The Real Estate REplay

Equity Snatchers: The Truth About Home Equity Agreements

• Wendy, Founder of Selling Later • Season 5 • Episode 9

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Quick cash, no interest, no monthly payments—sounds like a sweet deal, right? Wrong. In this episode of Real Estate REPlay, Wendy Gilch teams up with her no-nonsense lender BFF, Chelle Prunkel, to call BS on the slick marketing behind Home Equity Agreements (HEAs). These so-called “loan alternatives” might sound like a dream, but spoiler alert: they’re a nightmare waiting to happen.

From shady equity grabs to terms that can double your payout, Wendy and Chelle rip the curtain off these equity-stealing scams and explain why they’re basically the payday loans of homeownership. Want to keep your house and your sanity? They’ll show you smarter ways to unlock your home’s value without losing your shirt—or your generational wealth.

Plus, we’ll throw shade at predatory ads, highlight how HEAs sidestep key consumer protections, and give you the lowdown on why a nosy loan officer is the hero you didn’t know you needed.

Tune in now for the real talk (and maybe a few F-bombs) you need to protect your biggest investment—your home.

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Later Wendy:

Lately, I've been seeing a flood of ads for these so-called home equity agreements or home equity investments. You know the ones that promise you quick cash up front, no interest, low credit scores and no monthly payments. Sounds too good to be true, right? Well, spoiler alert it is. Today we're pulling back the curtain on these home equity agreements. We'll uncover the truth behind their slick marketing, explain how they managed to make such wonderful misleading claims and, most importantly, share what you need to know to protect your hard-earned equity as a homeowner. Trust me, it's a conversation you don't wanna miss. Welcome to the Real Estate Replay. I'm Wendy Gilch, an industry outsider, here to reveal the hidden practices and explain the processes that can impact your next home purchase or sale. Alongside other industry misfits, we'll call out these poor practices and equip homebuyers and sellers with insights they need to protect themselves every step of the way. Welcome to the Real Estate Replay. I am your host, wendy Gilch, and today we have my lender pal, shelly Prunkle, back with us to call out yet another misleading practice in the world of homeownership and mortgages, aka the Home Equity Agreement.

Later Wendy:

Shelly, I'm pretty sure that you are the most visited co-host we have at this point. Right, I always lose track every time I bring this up. Is this your fifth? I don't know. Is it only four? Oh, we'll do another one. You have more than everybody else, so at least you're still the top ranked here. Shelly, you're the most truthful and blunt and that's why I like to have you on here, because you're not afraid to call shit out. So for those of you that don't know you, shelly, if you could give them a quick background and I want to note that Shelly is a wonderful contributor to our Rate, my Mortgage Rate program and is always helpful in contributing to help explain to buyers what they're being charged, why and what might be missing. So thank you for always contributing your time, shelly. All right, real quick, tell people about yourself and then we're going to rip the shit out of HEAs.

Chelle Prunkel:

Go ahead. I'm Shelly Brunkle from CP Mortgage Team powered by Nexa Mortgage. We work with over 260 lenders, so we're not stuck by anybody's overlays for easier ways to say yes to help you get funded. How long have you been in lending now Seems feels like forever between mortgages. And I used to sell cars too, so that's why when people try to compare it to a car, I'm like nope, completely different completely different.

Later Wendy:

One value may go up and the other one's going to go down.

Chelle Prunkel:

Yes, and unless you're under a certain FICO score, they're not asking to verify your income to see whether or not you can afford the car or not.

Later Wendy:

Right. Oh, and before we get started, I have a little housekeeping I need to do. Based on conversations on social media in the place, that may get banned and you'll never be able to find me again. Two things One Veterans United is not run by the VA. I want to make that very clear because someone didn't know that and I'm pretty sure that they're in lending and do VA loans. So Veterans United is a giant ass company that pays a bunch of retired military people to be their influencers and they give the appeal that they're run by the VA, but they are not. They are not related, but they sure do a good job marketing themselves as such.

Later Wendy:

Number two there are a ton of commercials currently fly commercials what ads? Whatever? Videos on said social media that might not be here anymore by the time. This airs promoting a certain website that is asking you to sell your home for cash, for a quick response, because real estate commissions are so expensive and you will get more money in your pocket. Now to this company.

Later Wendy:

I believe it was Sell ASAP, which is just their handle. I don't know where you end up. I just want them to know that Open Door made the same claims and got sued by the FTC. So if you're selling to an investor, there's a good chance you're not going to walk away with more money because you're not putting your home on the market for everyone to look at it. So if you are that company, I would probably change your ads and maybe not say you'll walk away with more money in your pocket because you probably will not. So, all right end of rant. That's my housekeeping. Let's destroy home equity agreements because I am getting, thanks to the algorithm of again said platform, I am getting a ton of ads that sound like the following HEA to take out $100,000 on my house, and it was one of the best decisions I ever did in my life.

Speaker 2:

I redid the kitchen, I redid the bathroom, I redid the back deck. I got everything that I needed to do in that house done. And some people were saying that I was crazy for doing that and they were like, oh my God, how are you going to pay back $100,000? Your credit needs to be at least $550,000 or above. If it's not that, just move on.

Speaker 2:

My neighbor was asking me how would I pay it back and I told her I didn't have monthly payments, I didn't have interest charges. I had 10 years to pay it back. I can pay it back in part, I can pay it back in full. I have the option to pay it back if or when I sell the house. So, of course, after I told her she did want to, but she only took out about $120,000, but she did a lot more work in her house than I did. But it's called an HEA it's short for Home Equity Agreement. You can even check to see how much you can get without it impacting your credit score. So if you want to try the same company that I use, the link to them is right below this.

Later Wendy:

Some of the other ads we've seen say how much better they are than a HELOC. And then they have all the shiny bells and whistles that an unaware consumer could be blinded by no interest, no monthly payments, pay it back when you want Even a mention about a loan alternative. And most ads seem to mention that they will take lower credit scores than a normal HELOC or mortgage, any sort of mortgage option. So if you're thinking, wow, this kind of sounds like MV Realty used to advertise before they got sued to oblivion by state attorney generals, I would agree with you. I know that Shelly has not had the blessing to be served with these ads before, but right off the bat, what red flags are you getting from these lovely ads?

Chelle Prunkel:

Oh, I've seen the ads there. I think anybody that's looking anywhere for any type of mortgage in any way, shape or form are getting targeted for these ads. But anything that ever sounds too good to be true is automatically a red flag, automatically a red flag, and these are no exception. I mean they're sharing in your future equity. These are no exception. I mean they're sharing in your future equity. When I was doing some digging, on them a little bit more.

Later Wendy:

they under appraised the houses to begin with. Yes, I saw that. So that's what I need to add to the article we put out. So for those who don't know, these companies will promise you upfront money in exchange for a piece of your equity. A lot of them advertise they'll give you like 10% of your equity right now, but they leave out that when you do have to pay them back, the equity stake jumps up quite a bit, so that 10% turns to 20%. Some take 27% and some of the scammy ones are taking up to 70% of the equity of your home when the term is up.

Later Wendy:

According to the Washington State Department of Financial Institutions, some, or probably most, of these HEAs also take a risk reduction off of the value of the home when you first take out the money. Yet when you go to pay them back the risk reduction, they pretend like it never happened. So when your term is up, one of three things has to happen you saved up enough money to pay them back. Two, you take out a loan to pay them back. Or three, you sell your house.

Later Wendy:

We crunched the numbers on this and in my market, looking at how home values increase over the past 10 years. Versus HELOC rates, this home equity agreement would cost you three times what a HELOC would have, and what's worst is, they say, your home value. Even if it actually goes down by the time you hit your payout term, they're still going to take more equity, leaving you further in the hole than when you even started. So question number one for you, Shelly these home equity agreements are not considered quote loans and they don't have to follow the Truth in Lending Act. Explain what a Truth in Lending Act is.

Chelle Prunkel:

So the Truth in Lending Act is one of the biggest things that got put in place after the housing crisis in 2008. We are required, within three days, to send you out a loan estimate for any type of mortgage that you're looking to get into. Once we have the six pieces of information that we have to have, it has to have an APR, which is the number one reason why I will not quote interest rates on any live or any social media period. I can't. We have to tell you the loan term. We have to tell you the loan term. We have to tell you the loan cost.

Chelle Prunkel:

We have to tell you your rights, including the right of rescission, because when you're doing any type of refinance, this doesn't apply on investment properties, but if you're refinancing a primary home, you have up to three days after closing to change your mind and unroll everything. On a primary purchase, you do not have that option and when you do an investment refinance, you do not have the three-day regular rescission. That is the only place where the three-day regular rescission is is a primary residence. On a refinance, we have to tell you the number of payments, the monthly payment that's due and the total amount of fees and everything else. If there's any prepaid fees which there isn't going to be no primary residence, we have to tell you about that. But because these things don't qualify for this, they might have a prepaid penalty.

Later Wendy:

So let's compare that to a HELOC, because all of these ads target HELOCs, so a home equity line of credit. So real, quickly explain to me what the HELOC is, because in all of my number crunching, it's a hell of a lot cheaper than if you were to do this. So what's a HELOC? And what rules would you have to follow for the Truth in Lending Act if you were to talk to someone about a HELOC or to advertise a HELOC?

Chelle Prunkel:

So a HELOC works the same way like a credit card against your home. So it's a home equity line credit. You can draw and repay and there's different terms for that. The interest rate does change every single month. They are harder to get, which is why these things are targeting people who think that they want a HELOC, because you have to have a higher FICO score and you have to have a lower debt-to-income ratio in order to get qualified for a home equity line of credit. Because, again, second-team position credit card card against the house, more risk for the lender. So the HELOCs have the same rules to a large degree as far as disclosures, as far as fees, as far as you know, prepaid penalties and any fees or withdrawals and things of that nature as any other loan type. So you're still getting all the details and everything that you need to have spelled out in full details in 31 to 56 pages and a lot of pieces.

Later Wendy:

And in these it's a blinding ad just promising you a bunch of money up front and leaving out the fact that you're going to owe a crap ton of money most likely at the end, and actually the terms even change. So some of them advertise if you pay back within one to three years, I think, it goes from 10% to like 15. And then if you pay back in three to four years, it's 17% equity, and then up to 10 years it was 20% equity. If you took out 10% but most of them, when I play around with their calculators if you're taking out the whole 10-year term, you're essentially doubling the amount of equity that the company gets to walk away with when your term is up. If you go the whole 10 years.

Chelle Prunkel:

So from what I was reading on the ones that have nothing to do with down payment, which we'll get to that Number one, they're anywhere from 10 to 30 years from what I saw. Number two a lot of complaints were six and nine months after they closed on these things they were forced to sign new additional paperwork because the terms had changed. So it's not the same terms as what you originally agreed to. You have it at a later point in time and because they're not regulated like everything else, there's nothing to stop them from doing these things until somebody goes and files a lawsuit.

Chelle Prunkel:

The other thing I noticed is I think part of the reason why they're going after people for deluxes is because anybody who purchased or refinanced during the whole world shutting down in order to have really low interest rates, everybody's afraid of losing that lower interest rate to begin with, until they start running the numbers and realize that you're not really losing anything, especially if we're getting rid of high interest debt.

Chelle Prunkel:

But that fear of losing that low interest rate is causing people to go more after HELOCs and HELONs and not ask the questions as to how they can get in trouble with these things. And then now you've got this coming in. The other thing that I found interesting was they're going to charge three to 5% in origination On top of what they're getting on the back end of it. They're charging you three to 5% in origination, which is insane to me, and one to 5% in closing costs. Well, that would be the same as if you were doing a refinance, so you're not saving anything there, and it looks like they're taking five to 25% of your overall equity, not the equity between when you borrow the money and closing out.

Later Wendy:

It's your entire property equity, Yep Everything, and it's insane. Some of them it went up to like 70%. There's actually a lawsuit with a lady in which they were trying to get 70% of her equity off of her and it's worth mentioning there are a few states that are trying to put a clamp on these because they seem to just becoming more popular, not necessarily from consumer usage, but because there's really only three ways in the real estate industry for these companies to take money off of consumers and make money, and that's commissions, that's your loan or it's going to be working with your equity. So there's really not a ton of spaces. So everyone's trying to be real creative and make a crap ton of money off consumers off of the same three pots, right, and so if one does it, then more pop-ups. So there's a ton of these going on and in California they're the only ones that are like the closest to requiring more disclosures. I know Texas, Colorado, New York is working on stuff.

Later Wendy:

There are a couple lawsuits out there, but one state Washington I think you sent me this did a whole report on it in which the currently there are 2,466 of these HEAs in I think it was a three metro area and only 456 have actually like gone through and termed.

Later Wendy:

So they also said in their report of the 456 that were termed, some of these people were just using it as a bridge loan to buy their next home. So they termed out early. So, which is I'm sure, there's a shit ton of penalty fees for that. So the problem is, like you know, they're watching these, but majority of these loans haven't even termed to see what the outcome is going to be for a lot of consumers, because we're talking about it, especially in the areas that Washington pulled, which counties like the home increase of value has been astronomical. So it's going to be fascinating to see what they end up with when this report comes to like full fruition. But I do wish, not that they're listening, but you, Washington department of Financial Institutions, I wish you would have done median instead of average so we could see like what the most common number is, Because I think those people that cashed out early kind of skew what an average could be. Go ahead.

Chelle Prunkel:

I like. I always like average better than median in the first place, but there's two. Yes, Because when they talk about median home price, it scares the bejeebers out of people because they don't understand how median works versus average. So average gives you a more detailed look at things.

Later Wendy:

Yeah, but when it comes to the payouts, I think it's skewed, because they were talking about how a lot of these people were using it as a bridge loan to buy another home and then sell their home. So, like those people aren't really how these ads are targeting. These ads are targeting people to take out money to redo your kitchen, to do this, to do that and to not pay it back for a long time. So I don't think we really have a good idea of how harmful these could be.

Chelle Prunkel:

Maybe we'll find out in what the next five years so the two things that strike me on this, though, is that the companies that started this in general, from what I can see, are the same companies that are putting out news reports that the average American is not going to be able to own a home anymore. So, at the same, companies that are putting out news reports that the average American is not going to be able to own a home anymore. So, at the same time that they're investing in all this, on the back end, they're making sure that they're investing in everybody's equity, same time that they're telling everybody that home there's going to be a crash. You know they're going after people's equity, going after people's equity, and there was a report done in August of 2024, data from ICE Mortgage $17.6 trillion in equity in the average American home $17.6 trillion. $11.5 trillion is actually tappable, and I get all the time we're just like.

Chelle Prunkel:

You know, I can't refinance because I have this interest rate when I run the numbers for them, even though the interest rate's doubling, because I'm paying off all their credit cards. Don't ever put a car in your mortgage, don't ever do that but because I'm paying off all these credit cards, they wind up saving anywhere between 300 to 2500 a month, even though their mortgage interest rate's doubling. People are just like oh, I don't have to make a payment, I don't have to anything and I get to save all this money, and I don't have to pay the cost to refinance. Dude, they're charging you a hell of a lot more than a cash out refinance or a HELOC or a HELOM. All of these are every day.

Later Wendy:

It's like those, it's the intangible and and I've noticed that I have to cough that intangible marketing to people right, like you're not it's almost like how commissions operated for so long on the buy side Like you're not really like pulling the money out of your wallet right, it's, it's coming out, but you're not really writing a check for that specific commission or you're not really writing.

Later Wendy:

In this case, if you had to sit there and write out a check for $63,000, because you borrowed $17,000, I think you would think differently, right? But because it's like that money that you're never really touching. I feel like they market things so well to make it sound like it's so easy. I feel like they market things so well to make it sound like it's so easy and it's a no brainer. But then you're like ready to term out and now you have to sell your home, you have to take out another loan, or when you do sell your home and you pay these people off, you're left with so much less equity to buy another home, to do something with it, because it sounded like a good idea 10 years ago and it's not clear. A lot of them are not clear on how much this is really going to cost you.

Chelle Prunkel:

These are the payday loans of equity. That is all that they are is the payday loans of equity, Because a lot of people who do payday loans, they're in a tight bind. They're in a situation they need to get their funds before they're supposed to get them and they're trying to get them the best way they possibly can. A lot of times, it's people who don't like having credit cards and they pay cash for their cars and they don't like utilizing credit. And so if they do own a home whether it's something that they inherited or what have you they're just like oh well, I can qualify for this, even though I can't qualify for that and this would help me out, but how much it takes from you. It strips your generational wealth, it completely strips your generational wealth, and now they're doing it as down payment assistance. I'm like, oh you know, no, no, yeah.

Later Wendy:

Well we're going to. That's my next question. But before I forget that one company you said that does like financial education. I saw that and I was like, well, wait a minute, if you're teaching someone like true financial education, I don't feel like this product would be encouraged. Right, think yeah, and I'm like, well, what are you teaching people? And apparently they're teaching them doom and gloom. I didn't see that part, but I wondered that. Like there's no interest and you don't have to pay right now, I just the ads alone. I just wish that Tilla would apply to at least explain what's going to happen when you have to pay out.

Chelle Prunkel:

Like they don't even mention that the equity take increases, nothing nothing and they don't explain, they don't make it fully clear that they're undervaluing your house at the time that you're taking it out in the first place. So it's not an apples to apples situation. You can't say it's a shared equity program when you're not presenting the proper equity in the first place.

Later Wendy:

Right, oh, and then the one. So that ad. I was trying to play around with all these calculators they give you If they would have taken out the ad was $100,000. She claims she took out. Who even knows it's a for real, freaking ad, because I can tell you the investor website, those are not all real users, they all just pay people to make videos for them, anyway. So if she would have taken out like $100,000, assuming she was in, let's say she was in Washington she would have to owe in 10 years $359,000 of her equity. So it goes from about 10% to 25%, looking at home sales. If she would have, 10 years ago, signed up for this and taken out a hundred, taken out a hundred thousand dollars.

Later Wendy:

it's just it's student loans and payday loans all wrapped into one just bad idea and completely I don't want to say completely unregulated, but like the rules don't apply to how it needs to be explained or the dangers that could come from doing this program and hopefully a state finally would consider them to be a loan product. But it's funny like the way they advertise that you know it's not a loan, it's a loan alternative. There's no interest and you don't have to pay us back right away. Reminds me so much of Envy. Realty, because that's all their ads. The low credit score, all of it was in their ads, that's the whole thing. And then they got sued to oblivion.

Later Wendy:

So hopefully some of these companies will change how they market. All right, let's go to down payment assistant programs, because not that it's the same, but it does kind of work on some initiatives, because again, nothing is free and you really need to pay attention. So, all right, let's do it. I know this is your favorite topic, so let's go into down payment assistant programs. To my understanding, they share the appreciation difference and not the total home value, so they still want to tap into your equity, but a little bit different from an HEA. How do they work?

Chelle Prunkel:

Because it's part of the same company that's doing the primary mortgage. They're trying to stay more within the regulatory guidelines and making sure things are a little bit more clear cut and concise Because, again, we are the most regulated industry that I can even imagine. So anytime you do a down payment assistance program, it's going to jack up your interest rate and add to your fees because they need to get repaid that money somehow, otherwise they wouldn't be, you know, relending out that money, even if it's a forgivable grant, because everybody's just like no, it's forgivable, yes, but they're still getting paid back. Come on Right.

Chelle Prunkel:

When have you ever known a bank or lender or anybody to give you money for free? Take my money, take it all, right, no less, to do something that is actually wealth building. They're going to get their money back. I'm not saying it's a bad thing, I'm just saying let's all be aware of what we're into. I have a lender who's doing the shared appreciation program. So during years one through three, if you refinance or you sell the property, they're taking 100% of the appreciation of the entire value of the house just at the appreciation within the first three years.

Later Wendy:

So HEA is total house value. A down payment assistance is like the home was worth 200,000 and you're selling it for $230,000. They're taking $30,000, correct?

Chelle Prunkel:

Essentially.

Chelle Prunkel:

So if you bought a $250,000 house. Year three that house would be worth about $270,400 with appreciation at 4%. They're taking that additional $20,400. They're not taking it from the whole percentage, they're just taking it from the appreciation itself. Year four to five they're taking 60% of the appreciation on or after the due date of the 60th payment. Then they're only taking 40% on an FHA loan or 30% of the appreciation for USDA loans. So FHA they're taking 40, usda, they're only taking 30% of the appreciation. So again that additional $20,400, they would only be taking 40% of that versus the entire thing. If the first one to three years they would wind up taking that whole year. But on average home appreciation is anywhere between four to 6% historically. So you know the first three years. A lot of people are going to refinance in the third year to the seventh year. But you just have to know how that works.

Later Wendy:

I think that's the hard part is, I think, everything the way it's marketed and not that a down payment assistant program is to the level of an HEA, but like there's always strings attached but the way things are marketed as like free or no payments, or no down payment or $20,000 grant or you know, there's so many things that go into this to make that possible that you're eventually paying one way or another. And I think that a lot of times that marketing isn't really clear and so homebuyers are looking at it like it's a good opportunity and it could be if you're in that position, but you have to know that you're actually paying for it one way or another somehow.

Chelle Prunkel:

Everything's got pros and cons. The question is, does the pros outweigh the cons? And you know I get very irritated when I hear real estate agents talk about down payment assistance programs, because they do say it's free money to buy. No, it's not. Can you stop? If agents get regulated, I really hope they're not allowed to talk about loans. I just hope that they're not allowed to talk about loans because they don't understand them and that's fine.

Later Wendy:

So stop talking about them. You know, what's funny is there's someone on Twitter that keeps screenshotting people from like a year ago or two years ago, and they're like oh, in 2024, rates will be at 3%, hold and wait. Or oh, rates are going to skyrocket. And it's like, and they're like, no, that didn't happen. Well, that didn't happen. Like you know, you have, please go to a verified smart lender. You can go on our rate, my rate. Oh, you can see the lenders that actually consistently comment in there, who you can message and talk to them. Get, get someone that has years of experience as a lender to ask questions and do not take advice from someone who is not a lender.

Chelle Prunkel:

And find a loan officer who's nosy and state licensed, because I find that the nosier the loan officer in general just in life, the more they look for solutions, the more they look for ways that you know, so that you know that the pros and the cons of what it is that you're doing. I get so many people all the time who tell me they only put me in this loan why? I don't know why. If you qualified for more than that, they need to show you more than that and let you decide for you. I run the numbers on putting 3.5% down versus putting 10% down and people see that on a $250,000 loan, it's only changing your payment by $128. They're like well, why would I put an extra $16,000 now? No, why would you do that?

Later Wendy:

Yeah, Well, you know it's funny you mentioned that because there was a chase and a click to close loan posted on Rate, my Rate, and Tammy Metzger was talking to the person and, unfortunately, like they waited too long and they were coming up to closing to even switch Like it was is a little dicey, but she would. She said to them like why did they put you in this type of loan? Like you realize, you could do X, Y, Z, or you could do this or you could do that, but now you can't because, like, I forget what the timeframe was, but it was just too risky to try to do something different. But that's the thing. I think that sometimes a buyer just kind of gets the paperwork and it's like, oh, I guess this is what I qualify for, but you really you're right need someone that's going to explain to you here's your options, here's, we could do it this way. We could do it this way because it's not a one size fits all and there's so many strategies, I'm sure from a lender perspective, of how to slice this.

Chelle Prunkel:

Yeah, it's all puzzle pieces and you know what, before I ever go hit any down payment assistance program, the first thing I want to see is can I find lender credit? Is your agent willing to negotiate for seller concessions? Because those two things will do significantly more for you than a down payment assistance program. Seller concessions that you can get on any loan type no, but do I constantly get agents that go?

Later Wendy:

nobody's getting seller concessions in this market.

Later Wendy:

Yes, they are.

Later Wendy:

You just don't know how to negotiate.

Later Wendy:

I try not to spend every freaking podcast talking about real estate agents, but just to clarify the way that things are changing right and how commission is being negotiated kind of within the offer.

Later Wendy:

Now, and especially now that the Supreme Court told the DOJ they can further investigate the National Association of Realtors for shared commission, you really want to find a real estate agent who understands how to negotiate your commission within your offer with concessions or you know I know there's some states that do things a little bit differently, but you really need to know someone who understands kind of this new approach and that also knows to work with your lender to explain to them what kind of strategy you're doing, instead of like blindsiding your lender later like oh, we're actually going to do concessions and we need to pay this and we need to pay that, and like just someone that's kind of on a team that is able to really pay attention and negotiate and explain to you, because I don't think a lot of I shouldn't say a lot, I would say half of real estate agents don't really get that right now.

Chelle Prunkel:

So I, a bunch of us actually not just me, but I and I've been saying this for a couple of years the tide is about to start turning to where clients are going to be reaching out to loan officers before they ever reach out to an agent.

Later Wendy:

And they should. I mean shit Like I think someone should call you a year before they're ready to buy to understand where their credit score is not their karma credit score but their FICO score right, yes, yes.

Later Wendy:

Go there instead. Please Do not go to Experian because it's not going to be correct. But like, meet with a lender and be like I want to buy in a year. Where do I need to be? Like? And again, what are my options Like, what does this look like if I do this and this and this? Give me a number. I need to be at that we can be comfortable with living. And let me spend a year increasing my credit score and putting some money away because closing costs are not cheap. And like be be prepared. And you're right, it's going to be so interesting because right now people are going to a real estate agent and then sometimes rocket mortgage being pushed to a partner lender and that might change Right, and that's exciting, I think it's been shifting for a while.

Chelle Prunkel:

It's now picking up steam. It's completely picking up steam and but part of look, both real estate agents and loan officers. We have lovely humans. I say that she's facetiously in both, both jobs, right? Neither one of us, when we take our test and get our licenses, are really taught anything about our job. It's each individual person.

Chelle Prunkel:

The problem is is that everybody at this point in time, they don't want to go out and talk to people to find out. They need somebody to tell them what direction. It costs you nothing to speak to a loan officer. It costs nothing to speak to seven of us. Nothing at all does it cost you any money.

Chelle Prunkel:

And real estate agents have their people that they're used to working with and that they like working with, and there's nothing wrong with that, except for when they don't give you at least three referrals. I don't expect any agent just to refer me directly and I don't expect any agent thinks that I'm just going to refer them directly. You know, but you do. At the moment you think you might want to buy a house is the moment you need to contact a loan officer and find out what your options are and what directions you need to go in, whether that's. I've had people reach out to me just like I'm thinking about buying next year and I'm like, hey, I'm looking at everything. You're that's he. I've had people reach out to me just like I'm thinking about buying next year and I'm like, hey, I'm looking at everything, you're ready to go now. Why do you want to wait till next year?

Speaker 2:

and they'll be like I can go now.

Chelle Prunkel:

I'm like yeah, and they had no idea. I have people who think that they are ready to go right now. Oh well, you know, credit karma said I have a 725 score. You know you have 438. We need to do some work. There's just so much information that you need to have and there's no easy way to get it, which is why I, like you, know the platform that might be going away, because it's the easiest way to reach out to more people and get the information out there, because you can't even Google it. That's the worst part, because the web crawlers just reach out for the most common advertised information.

Later Wendy:

Wait, what website's going away? Tiktok? Oh yeah, I'm sorry, I thought you were talking about like Zillow or something and I was like shit, what did I miss? I mean, I have some theories On some future lawsuits that maybe they would have to be involved in, but yeah, I need to find a place to put all my videos. I have not done anything. I hate Instagram. I don't like Facebook. I'm going to Red Note. What's Red Note?

Chelle Prunkel:

Red Note is the Chinese TikTok. Oh, so now it's been pushed to the number one download. It's very much like TikTok, because I refused it to put more in the meta. Yeah, they partially pushed for all of this.

Later Wendy:

Did you see his stupid speech about like he needs to be more masculine and so that?

Chelle Prunkel:

all these, all these rich people are?

Later Wendy:

all these rich people are just losing their goddamn minds. I don't understand. Like, and the rest of us are just living, like we're functioning, we're paying our bills and we're just surviving, and then all these rich people, I feel like, are just making decisions and making things better for them. Yeah, okay, I need to look at Red Note Might as well. Just give the Chinese all my information. They already have it on TikTok.

Later Wendy:

I'll find somewhere I just like. It's like the only place where I don't have to put on a ton of makeup or do my hair or care to put out some relevant information. Although I told you my views, I have these copycat profiles who get more views than I do and I can't figure out why. But you know, whatever I'll just need to hire someone because I can't manage all this Shit. We're all off topic.

Chelle Prunkel:

Damn it All, right back to you need to do like a whole reel of outtakes of all the times that we all went off topic.

Later Wendy:

I know, oh, there's so many. Or like I even say to myself, like I'm not going to swear and I always swear, like within the first two minutes I drop an F-bomb or something because I just can't. It's the industry. The industry is making me a little delusional and swearing too much. So just to recap HEAs could cost you double the amount of equity that they claim they're going to pay you Huh.

Chelle Prunkel:

It can cost you everything.

Later Wendy:

Yeah, your house.

Chelle Prunkel:

Take out another loan. Everything. Because if the house, if they're already starting with below market value and they're taking all of the equity based on the new value, not just the equity difference, it can cost you everything. One of the concerns about HELOCs is if you take out a HELOC and it locks down, but it's accrued so much additional things to it, you can wind up underwater because of HELOC. Easy. This is way worse.

Later Wendy:

Yeah, you're taking out another loan, but if your credit's bad and you can't get a loan, you have to sell your home. I mean, there's no way around it. How else are you going to pay them back?

Chelle Prunkel:

Well, for that? Yes, but you can do a cash out refinance at a 580 FICO score on an FHA loan. You can if you're a batch rent. There are lenders out there, depending upon the circumstances, and sometimes we just need to tweak a couple of things in order to get you in the right.

Later Wendy:

But essentially you're taking another loan to pay off what wasn't a loan that didn't have interest and didn't have monthly payments. But, surprise, surprise, well, thank you for this. If anybody wants to find you, I will always, as always, link your profile. I'm going to link the Washington State report. I'll link the report from selling later too, after I add that they deduct a risk fee, because I don't think that was in there and that's an important thing to add. If you have a story or a question you want to share, hit us up at therealestatereplaycom.

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Wendy Gilch

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