Latest / The Jon Sanchez Show / Before You Buy Your Next Home Ask Yourself These 9 Questions
Transcript
- Jon G. Sanchez: Good Thursday afternoon to you. Welcome to the John Sanchez show on Newstock seven eighty KOH. It's a pleasure to be with you. One of our two co hosts, the the third one was was here, but he went off into cyberspace somewhere. So Aaron Clark will be back. He will be back. I I have all faith, Mr. Technology. Dwight Millardov Q Home Loans. How are you, my friend? Dwight Millard: Poof. I don't know. I'm doing fantastic, Jay. Yeah, the two people that don't know what especially me, you're you're actually pretty good at it. But me, you know, in fact I just you know, when I can't turn my computer doesn't come on, I think I think it's broke. So ⁓ Jon G. Sanchez: ⁓ No, you pick it up and you to be honest, you pick it up and you throw it across the room. ⁓ I you have mellowed a lot. You have mellowed a lot over the years. Yep. Dwight Millard: Not anymore. Not anymore. Used to. Used to. Use I have. I have. Well, there's no use anymore, right? You know, it's kinda like it's kinda like, you know, the the coach in soccer for all those years. And you and I talked about this. If I had one piece of advice to the parents, just chill. They're not they're they're probably not gonna go anywhere. Just enjoy the ride. Not not not be on the refs the whole time. You know, you just you get worked up after the game, but it's hard to do, but anyhow, yeah, that's what age does to you. Jon G. Sanchez: Yeah. This j Exactly. You're right, I know. ⁓ yeah, yeah, I know. That is that is great fatherly advice. You're absolutely right. I I yes, I it yeah. Mellows you. Mellows you. ⁓ Hey, we're eligible now. ⁓ It's not the full retirement age. I know. Dwight Millard: Yeah. Yeah, that's what age does, right? It ⁓ matures you, I guess. When when we can start taking Social Security, I think I need to mellow out. Yeah, yeah. Not me yet. I'm I I'm right around the corner though, but yeah. Mm-hmm. Yeah. Jon G. Sanchez: A couple more months. A couple more months for you. right, my friend. Well, let's tell everybody what we have lined up for you today. Tough day today. We're gonna give all the details why the market fell, why bond yields fell, or excuse me, why bond yields rose and s and bond prices fell. we're gonna of course cover the ⁓ primary culprit, which was the oil prices. ⁓ shocking news there, right? so we'll get through that to explain everything that's going on so there's no questions in your mind when you ⁓ look at your portfolio today when you get home. What the heck happened? So we'll cover ⁓ Then we're gonna into our real estate topic. This is interesting. I've titled today's show, Before You Buy Your Next Home, Ask Yourself These Nine Questions. Because buying a home is exciting. Everybody, don't care if it's your 10th home, it is exciting. But excitement, of course, sometimes can cause us to overlook some very, very important financial decisions. So today going to be slowing the process down. Speaking of which, slow the process down a little bit ⁓ and ask simple, but very, very important questions. Every home buyer, again, brand new or experienced, should be answering before they sign on the dotted line. Dwight, there's a lot of people that just jump into it. I've been guilty it ⁓ many over the years buying houses. The emotions get in the way. I don't ask the right questions. So I'm like, you know what? We need to ask, have have people ask the right questions before they sign on that dotted line. Aaron Clark of Agility, good to see you, buddy. Dwight Millard: Mm-hmm. Mm-hmm. Yeah. Yep. Jon G. Sanchez: Good to see you. See, I told you we'd have faith in you. We were joking. Dwight didn't have any faith. You'd you'd figure out the technology glitch, but ⁓ but I said I said if anybody can, Aaron can. So good to see your smiley face. It's the way it works with live radio, man. It's the way it works. But but Dwight answered my my point there. Aaron Clark, Edge Realty: Yeah. Dwight Millard: Yep. Yeah. Yeah. Aaron's got it. Aaron Clark, Edge Realty: ⁓ yeah, just just at the wrong time, that's all. So Yep. Dwight Millard: Mm-hmm. But well, John, I mean, it and and Aaron can attest to this, you know, the excitement just overwhelms you that you blow through all the stop signs, the yield signs, you know, hey, you're qualified for 585, and pretty soon you get a hey, can you give me a pre-qualification for 695? You know, and it's like, whoa, what what just happened? ⁓ know, so people kind of get the the selective hearing, I guess, right, Aaron? I mean, people like to hear what they want to hear. ⁓ Jon G. Sanchez: Mm-hmm. I liked it. Right, right. That's a great point. Yeah. That's emotions. It's emotions. Dwight Millard: Yeah, it is emotions. But it they get caught up in it. It's fun. And and we always say that. Enjoy the ride, but be practical and be reasonable. And like you said, be be at least cover the basics, right? Of of why you're doing this. Jon G. Sanchez: Did you like have a beer before the show or something? You you are so calm, cool, and collected. You you missed it, Aaron. He he was giving advice to parents that, you know, like soccer, don't get upset. Your kid's probably not going anywhere. Don't get upset and yell at the rough. Now he's saying, just relax on the, you know, buy in the house. What is got into you, Dwight Millard? I think you had a cold corona or something today. All right, there you go. That's another one. Yeah. He sounds like one of my clients. Yeah. Dwight Millard: Who me? Aaron Clark, Edge Realty: Ha ha ha. Dwight Millard: Thanks. Yeah. I I I don't know, John Sanchez. I I yeah, yeah, yeah. Yeah yeah yeah yeah yeah yeah. Yeah. Aaron Clark, Edge Realty: He sounds like a retiree, is what he sounds like. Jon G. Sanchez: Well, you're you're you're my client, but you haven't told me you're retiring, so I I you know, I I'm hoping I'm the first one you tell, you know. Dwight Millard: Yeah, no, no, I'm not retiring, John. I'm I'm actually racing you to retirement. Whoever gets the fr I know. I know. But ⁓ but yeah, it's i ⁓ John it's I think it's it's a it's wonderful, especially when you get the y well, you get repeat clients and but the young buyers are so much fun. I got one right now that they're just giddy, you and it's just fantastic. So yeah, it's a it's a good topic. Jon G. Sanchez: you're you're gonna lose that race. I guarantee you'll be before me. I'm having too much fun what I do. Yeah. Yeah. Yeah. Join in, Mr. Clark. Aaron Clark, Edge Realty: Which part are you on? I d I'm I came in late. Jon G. Sanchez: Just just a again, you know, we're we're gonna be talking about again the you know, the nine that people need to be asking before they buy the next home. And ⁓ again, I don't care if you're you're brand new to it or you've bought your tent you're buying your tenth home. These are these are primary questions everybody should ask. Everybody. Yeah. Aaron Clark, Edge Realty: Mm-hmm. Absolutely. And a lot of the the basics too, and buyers come in is they get that tunnel vision where they're just focused on what they want what they think they can afford and they don't actually do the homework. And we talk about this all the time on the show. You know, I usually the first point of contact for a first-time home buyer. They call me and they're like, I want to buy a home. I can afford X amount. And that's the end of it. And it's like, whoa, whoa, whoa, cart before the horse here, bud. Yeah, first of all, have you talked to Dwight? no, who's Dwight? Dwight's the mortgage guy. You gotta talk to the mortgage guy. And then they're like, Okay, so what is that gonna help me with? You know? And it's like, Well, you gotta talk to him because a lot of people, believe it or not, I still get phone calls from people and I talk about rates and they're like, well, I thought they were still at like three and a half, four percent. And I'm like Jon G. Sanchez: Easy there, Junior. Easy junior. Ha ha ha. Yep, I believe it. Aaron Clark, Edge Realty: ⁓ no, no, no. If you're if you think you can afford a $700,000 purchase and this is ⁓ roughly what the mortgage would be, ⁓ no, no, no, I I can't afford that. Exactly. We got to talk to Dwight first. So that's that's the biggest thing is they just get super excited and does a terrible job of brainwashing people into how the whole process works. And believe it or not, us realtors, we get calls from HGTV for their shows where they want to use our homes that have closed or in escrow. Jon G. Sanchez: Yep. Yep. Yep. Exactly. ⁓ that's a good point. Are you serious? Aaron Clark, Edge Realty: For some of the shows where they do like the, you know, I can't remember the name of the show, but where they h look at like four houses and decide which one they're gonna offer on, it's TV. It's not real. That's not how all this stuff works. But a lot of those th things are what the mindset is that people are coming in with and they don't understand. So they get really excited not knowing the whole process. And the process, although complicated, it's easy when we're with you because we're gonna take you through it step by step and you're not gonna make a mistake and you're gonna have the right expectations. Jon G. Sanchez: Okay, yeah. ⁓ that's so funny. That is so funny. Yes. There you go. Yeah. Nicely done. Nicely done. No, no, not at all. Neither neither one of us. He should be the host, not not me. No, no, no, no. That's right. See, and you won't. You won't be you won't have it. And what's left is an attestament to that. I literally started balding because of the of the ⁓ headphones. Literally. The balding spot on my head started right where my headphones sit. Dwight Millard: I couldn't said it better myself, John. There you go. Yeah, yeah, yeah. Aaron Clark, Edge Realty: No. No. I got too much hair Dwight Millard: Yeah. Aaron Clark, Edge Realty: know, I don't want to lose it. ⁓ ⁓ okay. Jon G. Sanchez: That's that's one of the hazards of of ⁓ of this radio business. There you go. And you wear a hat. ⁓ get a break answer. Yeah, exactly. That's That's right. I'll I'll take the baldness. Thank you. goodness. All right. Well, let me get the bad news out of the way. We're having too much fun. Let's get to ⁓ to the serious side of things here. So what the happened? I I need to just let's just get the bad news going. And if you haven't seen the market, let me tell you what happened today, then I'll back into why it happened. Aaron Clark, Edge Realty: That's crazy. That's why I use AirPods. But I'll get Bluetooth. So, you know, whatever. ⁓ Dwight Millard: Anyway. Jon G. Sanchez: 507 loss on the Dow, point nine seven percent. Our close is fifty-one thousand seventy eleven. NASDAQ a five hundred and fifty-three point pullback, down two point one five percent, closed at twenty-five one thirty-seven. S P down ninety-one points, one point two one percent, closing at seventy-four ⁓ eight. the two thousand, the small cap, ⁓ not all bad. Just a twenty-point loss or point six seven percent. It was this right from the pre-market session. I'm looking at my notes right now. yeah, right before the market opened, well, we were down about six hundred and 35, 638, actually, a few minutes before the market opened on the Dow futures. NASDAQs were down ⁓ hundred and sixty-five. SPs were down eighty-four. So good news we came back a little bit from from those lows, at least on the on the Dow side. But you have to admit, I have been throwing the the warning shots across your bow for days and days and weeks and weeks. And I said, This market not reacting negatively. I keep using the word Teflon code. I keep saying ⁓ this market not factoring in rising oil prices and what they can do. And I said just I think, I don't know, Monday, I think it may have been. All we need is a big run up in oil prices, and everyone's gonna go, uh-uh, this isn't this isn't gonna be sustainable. And then of course, the earning side of things and i.e. the the AI spending. So I'm gonna give you two reasons this market sold off today. Number one, rise in oil prices. Number two, AI spending we learned about from Google and Tesla yesterday after the close. So let's bring down the oil side. Dwight Millard: Yeah. Jon G. Sanchez: So we awoke this morning to news that the Houthis, the Houthis, now remember them, that crazy group that is ultimately controlled by Iran. The Houthis to fire on two Saudi Arabian ships in the Red Sea. Not straight to the Red Sea. So they did some pretty damage ⁓ to those ships. So early this morning we awoke to a a post by the president and on True Social, ⁓ you know, indicating that Whatever the Houthis do from this point forward, he is holding Iran accountable. And he said, if they do that again, fire on ships, the Houthis, then Iran's gonna pay the price. So soon as that, that was at about, I'm gonna say five thirty or so, because oil wasn't all that bad. But I'm telling you guys, soon as that news broke across the wires of ⁓ and from true social, that's when we saw oil prices begin to just move up rapidly. And they just continued to do that throughout the day. So that was the the number one factor. The number two factor, I said, and I covered it on the show yesterday, we had earnings numbers come out of Tesla and out of Google. Quarterly numbers were okay. They weren't great on Tesla. They were good on Google. But why did Google lose almost 7% today? Down $23.57, closed at $318.34. Because of the CapEx expenditures, capital expenditures. Okay. As I shared on the show, the street was looking for Google to say, we're going to be spending about 185 billion the rest of the year. That's crazy to think. Here we are more than halfway through the year. Google came out yesterday and said, nah, it's going to be spending of about 195 billion to 205 billion in CapEx spending. Matter of fact, Tesla is saying similar things, above what Wall Street was looking for. And it's going to throw Tesla into negative cash flow. Then that's when the panic set in. Tesla got smacked today. $54.41 loss on that news, 14.5% decline to $319.60. again, Google down $23.57, 6.89%. So that set the tone for today. So as you would imagine, and the analogy I keep giving, three steps back, one step forward in the semiconductors, today was the ⁓ big step back. It carried right across pretty all sectors, other than we had a good standout in the industrial sector today. Thanks to some some pretty good earnings numbers from ⁓ the likes of United Reynolds. I mean, my gosh, the stock shot over ten percent gain, a hundred and four sixty-five, hundred and four dollars and sixty five cent increase. ⁓ Lockheed Martin had a great earnings report, also up ten and a half percent. ⁓ Thermo up eight point seven one, so on so forth. So ⁓ it doldrums and and panic selling across the board by any means. It was it was pockets. It was, you know, areas again that are affected. Now when we come back, I want all of you to ⁓ you know, please pull over to the side of the road and say a prayer for Mr. Millard because he got smacked today also. And we want him to be nice and calm and cool and collected, which appears to be his personality today. So I think we're gonna be okay, Aaron, when we ⁓ when we get into the mortgage rates today. because he said, John, can I talk the whole hour about mortgage rates and my frustration? I said, No, you can't, Dwight, but we will, you know, talk about it as normal. So we will come back, share with you what happened on the bond side. The commodities and of course mortgage rates. Then we'll get into our topic. Before you buy your next home, ask yourself these nine questions. Welcome back to the John Sanchez Show on News Talk 780KOH with Aaron Clarkovich, Reality Dwight Millard of on Q Home Loans. right, once again, here's how we finished. We lost a 507 on the Dow, the Nasdaq. That was a tough one there. 553 decline, 2.15%, SP down 91 or 1.21%. Again, made a real simple oil the culprit. $5.24 gain on oil. Big run-up in one day. $92.07. gold prices, we lost $101.96, $4,079.20. And I want to explain why. ⁓ actually I'll do it right now, then I'm gonna turn it over to Dwight. a lot of questions coming in. Wait a minute, John. I was trained that gold price you want to buy gold in global turmoil and market volatility and so on and so forth. Why isn't it working this time? Well, it's not working this time, just like it didn't work when when you know we were a few weeks into the war and things really got nasty. And reason being it's about inflation, right? Gold is a non you know yielding investment, right? ⁓ So the the theory is it's just like at least a bond pays you a yield, but this is it's the same theory, and we're going to get to the bond market why bond prices went down today. Traders do not want to own gold. They do not want to own bonds in the fear of a rising inflationary environment. why we in the back to the inflationary environment camp? Very simple. Oil prices, like I keep going through over and again, oil prices are big component of the calculation of the CPI. Now, remarkably, I want to remind everybody that The new Federal Reserve chairman, they're changing the way they're calculating CPI, and they are expecting CPI to come down under this new calculation. So go figure that one. it's still going to be well above the 2% mandate, they said. But you know, like you said, you can you can say anything you want with numbers. so give me a start on that one. But, anyways, the fear of the next move is gonna be an interest rate increase. All so here's where we said according to the CME FedWatch tool, markets now are signing a 35.8% probability of a rate height at next week, next week's FOMC meeting. That's not much, 35%. gotta worry when they the numbers get up around 80 to 90, then it's usually pretty correct. ⁓ that's up from 11.8% just a week ago. So you see, as the oil prices risen, probability of an interest rate increase also has risen. ⁓ rate cut is now increased. You're gonna love this one, Dwight. 80.1% probability of a quarter percent cut at the September meeting. Pretty substantial. Now, with all that said, so again, traders don't want to own bonds, they don't want to own gold. Dwight Millard: Yeah. Okay. Yeah. Jon G. Sanchez: in a rising inflationary environment, fear of rising inflation due to the increase in oil prices. All this could change if something changes on the war scenario and oil prices come down. So watch the oil. Now over to you. Tenure Treasury, basis point increase today four seventy. Four ⁓ I'm afraid find out on the mortgage side. Take it away. Dwight Millard: Yeah. Yeah. Yeah. Yeah. Yeah. Here we go, John. So it these are the headlines that come out of a subscription I do, and it says MBS are down 31 basis points. This was first thing, this is the first thing this morning, around forty-four basis points lower than yesterday at this time, which would be Wednesday. So to put that in perspective, on Tuesday we were six point seven five according to News Daily. Today we've we've lost ten basis points in two days. We're at six point Jon G. Sanchez: Mortgage backed securities. Dwight Millard: eight five average and John keep in mind that is at a point cost typically remember they they ⁓ that component out years ago or a couple years ago but know one of the things I I I saw was that the the East the your European central bank left the interest rates unchanged but warned the that will lead future rate hikes. So they're talking the same thing, right? They're just hey sorry we're just it looks like we're gonna have to raise rates and lower rates. Jon G. Sanchez: Yes. Yes. Yeah. Yeah. ⁓ they they they they have they have major inflationary problems there. I'm surprised they they didn't raise 'cause I think we got a I think we got a an increase a couple of weeks at their last meeting if I remember. Dwight Millard: Yeah. Yeah. They they left ⁓ yeah. Yeah, I don't remember, but I mean all of that global information just pours right into our psyche here with these bond traders. You know, they just yeah, it's and it it's making it very you know, I got and again I'm I'll stop after this, but we talked Tuesday. I'm going, you know, how many jobs have been affected since the feds I think called the wrong play calls March of twenty two? Here we are four and a half years later. Jon G. Sanchez: ⁓ when inflation's transitory, you mean? That that comment? Dwight Millard: And now they're still talking and they're still talking exactly. And they're still talking about it didn't affect them. And they're still talking about right. Right. Right. Right. Right. Right. And and here we are now talking about a of a probability of rates going up than down after four and a half years. It's just mind-blowing to me. Mind blowing. You know, so, but it's Jon G. Sanchez: Tariffs don't tariffs don't don't hurt the economy and interest rates? Really that one? Yes. Yes. Yep. Absolutely. ⁓ before we go to break, I wanna I wanna share this. This headline came across about five minutes before the show started. Trump's been teasing this and it looks like it's gonna be official. I have not read the story, so bear with me. I'm gonna kinda scan it as I read it to you. the Trump is going to impose new tariffs just after midnight. Jeez, tomorrow. ⁓ Okay, wow, waste time. ⁓ on dozens of country over alleged forced labor violations, according to a notice in the Federal Registry. duties set between 10 and 12.5% will effectively replace President Trump's temporary 10% global tariff, which are set to expire at the same time as the new ones take effect. The forthcoming tariffs will apply to 60 trade partners and cover ninety-nine point four percent of U.S. trade, according to the ⁓ USTR. the office separately told CNBC that it would not that it could not provide an estimate of how much revenue the new tariffs are going to generate. This move is most sweepingly international labor right action in the United States has ever taken that any country's ever taken, as senior Trump administration said. So we're we're bumping up tariffs because of labor issues, child child labor, which is a again a terrible, terrible thing. But I've never seen that. White House recently imposed 25% tariffs on US imports from Brazil, which took effect yesterday. 50% tariffs on wide range of goods from Canada. I was talking to a friend of mine in Canada. he said it's not some things about the way Canadians are looking at the US right now. And those will set to begin next month. So why am I telling you all this? Very simple. Keep in mind, you know, we all have short memories. Keep in mind back in April when last year, when tariffs were announced, right? For the very first time, and we went through a massive market sell off. I'm not saying that's gonna happen this time, ⁓ tariffs are never a good thing for the stock market. No matter what the Trump administration says, no matter what anybody says, they are not a good thing for the market. Hence why would the US government's having to refund billions and billions and billions of dollars to corporate America. Watch this closely. This is again just another little check mark for people to be nervous. You got rising oil prices, you have rising bond yields. Now we've got a new set new fresh set of tariffs. Luckily, they're not as severe. I we didn't know the amounts until the story just came out, like I said a few moments ago. Those aren't too severe. I don't think we're going to see much negative market reaction to to this amount of tariffs. But again, it's not a positive and traders can view that as a negative. All right. You're now up to date when we come back. Before you buy the next house, you gotta ask yourself these questions. Nine of them the boys have put together. We'll cover those when we return. Welcome back to the John Sanchez show on Newstock 780KO8s with Corey. If Corey, knew I was gonna do it today. I knew I was gonna do it today. I'm sitting there trying to do a bunch of different things and and yeah, yeah. ⁓ that's a payback for you missing the first two minutes of the show, Eric. ⁓ No, kidding. You get one pass. That's right. Eric Clark eventually, of course, and Dewan Bellard of On Q Home Loans. All right, again, we're gonna get into questions, 10 major questions you need to ask before you buy. Once again, on the market side of things, tough day. Dwight Millard: You're ⁓ Aaron Clark, Edge Realty: Mm. All right, goodbye, see ya. Click. Dwight Millard: Whoops. Yeah, yeah. Yeah, yeah. Aaron Clark, Edge Realty: Fair, fair, fair. You get one pass. One one pass. Jon G. Sanchez: 507 loss on the Dow. Now's deck down 553. SP lost 91. So we find ourselves, you know, in a situation. again, I don't care if you're a first-time buyer, I don't care if you're you know, a a veteran of buying homes, but everybody gets in the same position. Like I said, the ⁓ the emotions begin to take over and we do stupid as human beings when our emotions take over. So we have that excitement. we need to break it down. I want you to pause. before you go sign on the dotted line. Here we go. Aaron, question number one. Why am I buying this home? That sounds like such a stupid basic question, but it's probably probably the most important question out of this whole list. Aaron Clark, Edge Realty: Mm-hmm. Yeah, I mean you're if you're sitting there saying you want to buy a home just because your buddy did and so you're like, Well he did it, so I should do it, or you know, sibling or whatever else, that's not that's not a good reason to buy a home. So, you know, you you wanna go through the the concept of like, you know, processing the information and going, Why am I buying this home? Is it for an investment? Excuse is it an investment? Jon G. Sanchez: Yep. Which happens a lot. Yep. Aaron Clark, Edge Realty: Is it to grow a family? Is it to be closer to work? Better commute, timing, appreciation, it's a great deal, like ⁓ of these different things because each each direction for the approach of how you're going to buy that home has different avenues to approach in order to do it ⁓ where going to be able to have the the best process moving forward financially, logistically, everything. Jon G. Sanchez: Good point. Just hoping you're gonna say that. Yeah. Aaron Clark, Edge Realty: based upon what that decision is. Because I mean, we talk about all the time, like we you're selling a home because you're trying to pull money out versus leveraging that home versus 1031 exchanging that home, all those have different outcomes and different consequences and things like that. Buy why you're buying a home is the same thing. Because if if you're buying a home for a growing family, then we're gonna ask a whole bunch of follow up questions that are going to be very different than if you're buying that home as a a launch pad into an investment portfolio. Jon G. Sanchez: Mm-hmm, mm-hmm. Aaron Clark, Edge Realty: ⁓ very, very, very, very different processes and questions. Although a and even the money borrowing is different, so Jon G. Sanchez: Yes. Yes. Yep, that's a great point. job relocation. I like that point you put out. That that's a real important one. See that a lot. and then the retirement side, right? and we'll talk about this in more detail ⁓ momentarily. Are we are we ⁓ are we scaling down? If so, boy, I guarantee you want different features in in that the scale down house than you do in your current house, like not as many bedrooms, no stairs, you know, so on and so forth. Dwight Millard: Yeah, you want. Aaron Clark, Edge Realty: Sure. Smaller home but bigger community. A lot of people are doing the fifty five plus thing. Yeah. Jon G. Sanchez: Right. That's right. You bet. You bet. right, Dwight. Next question is up your alley. Can I comfortably afford it? What do you go through with them and why do you want people to ask this question? Can I comfortably afford this? Comfortably the key word. Dwight Millard: Yes. Yeah. But because I think people get tied to their house and that's no lifestyle. That's not a way to actually own a home. You actually then start regretting it and you get, you know, you you have remorse about buying it, you know, if you can't do anything outside of just occupying your home. So what you could afford five years ago is a little bit more different than today. I mean, you've had a what, a 400 basis point raise in rates, you know, from three to seven or close to. Jon G. Sanchez: Mm-hmm. Dwight Millard: So, I mean, your monthly payment is, is, is, there's a lot to it. You know, your monthly payment, your P I T I is your, your principal, your interest, your taxes, and insurance. And we talked about insurance last, you know, on Tuesday. You know, so you've got to be prepared for what that that payment in encumbers and be okay with a little bit of disposable income after. If you don't have any disposable income after it, I have seen people just absolutely don't like their house, you know, because of not being able to do anything. But keep this in mind. So if you are questioning whether or not you can afford it, John, I always say start with what you always preach is the budget letter. And you guys have one. I mean, start with your budget letter. Know what you know what you think you can afford ⁓ you just don't know if a unexpected we can manage around the expected, right? It's the unexpected we we need help with. But ⁓ Jon G. Sanchez: Yeah. Mm-hmm. Dwight Millard: Remember, we're pushing everybody to about a forty nine back end ratio on gross income. So we're not leaving people with a lot of so you know, you get paid, your what you deposit in the bank is net. ⁓ qualify you on your gross. So for example, if your house, ⁓ you if you make Jon G. Sanchez: Explain explain that in English. Dwight Millard: five thousand dollars a month, your back end ratio, we can push almost to twenty five hundred dollars of your gross income, which is barely what you you know, you're not taking a whole lot more money home than that. So we're not we're not we're not doing a lot of people a lot of favors by pushing them Jon G. Sanchez: Yeah. Crazy. Why does the industry do I let me interrupt you. I I I've got a I gotta speak my mind. Why does the industry allow that? 'Cause you you ⁓ you Yeah, because you're not doing the the the borrower a favor. Right? Yeah, you Dwight Millard: Mm-hmm. Business. Just business, John. Just business. I I I'm sure. No, what other industry what other industry could you get away with this? You know, pushing people right up to the edge of the cliff and and you know, a transmission goes out or something. And I would always say, John, you know, i we're not even talking about maintenance yet, right? We're not even talking about you know, I gotta get a lawnmower, I g I or whatever it the problem is. But Jon G. Sanchez: Yeah, yeah, yeah. No, no. Yeah. Dwight Millard: You know, it's just it just an unfortunate part. And so if you can demonstrate that you've been saving, you know, or you have additional reserves somewhere, you have, you know, resources, then maybe you're okay to weather any storm. But again, and then the last thing, you know, we added on this is HOA. You know, keep in mind an HOA is a it's a yeah, I know what the purpose of it is for, but to me it can be pretty pesky, you and high when it's not, but ⁓ they you can get a special assessment. Jon G. Sanchez: Yes, big one. Dwight Millard: you know, for a project that needs to be done. And there you go. There's your whoops. I need we we're gonna collect thirty five hundred dollars from all the homeowners to, you know, re what whatever. What yeah, whatever it is. So I would just I would caution people, like you said, start with the budget letter, know where you feel like you're comfortable, then let's work backwards from there. And you know, this is an environment Aaron talked about with higher rates, you know, i i i it's gonna be tougher to Jon G. Sanchez: Mm-hmm. Redo the community park area or whatever. Yeah. Whatever. And you have no say so. Dwight Millard: you know, get in that in that budget letter and to with some people, but you know, there's brighter days around the corner, John. Yeah. Jon G. Sanchez: Absolutely. All right, Aaron, question number three that you should be asking, how long do I plan to live here? Aaron Clark, Edge Realty: Yeah, that's a huge And everyone always says forever, especially their first purchase. How long are you gonna live I'm this is my dream home? I'm never moving. And I'm like, that's not true. I'll see you in five years. yeah, you gotta know because depending on what the the time period is, will execute whether or not you're gonna pick something related back to question number one or whatever it was. Jon G. Sanchez: Yes. Yes. Never move it. Yep. One. Aaron Clark, Edge Realty: i if it's gonna be something that's gonna be maybe it's a good deal, it's in rough shape. So you're gonna take ten, fifteen years to get it to where you want it to be, you can get some great deals, especially a really rough shape home in a really high-end neighborhood, which is gonna be a project for fifteen to twenty years. I have a client right now, he bought a it was a a on an acre and it was just surrounded by dirt and nothing more out in Pleasant Valley. And he spent the last ⁓ Jon G. Sanchez: Okay. Aaron Clark, Edge Realty: His goal was forever, maybe, but then life changed and but he put a detached garage, he turned it into a resort style home and made it everything he ever wanted it to be. And he had a 10 year plan that he executed every single day, knowing that he was going to keep it for at least 10 and finished everything on year nine. So all of those things will affect how you're gonna approach the purchase. And that's why it's important to know. It and a lot of people, if you're in a position where you know. Jon G. Sanchez: Yeah. Nice. Nice. Aaron Clark, Edge Realty: You know, my kids are going into high school. I know that our life is gonna drastically change when they're all moving out and we're buying a home right now. It's probably not a good idea to plan on being in that same spot for ten years because when they move out, your life is gonna change drastically. You may not even live in the same city or town or whatever. So might be better to focus on a five year plan. Jon G. Sanchez: That's right. That's right. Excellent. Excellent. All right, squeeze in one more before we go to break. Dwight, back to you. Is this the right mortgage? Next question. Aaron Clark, Edge Realty: Yeah. Dwight Millard: Yeah, so there's lots of choices out there, John. We've covered for years on this, but you know, typically you've got the fixed rate versus arm. we have already talked about, arms are junk right now because of the fear of inflation, fear of different things. So I'm a huge proponent of fixed rate mortgages. Get into the fixed rate. we preach on this. If you have fantastic credit scores, and I'm saying 740 plus, sif seven fifty, seven eighty, you pretty much i ⁓ i me, I would say do a conventional loan, five percent down. is the best way to go. you get rid of mortgage insurance with 20% down, but if you've got s just super high credit scores, you're not the the mortgage insurance, because of the tiering they've done now, is gonna be can be very insignificant right now to your payment. ⁓ And you the ability to remove it. So but if you're struggling with credit scores, you know, maybe government FHA or VA may be the the the direction you go. But again, I do You know, it just really is specific to each individual. And as far as term, we've talked about this too. I like there's not enough spread between a fifteen year and a 30 year. So I say take the 30 year and pay a 15 year payment on your own, because if that unexpected happens and you need some dollars, you're not tied in and do not do the payment plan that they ⁓ want to charge you to do. And ⁓ yeah, it's so hard to unwind. And ⁓ I so many ⁓ Jon G. Sanchez: I love that scam. I love that scam. Dwight Millard: I see so many perfect credit reports get spoiled by that crazy Yeah. Mm-hmm. Yeah. Jon G. Sanchez: No kidding. Wow. Amazing. All right, we come back. Erin and I are gonna ⁓ tackle question number five. Does this home fit my retirement plan? That's an interesting one. Welcome back to the John Sanchez show on New Stock Seven Eighty K which Mr. Aaron Clark. Can I please have your phone number? Aaron Clark, Edge Realty: Six seven three sixty seven hundred. Jon G. Sanchez: Mr. Millard. you laughing at? I was No, I didn't. No, it's because my phone was ringing and I'm like a ding-dong, I forgot to mute it before the show. I was multitasking. Exactly. All right, Mr. Millard. Thank you. All Quick reminder, a little housekeeping note before we get back to our final ⁓ issue on the questions you need to be asking. ⁓ Dwight Millard: He's calling you on it. Aaron Clark, Edge Realty: You almost did it again, you almost did it again, mister what's his name? ⁓ Good job, good job. Dwight Millard: Mine is ⁓ two four zero two zero two two. Jon G. Sanchez: ⁓ just remind you again about my upcoming webinar next Wednesday, 6 p.m. your trust outdated? Again, many trusts created years ago no longer reflect your family's wishes, the current tax laws, or current financial situation. So you're gonna learn about the warning signs that your trust may need a review or a restatement and how to avoid costing mistakes before it is too late. ⁓ Again, be next Wednesday, 6 p.m. No charge. You know, it's all about education. ⁓ Just to my website, specialized trust.com. Click on the Step Learning Center and you'll see webinars and you'll see it right there. Just sign up and ⁓ look forward to seeing you next Wednesday at 6 PM. right. ⁓ boys, let's get back to our topic. Question number five. Does this home fit my retirement plan? So, Aaron, you and I are going to tackle this one. So, what I deal with a lot with our clients that are that are in retirement is they come to me and say, you know, I'm thinking about downsizing, is usually the issue. I tell them, look at what you have to look at is number one. Where do you want to go and what's it gonna cost you? And Aaron, I don't know about you, but it seems like probably 60%, 70% of the time when I do that, that or pose that question, they're like, you know, I can sell my house, pocket a lot of money, you can invest it for me. But my gosh, the new home is so expensive. if I'm gonna get a mortgage, it's gonna be significantly more than what I'm paying now. So why don't I just stay where I am? And I'm like, ⁓ You know, that's where it makes a lot of sense. So you got to see what your future income is. What's that house going to cost you if you decide to stay in it versus say going to something new? know, and and really, you know, aging in a place is real important. You you I I've seen clients like for example, leave Reno and go down to Vegas where they think they can get a better deal. And next call is, I'm miserable. I don't like it down here. It's too hot. I don't like the people. Whatever it is, it happens everywhere that that goes on. So make sure if you are gonna downsize ⁓ for whatever the reason is. Make sure you check out the community. Go there and live for six months or a year rent by renting. Make sure it's the right move for you because I don't know about you guys, but I've had a lot of people that have left Reno and they end up coming back and going, you know what, there's no place like northern Nevada. so ⁓ learned my lesson on that. But those are the some of the things. And then Aaron, you know, kind of take it away as far as what the retiree needs to think about. If this is their last home, what do they need to think about? You know, fast-forwarding the the clock of the next 10, 15 years. Aaron Clark, Edge Realty: Well, and I mean, hate to say it, but you gotta think about, you know, the ability to go up and down the stairs and, ⁓ know, retrofit your home to meet your needs if you're having any medical type situations. But lot of people what they don't understand is, you know, in this world it's almost cheaper to keep her because when you're in that home, you've already established you know how it works, you know how it operates, you're not having to relearn systems, things like that. It Jon G. Sanchez: Yeah. Aaron Clark, Edge Realty: Yes, you might find something that pencils to where you save a little extra money and you can put that into something else. But the reality of it is a lot of people, when I see them doing that, they end up regretting it. It it becomes so convoluted and the emotional strain and the logistical strain just isn't worth it. So we can sit down, we can run numbers, try to simplify things, but it's something that we have to really take into consideration if you're going to do that to make sure it's the right move. Jon G. Sanchez: Dwight, question six, how do I know if I'm buying too much house? Dwight Millard: Yeah. Well, I I I I think the obvious is is that can you afford it? You know, going back to that earlier question. I think it ties in your h your lifestyle. I mean, I guess y y you know, only you know what your future is, you know, what your ⁓ objectives But you I mean, again, I go back to people who t get tied to their house and that's probably too much house. It's too mu you know, I I and there's there's literally and there's figuratively, right? I mean, too much house, it's too big. I ⁓ can't keep up all of it, but it's too much house because I don't have the Jon G. Sanchez: Yeah. Dwight Millard: ability to d maintain the lifestyle that I once had before I rented. And so those are easy to ask yourself. Poor. Yeah. Yeah. Aaron Clark, Edge Realty: We call house poor. Jon G. Sanchez: Yeah, house poor. Yep, absolutely. Not at all. All we could expand on that one. Music's playing. Let's squeeze in one more. Dw Aaron, let's get down to what they what hidden costs am I forgetting? Aaron Clark, Edge Realty: Yeah, you don't want to house poor. The biggest one out of everything is gonna be your utilities and it's gonna be insurance and your repairs. Like those three are the main things that when you're buying a house you need to take into consideration. A furnace is way more expensive than it was five years ago. Jon G. Sanchez: What about Yeah. What about closing costs? Is that a hidden cost? Aaron Clark, Edge Realty: Closing costs kind of yes and no, but we we go over all that in the very beginning, so it's not really a you kinda most people know going in they're gonna have to pay costs to close the home. And Dwight tells him too, explains all that. So it's not so hidden, but yeah. Jon G. Sanchez: Perfect. Beautiful. Dwight Millard: And John, you know the problem with like these hi other costs? It goes on credit cards. So all you're doing is going the opposite way. Mm-hmm. Yep. Jon G. Sanchez: Yeah. Yeah. No, you're right. You're right. All right, boys. We gotta run. Thank you so much, gentlemen. Great job as always, and thank you all for joining us. I will be back with you tomorrow on the John Sanchez show. God bless. Have a great afternoon. Aaron Clark, Edge Realty: Yeah. Yeah, you don't want to do that. Jon G. Sanchez: Beautiful Whoops. Awesome.