cory Edge: So does that mean everybody now has a FICO score and a vantage score, or is that not how it works? Dwight Millard: I think so. I think so. We r we just run FICO, but we haven't we haven't been instructed anything on any of that yet. I d I mean I don't I but I think the purpose of it to in be inclusive. Cory Edge: Like utility bills and all the other kind of billings. Dwight Millard: Yep. Mm-hmm. Jon G. Sanchez: Well, Vantage is just the three bureaus, right? Cory Edge: Interesting. Dwight Millard: They're the ones that they own a piece of it, yeah. Yeah, so the vantage scores Cory Edge: They own a piece of it. Yeah. Dwight Millard: It design it's designed to to it's designed to score people with limited credit history who might not have enough data to generate a traditional credit score. Newer models can individuals with less as a monthly of credit, can score individuals with as little as a month of credit activity. So that it I do know I I do know what it opened up the the net. Cory Edge: Hmm. So if you have an existing FICO, you'll use that, but if you don't, then vantage, gotcha. Dwight Millard: You're fine. Yeah. Yeah. And they're kind of still using the same scale, 300 to 850. You know? So, I mean, I think it's just a It it it it advanced versions consumers to optionally bank or card accounts to factor in positive cash flow data. So it's just allowing you to Yeah. Different things. Yeah. Yeah. Jon G. Sanchez: So they're trying to use lot of different things to get that score going. Yeah. That FICO doesn't doesn't look at that. Cory Edge: Interesting. Dwight Millard: No, it doesn't yeah. This is probably a a better scoring model. You know, how does somebody who owns everything don't have a good credit, you know, doesn't charge? Why w yeah. Cory Edge: Mm-hmm. Interesting. Jon G. Sanchez: Hey, Corey, you'll love this quick story. So, you know, I had these grandiose plans, you know, for the weekend to do shit. You know, I'm still in the middle of the landscaping project around the cabin and everything. And so Saturday, you know, got up early, crack of dawn, just get out there when the sun's coming up. We're just kicking ass, moving dirt, doing all kinds of shit. I'm on the backhoe, Megan's on the skid stair. She's ⁓ getting a bunch of weeds out. I'm grabbing them with the the backhoe, taking them across the the property to dump them. ⁓ And we're we just got this system, we're just kicking butt, like I said. So she drags back this pile of dirt and weeds, and there was a log about this big in there. Nothing major. So I go to scoop up the pile. The pile's about three feet tall. I go to scoop up the pile, and for some reason the bucket kind of went over the top. So the two front wheels of the backhoe, you know, go up over the over the over the mound, right? No big deal. Done a million times. So grab the back up, scoop it again. Dwight Millard: What? Cory Edge: Yeah. Jon G. Sanchez: Go back, go dump the pile, come back, and I go to make go to you know drive into the pile, the backhoe just quits. Just blow. Like, what the hell? Go to start it, nothing. the heck? So we're trying to so so then I get out and I the hood on the on the on the on these cat backhoes, it's a split hood. Like one side opens up where you can check all your fluids, the other side's more stationary. Well, I had just cleaned out all the filters and everything before this incident happened. I'm like, did I not close the hood? Because the hood's like jammed. It's like it wouldn't, it wouldn't close down. Like, what the heck? And all of a sudden I noticed this, like this, this bulge in the hood. You know, it says fiberglass. What the heck? So we start, we start searching around, like, what in the world could be causing this? So Megan, of all the people, she crawls underneath the backhoe. I hit that, I hit a log and it went vertical and jammed the filler tube to my hydraulic fluid, the giant filler tube through the hood of the backhoe. Cory Edge: ⁓ no. Jon G. Sanchez: Lost all my fluid. why it wouldn't start at something. So so now we've got this ⁓ giant like I said, sticking up the hood, sticking up, you know, poking through the hood. It didn't go through, it bulging the hood. But what crazy ass thing to happen. Hit a log, jam up a filler tube. You know, that's a big long tube. It's probably, you know, two or three feet long, winds its way up through the engine. it's like, so called the mechanic today. She's like, ⁓ I can get under there and fix it. It's just, you it's got flanges, just got bolts. I'm like, ⁓ we'll just call the dealer. God. Screw it, couldn't use the backhoe the rest of the weekend. ⁓ Cory Edge: I was gonna say th it's always the first day of a three day weekend. First thing in the morning. Yep. Jon G. Sanchez: It always is. It always is. Yep. Yep. You got it. You got it. Had all these grandiose plans. Thank God I had the skits there. At least we're able get something done. But I Sunday I woke up and I'm just like, screw it. We're gonna have a friend of ours invite us to the rib cook off. So we we went to Rena all day or went to the rib cook off all day. ⁓ here we go. ⁓ hold on one second. I'll say. Cory Edge: Yeah, a coup a few years ago I was cleaning out. ⁓ but yep. Jon G. Sanchez: Welcome back to the John Sanchez show on News Talk 780 KOH with Corey Ojved, reality and old white Mullard of OnQ Home Loans. All right, we'll get to the bank of mom and dad in just a moment. But first, get this news of the ⁓ the stock market side of it going today. Cause again, a very interesting day. Started off a little bit on the rough side this morning. We never recovered. Matter of fact, we weakened a bit further, especially ⁓ on the Dow side of things. We finished a loss of 628 on the Dow, 1.18% to 52,786. NASDAQ lost 86 points, 0.32% to close at 26,421. And the SP gave up 45 points or 0.58% to close at 7,673. right, so what the heck happened? Well, crude oil was the driving factor, as I'm sure many of you heard, read, watched, et cetera, over the weekend. more missiles were exchanged between the U.S. and Iran over the weekend. Ships were hit, so on and so forth. So we up to higher oil prices. Matter of fact, I'm looking at my notes, my first stock update this morning, and ⁓ We're up, you know, almost $2.50 oil. That's never good. Now, this whole oil price situation right now, folks, is very, very sensitive. Very sensitive. And here's why. Thursday have PPI report, producer's price index, wholesale inflation. Friday we have CPI, the retail side. Now, obviously, ⁓ what's on today is not gonna affect those two reports because it's you know, August is data. But we're right back to again feeding into higher energy prices, higher inflation. Fed raising interest rates. Again, right now we said as of this morning, that was about, I think we're at 63% probability of a quarter percent increase next week when the Fed meets. next Wednesday, of course, we'll have the interest rate decision. So that was the number one factor. Then things weakened further. We we were starting to recover down four to five hundred points right around there. And then came across the newswires again this afternoon that that the struck an Iranian oil tanker. ⁓ And that there were explosions reported near Karg Island, Iran's primary oil export hub. remember, folks, that Karg Island, we haven't touched touched on that in while. That is Iran's major terminal, right? That's where the majority of their ships come in, unload oil, load up oil, etc. This has been the threat of the president that, hey, you know, Iran, if you don't straighten up, we're gonna invade Carrig Island. And remember that's when all of the marines and things, you know, thousands of them were shipped over there, you know, months ago, was quote, supposedly put some boots on the ground. we see what happens. Iran also nailed a ⁓ Saudi energy facility. I think it was late yesterday. So things are definitely escalating heating up there and that's what caused oil prices. Again, we were lucky we only finished up a dollar fifty seven to ninety three ⁓ two, but as I mentioned on one of my updates, Remember, oil closes at about ten o'clock our time. ⁓ that news of the carg island explosion and that U.S. hitting that other ship, ⁓ that news came after ten o'clock. So we'll see happens ⁓ tomorrow. other than that, we had no economic reports on the calendar. Gold was down thirty seven dollars and ten cents, forty four thirty eight ninety an ounce. And Mr. Millard, two basis increase on the ten year yield of four eighty one. How'd we do on the thirty year? Dwight Millard: Well, so we got a goose egg today, John, which I think is a victory, right? I mean, considering everything that was going on. we finished a 30 year fix according to Mortgage News Daily, 6.89. Here we are, you know. I mean, we are just in this uncomfortably high six range. So, mean, there's a lot of if you look at the headlines, there's a lot of movement to arms right now. you know, ⁓ yeah, the the the 501 arm under conventional or FHA Jon G. Sanchez: Yes, no doubt. ⁓ interesting. Dwight Millard: Gives you a little bit. It gets you kinda back maybe into the mid fives. you know, but it's a temporary product and but people seem to you know, it seems to be the ⁓ choice of the day is the arms right now, you know. Jon G. Sanchez: So you said ⁓ six eighty nine. So obviously basis points were at seven. That realistically could happen, Dwight, if that if we get that hot CPI and or PPI data, right? Dwight Millard: Mm-hmm. Yeah, I know. It feels like it could happen this week, John. And then that throws then your predictability model goes to the 85. And if it goes to 85, why not just do it? Right. I mean, if they're if if you if you kinda get that, if everybody's expecting it, might as well just do it. So I I I don't know, you know, but we've had the ⁓ reverse reaction, you know, when they lower rates, rates go up, when they raise rates, maybe they'll go down. I don't know. But it doesn't just doesn't feel but ⁓ that th but the conventional wisdom, and let me just tell you what everybody's telling me. Jon G. Sanchez: Yeah that's what I'm saying. Yeah. Right. ⁓ yeah. Yeah. No, you you ni you nailed it. Yeah, yep. Yeah. Dwight Millard: Hey, let me get through. I'll I'll buy now, I'll get through it and I'll refinance because as soon as this conflict let's just as soon as this conflict's over, we'll get the oil going and things like that, then we should be able to see rates drop. I just don't know if that's gonna happen, John. Is that gonna be what's gonna happen? I mean, that quick. Jon G. Sanchez: Right. Right. I mean, yeah, it's anybody's guess. It depends upon. I I think the other thing too is it depends upon if this I'm gonna call it a war. I don't like this, you know, chicken, you know what answer of it being a conflict. I know that's what the president and and Heg Seth are keep saying over the weekend. It's just a conflict, it's just a little conflict. it's gonna be that you devil's in the details, Dwight, right? Devil's gonna be in the details. What if if and when a tr some type of a of a ceasefire occurs. Dwight Millard: Yeah. Jon G. Sanchez: What's gonna be the details? Or are we gonna give it up or w you know, what's it gonna be? And then I think that'll have a lot to do with it. But, know, ⁓ the the right side, Corey, you know, last week as we discussed, you know, we had a lot of days where where oil shot up and and the stock market actually did pretty well. so we're not seeing this exact direct correlation between rising oil prices or not. But number i if any anything fuels into the fire of of something that can increase inflation, ⁓ that's the one driving factor, don't you agree, Corey? Cory Edge: Yeah, and I think sometimes there's a delayed reaction for whatever reason the markets don't respond right away. But as you mentioned, the PPI and the CPI come out. And I think if they were if they were where they're supposed to be or a little bit hotter, but you saw oil going down, then they could say, Hey, the next ones will be lower because here's what's happening. But if oil's shooting up, then Jon G. Sanchez: Mm-hmm. That's right. Yes. Yes. Cory Edge: All bets are off. I just I can't I still can't see Walsh raising the rate. I just for some reason I I just don't think he'll again, I know it's not his sole decision. I ⁓ just the the amount of hell he will go through if he does it. And and I mean, hey, he's gotta do what he's gotta do, but I just don't see him doing it. Jon G. Sanchez: ⁓ I know. I know. Yep. Well, the flip side to your to your exact correct point, ⁓ Corey, is is it could also be if he did raise rates, he could kind of look back at all of his critics and go, see, I told you I'm gonna run this thing the way that I want to run it. I'm not gonna get pressure by the president, you know, so on and so forth. But guys, I'm looking right now, I didn't realize first time I've looked at the the latest prediction, they're looking for a pretty substantial increase. I'm I'm looking at the predictions right now, or analyst forecasts, not predictions, but for CPI, which again will be Friday. ⁓ we got July's number, it was up one tenth of a percent month over month. They're looking for that to jump up four to four-tenths of a percent. core, looking actually to go from a two-tenths increase to just one-tenth. So that's where you strip out food and energy. So ⁓ you how they're the the analysts are starting to price in. obviously, how much ⁓ you know oil is gonna ⁓ gonna come into this whole thing. On the PPI we were unchanged from June to July. ⁓ they're now predicting a four-tenths of an increase there on headline. ⁓ And ⁓ unchanged on the core, where it's ⁓ we're up two tenths of a percent from June to July. So no what, it's been a while since I've seen an increase in predictions on on inflationary data. Most of the trends, you know, prior to the release have been somewhat ⁓ you know coming down. So ⁓ that's ⁓ got me a little worried there from that standpoint. So Dwight Millard: Well well you know, John I go ahead, Corey. Cory Edge: I do think John, if just real quick, if if if they do raise a rate, I think Walsh in the statement afterwards is either going to have to explain that this is first in a process, which will really send the market into a tizzy, or the market may like it, who knows? Or he's gonna have to say face by saying, This is the one and only, which will do absolutely nothing for any of this. ⁓ Jon G. Sanchez: Yes. Yes. Yeah. No. No. He I I I can promise my bottom dollar he will not say and done. Because know that's just not Fed lingo, right? Fed lingo is incoming data, we're data dependent, so on and so forth. But Corey, to your point, if we go back to Jackson Hole, you know, there were pretty subtle hints that it it's not gonna just be one, that it is gonna be two or more. so I'm gonna lean into the camp that we do get it ⁓ and and yeah. And to your point, Dwight, I hear your little voice about mid you've been harping midterm elections from from J Yeah, exactly. It yeah. So it's gonna be an interesting one. That's all we can say. Cory Edge: And you're gonna have midterms, yeah. It's crazy. It's gonna be a Dwight Millard: Well John, there's there's no reason it can't hit seven I don't wanna be a a pessimist, but there's no reason it's not gonna hit before seven before n next Wednesday. Then if he does raise it, I I don't know where it goes from there. Because then like you said, well, yeah, yeah. Jon G. Sanchez: ⁓ no, it's eleven basis points, that's nothing. Yeah, yeah. Right, right. Well, ⁓ it's it may go down. Yeah, exactly. I was gonna say the same. We've seen that happen as you said. So amazing. right. You're up to date now on the markets, mortgage rates and the commodity side of things. Exactly what happened today. Now when we come back, we're gonna get into a fun topic. The bank of mom and dad, smart ways to help your kids buy a home with Corey and Dwight. Let's turn it over to Jack Saban. He's got news traffic and weather. Hey Jack. Cory Edge: It may go down. Yeah, it may go down. Yep. Yep. Maybe he'll do something with the balance sheet instead of messing with the rates. Jon G. Sanchez: You know what? That could be that's a great point. Yep. Yep. You're absolutely right. Either that or basent will come in with maybe maybe worse or raise rates and Bissent will come in, you know, on a news conference minutes after and go, Yeah, but we're gonna do this and counteract it. Yeah. Cory Edge: I mean it's kinda safe face and We're gonna buy a trillion dollar, yeah. Well I was listening to a guy last week say, you know, bascent has a limit. He only has the money he has, whereas the Fed has unlimited money. So it's basent is the boss, but he can only deal with what he has. Jon G. Sanchez: That's a good point. That's a really good point. Cory Edge: So the I was telling Lancis earlier. So when Archer broke his wrist, we went to the emergency room at Folsom. And when I was talking to the finance gal there, she was super cool. And she's like, Well, where's your insurance? So I gave it to her. I go, but you what? Just cash pay, because I know my deductible is fifteen thousand. I'm gonna end up paying this all anyway. So I just cash pay. She's like, Okay. So I get a bill for the cash pay was forty one hundred bucks. Well, in the meantime, Jon G. Sanchez: Yeah. ⁓ she's Cory Edge: The club had called and said, Hey, whatever your deductible is, we're going to pick up everything. So you guys don't have to spend the I'll go, okay. But she said, but you got to run it through your insurance so that they'll pick up their portion, then we'll pick up the rest. I said, okay. So I called the hot or Jessica called the hospital and said, Hey, we told you cash pay, but run it through the insurance. So the insurance gets a bill last week for $5,800. And I'm looking, I'm like, this is bullshit. And it all runs to me because my deductible is so high that it shows that I have to pay it now. Jon G. Sanchez: Right, right. Cory Edge: So I get the bill and I'm looking at all the codes and I throw it into Gemini and like da da da da, what is all this stuff? They built him for a level five trauma bed, which is reserved for like heart attacks and amputations. They build him for an arm cast, which they didn't do, plus 90 days follow-up, which they didn't do. They built him all this high level stuff. So now I'm in the middle of having to appeal it to say, A, to the hospital, you're overbilling, and B, I didn't know this till before this happened. There's a federal law. Jon G. Sanchez: What? Cory Edge: That says anytime you go to an emergency room, they have to treat it as an in-network service, no matter where you're at. So they have to apply the network contracted rates. They can't just take the bill at face value and pass it. So I had to appeal to the insurance company to say you didn't apply the in-network rate. So it's just huge. But I'm like, man, these hospitals are freaking I mean, they just gouge you. Jon G. Sanchez: Yes, that's correct. Yeah. Right, right. Wow isn't that something? And you you threw that's so cool, you threw it into AI and came back with all the codes and everything too. Cory Edge: Not only did it give me all the codes, it wrote the email to send to them for the appeal of which laws they're breaking. Yeah. So I I just cut and pasted it over to them. That's nuts. Jon G. Sanchez: You're kidding me. ⁓ my god. Holy crap, so scary. It's amazing. And I mean, that's a blatant federal violation. billing like that? God. ⁓ Cory Edge: I I have no idea, but like of course it must happen every day, right? Like who they don't catch it and then they you know, whatever they don't get paid, they'll just be a write off and then it goes to a loss and then we gotta raise rates 'cause we're losing so much money. Like, we haven't lost anything. Jon G. Sanchez: ⁓ yeah. ⁓ every day. Every day. Right. Right. Right. Cory Edge: Yeah. Jon G. Sanchez: To bill you but to have that differential of what, fourteen hundred dollars from cash to insurance? Cory Edge: Yeah, 1700 bucks. But they changed the coding. When as soon as I went to insurance, they upped the coding. Yeah. That's why the bill went up. They changed it all. Like it's it was bonkers. Jon G. Sanchez: Or seventeen, seventeen. really? ⁓ Dwight Millard: Hey John, where are we starting? all the are we going on the nineteen page? Jon G. Sanchez: Mm-hmm. Yeah, we're just starting the beginning. Just get through Dwight Millard: And you sent three different emails. Jon G. Sanchez: the the not article but the but the other one, the first one that I sent you. Dwight Millard: Thank a moment. Bank of mom and dad. Jon G. Sanchez: Yeah. All right. So we'll probably skip the first segment 'cause we pretty much touched on that, but we'll see. Dwight Millard: So start with segment two. Jon G. Sanchez: Yeah, you're breaking up again. Talk to me. Yep, you're all correctly. Yep, all correctly. Dwight Millard: I am? Am I still right now? I don't okay, let me God I'll go quick. I'm gonna have to. Is it better now? Cory Edge: Go to your iPhone. Jon G. Sanchez: No, now you're good. Cory Edge: ⁓ that's way better. Yeah. Dwight Millard: You know what it is? If I have something open, do I have time to go grip the paper? Cory Edge: Yeah. Jon G. Sanchez: well f yeah, go ahead. All right, thirty seconds. Dwight Millard: So it's better now that I don't have anything open? Jon G. Sanchez: Yep, you're fine. Is your com your computer's not old, is it? Dwight Millard: No, I don't know. let me no, it's not old at all. Jon G. Sanchez: Do I? ⁓ Here we go, music's plan. Sorry. Welcome back to the John Sanchez show on News Talk 780KOH with Dwight Millard of Uncle Home Loans and the Corey Edge of Edge Rility. All once again, middle of a tough day today. Finished down 628 on the Dow. NASDAQ lost 86. The SP down a 45. Again, oil prices up $1.57, 9302 a barrel. I am seeing them trading a bit higher right now. So we'll keep an eye on those again as the conflict All right. ⁓ Bank mom and dad. Smart ways to help your kids buy home. I know. I was to be politically correct. Dwight Millard: War. Jon G. Sanchez: Good job, you caught me. Exactly. right. So think about this, folks. And then we're gonna get into it. Here's the question of the day. Your son or your daughter calls you tonight. They found the dream house. ⁓ love it. They both got good jobs, right? They can handle the monthly payment, but there's one small problem. They don't have enough money to get into the house. Dwight Millard: I know you were. I know. I caught you. Jon G. Sanchez: And then here comes the six words that every parent loves to hear. Mom, dad, can you help us? how many times did I say that growing up? Well, to the bank of mom and dad. And apparently, business is booming, as we said in our little informal survey a minute ago with Corey and Dwight, you know, north of 50%, we'll call it, of first-time buyers are needing help from mom and dad. So ⁓ this isn't crazy planning, you know. Pie the sky thing, like all when all of us were buying our first houses, as Corey said, and I had the same situation. it's happening everywhere. So what we want to do is this. We want to help our kids. We know that. But that's not really the question we're gonna be posing to you today. The question is: what is the smartest way to help them? Give them the down payment, loan them the money, buy the house, buy it together, or help with the monthly payment, right? Those are the same, those are the areas that we're gonna try to cover. Or you tell ⁓ tell your kid, Hey, you know what, I love you so much, but doggone and I got into my house by my on my own and you do the same thing. Keep saving your money. many people do that one also. So Dwight, let's start with you. Why is the bank of mom and dad getting so big? What is the reality? Dwight Millard: Yeah. J I think just the affordability that we talk about all the time. You know, the affordability is just very, very hard for these young kids like I said, even older kids sometimes to get into. And so the the the most natural place that people would go is to their mom and dad or family member. And, you John, there's there's two parts to this. There's there's the money to get into the house, but there's also the the qualifying of it, know, which is as equal, if not harder. Jon G. Sanchez: Right. Right. Dwight Millard: point to get over or hurdle to get over than the actual down payment. Cause w with, know, little to no down payment programs or just three and a half on FHA, you know, three percent to five percent on conventional, people can figure that out somehow. ⁓ and dad are always good for that, but yeah, it's it's it's very challenging. Jon G. Sanchez: Are you seeing are you seeing they're helping the parents are helping in both the down payment and the cosigning or one more than the other? Or what are you seeing there? Dwight Millard: I think you're starting to see more co-signing now. And then when that happens, John, I don't have to document the down payment because now it's a blended ⁓ So now there's no there's now there's no gift anything because now it's a blended file. But I I'm telling you, we moved the needle from helping to get in, maybe pay some debt to probably just outright co-signing now. Jon G. Sanchez: ⁓ interesting. That makes sense. Okay. Right, right, exactly. Dwight Millard: Which is a bigger that's a bigger animal to take down for your child than gift gifting them fifty grand or paying off s this this now you're on the hook. Yep. Mm-hmm. Yeah. Jon G. Sanchez: Yes. ⁓ yeah. ⁓ yeah. Absolutely. You're on the hook forever. And and I I always warn clients about that when they me, geez, do you you should I cosign? I'm like, We all love our kids, but I told my kids from day one I'll help you and I'll go to my grave trying to help you out, but I will never, ever, ever co sign. Never. I will never do that. It's just I've seen too many disastrous ⁓ situations happen. Corey, let's go to ⁓ our first option. Just give them the money. What w what's wrong with that? They need a hundred thousand dollar down payment. What's wrong with that? Cory Edge: Well Dwight's point that he just said, which I did not realize it was like that, but when he explains it, it makes a lot more sense. The $100,000 down payment may not be the issue anymore. It may be the qualifying. Unless, course, you're on, and Dwight, you can explain it better than I can. If you're a 3% down and the 100,000 is obviously way more than the 3%. So it ultimately makes the file look that much better. but yeah, the the The qualifying, the co signing, the this and that, that's a whole different world than it has been, at least in my experience, for the past twenty five years, because that there's not a there's there's not a whole lot of people that would go out on that limb, and rightly so, to do that. So Jon G. Sanchez: Exactly. Dwight Millard: John, I think part of the problem with gift giving, and I gotta call it gifting unless you are months out and you give it to them before that. But what I see is they're using the money to pay off debt. The problem with that is you know when you pay off debt, guess what happens four, six, eight months down the line? It's all back again. So it it made it worse. So it's that's it's all yeah, yeah. ⁓ so ⁓ ⁓ Jon G. Sanchez: Mm-hmm. Right, right. That'd be a tough conversation with mom and dad. Remember that twenty thousand dollars of credit card I paid off? I'll back at it again. Cory Edge: Mm-hmm. Dwight Millard: Right. But you know, John, in the old days, you I and I say old days, you go back to the eighties and nineties, you know, it was a ten thousand got you pretty far. Now it's fifty thousand or sixty or seventy thousand. You n yeah. Yeah, yeah. Jon G. Sanchez: ⁓ yeah. Ten ten ten's worth a hundred now. Yeah, exactly. one thing, guys, I wanna I wanna cover on the estate planning side. I don't know if you guys get this question a lot, but I do is okay, what happens if I if I gift this money, right? I'm giving it to my to my I'll pick a child to to my son. do owe ⁓ you know in taxes on that? Does he owe taxes, that type of thing? And the answer is no. So keep in mind, you can gift nineteen thousand dollars. per person to as many people as you want. So if you're married, obviously that's $38,000 a year that you can give. That's the 2026 annual exclusion amount. what you have to do, however, if you exceed that 19,000, you must let your accountant know so they can reduce that off of your your lifetime exclusion. So remember right now you can have you can give you can have an estate worth $15 million. Your spouse can have a state worth $15 million. So essentially if you're married, you can have an estate worth $30 million before any ⁓ ⁓ estate taxes are due. that gift of let's say $100,000 or $38,000, whatever it is, it that will come off that current $15 million. You may think, ⁓ my God, I'm never going to gift away $15 million. But as I always remind people, guys, and I'm sure you agree with this, remember that $15 million is thanks to President Trump. remember, were dealing with what's called the sunset provision, right, Corey? You and I talked a lot about this. Cory Edge: Mm-hmm. Yep. Jon G. Sanchez: Before Trump got reelected, where the Democrats were talking about bringing that exc I don't even where was the exclude? It was 12 million and some change, if I remember before Trump got elected, Corey. they were gonna bring that, they were talking, I saw some predictions, down to where it was when I started in this business, which was like a couple million dollars, right? I wrote a blog today, I don't think it they got it up on my website yet, ⁓ but about you know, what what you have to be very cognizant about is Whoever's in the administration, they can change that a lot very frequently. when you what I wrote in the blog is what people don't realize, you have to look at for your total value of your estate, it's a lot of things. And the one that I see that gets people a lot, I don't know if you guys do, is your life insurance, right? It's not uncommon for someone to have a half a million, a million dollar you know, term policy or even a whole life or some other permanent insurance. ⁓ But gets thrown in there. Obviously, the value of your real estate, your investments, your IRAs, people think. ⁓ my my my qualified plans are not included. ⁓ yes, they are. That's a whole aggregate value. So yeah, for the majority of you, yeah, you're well aware for well away from 15 million. But you have to keep in mind, if you don't keep good records now, what happens again if someone gets elected and they go, hey, the the new lifetime exclusion is two million dollars. I mean, right, Corey, they can do that at any point. Easy, easy. And now you're gonna go, ⁓ my God, what year was it that I gifted little Johnny this and that and everything else? So just let your accountant know they'll just keep a running track of it. Cory Edge: Yeah, easy. Yeah, yeah. Jon G. Sanchez: And ⁓ that way if that time period ever happens. But yeah, you can gift as much money, you know, I can give Corey you know, nineteen thousand, my wife can give him. Same with Dwight. You can gift as much money as you want. You can gift away your whole estate, but you just better keep you know, just keep really, really good ⁓ track of it. All right, we come you're good. Dwight Millard: So John, the way the the way I say it real quick is it's a notification, not generally a taxable event. Is that correct? That yeah, it's just notif yeah. Jon G. Sanchez: That's a great way to look at it. Dwight. Yeah, it's a notification. Yep. That's a excellent way to put it. Much better than what I said. Much, much better. Good job. When we come back, we are going to continue ⁓ the bank of mom and dad. Don't give it to them, loan them is another option that we'll cover. But first, let's wrap it up with Jack Saban and the right now traffic center. That was good, right? That's a lot better than what said. ⁓ yeah. Dwight Millard: No, I was saying that rhetorically. I didn't s I wasn't trying to trump. I just I that's what I I didn't know that it goes against your lifetime. I I just have always said, I've never had anybody have a taxable event on a gift ever. You know, nobody's ever called me. ⁓ you don't think most okay. Yeah. Yeah. Jon G. Sanchez: Yeah. Yeah. Cory Edge: I don't think most people report it. Yeah. Jon G. Sanchez: Yep. Yeah. No, they don't. Cory Edge: No, most people don't even deal with it. But Jon G. Sanchez: But you watch to see Democrats get elected and they bring that down to two or three million and they're gonna go back and audit and Dwight Millard: ⁓ shit. Do do we really think that this midterm is as close or as lopsided as the media is making us think? I can't imagine people I can't imagine common sense will not prevail. I mean, that's just w it's stupid. Not typically, not yeah. But you see the difference that Telarrico has raised over Paxton? It's insanity. His war chest, that's why Trump just gave him 10 million from the Jon G. Sanchez: It's gonna be so interesting. Does it ever? They vote with their pocketbook. Really? Dwight Millard: MAGA Inc. Yeah, Trump just gave yeah, now they're that's why they're doing the midterm convention in Dallas tomorrow. Jon G. Sanchez: interesting. I didn't hear about that. Dwight Millard: ⁓ yeah, they're doing it. This is the first time ever. You know, have you heard about it, Corey? Yeah, they're doing a midterm convention. Never happened before. Jon G. Sanchez: Cheese. Cory Edge: No. they're they're they're bait I mean they don't want to lose the house but it seems like they'll lose the house but they're not at risk in the Senate are they? Or maybe they are. I don't know. Dwight Millard: They say they they could lose both. Then you got impeach, impeach, impeach. That's all we're gonna hear. Cory Edge: That would be a Jon G. Sanchez: ⁓ can you imagine? Can you imag yeah, there you go. Yep. ⁓ Cory Edge: Well, they always say that though. I mean Jon G. Sanchez: Man, I read this article yesterday. It felt so bad. It was a it was a this young, really pretty gal who husband, remember that that that that fuel tanker that crashed a couple months ago and everybody died on there. It was, you know, one of those mid midair refueling tankers and they crashed. Yeah, her husband was was was on that. The government denied her survivor benefits. You why? Cory Edge: ⁓ yeah, yeah, yeah. Yep. Really? Jon G. Sanchez: Because it's not declared a war. Is that sh I am not shitting you? Nope. Nope. Denied or and it obviously it goes for, you know, the 18 other lives that or 17 other lives that have been lost. But yeah, didn't realize that. They they they the Trump administration has not declared it a war, so therefore none of those benefits are payable. Cory Edge: ⁓ you're shitting me. I didn't think about that too, because when my dad used to fly the C the C one thirties or he was in there, he would always tell me, like, ⁓ yeah, when they're out Norway or wherever he's like, We would if there was a war somewhere, they'd always fly over the edge of that country because they got war pay. Even just being on the outside edge of it. But I never thought about it not being declared a war. So does that mean even the sailors that are getting missile shot, like none of those people are getting war pay? Jon G. Sanchez: ⁓ okay. No kidding. Yep. Wow. Yeah, yeah. Doesn't matter. They get hazard pay. Yeah, they get hazard pay, but they don't get they don't get, you know. yeah, but yeah, and you're right. There's there's I guess there's all these different levels like hazard pay and yeah, different things like that. But ⁓ but war pay is ⁓ I know, I know, yeah. Buncha Congressional are just up in arms about it. Yeah, really cute gal. It's like God, you lose your husband and you can't even get the right benefits. Just Cory Edge: Different levels. ⁓ that's a crime. That's ridiculous. So was it I know they're not calling it a war now, but were they calling it in the beginning? Jon G. Sanchez: Conflict. I thought they did. It shocked me when I read that. I thought for sure. Cory Edge: For like the first fifty nine days or whatever the deadline was, you know, and then they said, ⁓ no, we're not shooting. Hmm, that's a bummer. Jon G. Sanchez: Yeah. Yeah. Yeah. Yeah. I know. Really is. All right, twenty seconds. Cory Edge: It's plain fetch. Jon G. Sanchez: Yeah. Dwight Millard: Dog's out of control today. Jon G. Sanchez: All right, here we go. Welcome back to the John Sanchez Show on News Talk seven eighty Q. It's Mr Millard. Can we get your phone number, sir? Dwight Millard: Yes, sir, two four zero two zero two two. Jon G. Sanchez: Thank you. Mr. Edge. Cory Edge: 673-6700. Jon G. Sanchez: Thank you, sir. right. We're going to continue on the bank of mom and dad. Now, our next option. Okay. So we touch touched on just giving them the hundred thousand. Just make sure, again, you let your accountant know so they can reduce your lifetime exemption, so on and so forth. Dwight, option number, our next option. Don't them the we're just gonna use the hundred grand, loan them the hundred Lender's perspective, what happens there? Dwight Millard: Okay, so I I don't like that word, but if they're on the if they co-sign, I don't then it w it's all, you know, they can use whatever they want. So we either have to source or season funds, John, for 60 days. So what I'm trying to say is read it between the tea leaves. If you're gonna help somebody out, do it now before I get into an application, because then you can do whatever you want. All right. I demonstrate they have 60 days worth of two months worth of bank statements that show the money in there. That has to be kind of outside of escrow. I don't like the loan part of it because it's like anything else. you know, the first time they don't make the payment, what do you do? You know, what do you what do you I think I think my dad used to always say when I asked but asked my dad if I could borrow 20 bucks, he goes, Ask for the right way. And I always go, Can I have 20 bucks? ⁓ know, then he'd give me 20 bucks. I but I never borrowed it, right? I always it sounded better, but I never borrowed it. So I just think you get into a little bit of that, that's a tough one. Jon G. Sanchez: Yeah, foreclose on your kid. Yeah. I can see your dad did that. Yeah, that's right. Dwight Millard: Family wise. Cory Edge: But Dwight, if if it was a loan, would you have to hit him with a payment? Jon G. Sanchez: I I was just gonna ask that. Dwight Millard: Yeah, but that has to be yeah, but it has to have terms, it's gotta be and it can't come from a family. So can use loans, but there's a lot more guidelines behind that lending ⁓ It's got it's about gotta be a prev prevalent rate and all that prevailing rate, yeah. Cory Edge: So if it's ⁓ I guess reading between between your lines, above your lines and below your lines, if it's gonna be alone, document it after the fact. Jon G. Sanchez: Yes. Dwight Millard: Do it do it amongst yourselves. I just need you. Cory Edge: Okay. So put the money in ninety days ahead of time and do the loan terms ninety days after. Dwight Millard: Whatever you want to do. Yes. Yes. Cory Edge: Give or take. Okay. Jon G. Sanchez: Done, done. right, let's go to our next one. Mom and Dad buy the house. Corey? Dwight Millard: Okay. Cory Edge: I mean, hey, if you want to be a landlord, like sometimes your kids are the best tenants and sometimes they are the absolute worst tenants you can have. And so you're the only one that knows your child. So you'll be able to hopefully determine. It does happen a lot. I do have over the years I've had a lot of clients, especially up and around the university. They know they're they know at least one child, if not multiple child children are gonna go there. They set it up as hey, I'm either an investor now or is going to be anyway. Wanna buy the house now? It saves on dorm costs, it saves on You know, they're gonna be paying the apartment rent or all of that stuff anyway. so go ahead and buy it now. My only advice or my best advice was handle it as you would any other investment in an LLC, have a lease agreement, have all normal stuff because nobody wants to evict their kid, but if you have to, you still wanna be able to beat him in court, because if your kid outsmarts you in court, then Thanksgiving dinner's gonna be hectic. Jon G. Sanchez: Thank you. Yeah. Yeah. Well, as I always tell people, Corey, and that's excellent advice on the LLC. I ⁓ and again, using your university example, as you and I both know, very common. My daughter lived in one of your rentals in the beginning. And it is a situation where, you know, picture it, we all did it. You have a party, big party, someone gets hurt, whatever the case is, they're not gonna see your kid. They have nothing. They're gonna come after you as the landlord. So ⁓ it may crazy to go, wait a minute, I need asset protection if my kid's living there. You better believe it. You absolutely do. wrap us up. Yeah. Dwight, wrap us up. Cory Edge: Probably need more. Dwight Millard: Yeah, John, I mean there's it there's so many ways to do this. Buy it together. I like that one. I know you're not a big fan, but there's lots of ways. You know, just just talk to Corey, talk to a lending professional, just get it figured out. There's ways to do this. And if you want to help your child out, I mean, like you said in the beginning, what a great time to do it while you can see the benefits, the fruits of it. So Jon G. Sanchez: Yeah, there's there's an estate planning term called giving while living. Right? Giving while living. Exactly. ⁓ right, fellas. Excellent job as always. We will do it again tomorrow on the John Sanchez show. God bless. Have a great afternoon. See you tomorrow. Dwight Millard: Hmm, I like it. Yeah, I like it.