Episode 29: Pocket Change Podcast
With an ever-changing housing market, buying a home can feel overwhelming and stressful. Listen to the new episode of the Pocket Change Podcast, where you can learn from experts on how to make wise financial decisions that will benefit your future. Guest speaker, Chris Gray, is the Chief Mortgage Officer at Leaders Credit Union. He joins our hosts, Shea and Carrie, to provide insight to the housing market in West Tennessee.
"A lot of it is just educating yourself and getting a feel for how the process works," says Chris.
Summary
Don’t let the current volatile housing market keep you from moving forward with your dream of owning a home. While the demand on the market is high and inventory is low, there has been a slight decline in interest rates in the past year in West Tennessee. It is important to take advantage of this decline instead of waiting if you are interested in purchasing a house.
Despite any uncertainty you may feel about navigating the housing market, there are many resources and tools available to you. Remember, it is never too early to begin planning for your home buying journey. When you start considering your mortgage, be sure to get pre-qualified for opening a loan with a mortgage lender. They will help make the process of mortgage lending notably easier by walking you step-by-step through an action plan of what financial decisions you need to make.
“We have a seasoned team that cares a ton about homeownership and helping people to achieve that dream,” says Chris.
There are two down payment assistance programs that could benefit you as you enter the housing market. The most popular is the Tennessee Housing Development Authority (THDA), which runs all year and has no limited funding. If you live in a rural community, the Welcome Home Grant is valued at $20,000, and it can be allocated for closing and down payment costs.
Key Takeaways
- There is high demand and low inventory in the housing market.
- Interest rates in West Tennessee have declined slightly, which could be beneficial to current home buyers.
- As more buyers enter the market, the more interest rates will increase.
- Even if you’re just thinking about buying a home, go ahead and meet with a mortgage lender to develop an action plan.
- Two beneficial down payment assistance programs are the Tennessee Housing Development Authority and the Welcome Home Grant.
If you’re ready to move forward and learn more about conquering the housing market, contact one of our mortgage champions to begin the process of purchasing your dream home.
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Full Transcript
Shea:
Hey, this is Shea.
Carrie:
And this is Carrie.
Shea:
Welcome to the Pocket Change podcast.
Carrie:
Where you'll learn better ways to spend, save, and invest, and take control of your financial journey.
Shea:
You know Carrie, in 2023, and really recently, we've had a volatile housing market, and there's been a lot of changes. And so that's what we're going to talk about and educate our listeners on today.
Carrie:
Yeah, I'm pretty excited about it. As a current renter, I am interested in what our guest has to say today about the home buying experience. I've done that once, but things have changed, and so I'm always interested in looking at the market and seeing the changes and what's going on. I'm excited to hear what advice he has for us today.
Shea:
So we're excited to talk to an expert in the mortgage field and see what he has to say.
Carrie:
That's right.
Carrie:
We're excited to welcome our guest today, Chris Gray, Chief Mortgage Officer at Leaders Credit Union, to the podcast. Welcome to Pocket Change, Chris.
Chris Gray:
Hey, thanks for having me. I'm very excited to be here.
Carrie:
Yes. Tell us a little bit about yourself and what you do at Leaders.
Chris Gray:
Sure. I just entered my sixth year at Leaders, and I get the opportunity to lead our team of ever-growing mortgage champions. That makes it always an interesting day every single day.
Shea:
That team includes not only Mortgage Loan originators, but processors, underwriters. So a big operation that you lead for Leaders Credit Union.
Chris Gray:
It is, and it's been expanding literally all six years. So it's an exciting time to be leading this group and just be a part of what Leaders is doing and the focus on real estate.
Shea:
Yeah. So Chris, the last few months, we've had episodes focusing on home buying, not only for first-time home buyers, but those who are experienced, and telling us more about that process. So what are you seeing in the market and some updates for home buyers?
Chris Gray:
Yeah. So it's an interesting market. It's one like I've never been in before. Tons of demand. Covid, 2021, that was the biggest real estate year ever in the U.S. The same was true for us here at Leaders. We are like 5 percent off in application volume from our biggest year ever. So just to frame that.
Shea:
So it's still pretty big.
Chris Gray:
There's so many folks that are wanting to buy a house. Credit quality is good. Across the board, folks are very, very eager to buy a house, and then they're running into limited inventory. Interest rates are up a little bit, and prices have jumped up a bit. You're seeing a long line of folks that are on the sideline and waiting to jump in.
Shea:
That demand is really causing maybe some of those prices to go up, and it's maybe, some people may be bowing out of the race because of affordability issues and things. There's a lot that's going on, not only with demand, prices, interest rates, affordability, and budgets is in there, too, I think.
Chris Gray:
Absolutely. One of the things that I think most would say that the interest rates jumping up is a negative. But if you look at the prices, specifically over West Tennessee, that's what we focus on. They've been going lateral for nearly a year. You're up maybe 2 or 3 percent where they were jumping 10 to 15 percent per year. If you look at that from that perspective, you go, the interest rates have slowed down the prices of the homes, which, in my opinion, gives folks an opportunity to go ahead and get in while the houses aren't running away from them. Because the fear being when, not the if, but when interest rates do start to fall, if we have this long line of eager buyers on the sideline and they all decide to enter at X rate, you will see that, Shea. You'll see prices start to run again.
Shea:
Yeah, that's true. That's a good point. I didn't think about that.
Carrie:
What advice would you give to someone who's unsure about their home buying journey?
Chris Gray:
Call us. You can't start too soon, right? A lot of it is just educating yourself and getting a feel for how the process works. There's so many tools and products and programs out there that most folks just aren't aware of, right? You may think you're a year or two away, and we talk with you and go through your budget and talk to you about different programs that are available. You realize that you're ready now or you're going to make the jump in six months, but you can start that planning. So you can have a conversation with us about how the process would work and where you are in the process without even putting in an application. We're happy to chat with folks. You don't have to be a member to chat with us. We're happy to take care of the membership and all that, but you don't have to do any of that stuff to just have a conversation about the process and how we'd be able to help.
Carrie:
So what is the best way to contact you guys? Is it through phone or email or online application?
Chris Gray:
Come in and see us too.
Carrie:
Okay.
Chris Gray:
Any of it. Yeah, we're happy to engage however our member or prospective member wants to engage, so we can do any of it.
Shea:
That's great. I think it's important. This is the most people's biggest purchase of their lifetime, purchasing a home. It is a process. It does take time and preparation in some cases where people may need to do certain things six months out or a year out. You and our team and the mortgage originators can tell folks like, "hey, if you do X, Y, Z by six months from now, or maybe when rates do come down, you'll be ready or be prepared for that first-time home buyer or experienced home buyer journey." I think that's so helpful that people, they should have the conversation. Don't just go into this blindly. I mean, we're here to be a resource and a champion for members and those who are looking for a home. I think it's important just to have the conversation, just sit down and chat about it.
Chris Gray:
Absolutely.
Shea:
And like you mentioned, there are programs out there that people aren't aware of, not just state, federal, local, but what are some of those down payment assistance programs people and borrowers may qualify for?
Chris Gray:
I'd say THDA is probably the most popular, and it runs all year, and it doesn't run out of funds.
Shea:
And that's Tennessee...
Chris Gray:
Tennessee Housing Development Authority.
Shea:
Okay.
Chris Gray:
Nice try.
Shea:
You got it.
Chris Gray:
So that one's popular, runs all year. There's one that's out right now. So if you're listening to the podcast, it's available right now, but it does have limited funds. And there's certain financial institutions that have a relationship with federal home loan bank that get funds this time of year. So it's usually February, March that we start to receive funds. We have allotted funds of, I think, $600,000 this year, and those go out at $20,000 a pop to qualified buyers. That money goes quickly. Last year, they surprised us and gave us another round of funding mid-summer. We try to put that information out through the marketing team as quickly as we find out about it. If you're hearing this right now and you think you just want to learn more, then certainly reach out.
Shea:
That's maybe a grant, I guess, $20,000 is like a grant that can go toward down payment? Closing costs? What can it go?
Chris Gray:
Yes, that's right.
Carrie:
Oh, wow.
Chris Gray:
And then even outside of Tennessee, the THDA, I'm not going to try it twice, the THDA program and the Welcome Home Grant program that we're talking about, you have programs if you have to live in rural markets, which we serve all the rural markets across West Tennessee. USDA is a fantastic program and has great interest rates, no down payment, very low mortgage insurance, and so we have a ton of members that opt that path. Something that's interesting about that program and your other government programs like FHA and VA that most don't realize is they come with a streamlined option on the refinance. And so a very simple, more affordable refinance option if you're in one of those products. So if you are buying and you're going, I really wish the rates were a little lower. When they do dip, it's a very, very simple no appraisal. You don't go through the full process. You can take advantage of lower interest rates, and you can do it more than once. You can do it as many times as it's advantageous to you. So another good thing to know about those.
Shea:
That is helpful.
Shea:
So, if I do the first-time home buyer program, FHA program for a home loan, and the rate might be higher than I want or anticipate, they've got that streamlined process that makes it easy. That's a good thing to know.
Chris Gray:
Absolutely.
Carrie:
What would you say makes Leaders different from other mortgage companies?
Chris Gray:
That's a great question. I'd say there's several things. One, our team. We have a seasoned team that cares a ton about homeownership and helping people to achieve that dream. It's just part of their DNA. They're sincere about it, and they show up every day ready to work and to do the hard work. So some of these programs that we talked about, the government programs, maybe not the easiest or most fun thing to work with multiple agencies where you're working with USDA, THDA, and trying to coordinate all those things. But we're one of the top lenders across the state when it comes to that. So we're very well-versed and happy to do that. When you talk about, I guess, just Leaders as a whole and how we approach originating mortgage loans, it doesn't matter if you're a surgeon or a first-time home buyer. We're going to look at your total financial picture. One of the things that we've recognized is regardless of where you are in life, you don't want to pay money that you shouldn't have to pay. If you can save money, you want to pay, or you want to save it. And if you're not saving money at a rate that you should be receiving from your current financial institution, we want to help you there, too.
Chris Gray:
So we take our mortgage champions, our loan officers. They look at the total picture of each applicant and look and see, would you benefit from a zero balance credit card transfer? Would you benefit from debt consolidation loan? Would you benefit from a cash out on a vehicle, right? To where you could pay off some high interest loan and save some money on cash flow. And what we realized on that is if you take that approach where you're looking at the total picture, well, the interest rate on the home that you came in to get pre-qualified for, may be a half percent or a percent higher than what you had hoped. If we can save you some money over here, the budget starts to fit, right? And so that loops us back to why I would encourage folks to call. You might not buy a house today, but we might save you some money today with the credit union.
Carrie:
That's right. That's wonderful. Well, we thank you, Chris, for being with us here today. But I do have one more question for you. If you were to find some extra change in your pocket, what would you spend it on?
Chris Gray:
I've seen a few of these before, and my son bailed me out. He got an early birthday present last night, and it is a digital coin counting piggy bank. Oh, wow. So he owns all the change in the house now, and he's up to $5.98.
Carrie:
Awesome.
Chris Gray:
Right? And he's got a birthday coming up May seventh, so he'll be five. And that's when my 11-year-old, Perry Wren, when she started her first savings account at Leaders. So his goal, I told him, I was like, "We're going to get to $100, and we're going to start your first savings account here at Leaders."
Carrie:
It's your leader's account.
Chris Gray:
May seventh. He's coming. He's ready.
Shea:
So he's finding all the change, the car, the couch, everywhere.
Chris Gray:
He's hunting it.
Shea:
Racking it up.
Chris Gray:
Absolutely.
Shea:
There you go.
Carrie:
That's a great answer. Well, thank you so much for being here with us today.
Chris Gray:
Yeah, anytime. Thanks, guys.
