Speaker 1 00:00:09 What's up everyone. Welcome to the finance for physicians podcast. I'm your host. Daniel RI join me as we dig into what it looks like for physicians to begin using their finances as a tool to live better lives. You can learn more about our
[email protected] let's. Jump into today's episode
Speaker 1 00:00:27 Today. I'm talking with rich Richie. Rich is a physician mortgage and ju alone specialist at truest mortgage and has been working there for over 14 years. I'm excited to talk with rich today and get into the basics of physician mortgages. We talk about how qualification works, how credit scores play into it, and best practices you can use when shopping for lenders and comparing rates. We also get into the differences, physician mortgages and conventional loans, and talk about why it's important to be an educated mortgage consumer. So if you have a physician mortgage or are considering one in the future, you definitely will enjoy today's conversation. Rich. What's up. Thanks for joining us on the podcast. What's
Speaker 2 00:01:03 Up buddy?
Speaker 1 00:01:03 So rich and I go way back. Actually, we were fraternity brothers back at university of Florida. How long ago was that? Like,
Speaker 2 00:01:10 Oh, geez. Um,
Speaker 1 00:01:11 15 or so years,
Speaker 2 00:01:13 At least 15 years
Speaker 1 00:01:14 Back in the good old days. Yep. So it's, it's always good to catch up, but, uh, before we jump in, so I know rich, but just for the listeners, can you give us kind of a rundown on you?
Speaker 2 00:01:25 Yep. First of all, professionally, I work for SunTrust, which is now truest mortgage, and I am a producing sales manager. What that means is I manage a team of loan officers and I also originate my own loans live in Jacksonville, Florida. I am married to a beautiful wife who owns her own insurance agency and I have four year old twin boys and a seven year old daughter, other than going to UF and being your frat brother. That that's about all.
Speaker 1 00:01:55 Yeah. So yeah, you're living the, the quarantine life. I'm sure with the three kiddos has been kind of crazy. Yeah,
Speaker 2 00:02:02 Yeah, yeah. It, it has been crazy.
Speaker 1 00:02:04 The market has been crazy too, right? I mean like what's up with mortgage rates.
Speaker 2 00:02:08 So mortgage rates are, are the lowest that they've ever been like. This is, they keep saying
Speaker 1 00:02:13 Historic, keep getting lower historic
Speaker 2 00:02:15 Loans. Well, they keep getting lower. Um, so right now we're at as low as it's ever been in the history ever of our country. And what that's doing is it's keeping, even though the economy isn't as strong as it could be because of the coronavirus, it's not like 2008, you have pockets of people that are struggling right now, but there are many people who are still doing well and are taking advantage of the rates. So they're, they're continuing and, and they, they are predicting that they they're gonna stay low through 2021.
Speaker 1 00:02:46 I have noticed some strange things happening in just general, like jumbo rates and then various lenders are kind of all over the place. Like they're not as comparable across the industries. It seems like they used to be, is that accurate in
Speaker 2 00:03:00 Yes. Yes. So another thing that's made this kind of a weird time is because rates are so low volume, is this through the roof. So lenders can't handle the volume they're over capacity. You know, whereas maybe a processor before this last year, they probably had 40 loans, a piece in their pipeline, something like that. Right now they're probably at 90 plus. So the bank has two options. They can just keep stacking up loans and not be able to process 'em because they don't have the capacity or they can stop the flow by raising rates. So you'll see some banks, especially refis, refi rates are typically a lot higher than, than the purchase rates right now, because they need to stop that so that they can focus on the purchases. So that's why it's really hard to tell because institution to institution will be different depending upon the day.
Speaker 1 00:03:55 Yeah. So it's basic supply demand, kind of a thing going on. Yep. Gotcha. So you work in physician loans and then in, in jumbo loans as well. So what is exactly the physician loan?
Speaker 2 00:04:08 So I do all loans, but I specialize in, in the physician loan. And the main benefit of it is it's a lower down payment with no PMI and PMI for the people who don't know is private mortgage insurance. And that's required on all loans where you put down less than 20%. And that is a extra payment that you pay to a separate insurance company that ensures the bank should the borrower foreclose. So it really isn't benefiting the borrower in any way, but it's a necessary evil most of the time, um, for the physician loan, we don't have to, they don't have to pay the PMI. They're putting down less money if any, and it's structured specifically for physicians. So as, as like physicians have a lot of student loans for the most part, so it's more lenient when it comes to student loans, they allow the physician to close before their contract start date. So there's little things in there other than just the low down payment and op PMI tailored specifically to physicians,
Speaker 1 00:05:11 How does the loan student loan work? Did they just not do a standard amortization? And they use the actual income based payment? Is that,
Speaker 2 00:05:20 Yeah. So there's different way and different banks will do this different ways, right. And guidelines change. But our guidelines at truest, if they are in IBR or income based repayment, as long as I can show that their payment is going to be like that for the next year or so. Like if they're a resident and they're, they're moving on to become an attending physician and their payment, you know, their salary's gonna go way up. I have to factor that in, but I can use the IBR payment or if they're a resident and it's deferred, I don't have to count the payment against them rather than a lot of the other loan programs. You have to take 1% of the balance or you can't take the IBR because it's not the fully, you know, fully amortizing payment.
Speaker 1 00:06:03 So how does the lender in general decide on the maximum they're willing to loan any, you know, given individual or specifically with a physician loan.
Speaker 2 00:06:13 So it's all based on debt to income ratio.
Speaker 1 00:06:16 What is that
Speaker 2 00:06:17 Debt to income ratio is how much you're paying out, uh, compared to how much you make
Speaker 1 00:06:22 Collective debt payments.
Speaker 2 00:06:23 Correct. And that's monthly debt, not total, like a lot of people are under the misconception that it's like, they'll say I have $500,000 with the student loans. Well, I don't necessarily care about that number. I care about what the monthly payment is. So if you take your gross monthly income,
Speaker 1 00:06:41 Gross is pretax
Speaker 2 00:06:42 Gross is pretax. Yep. And you multiply that by typical guideline is 43% is the max. And they'll do exceptions over that, depending upon how strong a borrower you are. But 43% of the gross income is basically the max debt you could have for the month. And that includes your mortgage payment, which will include principle and interest and taxes and insurance, or any HOA dues on that property. Plus any monthly payment you have that reports to your credit bureau. So car loans, credit card, minimum payments, any unsecured loans, student loans.
Speaker 1 00:07:20 If I have no debt or maybe I just have a little student loan payment, what does that translate to ballpark in terms of like, say an amount roughly,
Speaker 2 00:07:28 As far as
Speaker 1 00:07:29 The loan, let's say I'm making 60, I'm a resident. So I'm making 60,000 a year. I just have a hundred dollars a month student loan payment or something that, or less ballpark, like what's kind of the ceiling on the max you would be able to get at that income level
Speaker 2 00:07:44 About
Speaker 1 00:07:44 2 50, 2 50. Yep.
Speaker 2 00:07:46 For a resident making about 50, 60,000. That's usually the max, unless they're putting more down or they have a gift from some, but that's usually the max loan amount.
Speaker 1 00:07:57 What's the typical encounter you have? Is it like, um, a resident or fellow comes to you and they're like, give me the max or is it normally like I have a budget or is it kind of 50, 50?
Speaker 2 00:08:07 Well, most of 'em, most of 'em have a budget. And most of them understand I've had a couple that, like I had a resident try to buy like a 1.2 million house Miami. And I was like, yeah, well, we need to talk about this. But most people understand because they're, they talk to their friends who have already done it and they've bought $200,000 house or, or whatnot. But I try to make sure that I, you know, I drill into them that I don't really care about what the max is of what you qualify for, because that is not necessarily, what's good for you. Right? Like it's about what you're comfortable paying. And when you talk to someone like you, who a financial plan for 'em, that's more important than what they qualify for.
Speaker 1 00:08:50 Yeah. The other challenge with the maximum scenario, we were just talking about that leaves in that scenario, roughly like a thousand a month or so give or take after the principal and interest taxes and insurance to the full mortgage payment, which, you know, maybe you can get by on a thousand a month, but, um, maybe you can, and that's before repairing the house, if it, something happens. So it's, it can be a stretch, but how about credit scores? How do, how do they play into the whole picture?
Speaker 2 00:09:17 And that's gonna be different from lender to lender too, but first of all, credit score is important for interest rate, the higher, the, you know, credit score, the better the interest rate you're gonna get. Usually depending upon the institution, seven 40 or above will get you the best
Speaker 1 00:09:33 Rate. Pretty much everywhere, pretty most places.
Speaker 2 00:09:35 There's some that will, you know, you'll have another kicker at seven 60 or seven 80, but most of the time it's seven 40, but there's usually a, a credit score requirement for, for instance, like right now, we're not doing a hundred percent financing we do. And we will again, but during COVID we required 5% down before this period, you needed at least a seven 20 for a hundred percent financing, 700 between between 707 20, you could do 95% and then six 60 and above, you could do 10% down.
Speaker 1 00:10:10 Did it also affect the interest rate? The lower your credit?
Speaker 2 00:10:13 Yeah. It offsets a little bit because the more you put down the better that
Speaker 1 00:10:17 Also helps. Yeah.
Speaker 2 00:10:17 The rate is too. So if somebody has a six 60 and they're putting down 10%, it it's probably not gonna be that bad.
Speaker 1 00:10:24 So if I'm in, in medical school and I'm thinking, I, you know, I wanna buy a house in residency, should I be looking at my credit score? Or when, I guess, should I look at my credit score in preparation?
Speaker 2 00:10:36 I wish this is something they taught in high school, you know, like, yeah. Right. It's so important. I mean, you should be doing it immediately. You know, like if you're listening to this and you don't have good credit, like start working on it now, you know, because that is going to impact you for the rest of, of your life. And a couple things that I've noticed from residents specifically is they're going from college to, and I don't know about you, but I didn't really have much credit in college. Other than that, like, t-shirt, I signed up for to get <laugh>
Speaker 1 00:11:09 $500 capital, one card. Exactly.
Speaker 2 00:11:11 They're going from college to medical school, straight into residency. And a lot of times they don't have a lot, a lot of money when they're in medical school and they keep everything on their parents' name. Like I need a specific amount of trade lines. Like credit trade lines are, are important. They call anyhow open account, a trade line. So a credit card or a car loan I'm looking for at least three that have at least 12 months history on 'em. Now, if they don't have that, which a lot of them don't like majority of them don't actually, I can build trade lines through cell phone bill, you know, rent, you know, stuff like that. But if everything's in mom's name or dad's name, then you have built no history. So building a history is really important so that you can show the lender, you know, that you are able to make a payment on time for, for a long time.
Speaker 1 00:12:05 So it could be as simple as having a credit card that you just use for gas, for instance, and you know, you pay it off every month and you do that through medical school. That's kind of one line.
Speaker 2 00:12:16 Absolutely. So I tell people, if you have to open up three credit cards, do it, I mean, don't open up three credit cards and charge the heck out of 'em, right? Like just use it for gas. And the other thing can pay it off in full don't ever. Like if, if you're ever paying interest on a credit card, I mean, you shouldn't have credit cards, so you need to pay it off in full. And if you have a credit card that only has a $500 limit, you cannot charge it up high because anything over like 50% of the limit is gonna hurt your credit score. So utilization is important. So you gotta keep the balances low as well.
Speaker 1 00:12:54 What's the ideal utilization, is it 35% or less
Speaker 2 00:12:57 Like 30, 35%? Yeah. Yeah.
Speaker 1 00:13:00 You got any places where people can check credit scores for free or low cost, or
Speaker 2 00:13:05 You got credit karma, you can do credit karma credit. Karma's great. Um, it tells you exactly what's going on and it gives you alerts and stuff, but the scores are way higher than what we see and that's everywhere. So any score that somebody sees at home, unless they are specifically asking for the mortgage score model, which you can
[email protected], like it's kind of hard to find, but it's like the mortgage lender scoring model or something like that. But if they don't pick that my score's gonna look way different than what they see. There's a different model for everything out there. You know, credit cards have a different model. There'll be different scores between a credit card and a car loan and a, and a mortgage. And what they see online at home. Sometimes those like the credit karma goes up to like 900 something as the top score. Nothing goes that high on our model. So as long as they aren't like fixated on the score, but more of what is on the credit report and making sure there's nothing derogatory or nothing, that's incorrect.
Speaker 1 00:14:10 Yeah. So on credit karma, you can see your lines of credit and you can see your payment history and your utilization percentages. Right. Which are the key factors that go into.
Speaker 2 00:14:20 Yeah. So that's why I think, I think it's a really good tool as long as you're not, you know, because every time somebody says, well, I got a 9,000 credit score. <laugh> like, no, it's not, it's not what it's gonna be.
Speaker 1 00:14:32 But yeah. So it's not the exact same calculation. It's just kind of to get a good range. So with the physician loan, you, I, I think you had mentioned about the 10%, 5% and whatnot. I'm curious, maybe if we're just comparing like a conventional loan, 20% down to like a physician loan, whether it's 0% down or 5% down, or, you know, a, a much lower down payment besides the PMI difference. And the other things you mentioned, I'm curious about like the cost difference. Like how do they roughly compare not, you know, specific numbers, but generally
Speaker 2 00:15:06 So roughly, so for instance, right now, like the low down payment, the lowest of the low, so the, the 5% down right now is a little bit higher than a 20% down conventional and then 10% down will be real close to what conventional is. But depending upon the day or the month, I mean, there were a time there was a time where my a hundred percent rates were lower than the conventional. What? Yeah. I mean, it just depends on what the model looks like to the, you know, the actual actuaries that are figuring all this stuff out. So I've had times where it's lower the majority of the time though, it's a little bit higher because you're not having to pay the PMI. So you have to pay for that somewhere. But it's definitely to a point where you're saving money and then most jumbo. So when you get up into jumbo territory, which is 5, 10, 400 or above, most banks required 20% down, no matter what. So being able to put down less than 20% on a jumbo loan and still getting a really good rate is, is pretty strong.
Speaker 1 00:16:12 Yeah. That has its own kind of appeal. I guess if you're above, if you exceed that jumbo number, what was the jumbo limit? Again?
Speaker 2 00:16:18 510, 400, so 500.
Speaker 1 00:16:21 And that's like most areas of the country.
Speaker 2 00:16:23 Yeah. Yeah.
Speaker 1 00:16:24 There's a few like exceptions to that. I, I
Speaker 2 00:16:26 Believe, yeah. Some high cost places, but majority of it is, is that
Speaker 1 00:16:30 One thing we've seen before I've seen where lenders, for some reason with physicians, they'll just kind of keep 'em in the physician loan program as they, you know, refinance or, or get new loans or new houses. And on occasion, we'll see it where it's actually detrimental to them. For instance, if their house is appreciated and they, you know, have 20% equity by that point in time. And so I think for our listeners, like you gotta kind of physician loans are great, but when you have 20% equity, generally there, the conventional route is, is, is typically gonna be better, right?
Speaker 2 00:17:06 Yeah.
Speaker 1 00:17:06 Yeah. Aside from the exceptions you've
Speaker 2 00:17:08 Made. So not always in jumbo land, um, jumbo land a lot, a lot of times my rate is better on a doctor loan rather than a regular jumbo. So I had 20% equity, you know, I'd just look at it and see, which is best. Um, and do what's best for them as far as conventional, typically if they have 20% equity, it would be better to do a conventional loan. Like you said, unless there's something else at play, like the student loans that we talked about, or there's another reason why they didn't qualify for that, but I don't know why they would do that. If it wasn't in their best interest,
Speaker 1 00:17:43 If I'm talking to like five lenders or, you know, more than a few, is it all about interest rate?
Speaker 2 00:17:49 No, of course not. Don't be ridiculous. I mean, interest rate's important, right? Like
Speaker 1 00:17:54 That's what they advertise a lot of times or, I mean, I, I guess they'll advertise closing costs.
Speaker 2 00:17:59 Yeah. And, and that's another misleading thing. So you, you can be mislead by both of those because, you know, interest rates, you can say this is the rate, but there could be points they could be charged in origination fees to lower that rate or the guy on, you know, that's talking about no closing cost loans on, on the radio all the time. He's just giving you higher interest rate. Like I've seen those rates, they're like a percent and a half higher than what the market is. So, so that being said, rate is really important because especially if you have a 30 year loan, you know, that, that can add up. So if I'm the best loan officer in the world and someone's beating my rate by 1%, I'm not gonna be mad that someone's going with that person, but if it's close or the same, I mean, you know, being a, an advocate for the doctor or whoever the borrower is, is, is very important. There are a lot of folks out there. It doesn't matter what bank you work at. You know, there's good and bad, same with realtors and, you know, financial advisors there, good ones and there's bad ones. And if you're there as their advocate and you are explaining the process and you know what you're doing, so you're not submitting a loan, that's just gonna get denied because you don't know what you're doing. I think that's real important.
Speaker 1 00:19:15 Yeah. We saw an advertise, uh, a client sent us an advertis rate of 1.9, 9% on the 30 year mortgage. And we're like, what? This doesn't make sense. And first it kind of checked out, but then I finally realized that they had like a bunch of points kind of built into it. It was like 10, $15,000 closing calls for the situation. And I'm like, oh, okay.
Speaker 2 00:19:35 Yeah, a fine print. It says like two origination, one discount or something. Yeah.
Speaker 1 00:19:39 So you really have to look at both right. Closing costs and interest rate together. Yeah. To do. If you're really wanting to do an analysis between more than one mortgage to compare 'em you have to look at both closing costs and interest rate.
Speaker 2 00:19:52 Absolutely. And, and also when somebody gets an estimate, the bottom line can be manipulated very easily. There are specific things that you wanna compare. So if you can get an APR, that's the easiest way to do it. And the APR is the annual percentage rate. And it's a hypothetical rate that combines the interest rate. Plus the closing cost amortized over a 12 month period. So it basically, if I have a three and a quarter rate and my closing costs are very low, my APR should be just above that. Like, you know, 3.3 or something like that. Now, if somebody had the same rate as me, a three and a quarter, my APRs 3.3 and theirs is four. That means their closing costs are a lot higher than mine. So that's a really easy way to do it. The other is look at the rate and then compare the lender fees and throw out all the rest like, don't, you need to pay attention to that, cuz that's gonna be something you're gonna have to pay, but title fees, city and state taxes, escrows, you know, all of that stuff is gonna be the same, no matter what bank you go with.
Speaker 2 00:20:54 So if you were looking at, um, the origination fee, which is any points, um, processing underwriting, you know, application fee, credit report, fee, appraisal fee, those are specifically lender fees. And if those are lower and the rate is better, that's who you go with. That's I usually coach people through it and you know, if I review it and the other guy's better, which never ever happens. <laugh>, you know, I don't, I'm not afraid to, you know, tell 'em, you know, it's not about me.
Speaker 1 00:21:25 What's the loan estimate is that, uh, the document that's required to be provided on the front end is that
Speaker 2 00:21:31 Yep. So it used to be called the good faith estimate and they, they changed it. And then now it's called the loan estimate. Um, you might hear some mortgage guys call it an Le, but it's basically like the loan estimate plus everything that you could possibly want to know about the loan as the payment amounts, it talks about all the fees involved. It talks about, you know, APR and prepayment penalties and you know, so forth. Like anything you could want to know is on there.
Speaker 1 00:22:03 Oh, at what stage in the game are people supposed to receive that
Speaker 2 00:22:08 Within three days of their loan application and that is an official, so an official loan application is not a preapproval. So if they do a preapproval, they're providing all their information, but there's no address. And because there's no address, we just run the app and we can send out what's called a preapproval. As soon as you add the address, that turns it into a real live application. And that happens when you get the contract. So I get the contract, I add the address that turns it into an app. And then I gotta send out the mortgage disclosures, which includes the Le and a bunch of other documents within three days.
Speaker 1 00:22:44 Can you do loan estimates without checking credit?
Speaker 2 00:22:47 Yes. But not official ones. Ours is called a, uh, fee worksheet has all the same info, but it's not an official loan estimate. Would
Speaker 1 00:22:55 You prefer to know if somebody is talking to more than one lender on the front end? Is that helpful to know so that you,
Speaker 2 00:23:01 Yeah. I mean, it's always helpful to know mostly because, so I can help them understand these things that we were just talking about, but sometimes I'll, you know, we'll get, get into it and then they'll be like, I'm going with this guy, he's got a lower rate. And then I'm like, hold on, let me, let me, let me see that estimate. And it's like, he's charging you two points. It's not that you know, so like people don't understand.
Speaker 1 00:23:25 Yeah. I think the thing we see is that the lenders sometimes will, I guess when they don't know that somebody's talking to five different other lenders, they'll all check their credit and they have like five credit hits. And you know, I don't, I don't know how that affects their score. My guess would, it would be potentially negative.
Speaker 2 00:23:41 The rule is supposed to be that if you're shopping for a mortgage, you have a two week period to where you can get your credit pulled numerous times
Speaker 1 00:23:50 As many times as you want.
Speaker 2 00:23:51 It's only supposed to hit you once
Speaker 1 00:23:53 As long as it's within the two week threshold. Yeah.
Speaker 2 00:23:55 Correct. Yeah.
Speaker 1 00:23:56 Okay. So is there wiggle room on rate closing costs? Do most lenders show like their best cards? I guess if there is wiggle room, do most lenders kind of show their best cards on the front end or
Speaker 2 00:24:06 Not? All of them, <laugh> the way that it works now is you have your rate on your rate sheet and then if somebody's shopping you and you can prove that someone's shopping, you, you might have a little wiggle room there, you know, threshold. It's not always how it works. I mean, you, you might not have that threshold at that point, but basically some folks will, you know, come with something that's, you know, not as strong as they do later on when they find out somebody's shopping them. So I, you know, I try to, from the beginning, just give 'em my best
Speaker 1 00:24:40 In your experience with the, I guess the average person, how often do you think they either refinance or move,
Speaker 2 00:24:47 Um, that as far as doctors specifically?
Speaker 1 00:24:50 Yeah.
Speaker 2 00:24:51 So it, it's kind of a tough question to ask because it just really depends. The refinance part just depends on rates.
Speaker 1 00:24:57 I mean, it it's been fairly frequently
Speaker 2 00:25:00 <laugh> yeah, but like now I'm refinancing everyone that I've done in the past, like two years, because rates are so low, but it it's been odd though, because in 2018, there was a period where we were in like the high fours, you know, rates were in the high fours. So you got somebody who like, I will refinance in our year or two or maybe less than a year. And it still makes sense. You know, we're not really used to that happening as much, but so there's more refinances happening as far as purchases, usually they'll buy a doctor or resident will buy one in residency, not all of 'em, but some will buy 'em in residency. And then when they start their attending job, most of the purchases that I have come before their start date. So once they get a contract, whether it be incoming resident, fellow, or, or attending physician, you know, where they're moving, that's usually when they're calling the realtor and the officer,
Speaker 1 00:25:57 I think on the, when we have worked most of our clients, it seems like on the front end, they tend to believe that they're gonna stay in the house a long time and not refinance it. Or at least that's the math kind of that they're doing. But in reality, our experience is probably every two to three years collectively, like they're either refinancing or moving. And so these mortgages tend to not stay as is for the full term. I would guess that it's extremely rare for a mortgage to be carrying out all 30 years, for example.
Speaker 2 00:26:27 Yeah. You're a hundred percent, right. Because a lot of the ones that we're doing are in various stages of the, of a young career, right. So they're usually moving up two or three times and then when they buy, you know, they, they might buy that forever home, but yeah, you're right. I do see more, more repurchases and refinances.
Speaker 1 00:26:48 Do you see mostly 30 year? Is that the versus 15 year or some other option? What's
Speaker 2 00:26:53 Mostly, I mean, most people do 30 year fix. Some of 'em will ask for a 15, my philosophy and what I do in my life with my mortgages is, is I do 30 for all of them. And then I pay extra. So I calculate how much I need to pay to pay it off by a certain date, whether that's 15 years or whatever, and make sure that I do that. And God forbid, if something bad were to happen and you know, I'm not making as much money or, or whether
Speaker 1 00:27:18 It was a global pandemic or something, well,
Speaker 2 00:27:20 There's the global pandemic. Then, you know, you can go back to paying the 30 year fixed rate. If you lock yourself in at a 15, you got, you have no choice, but some people, if the rate difference is big enough, it can make sense right now. They're not really that different, which is kind of strange. Like the, the spreads aren't aren't as big. So you might be like three ACEs of a percent different between the two, which is not worth it in my opinion, but other people don't have the willpower to pay extra. So they need to make themselves pay 15. And that's fine too, but that's just how I look at it.
Speaker 1 00:27:51 I don't think the average person is, is as disciplined as you in regards to overpaying their mortgage regularly. At least in my experience seeing people's finances seems that it's extremely common for people to start out with the intent of overpaying something and then reality hits and they kind of end up just paying the minimum payments or whatever. Yeah.
Speaker 2 00:28:13 And, and it depends on the person. And I mean, I've seen, because I've done a lot of refinances of folks that I originated, you know, a year or two ago. And a lot of 'em had paid down a lot, a lot of doctors because once they get rid of those student loan, because they pound out those student loans, right. Like, you know, once they, they become an attending physician pound out those student loans, and once those are done, then
Speaker 1 00:28:37 Next on the chopping block
Speaker 2 00:28:38 Next on the chopping block's the mortgage.
Speaker 1 00:28:40 Yeah. So cost is definitely important, but I kind of wanted to get your take on people. So working with a, a lender, how does that play into it? What's the role of someone like you in the process and, and why, why would it be important? We had kind of hit on the inexperienced person versus the someone with skill what's, what's the value in, in, in working with somebody that, that knows their stuff.
Speaker 2 00:29:04 So the no knows your stuff part is really important, especially if you're working with specialty product, right? Like the doctor alone has a lot of caveats to it that doesn't really matter to the customer. They may have a little bit more documentation they have to provide, but the guidelines are what's important. Like you need to know how to structure it. Right. And if you don't, you know, you could wind up in problems downstream. So the loan officer in the beginning is like the gatekeeper, right. And the quarterback. So they're taking the app and they're reviewing it and they're making sure everything looks good before they pre-approve it. Now, if I find something that isn't going to meet the guideline, or it's gonna be a problem, you know, that's something that you'll either work out, up front, um, figure that out up front, or we can't do it. Right. And I would much rather give bad news saying I can't do it than submit alone and throw it against the wall and hope it sticks. And, uh, have it de get denied, you know, the day before closing, when everyone's been counting on it. Um, so that, that's huge,
Speaker 1 00:30:08 Especially when you move, you're moving across the country to a brand new location and expecting to move into the house the next day.
Speaker 2 00:30:14 Yeah, absolutely. Absolutely. And then just knowing your stuff doesn't mean you're not gonna take, try to take advantage of the person. Right. So it's important that you're working with somebody who is honest and, and actually cares about you. You know, like that, that, to me, the caring part is very important because if you're just in this for the money and, and you know, this it's the same in your business, right? Like if you were just in this for the money, you could make a heck a lot more money. Right. But you might have a lot, you know, you might have less happy customers. You know, you're not creating raving fans if you're just in it for the money. So if you're there and you're out, out to look for 'em, you know, look out for 'em, they can tell too, by the way, you talk to 'em and by the way, you're trying to help them through it. My philosophy is I try to limit stress as much as I can to everyone around me, like including my processors and, and underwriters and customers and realtors and everyone
Speaker 1 00:31:11 And wife and family and <laugh> wife
Speaker 2 00:31:13 And family and me, you
Speaker 1 00:31:15 Know,
Speaker 2 00:31:16 You know, I mean, there are some loan officers out there that will like just push, push, push for something that, you know, isn't even needed and create stress for no reason. And if you're just honest and you you're upfront about things and you, if you have a problem, you tell 'em right away rather than hiring it, that's huge.
Speaker 1 00:31:35 Are there any specific examples of what people should look out for with lenders or Mo mortgage brokers or is there a, uh, from a maybe cost standpoint or service standpoint, like just things that come to mind that that might pop up.
Speaker 2 00:31:47 One thing is you wanna make sure that the loan officer you're working with is not someone who's just gonna submit it and forget it, you know, because it goes from, from me or someone on my team to the processing and underwriting folks. Right. And there are a lot of loan officers that are our salespeople and they don't, they're focused on just the next deal, the next deal, the next deal. And you have to be, you know, to make money. But if I don't follow that loan all the way to closing, it's not gonna turn out. Right. And that's nothing bad about my back room. It's just, nobody wants that loan to close more than me. And if you have somebody, I mean, that's a question I would ask, like, how involved are you? If I have a problem with the processor, you cannot call you, will you be there to help me? Um, that's real important too.
Speaker 1 00:32:34 Yeah. That, I guess that could lead to delayed closing dates or worse.
Speaker 2 00:32:38 Yeah. Yeah. For sure.
Speaker 1 00:32:40 Awesome. Well, as we wrap up any like big changes, you see coming down the pipe, either in the industry or, or can you predict the future of rates? Just kidding.
Speaker 2 00:32:50 <laugh> so rates, I, so rates, I think they're gonna, like, I mean, the fed is pretty much, you know, they're in it. Um, as far as the environment we're in like mortgage industry is booming right now, um, real estate is doing well, rates are real low. I don't know if you've saw thi seen this, but there's a lot of folks that do doctor loans that don't do 'em anymore, or there's banks that have stopped doing jumbo entirely. And I, I talked to a doctor about this the other day because we, we changed some of our guidelines because of COVID and the doctor said, well, my business is better than ever. Like, why are you <laugh>? Why are you doing this to me? And I was like, it's not, it's not that like, it's basically portfolio loans. Like the doctor program and jumbo loans are paid for by the bank's balance sheet. Whereas Fannie Mae, Freddie Mac FHA, um, those are ensure, you know, those are guaranteed by the government, so that money stays on their balance sheet and they pay for it with deposits. So less deposits now during COVID more loans. So that's kind of outta whack. Um, so that's why they're pulling back on those things. So that's something to look for too, is, is the portfolio space
Speaker 1 00:34:02 Rich. I really appreciate you sitting down with me. How, how can people find you if they have questions or if they're looking for help on this type stuff?
Speaker 2 00:34:08 So my website is www.suntrust.com/richard.richie. And Richie is spelled R I C I, and I also have, you know, you can find me on Facebook personal or you know, or my business page.
Speaker 1 00:34:26 Well, I appreciate it, man.
Speaker 2 00:34:28 Absolutely. Thanks for having me, man,
Speaker 1 00:34:31 As always. Thank you so much for joining us today. If you found this valuable, please give us a review on iTunes and share with a friend. Also check out our website at finance, for physicians.co for all sorts of additional content. See you next time. Finance for physicians is not an investment tax legal or financial advisor. All content included in this podcast is for informational purposes only and should not be considered financial tax or legal advice. Material presented is believed to be from reliable sources and no representations are made by finance for physicians as to another party's informational accuracy or completeness, all information or ideas provided should be discussed in detail with an advisor accountant or legal counsel prior to implementation. If you don't have an advisor or like a second opinion, feel free to check out our website for recommended advisors.
