U.S. Home Talk

Eight Mortgage Myths That Still Trip Up Buyers

• Jason Walgrave • Season 4 • Episode 21

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The mortgage world is full of “common knowledge” that quietly costs buyers time, money, and confidence. We sit down with Jason Walgrave and Marcus Walgrave to pull apart eight of the most persistent mortgage myths and replace them with what actually happens when a lender underwrites a real loan in today’s market.

We start with the big one: you do not need 20% down to buy a house. We talk through real low down payment options like VA loans, USDA Rural Development (yes, “rural” can be closer to the metro than you think), FHA at 3.5% down, and conventional loans as low as 3% down. We also explain how gift funds work, why gift of equity can be a powerful tool in family transactions, and how PMI (private mortgage insurance) is priced by risk rather than being one expensive flat fee for everyone.

Then we get into credit and approvals. No, you don’t need “perfect” credit, and we break down how automated underwriting looks at your whole profile, not just a score. We also cover the truth about credit pulls, including the mortgage shopping window, plus what not to do before closing. There’s even a practical furniture-buying workaround that helps you avoid wrecking your loan while still locking in what you want for move-in day. We wrap with the myths that trip up experienced buyers too: pre-qualification vs pre-approval, why the lowest interest rate is not always the best loan, and why working with the right lender and real estate team can make or break the entire transaction.

If you found this helpful, subscribe, share it with a buyer who’s feeling stuck, and leave a quick review so more people can find straightforward mortgage guidance.

You can always find U. S. Home Talk and connect with the hosts and the community at their facebook page https://www.facebook.com/U.S.HomeTalk/ or at our website, USHomeTalk.com

Welcome And AI Photo Banter

Mike Ouverson

Hey folks, welcome back to US Home Talk. I'm your host, Mike Overson with Luminate Bank, bringing all the mortgage and real estate news to you guys. We talk about current events in the mortgage and real estate world here in Minnesota, South Dakota, and across the entire country. If you haven't caught our show before, uh, we like you to be interactive with us. You can catch us uh going on Facebook, um, on the YouTube, you can uh reach us during the week at ushometalk.com. Um, there you can connect with us uh pretty much 24-7. Um but we do like your feedback, comments, questions. Uh if you're watching the show live, um reach out to us during the show uh and we'll uh answer your questions live on air. With me uh today is No Strangers to the show, Jason Walgrave, Walgrave Real Estate Group, Remax Advantage Plus, and Marcus Walgrave coming from the lovely Sioux Hall, South Dakota, Heg Realtors, um, and the South Dakota home team. Welcome, fellas.

Jason Walgrave

Great to be here. Good afternoon.

Mike Ouverson

Uh I so I had to take a screenshot of the um of like the uh the intro the AI intro. The AI intro picture that that Evan made. Yep. Um because because because somehow Marcus got my gray hair in that picture. Marcus got my gray hair. I look 20 years younger. Jason doesn't even look like himself.

Marcus Walgrave

Uh I look good in that. I want that. Hold on, let me see. Oh my goodness. I got old as shit in that one. He did.

Mike Ouverson

I like it. I'm not gonna lie, I like it. I got I got the me and Jason got definitely the better, the better end of that stick. Marcus, you got shafted on that one for sure.

Marcus Walgrave

You know, some days you look good, some days you don't. That was my my not good AI day.

Mike Ouverson

Marcus got shafted. Maybe that's what you're gonna look in like 20 years, Marcus. Maybe it's like AI is so like smart now. It's like you're gonna you're gonna have a gray goatee, still no hair, and you're gonna look just like this guy.

Marcus Walgrave

Maybe see it again. I gotta look at it again. Let me see.

Mike Ouverson

Where's it at?

Marcus Walgrave

I looked at it. Man, oh no. I don't know. You know, the one thing I'll give that AI is is you know, looking pretty uh slim. And then I'm not here these last couple these late recent months. So thank you, AI, for knocking off a couple 10 10, 15 pounds.

Jason Walgrave

Did you put on some LBs or something? You didn't look like really you don't look like it.

Marcus Walgrave

You look good, dude. I'm rocking full dad bod. Full dad bod. What do you weigh in these? You guys saw you guys saw last fall. What do you weigh in this? 205? 205? I should be like 185.

Jason Walgrave

But uh, what do you weigh, Overson?

Mike Ouverson

Uh probably 218. I mean, you're only you're only 13 pounds behind me, Marcus.

Jason Walgrave

I'm I'm 212, so yeah.

Mike Ouverson

Look at all of us bunched up there in the middle, just close to each other.

Marcus Walgrave

If it was cold, I'd be well insulated right now.

Mike Ouverson

If we're on a survival show, Marcus wins. Is that what you're trying to say, Marcus?

Marcus Walgrave

Survives the longest. I'm just hanging out in the tent, not doing anything. You guys are freaking out, trying to get fish. I'm just sipping some dandelion tea and whatever. Dandelion tea.

Mike Ouverson

You've already got this planned out, clearly. All right, let's uh let's uh we're not talking about survival shows today, how to survive

Myth 1 Down Payment And Gifts

Mike Ouverson

on a desert, uh deserted island. There, we're talking about common mortgage myths. Common mortgage myths. We're gonna go through eight common mortgage myths out there, uh, and we're gonna debunk these myths. Or or we'll confirm them. Maybe, maybe the myth is true. I don't know. Maybe we'll see. All right, myth number one: you need 20% down to buy a house.

Jason Walgrave

That one is still pretty common as far as what what buyers think. A lot of buyers that we talk to, first-time home buyers, um, they still think you need 20% down. And um, that's just not the case. I mean, there's there's a couple different really good zero down programs out there.

Mike Ouverson

Absolutely. Yeah, if you're a if you're a veteran, you qualify for V alone, you can do zero down. If you are buying in uh a rural area, um, and the thing with rural people here, rural is like, I'm not buying a farm, like I'm not a farmer, I can buy a farm. That doesn't, that's not what that means. Um, if we look at the like the metro area here in Minnesota or outside of Minneapolis, if you're in the heart of Minneapolis and you drive 25 minutes to the west, 25 to 30 minutes to the west or the south or the north, yeah, um, you're in USDA rural development eligible areas. Yeah, you're in the suburbs, basically, right? Um, so that's another program where you can do zero down. Um, FHA, minimum three and a half percent down. Conventional loans, right? Conventional loans, I don't qualify for any of the special programs out there because I'm not a first-time home buyer, uh, or I make too much money, or whatever the case may be, um, three percent down or five percent down is going to be your minimum down payment requirement.

Jason Walgrave

Yeah, it's it's it's super reasonable to get into a house. And uh gifts are accepted, right? I mean, I mean, there's you know, you can so you can get gift money from uh uh parents, grandparents, you know, siblings, uh, and you can use that for down payment money as well.

Mike Ouverson

Absolutely. Yep. And every single loan program out there allows gifts. Uh, if you're buying it for a primary residence, they allow gift, and there's no limit on the gift. So they can gift you one dollar, they can gift you a hundred thousand dollars, they can gift you whatever they want to.

Jason Walgrave

Um when I think of gifts, the other thing that comes to mind is we've we've done a number of these deals over the years that um the gift of equity. And so there's a property that you know that the parents or the grandparents are going to sell to the kids or the grandkids, and you're able to do the gift of equity, which you know can be pretty substantial, you know. So let's say you got a $400,000 house and and grandparents are willing to sell it to you for $300,000. Well, you can count that $100,000 worth of equity as a gift. Um, and that that can work out really well as as well.

Mike Ouverson

Yeah, that that equity acts as down payment. So, hey, my grandparents are gonna sell me this thing for $300,000. I only need a loan for $300,000 to buy this thing, but it's worth $400,000. In the bank size, they're lending $300,000 on a $400,000 property. You already got 25% down.

Jason Walgrave

Yeah, that's a solid deal.

Mike Ouverson

So um, it'd be no different than you buying it from them for $400,000 and they're saying, Hey, we're gonna give you $100,000 to put down on this thing.

Jason Walgrave

Sure.

Mike Ouverson

Right? Same thing, it's just easier to do it this way, right? So, yeah, common myth. That is a common myth. That is not true. Um, you do not need 20% down to buy a house. You can get into

Myth 2 Credit Requirements Today

Mike Ouverson

a house with as little as zero down. Uh, next myth: you must have perfect credit. Do you need perfect credit to buy a house, fellas? What is perfect credit?

Jason Walgrave

Like that's that yeah, that's a great question.

Mike Ouverson

Well, that's a I don't know if anyone has perfect credit. I I mean on the FICO scale, it goes up to 850. Have I ever seen an 850 score on a mortgage credit poll? No, I have never. 11,000. Evan has an 11,000 credit score. It's amazing. Um borrow anything. Um so no, have I ever seen an 850 credit score? No. Um, do you guys want to take a guess at the highest credit score I've ever seen? 845. 837. 843. Whoa. 843 is the highest. So it's been close. It's been close, but I've never seen it.

Marcus Walgrave

Do you need an 800 mic?

Mike Ouverson

No. No. Here's here's actually the cool thing. And this recently came out, and you guys probably know this already. This came out earlier this year, probably three months ago. Fannie Mae came out and said, Look, we're not gonna have a minimum credit score requirement any longer.

Jason Walgrave

At all?

Mike Ouverson

At all.

Jason Walgrave

Wow.

Mike Ouverson

On conventional loans, there's no minimum credit score requirement. They have a system, right? They have an automated underwriting system that assesses risk on loans. It's gonna look at credit profile, it's gonna look at credit score, it's gonna look at your debt to income ratio, it's gonna look at how many reserves you have, it's gonna look at all these things, and it's gonna spit out an approval or a denial.

SPEAKER_03

Okay.

Mike Ouverson

So now if you have a 550 credit score and you only have three percent down, the system is gonna say, no, that's too that's too risky. We're not gonna approve it, right? Yeah, so just because they have no minimum credit score doesn't mean you're just gonna qualify, right? Right. Um but if you have a 550 credit score and you got 25% to put down, maybe you won the lottery, right? Maybe you hit it big at the casino, you doubled up, tripled up, you went black, and and it hit. Whatever the case may be, if you have a bigger down payment, right? And you can offset your credit score with a lower debt to income ratio and you got big money down, and now you have reserves and things like that, yeah. You might be able to get in a comfort alone with a 550 credit score, which you were never never able to do before, you know, three months ago.

Jason Walgrave

That's good stuff.

Mike Ouverson

So no, you don't need perfect credit. You definitely do not need perfect credit in order to qualify. There are credit requirements, but it helps, right? Yeah, yeah. There's requirements you have to meet, but does it need to be perfect? No, it doesn't need to be perfect.

Myth 3 Shopping Lenders Safely

Mike Ouverson

Okay, myth number three. Um, getting credit polled by more than one lender will destroy your credit. Oh, destroy it.

Marcus Walgrave

A hundred points every time, every lender. Same level as bankruptcy. Seven years destroyed. Yeah, yeah.

Mike Ouverson

So that's that's not the case. And so um, what happens is that a lot of lenders will do soft credit polls. Like we do soft credit polls now. Okay, so when we get an initial application that comes in, we do a soft credit poll, doesn't show up as an inquiry, doesn't take any points off, shows us two of the three scores that you're gonna have, and then it also shows all your account information, right? The uh the auto loans you have open up, the credit cards you have open up, their balances, the payment history still shows us all of that stuff. Um, but you don't get that inquiry on there. So a lot of lenders will do a soft poll initially up front um to start things. But if you do a hard poll with a lender, what happens is that as soon as lender number one pulls your credit on a hard pull, that opens up a 14-day window for as many other lenders as you want to pull your credit on a hard pull, and those um subsequent polls do not affect your score at all.

Jason Walgrave

Is that similar with auto loans?

Mike Ouverson

Same as auto loans. The auto industry and the mortgage industry are the same where you have that 14-day window.

Jason Walgrave

Got it.

Mike Ouverson

Everything else, every single hard pull is gonna hit your credit score. Five to 15 points off your credit score. So getting credit 15 after day 14. Correct.

Jason Walgrave

Per inquiry. Yep. Per inquiry. And how and how long does it take for that to bounce back? Is it third 60 to 90 days, or what you get the you get the points back 120 days. 120 days, okay.

Mike Ouverson

You get the points back 120 days. So if you go out, let's say you go out and you um you're gonna go out for the July 4th specials, right? Two weekends, you're like, hey, July 4th, I my Black Friday because they have July 4th deals going on, I'm going shopping, right? And you go out there and you go to five different stores and you open up a new credit card at five different stores to get their July 4th discount. Okay, your that because it's not the auto industry and because it's not the mortgage industry, every single one of those polls is gonna hit your credit score. So let's say you let's say it's interesting. So let's say it's 15 points per poll. You do five polls. What's five times 15? What is that? A lot. 675? 75. 75 points comes off your score in one day because you did those. Okay. So you just went from uh whatever, you went from a 750 down to a 675. Okay, 120 days, they pop back on and you're back up.

Jason Walgrave

Yeah, but that going from a 750 to a 675, that's a whole different batch of opportunities, right? Of options.

Mike Ouverson

Right. So so um that's why if you're in if you're in the home buying process, whether you're just starting, whether you're out looking at homes, or whether you're under contract and you have a close date set, you can't be you can't be jacking around with your credit. No, you can't be having people pull your credit. Don't do it. You can't do it. You got to wait till closing.

Jason Walgrave

Yeah, don't don't take don't accept that free t-shirt. Don't do it.

unknown

Right?

Mike Ouverson

Mark 250, though. It was a sweet T. So a lot of people are like, What furniture? But we want to outfit furniture and we gotta go get furniture, so then they gotta open an account because we open an account with them, we get 10% off or 15% off. Here's what you do with that. You go to the furniture store, pick out all the stuff you want, have them type up the purchase order. Okay, you put $100 down or $200 down with them to hold that order. So hold those items, reserve them for me. Here's my $200 to hold them. You wait for your close date. Your close date happens, right? Then you go back to them. Now you open the account with them, you complete the transaction, you get your furniture delivered. That's how you do that piece.

Marcus Walgrave

There you go. That's a great tip, Mike, about the you know, because a lot of people don't know that you can do a very small amount to hold, you know, pieces of furniture that you like. And they and and that's a common um practice in a lot of furniture stores. Correct.

Mike Ouverson

Yep, yep. It's just like holding the car. Like you go and go buy a car, you know, put a thousand dollars down, we'll hold it for you. It's no one else can buy it and come back and complete the transaction later. Same thing, same thing with furniture. Okay, uh

Myth 4 PMI Pricing And Choices

Mike Ouverson

myth number four, common mortgage myth number four. PMI is expensive and it's the same cost for everybody.

Jason Walgrave

Nope. Neither's true.

Mike Ouverson

That's I I I would I would confirm that. Now, can PMI be expensive? It can be expensive if you have a shaky credit score and you have a high debt-to-income ratio. Yeah. Um so PMI is one of those things that has changed over the last few years, um, and changed for the better, right? With technology, right, they're able to assess risk. PMI is just right private mortgage insurance, right? It's really a measure of how uh how likely are you to default on that loan. If you're not likely to default on that loan, your PMI is gonna be cheap. You're you're a low risk, you're not gonna default on it. Okay, so if you have a low debt to income ratio, if you have good credit, if you have you know a bigger down payment versus a smaller down payment, okay? All that goes into consideration, your PMI is gonna be cheap if you're good in all those areas. Now, if you have shaky credit and you have a high debt to income ratio, um, and you're putting the minimum down, 3% down on a conventional loan, PMI is gonna be higher. Yeah, but for a lot of the borrowers that I'm working with, a lot of times I ask them, I'm like, hey, here's you're like you want to buy this $450,000 house and you're gonna put 10% down. How much do you think your PMI is gonna be? And everyone is always like $150,000, $175,000, $200, and like the last one I just did this morning, right? PMI was $56.

Jason Walgrave

Oh, wow. I was gonna get $56 per month. $56 per month. Yeah.

Mike Ouverson

Until it falls off and it'll fall off at a certain point, too.

Marcus Walgrave

Love it. Mike, I think you know, when anytime I I hear like PMI, and it kind of brings me back to like the first myth, right? The twenty you need 20% down. And and it it's just uh um if you're online and you're just using some mortgage calculators, I mean, obviously, they're trying to give you the most accurate number, so they know that they can remove a an uh uh a variable uh rate like the PMI based on different criteria or or or uh um uh qualifications, um, and they they automatically put in like you're gonna put 20% down, you know. And so so then they don't have to calculate, or they don't have to give in the estimate for PMI, and that just helps like you know, those websites kind of come off as more accurate.

Mike Ouverson

Very true, very true. You gotta look at that, you gotta default it. And if they do calculate PMI, right, they're probably assuming I don't know what they're assuming. What are they using?

Marcus Walgrave

Are these assumption is like a 720 score or something and probably 40% DTI?

Mike Ouverson

Yeah, yeah, yeah. You don't you don't know, that's the thing. They don't they don't describe what they're using. So um, but anyway, PMI, I will guarantee you, out of the, you know, if I ask 100 people how much they think their PMI is gonna be for a certain situation, it's gonna be cheaper than what 99 of those people say they think it is. Yep, yeah, so it's definitely cheaper in today's world.

Marcus Walgrave

And there there's options too. You don't necessarily have to have it come out as a monthly. Um, you know, you can do a one-time PMI payment. Is that that's still an option?

Mike Ouverson

Yep, you can do that as well, too. So there's certainly different options on PMI. The PMI, like I said, the PMI thing has really evolved over the last few years, right? The PMI skip, the the PMI, you know, realm, if you will. So um, all right, so um, we have four left. We got four common mortgage myths left. So we're gonna pause for a legal minute here, and we're gonna come back and we're gonna hit the last four.

Legal Minute And New Build Warranties

Jeff O'Brien

This is Jeff O'Brien, attorney with Hush Black Wealth with a U.S. Home Talk legal med. When dealing with damage to your home, your homeowner's insurance policy is not your only option for relief. If you purchased a new home, then you should be aware of the statutory housing warranties for new construction contained in Minnesota law. There are one, two, and ten-year warranties depending on the nature of the construction defect, and the purpose of these statutory warranties are to hold builders accountable for certain defects caused by non-compliance with building standards. The one-year warranty covers defects caused by workmanship and defective materials for one year after the purchase of the home. The two-year warranty warrants the plumbing, electrical, heating, and cooling systems shall be free from defects for a two-year period following the date of purchase, and the ten-year warranty covers major construction defects for ten years after the date of purchase. There are also warranties for certain home improvement work performed by contractors. These warranties can be powerful remedies should you experience significant construction defect issues with your home. This is Jeff O'Brien, attorney with Hosh Blackwell with the U.S. Home Talk Legal Med.

Jason Walgrave

Thank you. Jeff O'Brien.

Mike Ouverson

That'd be that'd be an interesting show to me, probably wouldn't be interesting to other people, but be interesting show to me to compare new construction warranties from state to state.

Marcus Walgrave

Yeah. Yeah, South Dakota does not have any of those.

Mike Ouverson

No standard warranties on new construction. What does Wisconsin have, Jason? Do you know what Wisconsin has?

Jason Walgrave

I don't I think I mean Wisconsin has some. I don't Minnesota's got one of the I think the I don't know the they've got a pretty good one in comparison to to most other states. So I mean a one, two a one, two, ten warranty is pretty significant, and I think that's I think that's rare.

unknown

Yeah.

Jason Walgrave

I I can just I can see Marcus's wheels turning, and what he's thinking right now is well, if if you guys built homes as well as we did in South Dakota, you wouldn't need the warranties. Weren't you?

Marcus Walgrave

Well, I mean, I you talk about costs, right? I mean, we we talk about affordability of housing all the time, and and um when there's additional regulations that are set in place, it drives up costs. Yep. So um, you know, I think that that's probably a reason why South Dakota doesn't have any of those state laws in place for that. And and and are good builders, they do offer you know their own type of warranty, but they're not required to do so. Interesting.

Mike Ouverson

All right, we're gonna keep

Myths 5 And 6 Ownership Rules

Mike Ouverson

going. Uh, a couple, so myth, mortgage myth, common mortgage myth. Number five. A couple in a relationship can't own a home together unless they are married.

Marcus Walgrave

No, you don't need to be a couple, right? I mean, no, you can just be two individu two buds, two girlfriends want to buy a house together, they can do that.

Mike Ouverson

You can be two strangers, you can meet someone at the state fair, you could share a corn dog together and get to know them, be like, hey, let's buy a place together, okay? Let's do it.

Jason Walgrave

I I I think along with that myth, Mike, uh, is the myth that uh a married couple that they both have to go on the loan. That they that they both have to be on the loan to buy uh a house, and that's not the case either.

Mike Ouverson

That's not the case either. Yeah, that is a good that is a good myth. Maybe not uh first-time homebar myth, but yeah, that is a myth. So the loan on the house and the title to the house are two separate things. You can have one on the loan, you can have two on the title. You know what I mean? Um even if you have a co-signer, so let's say you have a you have a kid uh buying and they're on the loan and their parent is gonna co-sign and the parent is on the loan, the parent can choose if they want to be on title or not.

SPEAKER_03

Yep.

Mike Ouverson

Right? So it's not like they have to match, right? You can mix and match, and it's like I got this person on the loan, but this person on the title, it can be different. So can you have two people on the loan, one person on the title? Yeah, just like the parent co-signing. Yep. The co-signer can determine, they can decide if they want to be on title or not. They don't have to be.

Jason Walgrave

Marcus in South Dakota, do you need uh is it one to buy, two to sell? Or how does it is so saying?

Marcus Walgrave

Yeah, if you're a if you're a married couple, both have to um agree to the sale. But either can buy whatever they want, whenever they want. Yep.

Mike Ouverson

Gotcha. Um, okay, mortgage myth number six. Pre-qualification and pre-approval are the same thing.

unknown

No.

Jason Walgrave

No, I that's that's a very common one because you you hear those terms thrown around. Oh, I'm pre-approved. Oh, I'm you know, pre-qualified, and and so um they're they're not the same.

Mike Ouverson

So what's the difference? You guys want to try to describe the difference?

Jason Walgrave

Well, when I when I think of when I think of pre-approved um compared to pre-qualified, when I think of pre-approved, I I think that you're you've gone through some of the underwriting requirements for the bank. You know, maybe job has been verified, income's been verified, certainly the credit, you know. So I think the the pre-approval holds a little more weight. Um, pre-qualls, I mean, I you know, there's there's lenders out there that'll send out a pre-quall letter with you know, I don't even know if they pulled credit. You know, someone fills out an application, they're like, Yep, you're you're pre qualified. Well, based on what, based on what qualification. So um I mean, lend it it it's from different from lender to lender, but what I what I do know is Mike, when you send out a letter, that's Thing's gonna close.

Mike Ouverson

When I yeah, when I sent a pre-approval letter out, that thing's gonna close. I can't remember the last time I sent a pre-approval letter out and and it didn't close. Right, right. So pre-qualification is I basically say that's that's like that's like doing an application on a napkin, right? I'm out out some night at the bar, someone's like, I want to buy a house. You know, do you think I could get you know, think I could qualify for a loan? Well, how much do you make? And what do you think your credit score is at? Yeah, I mean, based on some calculation in my head, yeah, it sounds like you can qualify, right? You know what I mean? That's a pre-qualified. That's a prequalification.

Marcus Walgrave

Maybe hand them a napkin.

Mike Ouverson

Right? Hand them a napkin. Here you go. This you are qualified. This napkin is good for one home loan. You know, turn it in and receive one free home loan. Um, that's that's honestly what a pre-qualification is. So someone goes online, right? They go online and they fill out, you know, with the call center mortgage. We got call center mortgage, they fill an app online, right? And you type in your job and you type in your income and stuff. But let's say you're a commission income person, your commissioned income, and last month had a good month. I made 25 grand last month, so I make $300,000 a year. But you're right, but but your W-2 last year said you made $110. Yeah. Right? So just because you had one good month doesn't mean you make $300,000 because underrated is gonna look at that and be like, Well, but but last year you made $110, it's like we're not gonna use $300,000 just because you had one good month, we're gonna use $110,000. That loan officer, if they don't dig into it and look into it, they're gonna be like, This guy makes $300, $300,000 a year. He's approved, right? And then all of a sudden you get into it and underwrit's like, Are you nuts? You made $110,000 last year. You're on pace to make $130 to this year. Why would we ever use $300,000?

SPEAKER_03

Yeah.

Mike Ouverson

And now your pre-approval, right? Just went to went went to crap.

Jason Walgrave

So here's the question for you, Mike, is is how often, how often are people percentage-wise, how often are people accurate on their income? I mean, I'm talking spot on within within within like a thousand bucks.

Mike Ouverson

Spot on accurate, I'd say twenty percent.

Jason Walgrave

Oh, nice. Yeah. Yep.

Marcus Walgrave

It sounds like depending when you when yeah, depending on the year, uh time of year, right? If it's like tax season, they know it. They know they're taxing. But if it's like November, October, then Yeah. Now doesn't qualify just sound like it's uh official of a higher level, they have more official than approved. I think that's the mistake, right? I mean, just it just it's the I don't know.

Jason Walgrave

I mean they just come up with some different the three of us are highly qualified to host uh a real estate show every week.

unknown

Right.

Marcus Walgrave

Evan's been pre-approved though. Yeah. I don't need pre-approval with my 11,000 credit score, remember? I just walk in and I go, I will buy this.

Mike Ouverson

I will buy this, I will buy this small country.

Marcus Walgrave

I just bought it.

Mike Ouverson

Um all right, so yeah, pre-qualification, pre-approval, two different things. If you fill out an application for a mortgage and the loan officer doesn't ask you any questions about your income, doesn't require you to send in any docs. Guess what? You're not pre-approved.

Jason Walgrave

Nope.

Mike Ouverson

That that loan officer is crossing his fingers, hoping that what you put on the application is true. Hope it closes mortgage. That's what it's is exactly what's happening. Okay, next,

Myth 7 Looking Beyond Interest Rate

Mike Ouverson

number seven. We got two left. Number seven, the lowest interest rate is always the best loan.

Jason Walgrave

No, no, that's a that's a fantastic one because you got to calculate in the total monthly payment. Do you have P, you know, do you have P and I? Do you have what are what are all the factors? So no, because I know Mike, you've talked about this before. You've actually, you know, you've you've refinanced deals into a higher interest rate than they currently have because it eliminated some high mortgage insurance or or some other factors, right? So no, that that's not, I mean that that's how they that's how they bait you, right? With um on the internet and these online ads, it's like all rates, you know, we got rates at you know five five point five, you know, and then you look at the well, you can't read it because it's so small, but at the bottom it says, well, that includes a two points that you gotta pay and all these extra things and blah blah blah. So no, the lowest interest rate does not necessarily mean the best. Right.

Mike Ouverson

Or what if it's a an adjustable rate loan? Hey, you're gonna get a five and a half percent rate, but it's only gonna be there for three years, and then after three years it's gonna adjust. Yep. Is that better than a six percent third-year fixed loan?

Jason Walgrave

Probably not.

Mike Ouverson

I would argue no.

Jason Walgrave

Yep.

Mike Ouverson

You know what I mean? So that's the thing. You can't always just say rate, you can't just look at rate. There's a lot of different other factors in rate, but like you said, Jason, rate is that shiny object, right? It's the blinking lights in the casino that draw you to that uh, you know, that slot machine. Slot machine, you know what I mean? And you're just gonna feed it, and you're gonna feed it, and you're gonna feed it, and you're gonna walk away disappointed.

Marcus Walgrave

But if you're out there and you're you know, you're thinking about inquiring about home loan products, I think that that's the value of working with somebody like you, Mike, is that you have software where you can pull up three different loan products, put them side by side, and say, hey, here's here's here are some three products that I think would be good for you. You did mention one about, you know, hey, what about the super low rate? Well, this is what it looks like. And then they can look at it and they can look, okay, monthly payment, uh, life of the loan, how much total interest they put into it, and then they say, Oh, okay, now I see. Now I see what you meant, Mike. Why why I don't really want that one. I should actually go with this loan product. That makes the consumer super confident when they can, you know, see their options and compare them side by side. Yep.

Mike Ouverson

Absolutely. Yeah. Education's the key, right? Give them the info, they'll determine what they feel is best for them. You know, that's how it should be done always. Unfortunately, it's not how it's always done, but that's how the way it should be

Myth 8 Why Lenders Differ

Mike Ouverson

done. Okay, last one, last common mortgage myth here. All lenders are created equal.

Jason Walgrave

Oh, that's so true. I mean, I mean, they're just top to bottom, top to bottom, cool, all the same. Uh big myth. Um, and it that goes for real estate agents as well. You know, I mean, I mean, there's a reason why, folks, there's a reason why the top 10% in both the mortgage and the real estate world do 90% of the business. You know, and and so and then you know, last year in 2025, 71% of all licensed real estate agents in the United States sold zero zero houses. So so there is a vast difference between the best and the not best in in both real estate and mortgage.

Marcus Walgrave

And the best tend to um align themselves with the best. Like the you'll see like the top-tier real estate professionals, and and guess what? They're working with the top-tier uh uh mortgage bankers. So it it's it's uh you know it's a double win for that for that consumer who who chooses the right team to represent them.

Mike Ouverson

Yep. Yeah, and it's all industries. Are all attorneys created equal?

unknown

No.

Mike Ouverson

Nope. Does OJ get off if he has a different attorney?

Jason Walgrave

Probably not. Probably not.

Mike Ouverson

Right? I mean, gloves don't fit. You know, doctors, you know, heart surgeons? Why are why are some like ranked higher? You know what I mean? Brain surgeons, like yeah, they all do brain surgery, yeah. They all do brain surgery, which you know, it's not like they can't go home at night and someone can't tell them, well, at least you didn't do brain surgery, brain surgery all day for them. But are some better than others? I imagine, yeah. Yes, yeah, yes, they are. That's why some are like get referred and recommended by lots of people and some don't. So, yeah, but they uh that's definitely not all created equal. The the the ease of transaction, you will see if you work with a top real estate agent, a top loan officer, and a great title company, you will see the ease of transaction is there. And if your transaction is bumpy and it's stressful and it's just not what you expected, yeah. I can tell you right now, more than likely, you just you just worked with the wrong team.

Jason Walgrave

Yep.

Mike Ouverson

So

Wrap-Up And Next Wednesday

Mike Ouverson

well, good. Well, thanks, fellas. This uh this was great, great topic. Hope everyone enjoyed our show. Uh, check us out next Wednesday, uh, noon Central Standard Time. We'll be back with another episode of U.S. Home Talk. On behalf of Jason Walgrave and Marcus Walgrave, I'm Mike Overson. See you next week.

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Jason Walgrave

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Marcus Walgrave

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Mike Ouverson

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