Come To Find Out

Mastering Mortgage and Insurance Costs Amid Inflation

• Sarah Thress • Season 2 • Episode 29

Share episode

Send us a text

How do McDonald's prices relate to your mortgage rate? Financial expert Brendon Bland from Neighborhood Loans joins us this week to unpack the surprising connections between inflation and your everyday expenses. Brendon, a crowd-favorite for his clarity and insight, offers valuable advice on navigating the rising costs of mortgages, insurance, and property taxes. Whether you're grappling with a sudden spike in your monthly payments or just want to stay ahead of the curve, Brendan's practical tips and proactive strategies are essential listening.

Struggling to manage increased expenses or fearing foreclosure? Brendon emphasizes the importance of staying informed about community changes and maintaining robust relationships with local insurance agents. From understanding how to handle negative escrow balances to the benefits of regularly reviewing your insurance policies, this episode is packed with actionable steps to help you stay financially secure. Don't miss this episode if you're keen on learning how to protect your budget and avoid financial pitfalls during these turbulent times.

To connect with Brendon:
Brendon Bland
614-747-3530
bbland@neighborhoodloans.com
https://www.instagram.com/mortgagemademodern/
https://www.facebook.com/brendon.blan

Sarah Thress
614-893-5885

First Time Home Buyer course: https://sarahthress.graphy.com/
Instagram https://www.instagram.com/sarah_thress_realtor/
Facebook https://www.facebook.com/SarahThressRealtor/
https://www.youtube.com/@LIFEINCOLUMBUS

Sarah:

Hi and welcome to this week's episode of Come to Find Out. This week we have the wonderful Brendn Bland from Neighborhood Loans and if you guys have listened at all, you know that he is pretty regular on the show. And he is a regular on the show because I love not only the content that he provides, but he's really good at breaking down information in a way that makes sense to everyone, Because even being in this industry, I will hear things and I'm like what, and so then I'll reach out to Brendan and he'll break it down into a way that I can understand. So thank you so much, Brendan, for being here today.

Brendon:

Yeah, thanks for having me and ditto right back at you, yeah. You've had a lot of good stuff too.

Sarah:

Thank you yeah.

Brendon:

Thanks for having me on again.

Sarah:

Absolutely, absolutely. So when we were recording the last time, we were talking about um, you know, kind of like predictions, things we're seeing in, uh, you know you talked about how, um, mcdonald's ties into, you know like inflation, which ties into your mortgage rate, and you know it's, it's crazy that you know McDonald's would be a leading indicator, um. But we also talked about how, with everything going up you know, inflation, insurance, uh, property taxes, all of those things now, because you know people are getting those big, you know, hey, your escrow is negative. Because I got that. I mean I got the letter and I was like I'm sorry what? My mortgage is going up $200 a month and my insurance just doubled and I mean that is legit what happened.

Sarah:

I am glad that I'm able to make it work, but that is not the case for everyone. And so it got me to thinking, if someone is in that situation where they're like, holy crap, my insurance just doubled or tripled or whatever and my mortgage payment just went up $200, $500, whatever it is that it went up in there now sitting there thinking there is no possible way I can afford this. What are their options? Because I know a lot of people are like, oh my gosh, I'm doomed. And either they allow it to go into foreclosure, which is legit, the worst thing you can do, because that sits on your credit for so long. It's the same, as you know, like not the same as a bankruptcy, but I think about the same amount of time has to go by.

Brendon:

Yeah, it's. It's a challenging situation. If you go into foreclosure or even foreclosure proceeding start um. You know it, it makes future you not happy. It's going to be tougher for future, for future you to do the things you want to do. And so yeah, I think the biggest thing is educating yourself early, even when things you know are fine, right I think, before kind of things get too rocky, just understanding you know your options and kind of just knowing the game plan Um so for things like you were talking about your escrow account and talking

Brendon:

about taxes and insurance. Um, I would say, be aware of what's going on in your community, right? Um, I know I don't love watching the news and I don't, but I think being just having a general awareness of what's happening in the community and are taxes going up? Why are they going up? By how much? So you can hopefully plan for that, make some adjustments to your budget in advance if that is going to happen. Similarly, with things like your homeowner's insurance, that's been going up a lot because there's been the last couple of years a lot of really crazy weather across the whole country, and so when that happens and homes unfortunately get destroyed and there's property damage across the board, insurance companies don't like that and they're not going to take a loss, they're going to increase their cost. They're going to pass it along to us as consumers. So, staying in touch, I think, with your insurance agent and that's why, I think, working with someone local- not just for a lender or for a realtor, but for your insurance company too.

Brendon:

That's also really, really important have a relationship with them, have meetings set up with them, maybe every six months or at least once a year, to review your policy and understand what's changing, Because I think a lot of times what happens is specifically with insurance. People pick a policy for a variety of reasons. They set it and they forget it.

Brendon:

And unfortunately, this isn't like an easy bake up and we don't want to set it. We want to kind of keep working with it. Right, because you know one and I'm going on a little tangent here is this is not just about cost.

Sarah:

You know your life's going to change right.

Brendon:

You might go from being a single person to married, a married couple, to having kids, and so your insurance needs are going to change. Right, the things you're going to cover are going to change too. So you want to make sure that, one, you have the right coverage and two, if there is going to be a big change, you want to understand the financial implications of that. And hopefully your insurance agent, who you've built a relationship with and stayed in touch with, is letting you know of these changes that are coming and letting you know what to expect in advance of that happening. Similarly, if you let them know that there's going to be a change in your life, they can let you know what the implications of that are.

Brendon:

So I guess the point of everything I'm saying to this point is educate yourself on what's going on in your community, educate yourself on what's going on within your own kind of nuclear family and how that could potentially impact your budget, and build a relationship with the folks who are helping you kind of navigate these financial opportunities and obstacles, so that you can be prepared and hopefully not get to a place where you're like, oh, that word, I can't afford this. But let's say we get to a situation where things are getting stretched and we're getting tight, or maybe we're like outright like, hey, this doesn't work. I'm running the numbers and this does not work. What can you?

Sarah:

do you?

Brendon:

and I were talking before the podcast about kind of where we are in the current market right now and what does refinancing potentially look like for a lot of people.

Sarah:

So you know if you purchased a home in the last couple of years.

Brendon:

You know you probably bought that home thinking like dang it.

Sarah:

I missed that.

Brendon:

I missed that low rate opportunity time during, you know, during COVID-19 pandemic, and we've covered that kind of ad nauseum why that wasn't necessarily the best time to buy, even though rates were low. But obviously you might have some feelings that I wish my rate was lower because my payment might be lower.

Brendon:

So I think, if we're looking at it just from that perspective and trying to maybe save a little bit of money, refinancing for a lot of people who've purchased in the last couple of years I think is going to become a very real opportunity here in the next couple of years.

Brendon:

Things we've talked about in other podcasts. Rates are going to start trending down. By how much and how quickly don't know for sure, but I think for a lot of people there will be some relief there. So if you're maybe a little over your skis or stretched a little bit thin, or even if you're like, hey, I'd really like to find a couple hundred dollars in the budget to do something else, maybe it's not, hey, we're pressed up against the wall, but maybe it's like, hey, we'd like to set some money aside in our savings, put something aside for our kid's college, save for a vacation, start getting an emergency fund going so we don't get into a bad situation. I think refinancing for a lot of people will be an opportunity to hopefully save a decent amount of money on your monthly mortgage payment here relatively soon.

Brendon:

So I think that's a good opportunity, like we talked about last week, I think, especially if you're in a tight situation, we always kind of want to grab what's right in front of us, and so a lot of these direct-to-consumer companies are going to start reaching out to you about refinancing refinancing soon. You might be able to do that and save a little bit of money, but you also might miss out on a longer-term opportunity to save more. So, once again, if you work with a really good lender, someone who took care of you during your purchase process, um, and ultimately, um, someone you trust, um, lean on them to help, kind of help you navigate, like when it's going to be the right time.

Brendon:

Um it's your choice always, but um you, I know for my clients I want to make sure that when they do pull the trigger on refinancing, they're getting as much benefit as we, as we think they can get, without having to go through the process multiple times. Yeah, I think that's an important thing.

Sarah:

No, I think that's huge and I think that you know what I really want to make sure that people understand is, if you do find yourself in that situation where you know crap like I'm not going to be able to make my mortgage payment or I'm not going to be able to pay this or that, you know I want to make sure that people are reaching out to their lender first, before they miss that payment, to talk about different options. So if I, let's say, I'm in that situation and I call you and I say, brendan, holy crap, my insurance just doubled my, you know my payments going up $300 a month. I've got four teenagers and I've got, you know, I've got all this stuff and I'm spending so much at the grocery store, something's got to give. Um, you know what type of what would you do if I called you with all of that Like, you know how would you walk me through options so that I'm not going into foreclosure and you know I'm also able to feed my family?

Brendon:

Yeah, I think that's. I think the first thing you said is right, which is um, don't not make the payment, you know?

Brendon:

um, because obviously, when we're thinking about all the different components to our life, that's important Shelter is pretty important, so you want to continue to make that payment, um, but if you reached out to me in that situation, um, you know, we would have a little bit deeper of conversation, try to figure out what's going on, um, and if there's, you know, if, if, if we're talking about like, hey, maybe, maybe this is one of the easy low hanging fruit, would be like, okay, hey, let's, let's chat with you know, insurance, your insurance provider, see if there's anything we can do there, um, see if there's any way that they can maybe increase your you know or increase your decrease your premium by, you know making, maybe the, you know the oh my gosh, I can't think of insurance words right now, but basically making that premium go down so that yeah, so your deductible may be higher.

Sarah:

Yes, your deductible goes up, maybe just looking at different carriers, so you know, I think it's a good place to start.

Brendon:

Obviously, that can only go so far, and if we've found that, hey, maybe refinancing right now isn't the right time or it's not the right option to help you get into a place where you know that monthly payment is going to kind of solve the problem.

Brendon:

Most lenders are going to have options to help you kind of bridge a gap in time. It may not be a permanent option, but at least it might help you get from point A to point B, where point A we're struggling and point B we're kind of got over. Whatever's going on. You know everyone's situation is unique. So I think that's, I think that's that's kind of the first couple of things is, you know we look at is can we reduce costs? Can we, can we help refinance, or can we look for a temporary solution that a lender offers to maybe help you kind of bridge a gap in time? So I think and there was different letters, different options- so I think.

Brendon:

But it starts with that conversation.

Brendon:

I think a lot of times we're kind of afraid shame whatever it is and at the end of the day, like you just got to remember that if you, whatever you're feeling, whatever you're going through, there's a ton of other people not just like you know out in the world, like in your community, who are kind of going through that same thing and so, like, don't be ashamed, Don't be afraid, Just you know, the most responsible thing you can do is stay on top of it and have an honest conversation about what's going on and ask for help. I think it's most, that's the most responsible thing anyone could?

Brendon:

do so. Yeah, I think that I think that's really the biggest thing. And then you know, like I said I think we talked a little bit about it really the biggest thing. And then you know, like I said, I think we talked a little bit about it. You know, if we find that maybe, hey, the cost reduction isn't enough, if you know loan, you know loan, temporary loan options aren't enough, then maybe we examine, like, hey, you know what are the next steps, what can I do with this house? Like, before I go into foreclosure, before that happens, can I sell it? And maybe you can talk a little bit about that, sarah. But it's like, obviously, you know, we bought a house for a reason. We were excited for that reason. Um, it's in this scenario we're talking about.

Brendon:

Something's changed right, you know whether it's the costs have gone up, our income's gone down something in between, Um, and that happens. So I guess from your perspective, you know how do you work with someone where they've kind of they've exhausted those options. You know, maybe they're a little, they're bummed to say the least.

Sarah:

Like hey, they're sad. Like hey, this is tough.

Brendon:

How do you work with someone in that situation and kind of what's that process look like, to maybe help them get some relief and sell their home? What does that look like?

Sarah:

Yeah, absolutely. So. If I have someone that reaches out to me and says, you know, hey, sarah, like I, uh, you know, I'm not going to be able to afford my house, like I am struggling, I don't know what to do, and, uh, you know, obviously my first question is going to be have you talked to your lender, and you know? And if they're like, yep, obviously my first question is going to be have you talked to your lender, and you know? And if they're like, yep, we've, I've looked at them, I've called my insurance company. If they're anything like me, I called an insurance broker and tried to get my insurance to decrease, because, having, you know, three teenagers that are all driving um on top of, you know, my husband and I, and our cars and our house, and all of that, I said there has to be a way, you know, to do this. So, uh, if they're in a situation like me, where there's nothing that any company can do for, us because I unfortunately have some speeding tickets that haven't dropped off yet.

Sarah:

My one of our teens has had an accident, Um, and my husband and I both own Kias. Teens has had an accident, Um, and my husband and I both own Kias, which, for anyone listening, a Kia is very difficult to ensure because apparently it's easy to steal. So, um, so if you're like me and you call and you say, hey, I've exhausted every single option and I still can't make this work, what can I do? That's whenever I would go into the whole listing, you know process. So I would sit down and I'd say, okay, like you know, looking at comparables, you know, here's what's sold in your neighborhood, here's what it looks like and then just give a real, you know good picture of it. So I would produce what they call a net to seller sheet and so that is going to show hey, if you sold it for X amount of dollars, after all the fees and what you owe and your mortgage, this is what you would take home. So that's your net.

Brendon:

Yeah.

Sarah:

Now, obviously, the longer you stay in your house, the bigger that net is likely going to be, depending on any other financial options that you've made along the way. But if you've only been in there for a year, it's going to be very difficult to make any money. So you know, it's literally sitting down and having those tough conversations and setting the expectations, and so I'm going to paint the biggest, clearest picture I can um with you know, with my client, and I'm going to say, hey, look, this is, this is what it's going to be If we sold it for this you're still gonna have to bring money to the table. I know you don't want to, but you know, would you rather bring money to the table to get out of this house and not have foreclosure, or would you rather just wait for foreclosure and then you know like you're basically kicked out of your house and you walk away with nothing.

Sarah:

So you know, obviously if you're bringing money to the table, you're still walking away with nothing, but at least you're not hurting your credit and at least then you have a much better chance of getting into something else that does fit your budget. So you know, that's where really just being open and honest and knowing. You know like I mean I will share with people. You know that I I was never good at saving. You know I'm like like dude.

Brendon:

I get it.

Sarah:

I get it. I am still a work in progress.

Brendon:

Trust me, I'm sure 4Ks makes that easier too. For sure it does. It makes it so easy. I mean, I'm basically a work in progress.

Sarah:

Trust me, I'm sure for kids makes that easier too. For sure it does. It makes it so easy. I mean, I'm basically a millionaire with four children. That's right. Every kid you have can make more money. For sure, for sure. Yeah, they don't need to actually eat and like live and stuff.

Brendon:

Yeah, everyone knows, kids are money producers.

Sarah:

For sure, yeah, yeah. But in all seriousness though, like that's where I just sit down and I will be as open and honest with people as they, you know, want, and I will listen to everything. I never judge. I know whenever people call you you're not judging. Yeah, that's not. Our job is to judge. Our job is to help you with all of the facts to find the best solution all of the facts to find the best solution.

Sarah:

Yeah, so you know, that's kind of where where I, you know, walk people through things to make sure that they're they're thinking it through from every possible way. So the same as you, you know you're thinking, okay, like, hey, you're about to miss a payment, like, let's try and figure out what we can do. Okay, there's nothing we can do, that's going to be cause again. Let's try and figure out what we can do. Okay, there's nothing we can do, that's going to be cause again. There's no reason to put a bandaid on it. There's no reason for us to like refinance If, in you know, two months from now you're, you're gonna be back in the same situation where you're still not gonna be able to pay, like it didn't give you enough relief to actually make a difference.

Sarah:

So I think, again, that's another thing you want to keep in mind when you're talking with your lender. Does your lender have commission breath, where all they're trying to do is make a sale and they're trying to push you into it? Or are they legit sitting down? And I say that to you because I know you never, ever have commission breath. You always have everyone's best interest in mind. So you want to make sure you have a lender that has your best interest in mind, that isn't just trying to like push you to check off a box or to make money or whatever.

Brendon:

Um my, my breath's more sriracha, sriracha. Chicken wing yeah, usually what that is, so, but no, yeah, that's that's a good point, and I I see it now.

Sarah:

I see a lot of lenders, even in this current market pushing people to refinance.

Brendon:

Once again, there's opportunities and so that's great. But, like I said, I do want people to get the most benefit they possibly can without having to go through the process multiple times, spend money multiple times to do the refinance. But, like I said, I mean everyone's situation is different. So there are quite a few people who are benefiting right now and they should.

Sarah:

But no, that's great, sarah.

Brendon:

I think straight to the point is yeah, there's no judgment, it's really just about helping. I think, yeah, if you're listening to this podcast, you're like man, this is a bummer. I think what I would say is there's a lot of hope because what we're talking about is really like, kind of like, if you do fall into this situation, like just confronting it head on, taking care of business, so that you can come out on the other side looking pretty and able to when you get back on your feet whenever.

Brendon:

That is where things change, whether it's an income thing, it's a health thing, whether it's a costs come down thing whatever that is you're able to actually take action and kind of get back on the horse, because you went through this now and you kind of faced it head on and kind of taking it even a little bit further back. I think if you're listening to this you're like, oh man, this sounds scary. Maybe I don't want to get foreclosed, I'm going to buy a house. I think, once again, if you're working with the right team, the right lender, the right realtor, the right insurance folks, if your family's involved, that's great.

Brendon:

If you have a financial advisor, that's great. But if you have a few people in your corner who are, you know, partnering with you to figure out the right fit, not just in the house but like, once again, financially, a lot of that we do months before we even get someone pre-approved. We're talking about their finances, talking about you know what the outlook's going to be the next couple of years?

Brendon:

Are there going to be job changes, are there going to be family changes, and so you've already thought about all that stuff before you've decided to purchase a house, and you're well aware of things that are going to come to the best of your knowledge and ability. Certain things are just going to happen. You can't control, but for the majority of people, I think if you plan, you're going to be successful and once again, there are so many benefits to owning a home what it does for your wealth, for your family. It can really elevate you. So if you're listening to this and you're like, man, this is a bummer, don't be bummed out. Don't be afraid to buy a house. Just what I would encourage you to do is just continue to plan and lean on the people who you've chosen to be on your team to help guide you, and just know that if something does happen, if there are major changes, those same people should have your back.

Sarah:

Yeah, I totally agree, and I think if you're again, if you're listening to this and you're like crap, they are describing me Just know that there is hope that this is not, this isn't a one size fits all, and that's the other thing is, if you talk to someone and they're like, nope, the only way to do it is this um, please run, because there is no one way to fix everyone's problems or everyone's.

Sarah:

You know every person is unique, every situation is unique, and so you need to have someone you know every person is unique, every situation is unique, and so you need to have someone you know on your team and in your side, you know on your side that understands what you're going through and gives you like those options so that you do, because obviously, when you're in this situation, you're going to feel out of control, and if you're anything like me I am a recovering control freak, still have control tendencies, but if you're like me, you don't like being out of control and that's okay.

Sarah:

So this is the way that you can take control is by making those calls, being proactive, to figure out what you can do before you get into the situation of, like, a foreclosure or a short sale or anything like that on average, and please correct me if I'm wrong, but it's going to take three to six months for the foreclosure process to really take, take part and like for you to get kicked out of your home, but the damage happens after 30 days past, missing your first payment.

Brendon:

Well, yeah. Sort of yeah there's some things that happen after that first payment becomes actually late. So a couple things. You always have to well, check with your lender. You should always have until the 15th of any month to make a payment. So if you're like, well, yeah, on the 1st, I can't make it because I don't get paid until the 5th, that's okay.

Brendon:

You should have until the 15th. After that, usually most lenders are going to levy a late payment fee Right, but they're not going to report to their credit bureaus yet. Usually it's after that your one month pass due. So, hey, you know you missed your August mortgage payment. Now it's September 1st. You now have your August mortgage payment and your September payment due at the same time.

Brendon:

That's when you're going to start seeing that hit the credit bureaus and that getting reported. You have basically more than one of those in a 12-month period of time. That's where it starts to become a little bit more difficult for you to do anything in the near term and the short term. At that point you have to let some time kind of pass and heal what's happened on the credit report. So, once again, you know, before you miss that payment, before you get to day 30 or 31, just call your loan officer, call your lender, see what the options are and they might, they might do something to help, yeah, yeah, or, if you don't, like your lender call Brendan and he's going to help you.

Sarah:

That too, yeah, yeah, I love it. Well, did you have um any like client stories? Or you know, like, have you had to like help anybody with this recently, obviously leaving names?

Brendon:

out. Yeah, yeah, actually, I mean there was a personal thing. I mean we had a change of circumstance in our own family and you know, I wasn't aware that that was going to have an impact on our insurance. And you know, once again, like you said earlier, lucky enough to be able to kind of bear that change, but it kind of happened without warning and you know, transparently, I would have loved my insurance agent to call me and let me know this is going to happen. So I have a conversation to have with my insurance agent here soon, because we do have a relationship and I honestly expected a little bit more from that relationship. And that's what I would tell you.

Brendon:

Listening to this is like, you know, if you have a relationship with somebody, you've given someone your business, expect them to be in a relationship with you and help you out, and that's how I treat my clients, or at least that's what I attempt to do. But yeah, so it kind of came out of the bloom and so you know we're, you know, once again, we're going to be okay, we're working through it. But it just is a reminder to me that for a lot of people that wouldn't be the case and this change, would you know? It would shake a lot of people's worlds, you know, just because you weren't expecting it and you have a very specific budget. So I think the big thing once again, like we were saying earlier, be in a relationship, hold people that you work with to a standard.

Brendon:

Say hey you're supposed to be a good steward to me. Tell me what's going on. If something's going to change, and the good ones will, the good ones will, but you can take some ownership of yourself, hey, and I could have done that too.

Sarah:

I should have asked some more questions Like how is this?

Brendon:

going to change things and instead of just you know moving along so um, but I think that's the biggest thing constantly just continue to educate yourself about what's going on in the community, in the market. Um, you don't have to watch the news. You know from sunup to sundown, but just be aware of what's going on um, and I think that will put you in a position to be proactive and not reactive to any financial change you could see.

Sarah:

Yeah, so yeah, I love it, I love it. Well, thank you so much again for taking time out of your day.

Sarah:

I know how busy you are, uh, but I really appreciate that you take the time out to help educate people on what they can do, to be proactive, so that we can help people stay in their homes, cause I know they're. You know, I'm sure you hear this too. I have a lot of people that are like, oh, I'm just waiting on all the foreclosures to happen and then I can buy a house, and I'm like, well, I, I would really like to keep the foreclosures down. So how about we just be on their own? Let's not root for people that get foreclosed. Yeah, let's not. Yeah, so my goal is, with your help, to educate people as much as possible so that they can stay in their home or they can make a very informed decision of like, hey, you know what things have changed and as much as I love this house that we're in, unfortunately we're gonna have to move, and so what does that look like? So, you know, just having those, those conversations and making sure that you know you do get to stay in a home with you know all the things that you need, so I love it. Well, thank you so much and thank you everyone for tuning in.

Sarah:

Definitely, make sure that you are leaving a review, because feedback is a gift and only allows us to get better. If you have a suggestion of what you'd love for us to cover, um, definitely feel free to leave that in your review or send me a message on socials. Uh, everything is in the show notes. Uh, you also, uh should, definitely. If you're not following Brendan on socials, you need to follow him, because his videos are awesome and, uh, he really breaks down all of the information in a way that you're going to understand it. So if you don't want to watch the news and know what's going on, at least you know. Tune into his social media.

Brendon:

Yeah, we'll keep you up to date, don't worry.

Sarah:

No, you're really good about that, um, but yeah and definitely, uh, share this with people because, uh, that is the biggest compliment you can give us is by sharing that with someone, and then make sure that you are subscribing so that you never miss an episode. So, thanks so much. We'll see you next time on Come to Find Out.