Down payments, credit scores, and realtors — things every buyer should know about before purchasing a home. In this week’s episode of the Building Interest Podcast, Kerri Mclaughlin, Loan Originator at Leader Bank, and Beverlee Vidoli, Broker and Owner of RE/MAX discuss some of the facts and myths of the homebuying process.

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Episode Transcript

Greg Farber:
Welcome to the Building Interest Podcast presented by Leader Bank, a series of free flowing conversations on a wide range of banking and money related subjects. We are here to discuss all the issues that impact your financial future. Do you want to buy a home, start a small business or secure your financial future? Or maybe you want to maximize your savings ability, get your budget in order, we can help. Our talks with experts and influencers across the world of banking. We’ll set you in the right direction. I’m your host, Greg Farber. Let’s jump right in.

We are back with the Building Interest Podcast. Today we’ll be discussing the most common myths surrounding the home buying process. I’m your host, Greg Farber, and I’m lucky to be joined with a few special guests today, Kerri Mclaughlin, Loan Originator for Leader Bank, and Beveree Vidoli Broker and Owner of RE/Max Realty Experts in Burlington, Massachusetts. Carrie and Beverlee, thank you both for being here.

Beverlee Vidoli:
Thank you for having us.

Greg Farber:
I’m excited to hear your thoughts today. So let’s lay some groundwork. How long have you both been in the home buying industry?

Kerri Mclaughlin:
Beverlee…

Beverlee Vidoli:
Age before beauty, is that the story? Well, I shudder to to tell you that I actually have been licensed since 1979-80 year, and started shortly thereafter, part time, I was a full time teacher at the time, way before the technology of today’s world came into play. So it made it easier to kind of transition from one to the other. But starting in the mid 80s. When I started becoming a mother and wanting to be more home, I transitioned into the real estate full time, and I have never regretted it. I love that I can use my education background in my ownership of a company and training agents. But I really love the process of getting people into homes. And I came from a real estate family growing up. So I guess it was a natural transition.

Greg Farber:
Kind of knew the ropes already.

Beverlee Vidoli:
Well, It was a different world. But yes, I knew the ropes.

Greg Farber:
Kerri, you’ve been here, what we were just talking 13, 14 years now as a loan originator, can you share for our listeners that may not know what a loan originator is, what that actually means and what you do for the bank.

Kerri Mclaughlin:
I meet the clients from the realtors 90% of the time. And then I have to educate them on, you know, what they make per month, in order to afford home.

Greg Farber:
Do they come to you already with an idea of what they want, or you’re part of that decision?

Kerri Mclaughlin:
I would say 50% do and 50% of the people don’t, and a lot of them don’t realize what’s on their credit report, a lot of the time they come in with a preconceived notion of what they can afford. And then they, you know.

Greg Farber:
You kinda have to walk them through what what their credit score is like.

Kerri Mclaughlin:
Right, what their credit score is, what the taxes for the home is, I break everything down.

Greg Farber:
When you’re renting, you don’t think about taxes and things like that.

Beverlee Vidoli:
She carries them through that process. And I have to just interject here because a lot of the time, there’s there are buyers who come to us first and they don’t realize the process they should be going through in the order in which it needs to be done.

Greg Farber:
That’s what I was going to ask if they’re coming from you to Kerri. And you know, they already know they want to buy a house, they know they want to work with you, but they may not know what they’re getting into.

Beverlee Vidoli:i
They know what they want, but they don’t know how much it costs. And then when they start finding out how much it costs. The first thing a realtor should be telling them is to get pre approved. We just went through this yesterday, and the buyer gave me some information. But you know, in today’s world, we don’t as Realtors get into the financial complexities of somebody’s due to privacy due to privacy rules, and so forth. So we get general information, but then I quickly turn it over them over to Kerri, and Kerri has been great at setting people’s expectations on what they can and cannot do. As far as you know, their mortgage part part is now what they might have, in addition to that is something that she can explore as well.

Kerri Mclaughlin:
I think breaking down the payment for the customer between taxes insurance in the mortgage payment is definitely something that they don’t realize when they put it on…

Greg Farber:
Something they don’t do on their own, perhaps, when their sitting at home dreaming about buying a house.

Kerri Mclaughlin:
No, they look at it and say, but the rates are so low, I can afford this $600,000 home and then when I break it up monthly and the down payment and what they have to pay for it sometimes will slowly turn into more or less depending on what they make per year.

Greg Farber:
So really what I’m hearing is that you have very different roles obviously and to sort of paraphrase you find the house and you find the money, but it doesn’t work one without the other. You have to work it together. So that the right house can be found with the right amount of financing a down payment and things to make that that exactly happy.

Beverlee Vidoli:
So sometimes it works that we find the house and then that’s when I’ve met the buyer. So now we go to Kerr’s role. Oftentimes, before I even do that it goes to Kerri, and then it comes back to me. So to make my role more efficient, and hopefully quicker.

Greg Farber:
So in a slightly different direction, to me, and I see so many friends and colleagues that change jobs every few years, sometimes every few months. I think maybe that’s just an indication of today’s job market, or shifts in culture and things. But to me, one of the most impressive things that I’ve heard so far in our conversation here, today’s both of your backgrounds is how long you’ve remained committed to your respective roles, your companies and everything else. And Kerri, maybe I want to start with you. Obviously, there’s a lot of banks and mortgage companies around and you’ve had different managers, different team members around you all of this. What is it that keeps you at Leader?

Kerri Mclaughlin:
I love Leader, I think Leader checks all the boxes for me and my clients and my realtors. If it’s family oriented. They have amazing, amazing staff, underwriters, closing departments, I think the main thing about Leader is, I have to work with a team of realtors and attorney. So when you talk to a realtor or an attorney that you’re you’ve been doing business with for years.

Greg Farber:
So let’s let’s slow down for just a second for any of our listeners that don’t know, why are we talking to attorneys during this process?

Kerri Mclaughlin:
So the attorney in Massachusetts needs to close the loan for you.

Greg Farber:
Okay, so just like you need a realtor to find the house, you need a lender to come up with the money, you need a personal attorney, that’s going to close that transaction for you.

Kerri Mclaughlin:
You need an attorney to close the transaction, we need the attorney to run the title for the home, make sure it’s clean.

Greg Farber:
So you have all these different teams, all these moving parts. And so how is Leader keeping you relevant and keeping you successful in that?

Kerri Mclaughlin:
Oh, my gosh, Leader has such a wonderful name for themselves. My underwriting staff and my definite processing staff, and my manager literally could not be the best, it’s amazing. And they’ve always been so wonderful to me.

Beverlee Vidoli:
I am gonna jump in right now, because I have worked with a lot of banks. And there are some really good banks out there. And there are other banks that really don’t have the backup staff. The professionalism, the the proficiency that they work under. And every I’ve had some difficult transactions that I know were made possible for these buyers, because of the knowledge base, that Leader has. But not just the loan originator because things transition off of her to other departments. And it’s them working together to make that dream come true. It’s it’s not about the money, it’s about how it’s put together as a team, and to make that dream come true.

Kerri Mclaughlin:
I definitely think everybody that’s in their role is, you know, a master in their role.

Beverlee Vidoli:
I think from my standpoint, as the person who puts the deal together, you have to have a lender who communicates, communicates with the borrower, because one of the things that can happen and it happens everywhere, less frequently at your, you know, from your your bank, but it does happen that everybody thinks when they get that application complete, it’s been processed, and it’s going through gets to underwriting, they don’t always expect that something else is going to be needed. And so you get that email that says that we need, you know, it’s it’s been reviewed, but we need two or three more documents. It’s the communication explaining to them, that this, this is going to help benefit your loan approval. And they do that they’ve made you know, Kerri’s always been the one that oftentimes they’ll come to and ask for why do we need this, I thought we thought we were complete. So she actually gives them an explanation. So they understand.

Kerri Mclaughlin:
You have to give them an explanation, especially, you know, when they’re already stressed out buying a home.

Greg Farber:
If they understand what they need, or why they need it, they’re much more likely to give it to you.

Kerri Mclaughlin:
100%. And without, you know, reservation to do it.

Greg Farber:
So then, let’s talk about, I guess, for lack of a better word, some myths around home buying, right? So lift The lift the curtain a little bit and let’s talk about maybe if things are easier, or perhaps even harder than then they might be perceived. So I’ll start with historically there’s this perception that you need 20% down or you can’t buy a house. And we in the industry, we know that isn’t true. But can you tell me if that belief is still as strong with with your client base, as it was, say 10,15 years ago? Is that changing? And what tools do you have to kind of work through that to to get customers over that hurdle of, oh, I’m worried that I don’t have enough money to start this process.

Kerri Mclaughlin:
I think that’s where Beverlee will send me the client and I have to pre approve them, and I have to dive in and say, you know, what were you expecting to put down? What were you not? 20% is a huge myth that they have to put down. We have so many programs right now. First time homebuyer programs, home ready, home possible, FHA, Mass Housing. I mean, I could go on.

Greg Farber:
Realistically, how much could you put down?

Kerri Mclaughlin:
3%.

Greg Farber:
That’s a lot less than 20%. That opens the door for a lot of people that might not have considered that they’re ready for that.

Kerri Mclaughlin:
100%, I mean, you can put down 5% 10% 15% theres a program for every percentage down.

Greg Farber:
Beverlee, do you find when people come to you that they have that preconception that they still need 20%, and then you have to send them to carry and say that’s not true?

Beverlee Vidoli:
Well, they worry that they’re not going to have enough money down. And so they can’t get the house of their dreams, or at least some of the features of it. And so I let them know that that’s a good possibility. The beauty, if we have to find something good out of the change in the market over the last couple of weeks, is that people can still come in with lower down payments, and be competitive in the market, there was a period of time where yes, the programs were there with low down payments, but they were up against competitive offers that were stronger. So you try to work out ways in which we can make them more competitive. And Leader has been offering new programs, and creative kind of programs that have, I think, been in the forefront of what a lot of other lenders can do.

Kerri Mclaughlin:
I think the number one thing is when we do run a client’s credit, you have to sit and look at their credit.

Greg Farber:
Have a conversation with them about whats on it and what it means, why its impactful.

Kerri Mclaughlin:
And our credit reports are done so well. As a consumer, they might not be able to read it and say I get what you’re saying.

Greg Farber:
But with you to walk them through it,

Kerri Mclaughlin:
But talk them through it. And then we know how many points are available. If a card is maxed out, and they pay it down a little…

Greg Farber:
Which again, could increase their ability to get a particular program they’re looking for or something like that.

Kerri Mclaughlin:
The first time homebuyer programs are definitely limited to income limitations and credit scores. So you do have to meet in the middle. But I feel like a lot it. It’s a big range. A lot of people can get into these programs.

Greg Farber:
Now I know before I was a homeowner, I firmly believed that it was cheaper to rent than to buy my boss at the mortgage company that I worked at 20 Some years ago, he kept sending me information on homes that he saw coming across the market and I was missing out and I was the one that the you know, didn’t didn’t buy a house. And I resisted. And I thought I knew everything because you know, 20 something and of course I knew everything right. And I too I thought that it wasn’t affordable. But then once I did and once I became a homeowner, I it started to dawn on me how this whole time as a renter, I was paying someone else’s mortgage instead of my own and building my own equity. Do you hear that resistance from customers that there’s this myth that it’s cheaper to rent than to own and and how do you get over that hurdle with with potential clients?

Kerri Mclaughlin:
Right now what I’m hearing is, it’s the best time to sell just because of this particular market.

Greg Farber:
Right, the current economy.

Kerri Mclaughlin:
The economy that we’re in like, right this minute, they say, Oh, I’m gonna sell because I’m never going to make this much money. However, on the in-turn, if you look at what rent costs, you need a six month to a one year lease, and it is probably double your mortgage,

Greg Farber:
And you can’t get out of it either.

Kerri Mclaughlin:
And you cannot get out of it.

Beverlee Vidoli:
without penalty, without big penalties.

Kerri Mclaughlin:
And then you’re stuck. You can pay something because you’re in a lease.

Greg Farber:
Right, you’re tied up to a certain date.

Kerri Mclaughlin:
So that money that you made, because you sold right now is going to rent within four months. So I do feel that most people don’t feel like renting is number one right now, just what I’ve gotten to hear. Because rent is so expensive. Was it like this 10 years ago, no, you’d have to convince them that you are buying a house, it’s going to be yours. It’s a phenomenal savings account. It’s a phenomenal investment. You know, it’s going to be yours, you’re building your credit, your equity, and when you sell it, there’s money there.

Beverlee Vidoli:
When I get the opportunity to talk with somebody about rent versus buy. It really, it really comes down to what their lifestyle is what they want. The sellers that want to take advantage of the marketplace, do have the challenge of where they’re gonna go. So, again, Leader has programs now that have addressed that and been able to helpfully make it possible for them to be able to purhase and then sell afterwards, when people are looking at the first time home, and they’re coming out of an apartment, and they are realizing that they’re paying someone else’s mortgage, because their parents and everybody else I’ve told them that, have to be realistic about where they’re going to start and how and how they can afford it. So that’s where the, the analysis and the process begins. But I often tell people, that there’s no reason why you can’t purchase the property. And if in three years, or even, you know, stay after, say, two years, otherwise, there might be some tax implications. But after two years, if it’s not the right lifestyle for you, you can move on, I try to explain to people that look at the different type of types of loans out there right now, right now with the interest rates climbing, you don’t have to be at a fixed loan, you could be at a 10 year ARM, which gives you a long period of time to watch the track and and you build your equity, but you’re also building your income. And hopefully, in 10 years, you’ll be able to lock in if that’s what you want.

Greg Farber:
So I want to jump back quickly to something that you said earlier, we talked about cycles, and I’m thinking about shorter term cycles now, just annual seasons. And we always talk about there’s a hot spring market or a summer market, when everybody’s excited to go out and find a new home. They’re, I don’t know depressed from winter, and they want a new start or something. But when that tapers off, how do you both manage expectations? And how do you you kind of make sure that your clients can get what they need and find what they need in the fall in the winter, when maybe the market isn’t so hot? How do you how do you balance that?

Beverlee Vidoli:
Starting with the inventory. It depends on what timing people have, there was a period where people were looking so long to find their next step, that it might not happen until the fall. And so they had to deal with that, that timing. And rather than holding on to two homes until spring market, it made sense to put it on. But you can utilize with all the technology and the way we advertise and photograph properties. I often ask people if they have if it’s if it’s a winter time listing or a fall listing, do you have pictures of the house in the summer, in the spring when everything was in bloom, and we’ll incorporate that into our marketing pieces. So people can see how lovely it is, at that time. And I actually just on one of my current listings, I used a picture from the fall from the winter, a snowfall picture that was just beautiful with a sunset in the back. And it it was it was beautiful enough to put it in my springtime marketing piece that we were doing. And it was appreciated. The the real issue it for people is curb appeal. So if you’re if you’re taking care of your property in the fall, and you’re doing a fall cleanup, and the house looks good, then by the time you get to the winter, the house is still going to look clean and groomed. But if you’ve not been taken care of it, then we have to I have people that I’ll call in that will help do as much of a cleanup as we can possibly do. Because curb appeal is important.

Greg Farber:
So the myth to buy a house in the spring or the summer really isn’t necessarily true. It’s all about the presentation and how it becomes available.

Kerri Mclaughlin:
In the years that I’ve been doing loans, we always used to get ready for the spring market, like you just said.

Beverlee Vidoli:
It’s still the highest. It’s still the highest volume.

Kerri Mclaughlin:
But i feel like it definitely has tapered off because it is year round. And it is inventory based. Definitely. And right now, if you know, towns that used to have 250 homes on the market, at any given time had eight,

Beverlee Vidoli:
We can have adjustments of inventory and adjustments of the buyer pool in the middle of the summer in July. As much as we can have it in you know the beginning of the winter and December and through the winter. It’s really when people need to go and what their expectations are the majority of buyers are looking for a place that they feel comfortable that they can live in.

Greg Farber:
But this idea that there’s myths around home buying that maybe I don’t have enough of a downpayment or I shouldn’t be buying at this time of year or I I don’t know if it’s the right opportunity or whatever. Throw that all out. When I talk to talk to someone talk to a professional find out what the inventory is find out what your credit and your loan situation would look like.

Beverlee Vidoli:
Get prepared. So who you choose to work with has to be an important factor both in the lending and in the purchasing.

Greg Farber:
It certainly sounds like it.

Kerri Mclaughlin:
I feel like you have to be available. I think my phone goes off every day, 7am to 10pm.

Greg Farber:
And yet, like you said you love it.

Kerri Mclaughlin:
I do, I’ll take a call whenever you know that.

Beverlee Vidoli:
It’s having people that will respond and be involved in what you’re doing. Because the reality is that especially this past year and a half, real estate is 24/7. You don’t get weekends like we used to because of the competitiveness of things. So you have to be able to work with a person in a schedule that that meets the demand of the marketplace

Kerri Mclaughlin:
Agreed, you have to be available.

Greg Farber:
Well, listen, I really want to say thank you for both being here. Today, I had a blast, I thought it was great hearing about your experiences and all the different sort of options that are available. And maybe this whole process isn’t as as overbearing or hard as some people might perceive it to be. And I hope the listeners got that same message from us. Any closing thoughts you want to leave our listeners with and again, thank you for coming on today.

Kerri Mclaughlin:
I think the myth that you you know, our whole subject today is putting 20% down, that’s not the truth, you can put down very little. But I think you have to be educated in all the different points of the mortgage.

Beverlee Vidoli:
And I think the team effort of having the right Realtor having the right mortgage company and having the right attorney who’s gonna who are going to walk you through the process. So take the time to really know the background and the knowledge level of the person that you’re working with. At any one of those levels of particularly in mine, I think because we’re the we’re the core of finding the property and support system of the lender and the attorney are important.

Greg Farber:
Well, thank you both so much.

RE/Max Realty Experts is not affiliated with or owned by Leader Bank, N.A. and all opinions expressed by Beverlee Vidoli are her own and not the opinions of Leader Bank. For more information on today’s subject, visit leaderbank.com. In addition to past episodes, you can also find our corresponding blog entries for more insights. This podcast is a production of Leader Bank, N.A. equal housing lender. Member FDIC. NMLS #449250.