Life as you own with mark McDougal and Craig Miller. Remember you got questions we've got answers you may not take it and educate yourself about the single worst investment and opportunity you have. That investment group. Roof of your head in real estate we talked about your home financing making investments in real estate we keep the -- -- you know it's just go back. -- -- your and I'm mark McDougal then he is did you go to the skinny he is I notice you won't say he is the life force. I'm known it marks the life of their own it well thanks for checking -- out hope you're having a fantastic weekend and Democrat to -- that week. It was an eventful week it was a busy week I'll leave it at that it was an event has always busy and we hope that your week was eventful busy and hand. Past or may be -- vacation not so busy busy enjoying life. Well we are around back to school now it is most of you are most of your kids are either head back to school or already back to school. 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Okay now we'll go to commercials that'll start and I was actually just getting look we still hate upon on the F for the show on any gender -- cash is king right. Right is cast some people say OK well how about when you're buying a home -- casting them. Not so much okay will the queen will share three reasons that paying cash for your home likely put your finances in the dungy and let me explain it -- Miami's -- I am you are. But it -- to clean not -- and -- if I'm also owning a home is the American dream. That in winning American Idol mature Americans are there any other American dreams we can agree and Rosa. Mean we know hall Almonte were were condition that owning a home as American dream. And we have and that and Craig winning American Idol yeah road America is. Got talent that the American dream is just. Start with nothing in -- written all Pakistan okay we've put together what we believe the five biggest myths. About buying it said home so there's -- there's realities and there's. Something that lies just in between the two and that's usually the area where most truth is. I'm worried and you're getting rated buy or refinance your home better have your financial house in order you know -- will share for things your mortgage lender could care less about. When -- applying for loan -- and care he or she just does not care about these four things. -- Craig summer's almost over Ryan is -- -- kids back to school back to school with full force as of today are not today but over this past week so it's area there in school as of now all of so did you over indulge on your vacation this year. Not really do you help me indulgent little business they -- to get to go to Idaho for old imagery -- over indulged on numerous locations that was -- fifth I'm just kidding him over and no day you may be on over and -- John in -- relaxation. -- I am speaking to over indulge as it relates to the finances. Tom let's start planning your next trip now but don't fall victim to these common vacation. To crack. Not gonna let you fall victim to them on and that T keep it tidy house Craig you keep it tidy housed in -- city. Yet tidy house party YE's. Tiger -- equals safe yes believe it or not by keeping your house clean you're keeping your family safe. We'll tell you what you need to do now what and why. And how. In this week's race with Craig then. Who snapped that's our news soldier watch out here you drill wait. That is our wait that is being newest member of the life as you own it show what do we you know what's her name. The lender not on already got a got an agenda. Everybody around him and I believe she's from that the UK I think she is somewhere that you're along in there thanks -- always good to hear your voice. On the cell -- crashes jump the gun -- interest rates nodding -- -- not you can't wreck that's definitely not camera Nottingham. She could -- or not I can't wait sodomy case three lists just straighten up. There mark OK so anyway folks every week we're gonna bring you the national average on interest rates in this is highly important because guess what many of you either. Sit on the sidelines -- you try to figure out where rate straight -- time this thing perfectly. We wanna give you general facts about where rates have been that we they are now where they're headed some to share that with you. Every single week we need to into the show now these national averages are based upon about 200000 are alone amount to 30% or more equity and -- with excellent credit. So there's variations obviously be beyond those parameters that could affect what you get quoted in keep him -- -- sure these national averages. This isn't the exact quote you should expect when you're looking at refinancing of purchasing a home. It gives you -- general idea that movement. Upward or downward their rates have done in a range where they should fall. Yeah I watch those -- we say it every week watch this fees watch those fees and watch those fees because. Closing costs and fees although could potentially result in a slightly lower interest rates. Our our our most of the time. The in in the of saving money ultimately net so they -- against you in saving money they take time to breakeven we always recommend you go to life as unit dot com. Read the breakeven formula. That'll help you understand what we're talking about when you're comparing a lower rate with higher cost vs no cost or lower cost of the slightly higher rate. Do you that math is it boils down to math folks that's what you decision should be based upon not emotion. So here we have a thirty year fixed rates averaging over this past week four point 26. Our thirty -- that compares with four point 43. The prior week average but I -- assure you the week before that's -- always covered three week -- here at these numbers four point 24. So what are we seeing well on three weeks' time rates have traded within about twenty basis points overall. Over the last three weeks on a thirty year fixed rate mortgage and how does that affect you. Not a whole lot about get to that moment fifteen years fixed 3.2 one for just three point 17 the prior week and then 3.2. Below the week before that. -- your -- 3.5 six vs 3.2 one there's a big jump up on five year arms this past week 3.3 two the week before. And it FHA fixed three point 69 vs three point seven force a slight decrease on the FHA loans three point 72 is the week before last when we get back from the break folks I'll -- a little more lower rates are going. -- -- -- It's it's. All right we're back -- -- before the -- Craig was given those interest rates and it's. Sama we are getting ready to what talk about paying cash. Ash is that a good move or not -- before we do that let's Greg Little explanation yeah about rates. Just wrap it up on the rates folks so again really what you should take away from what I've shared with you today we've discovered about a three week window. In CNET about point 20%. Range for the most part to that we've seen as a trading range rates and in some cases on certain loan programs much less than that. Where we've been for weeks and weeks and weeks is a very flat market. The governments participating less and less in the purchasing a mortgage backed security bonds soon to be participating. Not at all. The market itself is going to dictate where rates -- what we're finding here was where bond yields are here both in the United States and internationally. We will probably see rates remain somewhat flat for awhile but there's a much greater chance of them increasing. Slightly. Van going much lower so. If you're waiting around for some magic to happen I don't know that magic would be. That's barring of course any huge international conflict the war breaking out a stock market crash or something along those lines we could see that happen. And that would drive interest rates -- potentially but folks again what we want to share they've been very consistent. And those of you on the sidelines need to make a move I recommend locking and if that makes sense that saving you money take the bird in hand. And move forward so. That in mind next week tune -- again it was to see what happened over this past week but for now we're once again fairly flat on. -- cultural quickly that gives you a range of where they are remembering your specifics of it for your particular scenario. Is impacted by your goals and there's so many of the details. That we don't even -- necessarily during that segment so get your range doesn't mean it makes sense to do something or doesn't mean it shouldn't get off the -- was having Craig was -- Sam should he stay or should you go baby every week we do them all right we have Ada. K I DNA. I -- I apologize you know or I -- if I'm not mispronouncing your name a high in Phoenix Arizona emailed. Hi guys love all the great info on the show every week we love you. Aid. I -- 384000. On my home that is worth about three and about 550000. My loan is on on an arm that has another two years ago -- just. Current rate is three and three -- At planned to stay in my home for -- -- -- better off taking out another five or seven year armor now are waiting until it reaches the adjustment period. I've been quoted around three and a half percent -- you arm thanks for the info. All right so -- I death however it's pronounced we do apologize for Richard name but we potato potato only think. Free email first of all it's the answer is go go meaning go for that refinance now if you're if you favor arm products that that's the way you -- -- to roll. And you wanna keep it in another arm -- five or seven your arm I think here. Not gonna see such a huge increase in in rates. Necessarily the next couple years on your arm at the same time if you can lock in for another five or seven year period for around three and a half percent. Just an 8% higher than you -- now as long as there's no points. In the fees are relatively low if not nonexistent they'll -- preferred that I think you're better off to go ahead and get that term locked in at a rate you can trust. To stay the same rather -- game what's gonna happen in two years right. The stuff OK remember if you got a question we've got an answer 802706425. -- questions. Questions question or questions at life as you own pet just type in life as you own it in Google. Hit enter and it'll take you to. We'll take you to a little bring you right into were awaiting arms their open wide open just waiting he'd be a big hug. Okay Craig cash is king and you my friend. -- -- I'm itself but let's let's talk about our may 38%. The in just the second quarter of last year 38%. Home purchases home sales worked. Homes that were purchase as distressed sales homes that were purchased by a large corporations. That in turn are going to have them in their portfolio so it's not. 38% of your average consumers. -- paid cash for their home it's 38% in aggregate consumers commercial investors. On its setter so a lot but that's a just just a crazy high number one is 42%. The prior quarter and that's because -- little bit less big institutional investors. Participating so -- with that in mind I would still see a big chunk of that 30% figure is coming from people buying private residences for themselves the -- and and potentially some private individuals buying investment properties as well. The others a lot of cash don't have to take so allow me if I'm if you're an institutional investor that's it different when speaking you necessarily. But we are. We're speaking to those of you. That are -- your hard work in life is you own it listener I'm thinking strategically. And -- trying to make sure they tell you're making a wise choice. Does Craig does paying cash. For your home does that make financial sense. It rarely and I mean rarely makes financial sense so you're -- give -- three reasons it is just -- silly absolutely. Here there clumsily. Reason number one folks your missing out and it. Enormous arbitrage opportunity. So your first your first one -- that makes it not Smart is missing out on arbitrage. What arbitrage is as when you're using other people's money to make money which by the way is how banks make all their money so if you're supportive of having your local bank holding money in their free youth. They're so kind as to keep your 203050 may -- 100000 dollars or more in their banks repaying that nice half a percent yield right now. All they're doing is turning around for the most part and making investments are loaning that money out and earning a profit margin on that money. So all bank's assets that there earning money are typically assets that they've borrowed. You yourself can practice the same thing and make money on some -- as money is not make money at least break even increase in liquid security for yourself with the money so. Taking an interest -- for the quarter percent on a thirty year mortgage. Figuring that most people who have the money to pay cash for house most likely also have the ability to itemize a tax return because they probably have substantial income or assets that might be taxable. You're affected interest rate on average. Is gonna be about two point 98% after you figure in this tax efficiencies. You're gonna get back. 25 to thirty cents on every dollar you pay a mortgage interest so first thing out of the gate is is real simple look at the -- if it's costing about 3%. To have the money borrowed let's say -- talk about a 1020300000. Dollars or more. What possibly could you be doing with that 1020300000. Dollars safely. And properly -- and in invested. As far as the -- earn money. That's number one. And number two which ties in the number one is lack of liquidity. You've got a higher risk factor because you have less reserves and you've made yourself you're you're forced yourself to put something in a non liquid account now can you liquidated sure. What does it take to -- selling that house off. Paying some realistic fees and commissions -- do it. Or taking out alone of course at future unknown terms because you don't know -- -- in at some point if feature if you're eligible if you're eligible to do it. And what those terms might be what the rates might be at the time but the fees might be to do it. You're taking your money you're investing in a realist stating you're saying hey. This money out of -- it's out of play now I can't move it around I can't leverage and can do meeting with a housing prices take a big hit. I can't move real quick to somewhere protected it just gonna take the hit. So he's got that that less reserves. The other negative about paying cash for house is. Your also locking yourself out of potentially. Future opportunities to maximize making an investment using that money. What I mean by that is one of the things we see a lot of people go and paying cash for house at the time it's what feels good it makes sense and have the ability to do it. Later on in life and -- -- an example someone who. Came into an insurance settlement. Or some inheritance or something along those lines. Sold something else they had they had generous amount of money and they went -- do you like the feeling of paying cash for the house that the moving -- Six months later six years later sixteen years later they're in a different financial situation is either great opportunity. Or there's a dire situation and now they're looking to change what they're doing -- -- wanted to do something with that money from that house. You have locked yourself out of the tax deductibility except for the 100000 dollar one time exemption. You lock yourself out of a potentially qualify for certain types alone programs and things like that so you are limiting future opportunities. But put your money in that way so. Basically get folks there's much there might be made on that money potentially far in excess of what it's cost you an interest. On top that you got the liquidity factors consider and having liquidity is is an important piece of investment many times. And the lastly. Future properties that you may be able to participate in. With that money. Are sometimes out the window especially when it comes to tax deductibility peace and I'm gonna hammer on the day it was one IC is going to be the liquidity or reserves that people will otherwise use that puts their financial future and their financial present. Risk folks when we come back out to talk about the five -- About homeownership as the American dream I think you won't stay -- death. Hand.