Home Lending with Jackie Peck of Sage Home Loans

Butch & Jon sit down with Jackie Peck of Sage Home Loans to discuss the different loan programs availalble to buyers.  Jackie gives tips on the current market status, getting yourself pre-qualified, fluctuating interest rates, and the difference between a brokerage and an institutional lender.

Transcript

Everybody, I'm Butch Whitfield and I'm Jon Howard. We're here for another episode of Porch’n with Butch and Jon. We're in a fantastic pavilion here in Ansley. Yeah, my good friend Bobbo was so gracious to allow us to be here and not only is it beautiful, you know, on this way, this direction, but you've got a great view of Midtown too. I think that's the best part of Ansley, right? It is. I mean, between Midtown and Ansley, I think that's the coolest thing. You have these amazing historical homes with these, the backdrop of these old oaks and trees and then the skylines just sort of like poking through. I love this place. 

So today we have a special guest. Now, Jackie Peck is with Sage Home Loans. She just started this brokerage about a year ago, but she and I have been working together for about a little over a decade. So I mean, when talking about this wild market that we're experiencing right now, I couldn't think of anybody better to have than Jackie with us today. Thank you. I appreciate it. I'm excited to try my first podcast.

We're all learning from them every time. So Jackie, maybe we'll start off with the first question of like, tell me what's going on? Like, how do you explain to our viewers, like maybe addressing some of their concerns with this tumultuous market? Yeah, that is a good question. So about a year ago is when in March, when the market just completely shifted and interest rates really popped up. And since then, we've seen them coming back down again to more reasonable area. People are seem to be more accepting of it. Can you use it in new rules? Right, it's the new normal. We're never going to see two's again. I wouldn't think in my lifetime. For the stress that led up to that, I sure hope not. But, you know, they're definitely hesitant to, you know, get into a home with the higher interest rates, but there's ways to work around that. Yeah, I'm looking forward to hearing what your thoughts are about how to take advantage of it or the loopholes that that went away or now coming back. And I shouldn't say loopholes as much as just tricks options, better word for it. Yep. So, I know that you just started your own form. We just talked about that. Tell us the differences between a brokerage and an institutional lender.

Yeah, so a bank. So you have a bank, you have a broker or you have maybe a correspondent lender. But the difference and the benefit, the reason I decided to be a broker, I've always worked for larger banks. And I decided I wanted to go out on my own. I should have done it years ago. But it gives me the opportunity to have the flexibility shopped for my clients and have many different lenders to go to versus. You get your rate sheet in the morning from the bank and you have your one option and those are your rates and your fix that a certain credit score, whereas I have options to go to. So as opposed to say like a group like truest, you're able to essentially offer more options to the client because based on their situation, you can better match them up with an option out there. Okay, right. So a lot of banks have a 640 credit score minimum, 620 sometimes. And we can go, we have certain lenders that will go down to 580. So it just gives more opportunities to get people into homes. Okay, perfect. Okay. So now the next, the next stage to this might be, might be jumping on you a little bit here. When when a buyer's making an offer, tell us about maybe some of the back to the tips of taking advantage or addressing some of the concerns in the market. Tell us about how you're able to offer a buyer some options to strengthen their offer in a potentially competitive market. Yeah, well, you're always good about making sure that they are pre-approved.

I have other people that come to me and they're wanting to make an offer that weekend. I've never spoken to them before and okay, I'm like, okay, well, we can do this. But you need to get your application in online, super easy. But I need to see your documentation. Once we have all of that, can check their credit, it's a quick and easy process. I can do it same day. But if you don't have that, I keep forgetting, I'm all wowing, but you do this all the time for me. I just hearing the same day is really cool to hear. Now, so why don't you say, you're prepared. Right. So what are you saying is it's really making full on approval and making full application documents and everything. So that when they, if they go out and look at a house, they have the ability to make an offer and you know it's going to be a strong offer. A trick that I have learned that you can do when I just learned this actually a couple of weeks ago. So I haven't even discussed it with you. But say you're taking somebody out for the weekend and you have five different houses you want to look at. You send me all of those addresses. I can plug them in, give a customized, a pre-approval letter for that property. And we can run it through the automated underrating and see if we can get an appraisal labor on it. Wow. That's a fun tip if you're going to look at houses this weekend. Yeah. So how long does that take you? I mean, it wouldn't take that long. Okay. So on Friday when we're pulling together searches for Sunday, we'll send you our list. You get that back to us probably in the morning or is it afternoon by the time we've seen the home and ready to make an offer?

Yeah. It might take an hour to put in all the different, you know, depending on how many properties you're going to see. But it's all automated. It's pretty simple. Awesome. Because it takes us maybe an hour to draft an offer, an hour for you to come up with it. And we have basically a essentially the value of a cash offer when we make our offer. Right. Yeah. Cool tip. Yeah. Talk to us about maybe the other terms of the offer in terms of appraisal appraisal waivers. And even right, tell me if you can get an appraisal waiver, then obviously, and you know that upfront, then you're, you know, one step ahead. But we are doing, you can do two day contingencies. If they have all of their documentation to me, I can get approval usually same day. But if you could put a two day contingency for financing, 10 day for appraisal, close within 20 days. It's a real strong offer. Wow. That's yummy. Doing it all the time. Like if I had, you know, 50 loans going right now, they're just like clockwork. So it's quite enjoyable. It makes your job a little easier. It is as long as the customer is providing the documents that are asked for.

Right. Actually, to expand on that, there are options to not have documentation as far as paycheck subs and bank statements and W2s because there's automated ways of doing that. Is that, is that a, what do they call that? That's from back for before the recession. They call that a no doc loan. No, no, no, no, no. So we would actually verify. But it's all electronic. When they're doing the application, they give access to their bank account. Because that was a four letter word. No, no, no, no, I'm not doing no. But we have access. Now, if they work at a small company, you know, we're not going to be able to do that. But if they have ADP, they can set it up and they can just say, hey, yeah, you have access. We can get all their information from ADP or these larger payroll companies. And then they don't have to dig out their. Older sub's and the worst part. Downloading the computer, saving them in a file for the past, however many years, especially if you're self-employed like us. Yeah.

It's just a nightmare. Yeah. Okay. So what are you saying? So no doc loans for what? No, no, no, no. That's basically you just, you could state how much money you made. The lender would take your word for it and give you a loan based on that amount. That's what led up to our financial crisis. Pre-2008. Yes. Right. So the great resignation was just this past of 2021. People were signing. And we looked it up yesterday like 32% of Americans stopped, quit their job and went into self-employment. Yep.

So I'll write. Yeah. Yeah. So that definitely creates issues when you're trying to get a mortgage. Self-employment has always been difficult for the borrower. And just because we're not able to either too many write-offs in the way that we figure the income is on your net income. So there are ways around that. They are called bank statement loans and you typically have to be self-employed for two years. So the people that have just quit working within the last year, they're going to have to wait until you know that two years is up. And then at that point, we just get their bank statements, either business or personal. There's any range of 24 month bank statement, 12 month bank statement. We look at all the deposits that go in. You don't look at the tax returns. No tax returns.

No kidding. Wow. Okay. Let's talk about buyers and their options for financing. I think a lot of consumers just believe that there's just a couple like cash or conventional loans. But there are many more options. Can you talk about those options? Yeah. So your cash buyers, they want to make a cash offer because it's going to be accepted over somebody that's getting a mortgage for say 3% down or what have you. But they might not want to keep all that cash tied up. Maybe they want to purchase another property or they want to invest it or whatever. If they close and they don't have any mortgage on the closing statement, there's a set amount of time they can come back and do delayed financing. And it's considered normally you have to wait at least six months to do a cash out refinance. But there's no seasoning window on that as long as you have it done with them. So this is pretty new.

Actually, no really. Yeah. I just never utilized because we've been looking at ways to be more competitive with this competitive market. So could because we see a lot of this to parent bomb dad's money. Can they do this if it's another if their parents money and then they can then get alone if of course they need all the requirements. So I do believe you have to to source where the money came from. I'd have to check and see if it's allowed as a gift. Okay. That would be interesting. Yeah, I don't know. Well, I'll get back to circle back on that one. But if they don't have, you know, $700,000 a cash to lay down on a house, there are options and with the new conforming loan limit up to 726,000. It there's a lot of options. These limits are going up. They are going up.

Yep. 3% down is the minimum on a conventional loan. And typically most people, if you have good credit, you're going to go conventional. If your credit scores are a little bit lower, you really start feeling the pricing adjustments on a conventional loan. And at that point, we'd want to flip you to FHA. That, but then you're in a lower, what is it for 20 for 72 now, 472,000 is a max on FHA. V.A. is one that sometimes people don't even mention that they were a veteran and that is a great loan, love that loan. Interest rates are better, typically than any of the other ones. And there's no mortgage insurance. And that money down. No money down. Yeah, 100% financing. And so if your grandparent relative was in the, was a veteran. Just that person. Yeah, so it's to be a member of the V.A. the credit union is that that's the requirement.

Nope. It's just somebody that has been in the military is in the military. Okay. And if it's husband and wife, you know, Mary couple, they can both be on the loan. And they get 100% financing. Awesome. Yeah, we don't utilize that much either. Yeah. It's something that I've found myself more frequently asking, well, do you happen to be a veteran? And sometimes they're, oh, yeah. And sometimes it makes sense. And sometimes it doesn't. But if they're wanting low down payment, it's a great option. Awesome. Okay.

So there are down payment assistance options in the state of Georgia. We have something called Georgia dream. And there's another one from Freddie Mac that is, it's called Barrow or Smart. Oh, that's not a down payment assistance. It will give about either 1500 or 2500 to a borrower. Just to help with costs. It's not going to get the whole down payment versus Georgia dream. Something that would have to be repaid if you sell the home within a certain amount of time or refinance. But there are options out there for the low to moderate income. Yeah. Go ahead. What about us DA? I mean, is that? USDA. Yep.

So definitely not something you're going to utilize here in Atlanta. It's four rural areas. I have somebody right now up in the Blue Ridge area. Oh. And it qualified. He needed a low down payment option. He was talking about getting a gift from his dad. So gifts are options as well. 100% gift can be given. You don't have to have any of your own money. And that can be used on a second home. Or primary only primary only. And that's what I'm talking about. I'm not saying that's not the right thing. Got it.

Is that a government back long? A USDA and FHA? So FHA is government back. USDA. Circle back around. Not that 100% sure. Okay. It has to be. Yeah. I have not done very many of the USDA just because it's. I'm not in that market. Right. And I think that's what I'm talking about. I'm talking about the market. I think that's what I'm talking about.

This is a good point. Especially with the past couple of years looking at these second home markets. And USDA cannot be second home. It's primary only. Got it. Yeah. Okay. Interesting. Can't work for that. So two more options that we haven't discussed is conforming long limits. And then jumbo longs. What's the difference? What's the difference between the two?

The two are different types of guidelines. And this year it is at 726,000. $20. For years ago it was like four. 50 or something, right? Yeah. It has gone up every year. And so anything over that is considered nonconforming or jumbo. Okay. And those are just a different type of loan, different type of guidelines. Typically we'd require a little bit more down payment. So anything over 726,000. It would be a jumbo. Exactly. Yeah.

And with the average price points in Atlanta creeping up, this is good news for a lot of people. Yeah, it is. It opens up a lot more loans that the three percent is not an option for somebody that is in the jumbo. Right. Right. Okay. Now let's move over to our sellers and give them some tips. Because there's this is a lot of people that are not going to get to know about this. Because there's this is sellers market right now. However, inventory is a bit more of a balanced market. Because there's some really challenging market or challenging. That's called like I've heard it called Thanksgiving leftovers.

The homes that didn't sell last year, they're sort of wingering on. Most of those homes have some issues. Right. So talk to me, maybe about some renovation loans or other ways that a seller can can bring about some interest to their house. And so the way that they're going to get their own loan is definitely a good tool for buyers to come in and make it their own. But a lot of buyers aren't aware that that is available. There's construction perm, which also will take care of their needs for major renovations. But they can the seller can market the home that hey, you don't like the kitchen. And so that's the way that they're going to get their own loan. And if they have the product available with a they're working with the lender or a broker and just have the information available.

So it's not as scary for somebody to go into it. And we have really great ways to, you know, virtually furnish home and virtually renovate a home. So now we have ways of literally finance it too. Yeah, yeah. Yeah, exactly. So, you know, the another interesting issue potentially in our market is that equity is an all time high, but debt is also an all time high. And I've found that people don't really know about how to take advantage of their equity in their home to maybe get rid of some of this debt. Talk to us a little bit about that. Yeah. So the obviously cash out refinance is an option. Okay. But people don't want to give up those wonderful interest rates that they got in the last couple of years.

And so they're thinking, well, I'm not, I'm just going to deal with it. But there are ways to around that home equity line of credit or a HELOC is something that you still have your first mortgage. Nothing changes with that. But then there's a subordinate lean that comes behind it. That is a line of credit. You don't have to pay anything on it until you use it. So say you have a hundred thousand dollar line of credit. If you don't want to use it, you don't pay anything. So there's a couple of good ways to utilize this, whether you're looking for an investment property, looking to get rid of some debt in the future, or just looking to put it back in renovations. Right. And I think with maybe these interest rates potentially going down, this HELOC would allow you to utilize it.

Well, I guess that would be from a cash out refinance. Maybe talk to us about that. Cash out refinance. So if you were doing that, then you're basically paying off your existing loan. That interest rate will go away. And then you would have the new interest rate with the higher, you know, if you're paying off $50,000 in debt, plus your $300,000 mortgage now $350,000. You know, with rates where they're at right now, it's certainly an option. You could also do the home equity line. Within the next couple of years, rates are going to be lower. You know, who knows that's also the big question of the hour. Is Ben, will the rates come back down?

The industry is expecting that they will come back down. It's just the win win. And then we'll have a refinance boom. So you're, you know, it could be a temporary thing that you have your, your first mortgage and a home equity line. You know, that's, but you can have them there. They're 30 years. Typically, it's an interest only payment. So the payments are nice and low. And just help you. They're adjustable based on prime. Oh, okay. So it's something to be aware of. Good or bad? Yes.

Yes. Right now, not so good. Right. So much better than your credit card does. So, you know, a large portion of our market is owned by investors. Yeah. Over 30% here in Atlanta. And since we're number one for, you know, migration for, job growth and number one market in the country and presumably the world. When it comes to investments, there's a lot of cash coming over here. Where do you see? How do you see that affecting our, our market? Well, it's going to be a lot of renters. Yeah. Good point.

So how do you get the renters to be homeowners? That's my job is to figure out how that can happen. What we're seeing is a lot of people are struggling with. Credit building their credit or, or having good credit scores. And now there is a way to have your rent payments. Go to the three credit bureaus. Oh, awesome. Okay. So it's not been available in the past now. It's within the last year. Wow. So I'm learning lots of it. Okay. So that is one thing. You know, get your, but get your renters to where that they will be.

So that's not going to be available in the past now. So get your, get your, get your renters to where that they will be able to buy. If they've been renting for two years and then they, they add it to their credit, then immediately you have two years of history. Wow. It's a huge impact on your credit. Right. That's some great tip. Yeah. Okay. But yeah, as far as renters, they're, I mean, as far as investors, there are products out there for those people as well. So that's something that's actually the big corporate, corporate type investment companies. Right. Yeah.

I don't know if you'll let them at all. I mean, actually, I don't, I'll say it. I don't think I like it. I don't know. Because it's taking away all of our inventory for our buyers. And these people don't have any, they don't have any, you know, skin of the game per se when it comes to, you know, being a part of a community. Right. And the bringing in people that don't either. Right. And tenants don't mean we see how they've destroyed condo, I mean, apartment buildings, they're condo buildings around. Right. Yeah. So gosh, that's boy, that's, that's a topic for another podcast.

We'll get first share. Didn't just see I read this article that there's, there was around 11 major investors here in Atlanta. Yeah. And they all own around the 1000 units, 1000. Wow. Yeah. So that's 110,000, you know, homes that are that are. I mean, we're over there. There's whole communities that are being built just for. For rentals. Yeah. So I don't understand. So you said one of the benefits of, you know, one of the tricks for a buyer to be competitive is this appraisal waiver. Because of, I guess the market increasing as the way it is or the equity.

And I don't know what, actually, maybe the question is what leads a buyer to getting alone without an appraisal requirement? Good question. I, it is. I mean, there's certain things that can't be, you know, typically you're not going to have a cash out refining. Okay. It's going to be a purchase. It's going to be probably a primary residence. But, okay. Maybe a certain amount down. There's, there seems like there's all kinds of very important. Okay. So it's hard for you to predict. Yeah. Okay.

So then going back to what John was saying about all these investors coming into the market. Do you think that's going to throw off our making appraisal issue? It just depends on it when they sell and how much they sell. Okay. So it doesn't matter who the owner is. Oh, okay. No. Okay. So now let's talk about the different demographics of people buying homes. Because we're now shifting to, I think the most affluent buyer right now is the GeneXsers that are about 49. I think is the average of those buyers buying as well as the millennials getting into the market. And I think their average age right now is 33. So if I'm remembering this, no, they're 36. Those two demographics together make up about 50% of the market of buyers right now. What challenge do you think are, do they face and how can they potentially overcome them?

Maybe, maybe the first in credit. From millennials, I would say probably their biggest challenge or, you know, from what I've heard, student loans, what I've seen student loans. Okay. You know, they, you know, it's every person is different, obviously. But there's a lot of debt out there. And the student loan payments, even though they're in deferment, we have to count them. And people don't understand that. But, yes, unfortunately, that is a sort of you saying is the way to get over this would be to start establishing credit, eliminate debt. I mean, this practically goes to about any buyer on the market. Right. Okay. So, the system millennials and the GeneXors are making up about 50% of our market of the buyers out there right now. The other 50 presumably would be that boomer market that's just been sitting there. They either buying up or, or downsizing or just moving laterally to be next to their grandchildren. What would you say are maybe some of the challenges or options they face?

So, I mean, you're right, they, they could be buying second homes, you know, somewhere their house might be paid for reverse mortgages. Okay. Or an option, but that is a completely different podcast that I am not your expert for that. I don't, I don't do reverse mortgages. But it's, it's basically a tool that somebody over the age of 62, I believe it is, can pull equity out. And then they get paid. It's really interesting. It is interesting. It is a great tool. It is a great tool. You just need to know what you're getting in there so that you're not surprised when you're eating up all your equity. Right. For your ears are looking to sell this beautiful home like one when there's no equity there. Right. Yeah.

But yeah, I'm not, I don't do those. So, I'm not an expert on that. But, yeah, that was my, my quick blib about my understanding of them. Yeah, I would say for, for boomers, I mean, I've had, boomers, I shouldn't say that for, for, for people that are downsizing. Yeah. You know, they have a ton of equity. I find that they're selling a house and if they are getting a mortgage, it's a very small mortgage just to have, you know, they don't want to put their whole nothing into, right. Right. Right. Right. Into the new home, but a lot of people just pay cash for it. So I don't really understand that. Even with rates. I mean, now rates are a little higher, but when rates were, you know, hopefully you can make more than 6% on your money, right. So why would you tie it all up in a, you know, your house when you could be investing it.

No, ways to save money with their loans or their, yeah, I see people all the time. I search, you know, just check their tax bill, put it in the file. Property taxes and they don't have their home set exemption. And it blows me away that whoever did their loan initially didn't tell them their realtor or their, their lender, their loan officer didn't tell them, hey, you're sure to follow home set exemption with your county because it saves money and it keeps your taxes from increasing. Because the way the county is looking at it is that you're an investor not living in that property. So it definitely, that's one tip homeowners insurance is something that. I don't know about yours, but mine continues to go up every single year. I've never filed a claim so frustrating and you have to shop it every. You know periodically and when you're doing a refinance, it's a, or a purchase, you know, you're setting it up, but shop around and get a couple of quotes. You know, get the best deal on it. 

Next, let's go to some lifestyle questions. Okay, some questions. Let's talk about your favorite brunch spot in the city. Favorite brunch spots. I know I spend there forever, but I just discovered it. The Highland Bakery.  Get your car bloating going over there. It's quite delicious. Yeah, I mean, that's off the top of my head. 

What's your favorite night spot? My favorite night spot. So my guilty pleasure. I really enjoy going to Metalsome, which is basically a live karaoke. They have a full band and people. I've heard about a band that you can say. It's a full band. Yeah, and they're going to know about this. Oh, it's, it's quite interesting. I'm definitely not the demographic that's supposed to be there. Who's supposed to be anywhere? I'm going to be there. 

Okay, then what's the best kept secret in Atlanta? I don't know. Best kept secret.

I mean, a lot of people may not think the Botanical Garden is, oh, you know, who doesn’t wants to look at plants? I love it. Beautiful. Absolutely. There's a rooftop there. They do. Yeah, they have music in the summertime. Concerts and their exhibits are strong. Exhibits are strong. It's attacks right off. Oh, right. Memberships are tax right off. And for every exhibit that comes through, I understand they buy a piece from each. So there's several Chihuly. There's several, well, of all the really interesting ones that have been through town. Yeah.

Y'all have that one too. Yeah, it's wonderful. I enjoy hiking. So getting out of town and straight up 400 or up 85 hour, hour and a half. It's farther you get, they get more exciting, but yeah, there's some amazing waterfalls. It's surprising what's within 45 minutes of time. Yeah, depending on where you live. 

Well, Jackie, thank you for joining us. I mean, this is, um, Thank you for having me. We've learned a lot today. I hope you guys have. I guess we've been a bit of it. Yeah. Just get into our groove and it's cool to hear how the markets changing and the cool things that are coming back or just being introduced.

So this is Porch’n with Butch and Jon. Thank you for joining us.