Latest / Buying Local Podcast / Mortgages Without the Stress with Ohad Oren | Buying Local #62

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Mortgages Without the Stress with Ohad Oren | Buying Local #62 · Buying Local Podcast

0:00
Welcome to Buying Local. I'm your host, Matt North.
0:03
And today we are joined by Ohad Orine, a lone consultant and
0:08
I've had the chance to build a wonderful bond business
0:12
relationship through our referral groups, Gold Stars,
0:16
which will actually be hearing more about that on Buying Local.
0:19
But Ohad, welcome. Thank you very much for having
0:23
me. When I first heard about this
0:24
thing that you do, I was like, I want to, I want to check this
0:28
thing out. Right.
0:29
Yeah, very, very happy to get you on here and Long.
0:32
Glad to glad to be here. Yeah.
0:34
Well, if there's anything I left out, would you just, you know,
0:38
kind of tell a little bit about you, what you do and to the
0:42
viewers out there? Sure.
0:46
I work, I work with Loan Depot, which is they're the third
0:50
largest independent mortgage bank in the country and they're
0:54
publicly traded. And the name is familiar to
0:59
some. So like if you are, if you're a
1:01
Miami Marlins fan, the stadium is a Loan Depot stadium.
1:06
So they're the official, they're the official mortgage company of
1:12
Major League Baseball. I've been with them for a short
1:15
period of time, but I've been doing real estate finance for
1:19
going on nine years. Wow.
1:22
I am. I am local, pretty much my
1:24
entire life since age 11. Grew up, grew up in East
1:28
Greenbush, went to SUNY Albany, left for the Big Apple, came
1:33
back like so many do, and, and I I never looked back.
1:38
Wow, that's awesome. So you signed a little bit of
1:41
real estate, a little bit of the loan.
1:44
Have you always, always been in this field?
1:46
No, I actually, I actually started out my, my degree
1:50
started out engineering, believe it or not, at University of
1:54
Buffalo. I failed out miserably for
1:58
various reasons and then moved to computer science, which was
2:02
actually easier for me. But also coincidentally,
2:07
programming became more important than engineering
2:10
because when I went into school, like engineering was this thing
2:13
to do. Like, you know, like lawyer,
2:15
engineer, doctor, right? But the computer science, like
2:18
programming and then the Internet and then, you know,
2:21
social media became like so many things in my life accidentally.
2:27
The thing that was simpler for me to do became the thing that
2:30
was what? So I started out for a financial
2:34
place, but as a programmer. I, I, I developed for Goldman
2:40
Sachs was my first job. So not a gold, but gold like the
2:44
parent company Goldman in the city I developed or as part of
2:48
the development team for regulatory and compliance
2:52
treasury SEC systems, the things that report, hey, are we doing
2:57
things correctly? Do we have the right amount of
3:00
cash on hand to cover our trades and stuff like that.
3:04
I was part of that system, which I found very interesting the
3:08
work, but I don't know how many system programmers, you know,
3:15
but they're, they're not usually a party.
3:18
So. So there was a little bit of a
3:22
personality fit which I initially interpreted as OMG
3:27
nobody. Likes me like I'm used to like
3:32
having a good time and connecting with people, but
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these people are like real, what I interpreted as really snobby
3:39
or but it was like no. We're just like programmers and
3:44
we are not. We're not very social.
3:46
In general. So there was some fun, but it
3:50
was just like I. It was a box that didn't really
3:54
fit my style that much. So the work was interesting, but
3:59
the my colleagues were not as interesting.
4:03
Do you know what I mean? So started out basically as a
4:06
combination of tech and science. And then ultimately when I moved
4:10
back here, I took a job in finance, but with an auto
4:13
dealership. I was part of the destination
4:15
group where they included me, but they didn't include puppies
4:19
and babies. And so I don't know if you know
4:22
that tag. Yeah.
4:26
So so I did finance, literally financing auto.
4:30
Loans and so that was a combination of sales and finance
4:34
that led me to be in the credit union world, which is was
4:38
significantly less of a grind than 90 hours a week.
4:42
Literally every day from 8:00 till the last customer leaves.
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Ten, 11:00 doesn't matter. Different dealerships are
4:49
different, right? Some are like we're open 8:00 to
4:53
6:00 and we close. I was part of a dealership that
4:57
was like, we're open 8:00 to 6:00 or 8:00 to 7:00.
5:00
But as long as there's customers, you're staying until
5:04
the last customer leaves. And that could be 10 or 11:00.
5:07
Do you know? And all Saturdays and every
5:10
other Sunday. So, and I just had two little
5:13
kids. So it was a grind and it was
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taxing on the work life, you know, leisure scenario, right?
5:24
Definitely. So, So what happened was, was
5:29
that it forced me to be like, I want to still use this skill for
5:34
doing loans, which I really enjoy, but work at a place that
5:39
not only doesn't want me to be there for overtime, but once 39
5:48
hours arrive, it's like you have to leave.
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You can't work more than 39 hours.
5:53
It's literally against our policy.
5:55
So it's like, oh great, a vacation, vacation.
5:59
Yeah, No, it really sounds like a lot of the skills early on are
6:05
very transferable. It it sounds like I had to do
6:09
this. You did it, it didn't work out.
6:12
But yeah, it really, it really sounds like you're happy.
6:14
You're you're you're in a situation where you know, you
6:18
can build a lot of success. And I and I see that and it's
6:21
it, it really fits with your personality too.
6:24
But just typically like who? Who would you work with like
6:28
throughout the day? OK.
6:31
So the the simplest way to look at what my business is like is
6:38
that I have a client and I have a customer and they're
6:42
different. The customer is the borrower.
6:46
The customer is the person who is applying for a mortgage
6:49
either to refinance or to purchase a home.
6:51
Right now, based on where rates are, most people are purchasing.
6:56
However, rates have been very high, between 6 and 8% for the
7:00
last five or six years, right right after COVID where they had
7:05
dropped really low, they started to go up.
7:08
So all of the people who bought houses, just to give you an
7:11
example, in the last at least three or four years locked in at
7:17
rates between 5 1/2 and 8 1/2 percent.
7:21
So imagine that the rates were to drop again, probably not like
7:26
you can't predict, but probably not as low as the twos that they
7:29
got to. But if they get to like one 2%
7:33
lower, like meaning low fours, everybody and their mother and
7:37
grandfather is going to be refinancing.
7:40
And then my the shift moves to like yes, still buying houses,
7:45
but also I did a loan three years ago, I could save 304
7:51
hundred $500 a month on my payment and the interest over
7:56
over time, which is hundreds of thousands of dollars.
7:58
So mine shifts between right now based on the current market get
8:04
help you get houses or at least educate you on the process,
8:07
right? So those are the customers.
8:10
I take the customer from the point of application to the
8:14
signing table all along making sure that they're approved,
8:18
understanding what the documentation requirement is,
8:20
etcetera. And then getting them to the
8:23
finish line and then being there for them if they have questions
8:26
later on in life. And if they want to just a laugh
8:29
because I'm silly sometimes, right?
8:32
So that's the customer, right? From a business development
8:39
perspective, my relationship is primarily with clients, and my
8:44
clients are the Realtors or builders or finance people,
8:50
people who refer to me, their person.
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But the relationship that's closest in general is with a
8:56
real estate agent because they have the most skin in the game.
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They have somebody buying a house who needs to, who's not
9:04
paying in cash, who needs. Like, and they need to know
9:07
what's going on with their deal, right?
9:10
So we're in it, we're partners, we're in it together.
9:12
Like I don't get paid if that person doesn't get the loan and
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the house doesn't close and neither do they.
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So we are literally in lockstep. My business development is to be
9:24
like, I'm a good partner. I will make sure that I make you
9:27
look good. I deliver for your, for your
9:30
client, right? Your, their client is the
9:33
customer. I'll deliver for them.
9:36
But the person that I'm taking care of above that is you,
9:40
because we are actually in business together.
9:42
My relationship, you see the distinction between custom
9:45
customer and client. The customer is still somebody I
9:48
treat well. I treat well, I take care of
9:51
them, but I don't have an ongoing business relationship.
9:55
They're not going to get another house likely in the next 5 or 10
9:59
years. The transactions are less right
10:02
the the focus for mortgage loan officers, which is Loan Depot
10:08
calls and loan consultants and it's a little bit confusing.
10:11
I love you Loan Depot, but it's not clear necessarily that
10:14
that's. What you do?
10:16
You have to sort of figure it out, but that's what the, the
10:19
official title is mortgage loan officer or mortgage loan
10:22
originator, of which I am licensed and I had to become
10:26
licensed when I left a bank. So to explain the, the
10:32
distinction, there's a thing called the SAFE Act and it is a
10:37
set of laws over the course of the last 10 years that have
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required, they have strict requirements for who it is that
10:48
can handle a mortgage and specifically who can talk about
10:51
mortgages like rates and things like that and who cannot.
10:56
There are, there's registered and then there's licensed.
11:03
When you work at a bank or credit union in my case, and
11:07
they have money, they have cash on hand in the institution, you
11:12
don't need to be licensed because there's enough money
11:15
potentially to support if something went wrong with the
11:18
mortgage. I see.
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But when you work for an independent mortgage bank or
11:24
broker like I do, now you have to get a license with New York,
11:28
and I'm also licensed in Connecticut because now the
11:33
standards are stricter. There's no backup plan, there's
11:36
no net, right? You either know what you're
11:39
doing and New York State said that you do, and so does the
11:42
country, 'cause it's a national test or you're not getting it.
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Does that make sense? Yeah.
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So, so I had been doing the work, but because I was under
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the umbrella of the license essentially of the bank itself
11:58
that had money to support the mortgages, I only needed to
12:02
register with something called the NMLS, the National Mortgage
12:05
Licensing database. But when I left to become to, to
12:11
join like The Big Lead, so to speak, and, and not just be at a
12:16
regional credit union, it required me to get to get
12:20
licensed. I had to learn all of the rules,
12:23
take a test, at least get a 75% on it so that I could so that I
12:28
could do it. And one of the distinctions
12:33
between being at a credit union in general and being at a
12:37
mortgage bank is that the focus is more on business development
12:41
because a lot of people, they love their credit union and they
12:44
were like, well, you did my car loan and you did my credit card
12:49
and you have my checking account.
12:51
So it naturally goes that I would also like to talk to you
12:55
who I trust the most with my biggest purchase of my life like
13:01
with my house, right. But So what that's what that
13:09
means is is that that business in general comes in.
13:13
It doesn't mean that people don't make phone calls and try
13:16
to develop relationships etcetera, credit unions, they
13:18
do, but there is a flow of. People from anybody who's making
13:25
a deposit all the way to somebody who got a credit card.
13:27
There's a flow of potential leads and referrals of people
13:31
who are banking with this institution.
13:33
The mortgage bank does one thing.
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So when you come to it, you're just there to either get a
13:40
mortgage or you're going with somebody else.
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So the challenge is, oh, I need to develop relationships because
13:48
other than certain lead systems like getting it from Zillow or
13:51
something like that, you're out, you're out on your own.
13:55
So that's like the challenge and the beauty of the of of kind of
14:00
running your own business, but being.
14:01
Part of a larger umbrella. Does that make sense?
14:04
Yeah, yeah, definitely. I mean, yeah, thank you.
14:07
I, I, I'm learning a lot too. And I'd, I just assume, you
14:10
know, kind of taking a step back, like you said, a lot of
14:14
this is, you know, first home buyers, it's a big purchase, A
14:18
lot of emotional strings tied to that.
14:22
How, how important is it that you're, you know, taking that
14:27
step above just being a loan officer and really honing in on
14:31
that toning, honing in on that like educational aspect, How
14:36
how, how much of your day is just, you know, being that being
14:39
that shoulder to cry on, I guess.
14:42
So some of that answer you were already kind of get the the hint
14:49
like this is the biggest purchase and even if it's not
14:54
your first and that one's the most emotional, it's still a
14:58
huge amount of money and it's stressful and you want a house
15:01
and etcetera. What sometimes people believe is
15:06
that, oh, I want it to get done quickly.
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That is here's what you want to get done quickly.
15:12
You want to get to the point that you're like, oh,
15:16
everything's fine. I don't.
15:19
It's all under control. I move in when I move in.
15:23
In fact, counter intuitively, you'd be like, yeah, let's get
15:27
it done right away. Closing quickly is important to
15:31
the my real estate partners who I love, but they also want to
15:35
get paid right. The priorities are slightly
15:39
misaligned, right? So you just have to keep.
15:42
It's like this marionette where you're satisfying different
15:46
people because think about it from the perspective.
15:48
Of what I call the customer. Think about it for you, if I
15:53
were to tell SO right now, are you renting?
15:57
Yep. OK, so you rent an apartment,
15:59
you have all of your stuff, you possibly have a pet, you have a
16:03
significant other, whatever. You come to me and you say I'd
16:08
like to buy a house and you point to that house.
16:11
If I said to you, Matthew, great news, I have you approved and
16:18
here are the keys to the house. Are you ready to move tomorrow?
16:23
I mean, I don't know. It's all right.
16:26
Like there's a bunch of plant and now imagine you're actually
16:28
moving a lot. Like the more stuff you have
16:31
kids, the school, all this stuff, like do you know what I
16:34
mean? Like you possibly single person
16:38
just in my apartment. Maybe you're like, yeah, I'll
16:41
just take the TV and leave these T-shirts.
16:43
I'm ready to go, right. But imagine like a family of
16:47
four or five, right? And what if you moved to school,
16:51
to the new school district registration, all that stuff,
16:55
like your pet, Where are they going to?
16:57
Where am I going to go to doctors?
16:58
I'm still going to like imagine compounding all of those
17:02
different things to being like, OK, I'm not ready to move in
17:08
tomorrow. Just the fact that you got me
17:10
approved and now it is one last thing, a very big thing for me
17:15
to worry about so that I can be so I can focus on the other 50
17:21
things that I need to think about in moving.
17:26
Thank you for doing that. Yeah.
17:29
So what my goal is for them to understand as much as they need
17:36
to make it as simple as possible, but not simpler.
17:39
I don't need to get into all of the different rules and
17:41
regulations and all the fluctuations of the market and
17:44
what it is that leads to one particular product.
17:48
I just have to present. And there's, by the way,
17:50
hundreds of different mortgage products.
17:53
And the bigger the organization you work for, the more there are
17:56
there's conventional and there's government loans, and then
17:59
there's special programs and there's ones for investors.
18:01
And then there's there's two large houses, Fannie Mae and
18:05
Freddie Mac, that offer similar but not exactly the same.
18:09
Imagine I hand you a. Encyclopedia, right, or
18:15
Wikipedia. Like imagine I hand you 75
18:17
Wikipedia pages basically and be like here is all of the
18:22
information you need, blah blah blah.
18:24
You read it and then get back to me.
18:26
Let me know which one you want. No, if you wanted to know what
18:31
the value that I that I look to bring.
18:34
It's that like? Oh, oh, Haad knows the mechanics
18:39
of what's going on under a car. He'll just present me with like,
18:43
here are three options. Make a suggestion what it should
18:47
be, but it's but I'm going to figure it out because you might.
18:49
This rate's a little bit higher, but you have to play glowing
18:51
costs. This rate's a little bit lower,
18:53
but you have to go out of pocket for this thing.
18:57
So like we weigh out the options.
18:59
The answer is not always obvious.
19:01
Sometimes it's two similar decisions, but Ohad will provide
19:08
me with the bullet points of what I need to know, what I need
19:13
to be prepared for and that there are in a in a transaction
19:18
that has a lot of surprises and they don't.
19:21
Usually go exactly how you plan. Nobody has perfect credit, No
19:26
title is always perfect, no house has not a single issue in
19:30
it. It's just.
19:31
Every one of those things and on and on is yet another component
19:36
that's not going to go exactly as you planned.
19:38
That's the only real irony in life is when you're like, I
19:42
think it's going to go exactly this way.
19:44
And then two months later it went exactly as I thought.
19:49
You, you know that from your own life and you're not even that
19:52
old. Like it's just not how life
19:55
works in general. The only irony, the only like,
19:58
Oh my God, that was crazy. Where you're like.
20:02
ABCDE is going to happen, and two months later, ABCDE is
20:09
exactly what happened. You're like, OK, what is this?
20:12
Like is this like a parallel universe?
20:15
Yeah, are we living in a movie? Right.
20:16
Do you see what I'm saying? So like, So what you are getting
20:21
from me is like, oh, he's an expert.
20:23
He knows what he's doing. Like a really good mechanic,
20:26
like a doctor, whatever it is, right?
20:29
I have faith in that and he'll give me the information I need
20:34
and he'll be available whenever I have a question or if I panic.
20:38
And he'll do it in a light way where we can joke and take the
20:42
pressure out of the situation. But I can tell that he's also
20:45
serious about the business as well.
20:48
And that's kind of balancing act.
20:50
And so similarly it is what I provide to my.
20:54
Clients, but a different version, which is I can count on
20:59
this person to take to provide that to my client.
21:02
That's what they're going to get.
21:04
I've signed up for an experience that is going to be that is not
21:09
only going to be great for the client who they have for life as
21:13
well. Even though they don't buy a lot
21:14
of houses. The whole point is they have a
21:16
cousin, they have a sister, they have a friend moving in from
21:19
Kentucky. Like life keeps happening.
21:23
So you want to be like, oh, Lindsay is who I talk to about
21:30
buying houses. That's And so somebody had a
21:33
question. Lindsay is who I'm going to have
21:35
them talk to. And if they were like, oh, wait
21:38
a minute, this has to do with finance.
21:40
It doesn't even matter. It's like I'm getting a credit
21:42
card, but this has to do with finance.
21:44
I know somebody who because like one of the hardest types of
21:48
loans, he probably knows about a personal loan or should you know
21:52
what I mean? So that that's how business to
21:55
kind of circle. Back to Gold Star that is it
22:00
operating at its best in the like that's when the the the
22:05
jazz band is the most tuned so to speak you know what I.
22:08
Mean where you're like, oh boom, boom boom, and you're making
22:10
the. Connections.
22:12
That's what you that's the place you want to go to.
22:16
Yeah, and I feel like that's the biggest thing again, back with
22:20
your personality, it's, you know, you light up a whole room,
22:24
but that's that's the key aspect of, you know, you your business
22:29
model, you make sure to provide everything, like you said,
22:34
bullet points. You know, there's so many loans
22:37
out there that, you know, people could, you know, be approved for
22:40
but may not make sense. So I love that, you know, the
22:44
education piece is before everything and then, you know,
22:48
you start getting into The Dirty work.
22:51
But what what would could you just kind of walk me through
22:55
that, you know, the that inert initial steps of getting
22:59
approved? How would someone get approved?
23:01
Sure, I'm going to. I'm going to speak in a general
23:07
way. And.
23:08
Then and at the same time specific way like with me and a
23:14
lot of it will overlap and some of it will be different.
23:17
OK, you and I know each other. You and our relationship is
23:27
going to continue to grow is my hope, at least unless I, you
23:31
know what I mean, get thrown out of the party, right.
23:36
So already in your head you're like, oh, how does mortgages and
23:41
I'm saving money and in two or three years I think I want to
23:46
buy a house. Let let me take you through
23:49
actually, basically because you're like, oh, what happens
23:53
when somebody calls you and, and I'm like, I could answer that.
23:57
They call, they want a mortgage, I send them a link, they put in
24:00
an application, it takes 5. Minutes and I go over it with
24:02
them. That's the boom, boom, boom.
24:06
That's the story, right? But now I'm giving you the
24:09
actual story. Of how you want it to go.
24:14
So one either either Lindsay who I keep naming this person who's
24:19
actually a real estate partner of mine, but I'm naming her as a
24:23
general person. Lindsay gets a buyer.
24:25
That's what happens. They're ready to go.
24:28
She asks them are you pre approved and they go no.
24:32
She said you need to talk to my friend Ohad.
24:35
You should, I mean, there's, there's different options, but
24:38
you know, from my experience, Ohio, this is very good.
24:40
You should talk to him and get pre approved or at least pre
24:44
qualified before you get started and then go shopping that way.
24:47
Similar to a car, you know how much car you can buy and you
24:51
know what the payment is going to be, right.
24:52
Or at least you have a pretty good idea.
24:55
That's the jump off through a real estate partner, right.
24:58
But let's say you came to me, we've known each other for a
25:01
while. You know, I have some sense of
25:03
of of what I'm talking about. And you're like.
25:07
I. Think I want to get a house like
25:08
in three years, if you start that conversation with me, like
25:13
I'm thinking about getting a house in three years, I'm not
25:16
going to be like, you know, who you need to talk to right now is
25:19
my friend Lindsay, 'cause she's going to want to start showing
25:23
you houses, right? But it doesn't make sense in
25:26
three years. So I say listen.
25:29
A lot of people. Think that they need to save
25:33
1020% in order to buy a house, which means if you're buying a
25:38
$300,000 house, you need $60,000, right?
25:42
20% down. It's not necessary.
25:46
In fact, you can get a house with no money down with certain
25:49
government programs. You can get a house even
25:52
conventional with as litter as 3 1/2 percent down.
25:55
But the question is. Oh.
25:58
I can get a $300,000 house and I only need to save like $15,000.
26:03
I'm doing the math off the top of my head but you get the
26:05
general thing and I'm like yes. However, the payment is going to
26:11
be $4500 a month. So yes, you could save less, but
26:17
the payment is not going to be affordable and you won't be able
26:20
to even be approved if you don't make enough money for that
26:23
payment. And that's when just even the
26:27
beginning of me introducing you to see how we're doing it right
26:30
now. And that's exactly how it works.
26:34
So like I'm showing you at the same time of like that's exactly
26:38
how it goes in life. You like you came to me and I
26:41
said here are some things that you want to think about.
26:44
You don't need to overwhelm yourself, but just know that in
26:48
general you want to have about this much available and you need
26:53
to be aware of the fact there's closing costs as well in
26:56
general. So it's not just the down
26:58
payment that you stayed for. You come back to me.
27:02
Oh, had great news. I saved $20,000 and I'm like,
27:08
but whoa, whoa, whoa, Matt, the news is not as great as you
27:11
think because you just save for the down payment.
27:15
But to close a mortgage, there's also closing costs as well.
27:19
The most of. Them are not.
27:22
What the mortgage bank charges, it usually charges like one fee,
27:27
which is a fee for the application itself, like which
27:31
they call an origination fee. So we charge let's say $1000,
27:35
right? But everything else, the getting
27:39
Dan, for example, getting the tax, the sorry the title.
27:44
Yeah. Attorney, the price of the
27:48
appraisal, the price of the credit report, we're not allowed
27:51
to profit off of any of those things.
27:54
They have a cost. We have to be very accurate with
27:57
what those costs are. I can't charge you if Dan
28:01
charges, let's say $50.00 an hour.
28:04
I can't say Dan charges $50.00 an hour, but if you go through
28:09
Loan Depot now, it's $75.00 an hour.
28:13
Everything is a thing and we say this is how much we are charging
28:18
for the thing. And the real money that a
28:21
mortgage bank makes is not off of you.
28:25
A mortgage bank makes money. We don't, unlike a car
28:28
dealership, we don't up charge the rate or if we do it's a min
28:33
it's minimal. The money that a mortgage bank
28:35
makes is from either keeping a loan and getting the interest on
28:41
the loan, right. We lend you $300,000, it's at 6
28:47
or 7%. Every time you make a payment we
28:51
get that extra interest. So that's one way that that's
28:56
why they don't need to like try to put in a bunch of stuff and
29:00
it's illegal anyway. But even if not, the money is
29:03
off of like it's a huge loan and 6% is like they're getting
29:09
thousands of dollars each month essentially in profit.
29:12
Do you see what I'm saying? And then which is even more
29:18
common is they just sell it basically to the secondary
29:24
market. Basically think about it, the
29:26
Stock Exchange, but for mortgages.
29:29
There are investors that buy a loan and so as long as the loan
29:33
is good then it gets bought and it gets bundled and it gets
29:37
traded. That's why most people who buy
29:40
their house get a letter like 3060 days later.
29:44
Great news. You did your, you did your
29:47
mortgage with you did your mortgage with XYZ lender.
29:51
Mr. Cooper is now your servicer because it's on the market and
29:55
it got sold. So the money that gets made
29:58
there is not what you would get over 30 years.
30:01
Example, there was a there's a mortgage, it was, it was a 30
30:06
year mortgage. The mortgage was for 300,000.
30:11
Can you take some guess as to how much money a bank would
30:16
collect over 30 years on a $300,000 mortgage at 5 or 6%?
30:23
I mean off the top of my head don't know, but I'd assume a.
30:26
Lot if if your guess is in the millions.
30:29
Yeah, you're right, right. So we're talking millions of
30:35
dollars like like to go for $300,000 over at at 6% / 30
30:41
years. It keeps collecting.
30:44
You don't start paying primarily principal meaning just the
30:49
balance, not the interest until the last 10 years, five years of
30:55
it's called amortization. That's how loans work.
30:57
They've they front load most of the interest in the beginning.
31:02
So that they can get paid quicker and they and because
31:06
that's the way the system works. Because if they waited till year
31:11
25 and the people moved and and whatever it is then so in the
31:18
1st 351015 years you're paying the most because the reality of
31:23
the business is the mortgage bank is not going to see year
31:27
20. Usually they're going to sell it
31:31
they're etcetera. So the mortgage itself has a
31:34
value, right? It's a $300,000 mortgage, it's
31:38
at 6% and the person has decent credit and had everything that
31:42
they needed provided the documentation right that let's
31:47
give it a value like that's worth $100,000.
31:55
So when the when the mortgage bank says I'm offering you
32:01
something that's worth $100,000 and I'm selling it to you for
32:05
75, they're like, that's a great deal.
32:09
And then they buy it. And that's a very simple
32:11
explanation of the mortgage business itself.
32:13
Does that make sense? Yeah, yeah, definitely.
32:16
So, so to answer to answer your question, that's basically the
32:21
process is 3 three years before Matt buys a house.
32:26
He consults me about like how much should I save?
32:29
I give him some information like this is what payments going to
32:32
look like and if rates stay where they are, this is about
32:34
how much you want and you need to be aware of closing costs.
32:37
So 20,000 is actually 35,000 because you have to cover both
32:42
and that can be a surprise. And from the, from what I've
32:45
learned is that nobody other than children for their birthday
32:50
like surprises and the surprises that people like the least is
32:54
surprises that have to do with their money, right?
32:58
Surprise, more charge surprise this is.
33:01
It's going to cost a lot more surprise.
33:03
It's taking way longer than I expected.
33:06
So I my commitment is to under under play what the situation is
33:14
or to or to overplay. Like expect a lot of money,
33:18
expect it to take time, but we will get through it together.
33:22
So that way if I set the bar like low or higher and you come
33:28
in, you close quicker than you thought, the documents and you
33:31
had to provide were easier than you thought, then you're like,
33:36
Oh my God, that was, that was better than I had expected.
33:39
But on the flip side, if I'm like, if you're like, how much
33:43
money do I need? And I'm like about $5000, you
33:46
get to the beginning of the mortgage and I'm like, it's
33:49
actually 10. And then I'm like, you said it
33:51
was going to close like next week.
33:53
And I'm like, well, but there's also the blah, blah, blah and
33:56
the other blah, blah, blah and the blah blah, blah.
33:58
But like, but why didn't you tell me about all the blah,
34:00
blah, blah before? I was like, well, we know what's
34:04
whatever you're like, what do you mean whatever?
34:08
You. See what I'm saying?
34:10
That is what you're getting Like, oh, I'm going to know what
34:14
to expect. It's likely going to cost me
34:16
less or take less time than he's presenting, and that's great.
34:21
Now to double click on the nitty gritty itself.
34:25
In general, there are three things that you need for a
34:28
mortgage. You need.
34:30
There's a credit score that you have and it determines your rate
34:34
and whether you qualify. There's your assets, the money
34:37
that you have to put down or is it coming from a gift, what you
34:40
can, etcetera. And then there's your and then
34:43
there's your income, your capacity as as it's called in
34:46
the mortgage business. How much can I afford?
34:49
How much do I make? How much are my debts compared
34:52
to my income and how much will they be when this mortgage is
34:55
done? Those three and there's other
34:59
factors, but those are the pillars, right?
35:01
Those are the three pillars of like what I need for a loan.
35:05
When you apply, I go over all those with you and then I ask
35:09
you to prove it. Show and prove.
35:11
You say I make $50,000. Matt's an honest person.
35:16
He says he makes $50,000. I believe him.
35:18
I send a pre qualification, but you know who doesn't believe it?
35:23
Those. Those finicky investors over
35:25
there, they're not. They're not Like, I'll take your
35:29
word for it, Matt. Sounds great.
35:32
They need the proof. They need proof.
35:34
They're like, no, no, no. But believe me, Matt is solid.
35:37
They're like, well, we see he has good credit.
35:39
We see that, but I don't know that he can actually afford this
35:44
banner. I was like trust.
35:46
Me, he's got it. Yeah, right.
35:48
So it. So it's like, oh.
35:53
Well, what do I need in order to prove?
35:55
My income, well W2 income is the easiest.
36:00
It doesn't mean that it's required, it's just the easiest.
36:03
Why is that? Because proving your income as a
36:06
self-employed person is difficult.
36:07
You need 2 years of tax returns. You have to show what did you
36:10
what did you profit, what was your revenue, what was what,
36:13
what did you take home at the end of the day.
36:16
On the other hand, if you've been, if you've been working as
36:21
a manager at Staples for the last six months even, it's like,
36:28
here's my W2, here's what I get paid.
36:31
Before that, I worked at Best Buy.
36:33
I've been the same type of work for five years and and here are
36:38
two W twos to prove it. And here's my pay stub from 2
36:42
weeks ago. Like, you know that the money's
36:45
there, you know how much comes out, you know how.
36:48
Much I can afford. W2 is the easiest but it doesn't
36:52
mean it's required. But that's why it is.
36:54
So you provide W twos, you provide your pay stubs.
36:58
That's my income. Then I say well we need to take
37:02
a look at your credit. No problem.
37:03
You fill out the application with your social on the other
37:05
six pieces that you needed to to pull your credit.
37:08
And I'm like 720. You qualify for most stuff,
37:13
simple as that. What 3 bureaus?
37:15
And now we know. And by the way, about the Bureau
37:20
thing, the way mortgages work is the score that is used in order
37:25
to determine how much or what your actual credit score is.
37:30
It's what's called the median. It's the middle 1.
37:33
So, so example, we use all three bureaus, it's called a Trimerge.
37:39
Those bureaus are Experian, TransUnion and Equifax.
37:46
So if your score, so it's not the average and I'll give you an
37:49
example if your score is on, on Equifax 700, on Experian 710.
38:00
And on TransUnion 760, so like 50 points higher, it's not the
38:04
average like 7:30, it's just the one in the middle. 7:10, 7/10 is
38:10
your score. So it could be one point away
38:12
from the lowest one or it could be exactly in the middle or it
38:16
could put the point all the way. It's just whatever the scores in
38:19
the middle and that's your score if.
38:22
You bring another person, another borrower, your
38:26
girlfriend, your boyfriend, your husband, your wife, your
38:29
partner, whatever it is. Then whoever's middle score of
38:33
the two of you is lower, that's your score.
38:37
So if your score was 710, but your girlfriend, for example,
38:42
was a seven O 5, seven O 5 is now your combined score.
38:49
It's not, it's not, it's not fair per SE, but they go with
38:53
the least risky because it's based on risk.
38:57
Every element says it's not. It's not not guaranteed.
39:00
You've been at Staples for 10 years.
39:03
They could just become a a online company tomorrow, right?
39:08
No, they know that there are no guarantees.
39:11
It's all the loans are risk based.
39:14
Like how much should I give? It feels solid enough.
39:19
Like it's edgier. Well, they have to put more
39:21
money down or their rate, their rate is going to live higher or
39:24
they have less programs that they can qualify for because the
39:28
risk is higher to the to the lender.
39:31
So anyway, back to the same scenario you talked to me about
39:35
3 years ago. You have a set plan and then a
39:39
year you're like a lot. I, I saved this much money.
39:42
I think I'm going to. I think I'm getting close to at
39:46
least wanting to look at houses. I say, OK, let's give it.
39:49
Let's give it a few more months. You save a little bit.
39:52
Let me introduce you to my friend Lindsay.
39:56
Just talk to her and you will get the same experience that you
39:59
had with me, except she knows more about houses and stuff.
40:03
You think I know about doors and windows and flooring?
40:07
Your boy doesn't. You know your.
40:08
Your boy knows there's a house and that house has a value.
40:12
But to me. Whether the house had wood
40:15
floors or carpeting, or do you think any of that is on the
40:19
application? It isn't.
40:21
I just get a value from the appraisal.
40:23
An appraiser goes out and says this house is worth $300,000.
40:27
Not because it has a beautiful painting, not because the lawn
40:31
is like the best lawn in the neighborhood, not because they
40:35
have a little gnome. All of that stuff that's not for
40:39
me. I don't know about that stuff.
40:41
I mean, not completed yet, but you know what I mean?
40:43
Like, it is not relevant to me. You know who does know about
40:47
that stuff? Lindsay.
40:48
She knows about gnomes. She knows how old a roof is and
40:51
whether it should be replaced. She knows who you should talk to
40:54
about like, gardening service. She knows how loud the the buses
40:59
are that drive past that road. All this information that isn't
41:03
relevant to my job. You don't talk to me about that.
41:07
You don't need to. You have somebody else to
41:09
consult for that. That's how the partnership
41:12
works. And then somebody asks her
41:15
about, well, are rates going up and blah, blah, blah, blah,
41:18
blah. She's like, whoa, whoa, whoa.
41:20
I know about lawns. I know about this neighborhood.
41:24
I know about your price range. You know who you should.
41:26
Talk about to this finance person about Ohio.
41:30
And that's basically how the whole enchilada works.
41:33
And so you apply, you provide that information, it gets
41:37
underwritten, it gets viewed. Everybody's like, oh, this is
41:42
clean as a whistle. You know you're good, you can
41:46
relax. I provided the documentation and
41:49
they gave me an idea of what I'm going to need to bring to the
41:52
closing table, or at least he told me eventually somebody's
41:55
going to tell you exactly what you need for the closing table.
41:58
I don't know yet. There's other factors and be OK
42:02
with the I don't know, I don't know doesn't mean I'm lying to
42:06
you. I don't know doesn't mean I'm an
42:08
idiot, although I am sometimes. All I don't know means is there
42:13
are variables that are not known yet.
42:16
There's how much the house is going to actually appraise for
42:19
are is there any issues? Is there issues with the title?
42:23
How much exact cash are you going to need to close?
42:26
We don't know. We have an estimate.
42:28
It's going to loan estimate. It's literally the exact legal
42:32
term for it. It's a loan estimate.
42:35
It's going to be very close though, right?
42:38
The loan estimate is like, oh, it's about 70 and then it's
42:41
like, I meant 700,000. Whoopsie.
42:44
No, it's gonna be it's gonna be within 0% or 10% at most over
42:54
what it is that I what I quoted you.
42:56
You will know if the quote was. I need about this much money and
43:02
this is about what my payment is going to be.
43:05
It's it's going to be very, very close because we're regulated
43:08
that way. But you won't know the answer to
43:11
that exact like detail. You don't know that till like 3
43:16
or 4 days before you close because there's still
43:18
information coming in about like, well, what is it going to
43:22
cost? It's going to cost close enough
43:25
to this. But when you get the closing
43:27
disclosure, which is the last part, it has to match almost
43:32
identically. And there's only certain things
43:34
that can be different. I'll give you an example of
43:36
something that can be different. Let's go back to the Dan is the
43:41
title agent. I say to you the title agent, if
43:47
you use this one or this one or this one is going to cost this
43:50
much, but you say I want to use, I want to use my own real estate
43:56
attorney. And then I say.
43:59
Well, then I can't tell you for sure how much it's going to cost
44:04
because you brought in somebody from the outside and I can't be
44:08
like, oh, it's going to be 50 an hour.
44:10
Like, oh, I brought the guy who drives the Lexus.
44:13
I was like, well, now it's not $50.00 an hour anymore.
44:16
How is that my fault? You see what I'm saying?
44:20
But there's certain things that always cost the same.
44:22
Property taxes will always be the same like you.
44:27
There's no up charging property taxes like property taxes in
44:30
Warren County are what they are on that house in in Washington
44:35
County. They are on what they are on
44:37
that house in Rensselaer County in Saratoga County.
44:40
They are the property taxes and school taxes are what they are
44:44
on a certain amount. That doesn't change.
44:46
That's what you know that how much money you're going to have
44:49
to pay and how much was paid already is in exact signs to the
44:52
0. But if you're like, oh, I also
44:55
want an inspector as well. Oh, you didn't tell me that me
45:00
bringing in an inspector that costs like $2000 was going to
45:04
cost more. I was like, yeah, obviously I
45:07
didn't tell you that you brought in a person.
45:09
You're allowed to, but but you can't be like, hey, you said
45:13
this, you said it was going to be less.
45:15
But like, yes, you're allowed to bring stuff, but it makes the
45:17
cost. So you do.
45:20
This whole thing that I'm talking about, I have to
45:23
basically pick the three or four things that make sense to you at
45:27
this very moment without overwhelming you and you getting
45:31
the impression within 5 to 10 minutes, oh, he's got this, he's
45:36
got this. And if I have a question, he's
45:38
available. He's not going to tell me all
45:40
the I will. Tell them to you as they come up
45:44
and if you have a question before that.
45:47
Ask any time. Well, that's awesome.
45:50
Ohad and I know we're running short on time here, so just want
45:55
to throw it out there. People were, you know, looking
45:58
to connect with you, learn a little bit more about you, get
46:02
in contact with you. How would they find you and get
46:05
get a hold of you? The magic of having the
46:09
stupidest name in America is that there's only two of me in
46:17
the entire country. Really.
46:19
Yes, 2. There's OK, so if my name was
46:23
John Smith, I would be like, listen, John Smith at Loan
46:27
Depot, the office in Westchester, not the other one.
46:31
That's me and that's the link take No, not that right.
46:35
But I there's one privilege to my name is that there's 10 hot
46:40
orn in all of New York and there's two in the whole
46:44
country. OK.
46:45
And that's how you? Use a weakness to your strength.
46:48
So if you Google even Ohad Oren loan depot, I come up.
46:55
If you Google just Ohad Oren, much to my mom's great pride,
47:00
She's so proud. A a doctor, oncologist, medical
47:06
professional with a Harvard degree who practices cancer
47:10
medicine is the other Ohad Oren. So listen, either it's me, the
47:15
mortgage guy, not great, but it's the other one, or literally
47:19
the guy working on curing cancer.
47:21
So you have your pick. Which one do you think it is?
47:25
Don't be disappointed. But good news, he can't help you
47:28
get a house. Well, this has been awesome.
47:33
Thank you everybody for listening and of course, you can
47:35
find us at buying local dot US. We're on Spotify, Apple rumble
47:40
and YouTube and Ohad thank you again.
47:43
This has been amazing my. Pleasure my.
47:46
Friend and we'll talk to everybody next week.