Less Stress In Life

Less Stress When Buying or Refinancing Your Home

August 10, 2021 Deb Timmerman and Barb Fletcher Season 1 Episode 24
Less Stress In Life
Less Stress When Buying or Refinancing Your Home
Show Notes Transcript

Money and finances are the number 1 stressors in life. In this week’s podcast we’ll talk about reducing the stress around buying or refinancing a home with  Eric Kistka, Branch Manager for Inlanta Mortgage. 

Eric helps clients finance their dream home and build their personal wealth. As a 20-year mortgage industry professional, he has a wonderful depth of knowledge of the mortgage and financial services industry.


Deb Timmerman:

You're listening to less stress in life. With hosts, Deb Timmerman and Barb Fletcher. We believe life with less stress and more energy is possible with the right tools, strategies and knowledge. So, we bring your real conversations around the stress of relationships, money, and the daily hassles of life, with guests that will inspire, challenge, entertain, and motivate you to take action. Welcome to less stress in life. I'm Deb Timmerman, and I'm here with Barb Fletcher. Today, our guest is Eric Kiska. He is a branch manager for Inlanta Mortgage. He helps clients finance their dream home and build their personal wealth. As a 20 year mortgage industry professional. He has a wonderful depth of knowledge of the mortgage and financial services industry, and it's National Financial Awareness Day on August 14. Money and finances are the number one stressor in life, so in this week's podcast, we'll talk with Eric about reducing the stress around buying or refinancing a home. Hi, Eric, so glad to have you on our show. Hi, Barb, how are you?

Barb Fletcher:

Great, welcome.

Eric Kistka:

Thanks for having me.

Deb Timmerman:

So Eric, buying a home and or obtaining financing can be a really stressful thing. What's the number one thing that you see that creates that stressful experience for your buyers?

Eric Kistka:

I'd say the current stressful experience probably just deals with the current market conditions. It's definitely a seller's market right now. So a lot of buyers may be getting frustrated, because they're in a multiple offer situation, depending on the area or the city that they're in. So it's like very important to have your ducks in a row and make sure your financing is in line for that listing agent goes if you're good to go when you're competing with multiple offers. Some people are also like writing a letter to them stating why they want that home and what it would do for their family to help them out.

Deb Timmerman:

So is it kind of a dear buyer, I want your home because......

Eric Kistka:

YEs, that's pretty much the realtors job because it kind of just makes them be like, Hey, I might have two kids or the school district, I really like it, it's important to me. You know, with a multiple offer situation, it's not going to be a make or break deal because typically, the seller is probably going to go with just the highest and best offer if they're making the most amount of money. But if you are kcompeting with someone else with a similar offer, it does help.

Deb Timmerman:

My realtor friends tell me that sometimes there are 10-20 offers on one piece of property.

Eric Kistka:

Yeah, it's a crazy market, there's definitely more supply than just a huge demand. So depending on the location, in Michigan, I serve the entire state, including the Upper Peninsula, there's actually even more 30 to 40. So some people are just using their retirement, going above and beyond what the home's going to appraise for and willing to come in with that difference. So depending on your area, too it's important that you have that money saved, or you're willing to do that, you're probably gonna want to waive inspections, and just make it a lot easier agreement. Just give yourself an advantage in hopes of getting that home.

Deb Timmerman:

That doesn't always help in the long term, though, with stress, right? Because if you waive inspections, you buy the house basically as is.

Eric Kistka:

Yes, that is correct. I mean, depending I always would recommend getting a home inspection. But for a newer build, or for almost five years or 10 years, and you know, it's, there's really probably nothing wrong with it, then it might be advantageous to do that. I would always just kind of take the advice of your realtor, we're all working together as a team trying to get you that home. And ultimately, you're the end decision maker. So if you feel like you need an inspection, you can still get one.

Barb Fletcher:

It's certainly a gamble these days to pay more than what the house is, is actually worth. And so you know, it's when we look at those mortgages and the amount of money that we Oh, for now, it's good. But if our our bubble bursts, and we find ourselves over leveraged, that can certainly add stress.

Eric Kistka:

Yeah, it would be a lot of stress. In that situation. You'd kind of want to discuss things with your family, your financial planner, accountant, make sure you can afford the payment, realize you're probably going to be in that home five years, 10 years, maybe longer. something were to happen and you needed to move could you sell it could you come up with the difference that now you're underwater on if that may be the case. So kinda just every situation is kind of unique. So it can just depends on what your personal situation is and what your personal goals are, what you're looking to accomplish.

Deb Timmerman:

That's really good advice. And there are a couple of realtors in my circle of influence who have been cautioning people against going upside down and paying too much borrowing out of their 401k. Because things typically do course correct over time, and you might not ever get that money back.

Eric Kistka:

No, but you're also kind of depending on what you're looking to buy the home for you looking to get out of the situation you're in, are you renting? Is your payment going to be a lot cheaper? You're actually going to own it? Are you buying it for the school district? For more space? Is it a long term investment in hopes that it does appreciate or you're in it long enough, and you're kind of just basically creating memories in your home and just kind of living life.

Deb Timmerman:

To help buyers in the process? Now, it's recommended that you get pre approved from a mortgage lender before you start shopping for a house. Why is that important?

Eric Kistka:

For a variety of reasons. Number one, a realtor is going to require that they're going to want to prove approval letter properties and show you a house. Unless you're looking to do a for sale by owner, you know the person you don't need a realtor. And also you just want to make sure your financings in line. So you're not wasting your time to realtors time. And that if you do come across your dream home that you can make an offer on it immediately if you want, especially in competitive marker market, because that's what everyone else is doing. And also, it's good just to make sure your financing is good to go and you have your credit check to make sure there's no crazy surprises or that something doesn't pull up on your credit report that you were unaware of. And you had no idea about it, where you would have looked into it months ahead in advance maybe could have corrected that problem ahead of time and just kind of be proactive and not reactive.

Deb Timmerman:

Whart is the strangest thing that's come up on someone's credit report that was an "I wasn't aware of"?

Unknown:

um, probably just similar names, senior, Junior dad's account, or something like that, that the fact that maybe that person cosigned for someone and didn't realize that a student loan, grandma and grandpa cosigns for their grand grandchildren, and it pops up and they had no idea that they were responsible for that debt.

Deb Timmerman:

I think that's really good to know. How much cash should a buyer plan on bringing to the table these days?

Eric Kistka:

We have VA if you're a veteran. In rural development, meaning if you're kind of buying a property in a rural area, those are zero down loans. FHA is also a government loan, that's three and a half percent down and then typically at conventional was 5%, down or more. And then you hear about if you put 20% down or more conventional, then you get rid of private mortgage insurance, which is just as an extra costs without putting that down payment. And then so factor in that whatever the purchase price is, and then maybe factor in four to $6,000 extra if you don't get seller concessions, seller concessions are when the seller agrees to pay some of your closing costs. Typically, you can have up to 6% of the purchase price rolled into the loan, although in today's market, it's it's tougher to get those because it's a seller's market, so you have to be more competitive. So I would recommend maybe saving four to$6,000 on top of whatever your actual downpayment that you're putting down on.

Deb Timmerman:

And then right now, I think people are actually doing something like guaranteeing that the there's like an appraisal gap. So could you explain what that is? And how that financing works?

Eric Kistka:

Yep, that's pretty much extra money you would have to have saved to if that's what you wrote in your purchase agreement. So let's say you love the home and your realtor saying, hey, it's probably going to only appraise for 250,000. You're like, well, I want the home I'm willing to pay more than it's worth let's give offer 275,000 within appraisal guarantee that meaning if it only does appraise for 250,000. You have to have that extra difference which is $25,000. On top of what your down payment would have been in on top of what your closing costs would have been.

Barb Fletcher:

Wow, so much to keep in mind when it feels even more complicated than it did when I was buying my first house.

Eric Kistka:

Yeah, my job is to make it not complicated for you though. That's what I'm pretty good at expectation set up front just so you know that you're qualified what you can or cannot afford, what payment can you afford to verify that you do have the funds That's something that you're willing willing to do, on average takes about 30 days to close alone, I typically keep all my clients updated during the entire process, to basically remove all the stress from them, and basically put it on me just because that's my job just to help you out and make it as a smooth transaction as possible.

Deb Timmerman:

What kinds of unexpected things come up that a buyer shouldn't prepare for

Eric Kistka:

Maybe something with their home inspection, we don't require inspections, when we do a loan, that's your personal choice. So if you do get one, there might be something that you want fixed, or you'll have to renegotiate the seller is about a 30 day process. There are a lot of third parties involved. So as an example, we do verification appointments with an employer verification deposit, we pull 45 or 60, tax transcripts to make sure what you the tax returns and tax documents you provided match with what's on record with the IRS. So basically, there's really nothing like to unexpecting appraisals a big one, he really can't control that as an independent third party appraiser, I can't pick it, you can't pick it, the seller can't pick it, it's all just going on and approved list and you have zero control over that. Hopefully, the listing agent has like tuck clear title. So the title company's gonna come back where the sellers correct, there's no issues, there's no extra liens, there's nothing showing up that could pop up that could stop the buyer from getting that home. Other than now, I check all your assets, your credit and your income, which is what you need to get the loan. So as long as all those things are in line, there should be like no issues.

Barb Fletcher:

When I was younger, they always said that, you know, buying a house was the biggest purchase that you'd ever make in your life and, and the pressure to make sure that we're getting it right and and now in the times that we are aware, there are so many people competing for the same homes, it it probably is easy to get caught up in that momentum.

Eric Kistka:

Pretty much every situation is unique. So I've made sure that you can just afford the payment, what you want. Just don't buy a home just just to buy one, make sure it's kind of accomplishing your goals and just making a smart financial decision and try not just don't get in over your head. And if you have to wait an extra year, two years, there's really nothing wrong with that the markets probably going to correct itself for hopefully, a lot more supply comes or more homes are being built, get back to a more normal market, because it's definitely not normal right now.

Deb Timmerman:

I don't know if anything is really normal right now. If you're considering buying a home, there's a lot to think about which we heard from Eric, really knowing and being clear about what you want what you're prepared to spend not being caught unaware and getting in over your head. And so if I heard you, right, Eric, you can't have champagne taste on a beer budget. They don't go together. You have to do a little bit of planning for this if you want it to be a smooth process.

Eric Kistka:

Absolutely. And that's what you're kind of doing up front and why I recommend getting pre approved, pre qualified and all those topics are discussed before you even make an offer and on a home so you know what you're getting into. And then you have the numbers in front of you to be like, can I afford an $800 total payment? Or what happens if it's 1000? Or if it needs to be 1200 with today's market, because you might be paying $200,000 instead of a home that you were paying for 150,005 years ago. So the extra $50,000 can you afford what that does the actual full payment thing all decide by yourself? Or if you have like a spouse or family kind of talk things over?

Deb Timmerman:

We ask this of everybody. What is your favorite stress relief tool? Eric?

Unknown:

That's an interesting question like a stress relief tool. Talking to you, Deb! But no, I enjoy golf, working out walks, being active typically, stuff that chemically releases stuff in your body and your endorphins and just like doing physical stuff is my biggest stress reliever.

Deb Timmerman:

That's awesome. Well, thanks so much for hopping on that today and recording this podcast. If people are interested in using your services within the state of Michigan. how do they contact you?

Eric Kistka:

On my cell phone along with texting as 517-937-1975 I'm available 24 seven you can also go on my website@www.ekmortgagelending.com that's EKmortgagelending.com and my name is Eric Kiska. You can also look me up on Facebook or LinkedIn and shoot me a message that way.

Deb Timmerman:

Thank you so much for being our guest today, Eric.

Eric Kistka:

Alright, Thank you very much, Deb. It was nice talking to you and Barb too.

Deb Timmerman:

Less stress in life is possible. If you're new to this kind of thinking and would like to explore what's possible for you, we'd love to connect. You can reach us through our website at lessstressinlife.com. That's less stressinlife.com