Our friends we are back like if you own it. So cash may not be -- after all but also. Myths there's plenty of those out they're not just as it pertains to cash for not buying a home in general the American DREAM Act we've had. Presidential candidates if not presidents themselves standing before large before the nation saying hey you're right or your. You know we wanna ensure your ability whatever you call to to have the American dream come true homeownership come and we've really hammered in on this we really. We've really made is built ingrained in the psyche of the American people that you need to be a homeowner is part of the overall package of living in this great country. Let's talk what's on business mark writes on -- on his side owning is better than renting. Now not the case depending on your specific situation. On your lifestyle your goals -- you -- position in life com each person has a different set of circumstances and if it makes sense for you to own. You've done the math it's a long term investment. In most if not all scenarios. Great but come homeowner. But do not fall for that pitch from the media from realtors -- I think much more than message today is maybe it does make more sense to rent. So just be educated it's a great long term investment. Can't be a great long term investment but don't don't fall for thinking that now you're of age you've got a good job and you save some money for down payment. You need to purchase and just say you can save your homeowner. I'm not ranting against freedom it gives sometimes -- more financial. Freedom and like -- freedom that you cannot otherwise. Forward or to speed and if your home -- -- -- -- -- -- On the myth we get a say just because in as far as buying a home is a great investment piece of it I mean we want to share with you defected over the last ten years we've seen a point 3%. Overall. Net in new sets the other myth number two is buying a home is a great investment right. Not necessarily. It can be a good long term investment but if you're and if your life as you own it show listener you'll know the many things that can enhance that investment. Understanding the financial implications as it relates to the tax efficiency. Doing the math on the financing side you don't pay a bunch of fees so that your ultimate borrowing cost is significantly greater than it could or should be if you're -- and on the house 345. Years or finance house for 345 years so. There's so much more they -- but Craig great point over the last ten years you get an average one point three and -- eight about -- a quarter overall return. Annual return on the S&P 500 so even after you factor in -- that's the that's taxable income right in you'd take anywhere from fifteen to 25% that away for taxes depending on how you have -- -- long term gain. You're still way way way ahead. -- that your other investments which goes back to what we talked about the prior segment with the whole arbitrage thing I mean if you borrow money two point 98 and you're gonna somehow returned. 678% on it actually making money to have that mortgage as opposed to having their house paid off which is still subject to fluctuations in the market still potentially gonna lose money. Our rights another -- for consideration Craig is that Sama. Location is everything location location. Location. Our Craig why might -- might that be a -- Well it's a myth because there's so many other factors that go into that I mean he used to be that you want him find a home yet find that perfect home. And that it is nice well established media that got low crime great schools. Closed airports close to shopping on the kind of staff but. There really needs to be. A look at that -- a little bit further down the road again look into the future a little bit about the -- that you moving into when you're thinking about this it's not about the here now location right times about what's. Forthcoming in his. Potential community -- open coming communion things like that so that the value of location is not a myth it is a reality however the -- there's a caveat that says. If it's hot today you. Will it be hot tomorrow what is their potential in this neighborhood or is there something coming into this neighborhood at whether a school's going to be shut and whether they're getting ready to bring in a our rail system right next -- your house those things that that. Presently hot location might cool down significantly. I'm also lot the concept -- we talk about this a lot buying the worst home in a nice neighborhood. Sure can be -- sound strategic investment. If you have the ability to put the money into the home -- at the home and and make it. Comparable with your neighbors on the however. -- if you -- just thinking that because you bought the worst -- clunker home in that neighborhood it's suddenly to be worth more money 'cause it's in great neighborhood. You're incorrect on the flip side of that is if you're buying any fixer upper neighborhood and neighborhood do you think is gonna be hot well you can't buy all -- house's. Com so what you may get one -- a great deal. But unless you're gonna purchase and fix up the other house for the neighborhood that neighborhood might never. Get the values that you believe is necessary to recoup your investment in his one requires a whole lot of math folks you've got to do enough research. Complaining in -- and the overall expenditure and add it all up you can't just go in thinking oh I can. This house all the houses down the street recently sold for 250000 I can -- this not for a 125. And I can put eighty and it. So be you know this much ahead you know -- every 45000 -- -- guess what. You -- unexpected expenses and you just don't know that an awful lot of planning and control with experts who make truly been a lot of math before -- All right -- out renewed those before we got one more coming next app. After the should he stay or should he go segment so hey Craig you're ready I emirate. OK we have about Roger Nashville Tennessee called the hotline with a voluntary I have a twenty year fixed rate mortgage point eight. And it has sixteen years and three months left on the term. I know 186000. And it's worth 250000. Or more. Should I refinance to a fifteen year loan at three and a half percent which the lender says is -- no cost loan or should I pay extra on micro loan. I've always heard you have to save a full point to be worth refinancing. Roger there's another -- for Haiti answers go definitely due to refinance. As far is. The -- in a full point that's complete myth if it is truly you know cost hello Roger it's a good deal. You gotta pay attention that means no cost is they're not rolling the -- in your financing they're absorbing those costs and you just financing the balance plus may be setting up and asked. Her account to pay attention to the man. And day it's -- no cost -- there's no doubt about it you'll save money by going that route. By -- go to back to fuel. All right -- five missed about buying a home -- number one is buying is better than renting not necessarily. Number two. That job purchasing a home is always a good investment not necessarily number three. Three most important factors are location location location. Sometimes but there's little more of that story. And number four. You buy fixer upper in any in a neighborhood that you think is a very nice invaluable neighborhood that you will be your money back guaranteed not necessarily. Ominous flip side of that as some if you are purchasing a home and what you think is going to be an upcoming neighborhood redid theirs and half the the house's or fixed up a nice. Be careful being on the the front edge of that because. Someone's gonna have to -- purchased and fix up those other houses to well for you to realize the potential -- investment in your home. And then the last one is that that this is the one that with his. Probably the last couple years has become more and more. Popular phenomenon to understand that it's -- that may not be true it's that real estate is local. I'm now. We can we can agree -- on the block you live on Omnia. And the neighborhood of the CD and it's in aggregate of those values -- are driven by -- local trends led to alternately. -- national trends are driving them also which includes. The institutional investors that buying a large number of homes battery -- distressed sales. Or around him or or bank owned properties -- arias. And also the fact that -- our economy is such new employment -- I'm on a national basis. The -- of all the information and news that it impacts the psychology of the consumer on a local basis. -- does impact. Every market it's not all about what happens in your local market has really seen here on the news that drives the psychology of the consumer. -- prior to there being such. You don't mean median now social media's really -- mean it's so widespread people here. Oh this is happening nationally they assume it's happening in their backyard or this whether it's good news or bad news so it does affect the outlook on things beyond the local market. All right mark OK so cracked there's a few things that your mortgage lender does not really care about your motive. You're gonna apply for that up purchase -- that refinance gonna. Connect pitcher best deal on the purchase financed transaction or year round he'd listen to show you're gonna do no cost refi. And you've got your your house in order your share all the info we'll hear some things that your lender just really. In the league doesn't really care they may care about it that it's not can be quickly transaction. One is going to be. On that income that is state that is gonna help you qualify. Or maybe it doesn't even help you qualify -- you like to talk about it whether it's you or the part time jobs that. You or your new. Both nephew and senate since chop someone hasn't household. But they're not going to be on the mortgage. Well we cannot tuna can use their income and candidly if it doesn't enhance your ability to qualify when you don't need Yahoo! we'll hear people -- to my wife makes quilts and she -- and it. Flea markets her you know. Whatever and she makes about 500 dollars a month doing that I mean that's great -- if you're not report on your tax return for the last two years and we can't document potential for the future income -- To continue it's not going to be used in non borrowing comes bottom line you know got a family or our Friends of the Earth or. -- -- this is I'll I'll. I'll get on the -- video well if they're not gonna be -- -- you can -- income to qualify mom's gonna live in the now president -- closures are getting checked yep you know I'm an in the one you said that -- the wife makes what or the husband makes patty -- So well every week we're gonna cover paddy -- that's right now that's right also why the lender. -- Qualification it doesn't impact your ability to qualify your race your age and your family status. On the those stone impact that you can be ot it it's amazing through the years -- of the most common. Question asked of me is Cohen is of some and it's a seven year old or 75 they save with a laugh I just wonder if I'll qualify because. For thirty year mortgage why do or do I have to do a fifteen year mortgage 'cause I'm probably not going to be live to be a hundred herself yet folks doesn't logical assumption it'll I've got an 85 year old people come to mean wanted to got a mortgage and elect well I mean I'm not I don't know that I'm going to be around much longer you get it blown this money. Folks we can't discriminate based upon -- we don't know when you're gonna. Exit the year so you call by the same Solis 24 years old OK I'm also -- in income front front that you we've gotten on our income and we got certain kinds of income tax let's say it's a pension victim you take. They you don't receive consistently your retirement income that you look you may take outs upon location lump sum but there's no consistent track record of the etc. I'm just see you know not all income tax the you have if you're not reporting it. A big one is if you're not reporting it to Uncle Sam to terrorists well that income type is not going to be usable for your loan. I'm so -- there are that that all those incomes that may -- and variety of streams. Probably are not gonna be usable or not it be usable unless they're document apple. On and in the last one is this is this is the one we hear probably the most frequent. Craig is one of the reasons that one of the the myths about shopping around for a home mortgages that that the lenders can pull their credit. And they shouldn't shop around because it's in impact their ability to qualify. Right so if you look at it's something that we don't care anything about if you wanna say from lenders perspective is if you. Copy two or three there Linder is not an affect your ability to call five for the -- may be applying for with another lender. You have thirty days. To get those inquiries done and shop around for the best deal for you. And again this Smith was created by lenders basically when he -- competitive advantage by keeping you from shopping around. It doesn't matter if ten people pull your credit on it within thirty day period of time. It's not in effect your scores etc. they are such a threat yet you -- yeah. Don't go apply for a car -- three new credit cards and so I don't know dream and impact your credit success. Our rights and other should he stay or should you go we've got Nancy impart the Missouri called the toll free hotline to ask what is the best way to handle PMI. We can only put down 5% this time and really hate the idea of paying mortgage insurance he's. We have been given the option of monthly -- hang it up front for 3200 dollars or taking a rate that is a quarter percent higher. I'm letting the lender pay the up front -- some detail Nancy -- I don't know how to. Do the math to figure out which is the best deal. I'm thinking if I take a higher rate it will cost you more over the life alone we appreciate your advice. -- -- Cianci an answer when we get back from this next break -- looks like -- it's eighteen.