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Welcome back to Go Gaddis Real Estate Radio right here on AM nine 20. The answer in this segment. What is a home Bott and mortgages 1 0 1? Understanding rates and Loans and financing, and 2023. And how do rates compare today? Two 20 years ago, 30 years ago, 40 years ago. And don't forget, we want to connect with you and it is easy.
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Next, we have our very favorite guest that we've had on the show for many, many years who did not even, I'm looking at him on video as we do this segment, and he did not even crack a smile when I said you could especially question my next guest. John Birchfield, a v p and mortgage consultant with Capital City Home Loans.
How are you, sir? I'm fantastic. How are you doing? I'm doing great. Full disclosure for everybody. John is the only one I ever get a loan from. John can be reached by calling 6 7 8 2 2 6 7 8 8 7. Just also go to Google and type in John Birchfield Capital City Home Loans. Or if you don't know what else to do, just go to go get us radio, click on Contact Us and say, Hey, have that man, John, have the mortgage expert.
Give me a call and we'll certainly do that. John, I was hearing that you have a new program, I think it's called Home Bott. Tell us a little bit about that program. How does it work, and who's it for? Yeah, hobo is a, is a, a database management software system that we've partnered with, um, that allows us to partner with, with real estate agents to just help keep in better touch with folks.
Um, but it does it in a very unique and intelligent way, providing some really some artificial intelligence type substance. We keep hearing a lot about that, that provides data to a homeowner's. Situation. Mm-hmm. How fast are they paying down their principal? How much interest are they paying? How much magic would happen if they were able to pay a little bit extra towards principal?
Uh, and of course, what's going on with the housing market in general? Real live data's gonna be supplied to them. Uh, as being part of our program. So we're pretty excited about it. So how would somebody, and by the way, so if you're a real estate agent and you wanna partner with John, you know, reach out to him 6 7 8 2 2 6 7 8, 8 7.
But if someone who is a consumer, a homeowner who's listening to the show, if they want to get set up, so they receive those reports, Do they have to get with somebody like me and we set 'em up? How does that work? Uh, either, uh, we'll, we'll both have access to the database that'll be able to input the data, uh, you know, home address, name, email address, phone number, so that they can receive these reports on a monthly basis via email and, uh, and, and be able to work with that.
But either one of us can input that bot. So you're saying that you're gonna partner with us on the home Bott, and this is the first I'm hearing Nobody explained that to me, so I guess I can say that we offer. A home bot service. Yep. Now I have seen these reports, John, uh mm-hmm. A couple of years ago and mm-hmm.
Here's what fascinated me the most. Is the report would estimate the amount of equity I had in my home based on what it thought the value was and where it thought my loan balance was. And then it would offer two or three different scenarios of what I could do with that money in terms of investing in investment real estate, or buying another home.
Or you know, I could sell one for 600 and buy one for 800 and put this money down and here's what my new payment would be. And my guess is, yeah. For your average homeowner today, home seller today, who in many cases. You know, bought a home in the last four or five years, their interest rate's very low.
They feel stuck, meaning they don't really wanna live there, but their rate is so low that they can't figure out how to move forward. And I'm sure you talk to people all the time who have this all the time, and I would imagine getting signed up for the home bot. Uh, is, it would be a great thing to do. Now, if you're listening and you want us to get you signed up for a home bods real easy, go to go gett us radio.com.
Put your name, put your address, make sure we have contact information. We'll get you hooked up eventually, I would assume we'll have a place that we can let them go straight to and register for the home bot, or they can send us information through our site. Is that right John? You bet. Yep. We're gonna make it easy.
So everybody keep up with that. That's a great service and I'm really looking forward to it. Um, John, interest rates are at, as I hear it, an all time low. Oh, wait a minute. Wait a minute. Scratch that. Interest rates, as I've heard old days, they're, they're as high as they've been since, right after 2000. Talk to us about that.
Yeah, yeah. Uh, 20 year high. Um, you know, roughly, you know, we don't get into quoting interest rates too much here, but you know, you can expect most folks to be locking in, in the low to mid sevens under most circumstances. Um, and I. We're also seeing just a, a general tightening of the supply of money. You know, it's becoming a little bit more challenging to qualify for mortgage loans and that's a natural occurrence.
When, I'm sorry, go ahead. Finish your thought. And I got, but I gotta ask you a question 'cause you've really got me thinking. Yeah. It was kind of a natural occurrence when basically people who are very forward thinking expect some type of slowdown in general economic conditions. And it's, it's a byproduct of the Federal Reserve telling banks.
Uh, investment banks, not necessarily the bank you go to make your deposits in, right? But investment banks, they say, Hey, you need to, you need to have more capital on hand, uh, to support your runnings. We talked about a banking crisis six months ago, you know, to prohibit anything like that from being a contagion in the banking world.
They want, they want banks to have more cash. Well, if they, if they gotta have more cash, that's less cash. They can lend. Only way to lend less cash is to charge more. Make it a little bit more challenging to secure a loan. Mm-hmm. So that's what you're seeing happen in the market. So John, I wanna push back just a little bit.
I personally, um, believe that the Federal Reserve and other economists expected us to be in a recession by this point. And already, I'm not an economist, but I would say that we are not, and he, I'm gonna make a bold prediction. We're not going to be. In a recession. I don't know if you remember a conversation that you and I had several months ago about what would happen to the amount of interest the US government would pay on its debt if it allows interest rates to stay high long.
Now, I know between the both of us, we do not have a degree in economics. We, well, no way. You have a not even close, you have a school of hard knocks degree in economics. Yeah, I have a school of hard knocks degree in economics, but there I, I just expect the interest rate environment to get better over the next year.
And this is, You know, if you take my opinion in a quarter, it'll get you what a quarter will buy you. But I just don't see us being in this place for long. And for those who are out there who are thinking, and I apologize 'cause I'm on the, you got you on the show to listen to you and I'm, I'm, I'm preaching instead, but I recently got a loan through you.
My interest rate was almost three points higher than my current interest rate on my current home. I'm so freaking glad I did it. I can hardly stand it because I love where I live. I flipping love it. Mm-hmm And I think it's something that people miss 'cause they're trying to make it make financial sense.
And am I spending more money? Yeah, I probably increased my interest. Expense 1500 bucks a month. I do not care. Because I am freaking loving living there and I think we all need to, uh, remember that. And even though interest rates are at their highest in 20 years, they are certainly nowhere near their highest over time.
When I got my first loan in 1992, my interest rate was 8.875%. And I knew for sure if those people knew me better, they wouldn't have even loaned me money at 8.875%. And you know what? I can afford that house. I figured out how to make it work so, Right. If those people, if people are out there, by the way, if somebody had a low interest loan on their property and they knew they had three or 400,000 in equity and they wanted to see what it would look like, it, it maybe, maybe they'd do an arm and get a little lower rate today.
I'm not even sure how it would work. They could call you and you could go through any scenario with them. Right? Here's your current rate. That's we love to do. Here's meaning like you work it all through 'em. I mean, you work through it all with 'em. And you touched on it when we were talking about home bott.
Yeah. People have so much equity in their home. Mm-hmm. They may be thinking, okay, I don't wanna move away from my 3% interest rate to a 7% interest rate. Well, that makes sense. But what if you're able to upgrade to the home you want and because you're able to put so much money down mm-hmm. From the equity that you built up in your current home, by having that low interest rates and seeing the appreciation that the home market has had over the last three to four years.
I bet you that payment's not as scary as you might've thought it might be. So you want to hear what I did and for those of of you out there listening. So I only put about a third of the equity down that I got out of the sale of my home, and so I paid about 50% down on the home, and then I took. Uh, enough money and put it in an online savings account and in CDs that are up around 5% that I actually make enough interest on my CDs and the online investment to make my house payment.
There you go. There you go. So, so, and your net. So US Bank and c i t Bank, they're the ones making my, my house payments. And I think that is so flipping cool and there's so many opportunities that people don't think about. When's the last time you could get 5% on a savings account? Come on. And two year treasury yields, you know, they're, they're hovering right at 5% and have been for weeks.
Um, what's considered the most secure way to invest money in the world is the, and that's just two years. Just two years. Two year treasury yield. Two years. Okay. Let's jump into this real quick. Um, I. I know you do f h a va, you do conventional loans. Uh, talk to us about other options. If somebody wanted to consider how they might save money on interest rate, we've got about a minute and 50 seconds left in the segment.
How could somebody save money off of a 30 year conventional interest rate? Well, there's, there's, you know, you can pay additional closing fees to permanently buy down the rate, what we call the discount points. Okay. There's temporary buy downs. I e what Cleve did, and you and I analyzed the numbers and it made perfectly good sense for me to absolutely buy that rate down just a little bit.
Sure does. Uh, in the current marketplace. And then you got temporary buy downs where you can set some money aside to help. Uh, basically subsidize your monthly payment over a couple of years. Yep. Uh, there's creative adjustable rate type mortgages that we always wanna explore and keep an open mind to. Is there much of a difference?
Is there much of a difference between, for example, a 30 year fixed and a 10 year arm? 'cause when I bought my last investment property, I think I did a 10 year arm. 'cause it made sense. Is there much of a difference today or not? Not so much. Not. Not today. Okay. Not today. Not today. Keep an open mind to it.
We explore it, but as of right now, Um, we're leaning into that fixed rate environment, but if somebody came to you and they're like, John, I'm really confused. Should I do this? Should I do that? You could actually say the additional cost you would save by going with this loan versus that loan and the charge or the amount you'd have to pay is this.
So you could tell 'em in black and white, Hey, it makes sense for you to do it or it doesn't, right? Mm-hmm. So, so there's been, yes, based on their individual goals and plans for the ownership of that home, there'd be no guesswork. Hey, John, I don't know if you're planning to attend, but right after today's show, From 10 to 11, and then on Wednesday evening, the 30th from seven to eight, we've got a free investor webinar.
Okay? And so if you're listening and you wanna sign up for it, go to go gaddis radio.com, click on uh, free investor webinar and get signed up. John, as always, is it a pleasure to have you on the show? I feel like I, it's just old friend time when you and I are on together, and I hope you'll come back on soon.
We're gonna take a quick break when we come back. Beyonce's Renaissance tour. How did it impact Metro Atlanta's economy and due diligence? What does that mean? Stick with us. We'll be back.