Ep. 14_Rent vs. Buy? How to decide with Matt Bassett

Hear from mortgage loan officer Matt Bassett while he describes the difference between renting and buying when it comes to the financial side of purchasing a home. Learn about different loan programs to help first time buyers and how buying a home can help you with future home purchases.

Matt Bassett: [00:00:01] Obviously, this was 8 years ago, I think we paid $141,000.00 for that house. You can't buy a house nowadays like that. It doesn't exist. The cost, the demand - everything's gone up. In our same subdivision, they're selling for about $245,000.00.

Chelsi Frazier: [00:00:15] That was the voice of Matt Bassett, loan officer with Trinity Oaks Mortgage. He's talking about the benefits of buying vs. renting when you take into account appreciation. He's our guest on this episode of Welcome Home.

Intro: [00:00:30] Welcome Home, a podcast brought to you by John Houston Custom Homes. Join hosts, Chelsi Frazier and Whitney Pryor, as they walk you through the exciting adventure of your home buying and building journey.

Whitney Pryor: [00:00:45] Thank you for joining us on today's podcast. This is Whitney and I've got Chelsi here with me. Hi, Chelsi.

Chelsi Frazier: [00:00:51] Hi!

Whitney Pryor: [00:00:51] How are you doing today?

Chelsi Frazier: [00:00:53] I'm great today. How are you Whitney?

Whitney Pryor: [00:00:54] Good! Today we've got a special guest with Trinity Oaks Mortgage. I'm really excited to talk with him some topics that we get asked all the time on the homebuilding side. Chelsi, why don't you tell us a little bit about our guest and who they are.

Chelsi Frazier: [00:01:11] Today we're talking to Matt Bassett. He is a loan officer with Trinity Oaks Mortgage. We've had some really great guests on the podcast from Trinity Oaks Mortgage. Matt is just another one of those really great experts. He's going to talk to us today about rent vs. buy, the benefits of buying vs. renting, what those numbers look like, and really just give us a good understanding of the pros and cons of both. Welcome to the show, Matt Bassett.

Matt Bassett: [00:01:41] Thank you guys for having me. I'm pretty excited about this opportunity. I'm glad to hopefully make a difference and just have fun with you guys.

Chelsi Frazier: [00:01:49] Yes, we're excited too! You're also excited to surpass the podcast numbers from your coworkers, right?

Matt Bassett: [00:01:56] I agree with you. I would be concerned if I was the President of this company, that I would have my own YouTube channel after this. I heard YouTuber's make quite a bit of money. We'll send this into all the major producers around here and we'll see what we can make happen.

Chelsi Frazier: [00:02:17] That's awesome. Matt, tell us a little bit about yourself.

Matt Bassett: [00:02:21] My name's Matt. I've actually been working with Trinity Oaks Mortgage, as of today ,for 4 years.

Whitney and Chelsi: [00:02:28] Congrats!

Matt Bassett: [00:02:28] Thank you, thank you. I started out as a loan officer here and luckily I still am a loan officer here. It was a big career change switching over to a loan officer. I am a loan officer, a preferred lender for John Houston Homes. We've been partnered together since inception, essentially. One of the things I love working about here most, is working with individuals and taking them through one the largest purchases they'll make in their whole lives. Hopefully, we can ease the concerns they may have and be there for them , like a life counselor walking them through the steps.

Whitney Pryor: [00:03:06] First of all, I don't mean to be rude, but how old were you when you purchased your first home?

Chelsi Frazier: [00:03:11] He looks pretty young now.

Whitney Pryor: [00:03:11] He looks like a baby.

Matt Bassett: [00:03:18] I actually purchased my first home when I was 20. I was a senior in college. I was blessed to have a job as a realtor. I got my license when I was 18 years old. Rent was obviously a little bit cheaper at college than if you were staying in a normal apartment, so I had the opportunity to save as much money as possible. When the opportunity presented itself with John Houston Custom Homes to be able to build our own home, I was like, "let's do it!" What I was paying in college for rent is one thing, but in the real world, I could actually purchase a home for a lot less monthly payment than renting a home. There were a ton of tools at the time. Trinity Oaks Mortgage didn't exist at the time, so we did use another lender. They walked us through the steps of a first time homebuyer program. It made me realize, you know what, I can afford this house. I don't have to save this large bulk amount of money. There are tools out there that were given to me, as a first time homebuyer, that made me realize that I can make this happen and better my family.

Whitney Pryor: [00:04:26] Yeah. I know that's probably not the norm or the case for everyone. Being a realtor, obviously you're super driven and that's a really admirable quality. Most first time homebuyers are probably going to be somewhere in the 24ish age range before they start even considering the purchase of a home. Can you give us any advice maybe to that age group of people? Would your advice be to just jump and make that purchase? What kind of advice can you give us based off of that?

Matt Bassett: [00:05:00] Yeah, 100%. I think it honestly depends on your life circumstance. Obviously, the first thing is, if you're single or married with the family, that's one thing. I know people are marrying at a younger age nowadays, which means they're trying to start their life sooner than later. If you're just getting out of college, you're looking for that first corporate job, I know getting the first job is the hardest thing to do. The last thing you want to do is worry about where you are going to live? What can I afford to do? This is probably your first big step in life that you're going to do. We actually have first time homebuyer programs that give you a down payment assistance that essentially cover all of your down payment and probably 50 % of your closing costs. We know how hard it is. If you're paying for your own college and going through school, then you're not going to have thousands of dollars sitting aside. You may be able to afford the monthly payment, but having the actual funds is another story. We partner with multiple companies for the Down Payment Assistance Program. We also work with John Houston Custom Homes. They have different incentives and abilities to pay for closing costs and rolling closing costs. That way, you come to the closing table with basically your initial deposit. That makes a huge difference on people's lives. Whereas, if you're going to rent a house, you're going to pay your first month's deposit anyways. Essentially, you're doing the same thing, but you're owning a home. Owning a home and owning a car are two different things. When you own a home, you're building your life and memories. It's something that you're going to treasure for a long time.

Chelsi Frazier: [00:06:41] I think there are more opportunities to buy a home when you're younger and have the ability to work from home. When you're fresh out of college or you're one year into your new career, but not sure if this is where you're going to be forever, do you want to buy a home in this city? I think the times that we're in now, it's even more of a possibility to make that decision than it was when you may have to relocate for your job. I think that's important for people to to think about.

Matt Bassett: [00:07:08] Obviously with everything going on right now, I would say a majority of the percentage are working from home. You have your own home office and you're not worried that you're going to be moving to another city miles and miles away. Yeah. Today's age is a lot easier for individuals to stay in one place.

Whitney Pryor: [00:07:30] We've had several families that are moving from California because their jobs have gone 100 % remote indefinitely. They're like, well, we're just going to move to Texas where we can afford more, have more land and still work for the same company. They were excited to bust out of California and get to Texas.

Matt Bassett: [00:07:51] You're buying houses for half the price down here and you're still making the same amount of money. I actually had a couple who just closed from California. The story is, if they bought this house in California, it was about three times the price of what they were paying. They were able to move here, pay over half less than their monthly payment and still keep the same income. The amount of opportunities that they're going to have in life now are just crazy.

Chelsi Frazier: [00:08:21] It's going to change a lot for us, I think, in the industry.

Matt Bassett: [00:08:23] Yes, 100 % so. We're learning to adapt to everything, but also with colleges, essentially, you're worried that you don't have the job history. That's another thing I wanted to talk about. Let's say you go to college, you start your first job, and you don't have a 2 year history. Typically, you need a two year history. We can actually use your college history in your college transcript as a job history for qualifying. You think that maybe you have to work at a place for a year before you can buy a house. No, we actually can use your college transcript as a job history, essentially, knowing that you already working at a place.

Chelsi Frazier: [00:09:01] I didn't know that!

Whitney Pryor: [00:09:03] Does it have to be the same line of a degree to some extent? If it's marketing, you probably should be somewhere where you use marketing

Matt Bassett: [00:09:09] It does. If it's marketing and you're a farmer now, then that might be a problem. There's obviously guidelines that we have to follow. They try to make this as easy as possible for first time homebuyers. They understand college students, millennials and how important it is to be able to help them buy a house.

Whitney Pryor: [00:09:32] Yes. I think that Down Payment Assistance Program that you talked about is a huge one for the younger age group. They don't have savings. They're just starting their life. They think it's insurmountable amount that they have to save up. To know that there's programs out there to help with that is just really big. I think once you make that first purchase, it's so much easier on the next purchase, because you hopefully have equity in your home. You're able to take that money and put it towards another one. It's just you got to get in the game, right?

Matt Bassett: [00:10:04] Exactly. When you make the purchase, you're putting money towards your loan amount, instead if you were renting, you're putting your money towards nothing, essentially. You're building that equity as you live in that house. I think a good example, is one of the John Houston communities that I was working with on with one of my salespeople in Waxahachie. The house they were trying to sell was $244,000.00. The estimated monthly payment, was around $1,650.00. If they rented that same house out, that monthly payment would have been about $2,200.00 A month.

Whitney Pryor: [00:10:36] Wow!

Matt Bassett: [00:10:36] Yes. When you buy a house, your payment is going to stay the same. It's fixed, which means, we're not going to change the interest rate, we're not going to change your payment. If you're renting a house, that rent can go up. Houses are appreciating. It's going to keep appreciating. As houses appreciate, your rents going to continue to go up, because that's how the market is. That's another thing. When you own the house and everything's appreciating, 3 or 4 years from now, hopefully you're going to make a good amount of money when you go to sell it, to where you can put down a large amount of money on maybe a bigger house for your family as you're growing.

Whitney Pryor: [00:11:14] You're not only thinking about, okay, this is what my monthly payment on my house, but you also have to think about how much that house is appreciating in value as well, right? It's not like you're making that $1,650.00 payment, then at the end of four years, that's exactly what you're selling your home for. Your home value is usually also appreciating in value somewhere in between 7% to 9%, somewhere around there on the market?

Matt Bassett: [00:11:45] I can actually give you a personal example. Our first house we bought was in Settler's Glenn in Waxahachie. I think we paid. obviously this was 8years ago, I think we paid $141,000.00 for that house.

Whitney Pryor: [00:11:57] Wow.

Matt Bassett: [00:11:58] You can't buy a house nowadays. It doesn't exist. The cost, the demand - everything's gone up. In this same community, they're selling now for about $245,000.00. This shows how much the houses appreciate over time. Everybody's forecasting that it's going to keep on appreciating. If you think construction is going to slow down, which means the houses are going to depreciate maybe 2 years from now, I can buy the house for less. Unfortunately, based off everything forecasting, you buy now and it's just going to keep appreciating. You'll be that person who sells in the future to basically set yourself up for another opportunity to build or buy a house.

Whitney Pryor: [00:12:35] It seems like the longer you wait and the longer you hold off, the longer you're delaying that process of being able to build your investment, your real estate investment.

Matt Bassett: [00:12:47] It's a risk. It kind of depends who you talk to. A lot of financial advisors will say, you can't consider your house as an investment. I think in this particular market where we're at right now in Dallas area, that's a totally different story. All 3 homes that I've owned, have all appreciated from the time I've owned them. It may be just personal experience speaking. You can just tell from history, if you look at charts, everything has gone up in pricing and selling for more. It's just going to continue. It's going to be beneficial to the sellers whenever they sell for the future.

Chelsi Frazier: [00:13:26] Let's talk about interest rates, how they're currently pretty low and what difference in your monthly payment that makes? That's important when people are trying to determine what monthly mortgage they can afford.

Matt Bassett: [00:13:38] Yeah, a 100%. In this example, we're going to use the same $244,000.00 house we talked about previously. On that house in today's market, we're at like a 2.875% for an average interest rate. We have some that are lower, some that are higher, but that's about an average rate right now. That rate's incredible. We haven't had that low of rates in 4 or 5 years. It's just out of this world! If you look at about a year and a half ago when rates were a lot higher, let's say 4.50% rate, you're probably paying about $200.00 more a month on your monthly payment. Yes, that's still less than what you would be renting, but how the market is right now, it's that time to buy. The amount of money that you can save over the life of the loan with that lower interest rate is tens of thousands of dollars. It's just ridiculous. Many people are refinancing right now. The people who don't own a property right now, one of the big selling points is they can buy a house. They may think that you can only buy a house for $250,000.00. Because of where these interest rates are, they're actually able to afford a $300,000.00 house or so and have the same monthly payment they thought before, which is just incredible. That's an extra bedroom or an upstairs to pay for. I think that's a big thing to look into when you're buying. Take into consideration when you're buying a house, with the market, how long is it going to stay like this? Hopefully, as long as possible. As of right now, when we're speaking in the present, those low rates, you just can't beat it. It's pretty incredible.

Whitney Pryor: [00:15:16] It's interesting to think to, wasn't it in this maybe 70s or 80s, the interest rates were somewhere around 14% & 15%. To think that our interest rates are 2.875% is just crazy, because people "back in the day," I say in quotes, which is not that long ago, we're paying just this crazy amount of interest rate on their homes. Now, they're able to get a home with that interest rate and it is just crazy!

Matt Bassett: [00:15:44] Yeah, I mean, honestly, being 28, I would have no idea what it was like in the 80s. The black and white movies back then, I just didn't know. I can speak from my parents perspective, basically the houses they purchased, speaking of a 10% and 12% rate. We tell them now, the rates are 2.875%. It's like basically they're giving you the loan. I mean, it's not for free, but compared to history, it's essentially like they're giving you the loan basically. It's just crazy. We talked about first time homebuyers before, but you also have individuals who are looking to retire. They're looking to downsize. They also are use to that larger interest rate, maybe not the 10 %. Let's say the last house they bought was 6 or 7 years ago and they're at a 4.5% or 5%. They're looking to downsize to a smaller home. The kids are out the house, grandchildren and everything like that. They're shocked to find out the rate is a 2.875%. It's just some of the stories I hear from these customers are just crazy. Their payment histories and everything like that from whenever the rates were a lot higher. People have even had tears on the phone, which is just awesome. It's honestly a blessing to a lot of them and it's a blessing to us to be able to present that information to them.

Whitney Pryor: [00:17:09] I want to take a second and remind you that this episode is sponsored by Trinity Oaks Mortgage. Trinity Oaks Mortgage is a part of the JH Family of companies and offers many different loan programs to suit your needs. For more information, you can visit their website at TrinityOaksMortgage.com NMLS number 1443326. They are an equal housing lender.

Chelsi Frazier: [00:17:35] Real quick, can you tell us about the process for finding out if you can even qualify for that low of rate? I think the pre-qualification process? When I was renting, it seemed very confusing and I didn't even know where to start. Is it really that hard to just call and say, hey Matt, here's a few pieces of information. Can you tell me where I could even be looking and what are the numbers?

Matt Bassett: [00:18:00] Sure. I'll take you through the easiest step process. This is what usually happens. You go out to a community, you go into the model home and you talk to John Houston salesperson. You tell them you're ready to buy this house and you love it. What are the next steps? Normally, 99 % of the time, the salesperson either will text you our mobile app right on the spot or they'll give you the link to our website. It takes 10 minutes to fill this application out, 10 minutes. All right. We will usually have an answer to you within a couple hours.

Whitney Pryor: [00:18:30] This is what you would call the prequalification.

Matt Bassett: [00:18:33] Exactly.

Whitney Pryor: [00:18:34] It's just going off of what you tell us in that app. How much you make, what your name is, etc. You run a quick report.

Matt Bassett: [00:18:43] 100%.This is basically just a verbal prequalification letter. We're not going to request a bunch of documents from you guys. If you're self-employed, there are different circumstances with that, obviously. For a normal individual who's salary or salary based pay, we will issue the prequalification letter based off of pulling your credit score and the information that you give to us. I mean, it's very, very simple. Most of the time, we've had people fill the application out while they're in the model home and they give us a call. If they need an answer within the next 20 to 30 minutes while they're still looking at the community. We can do that for them, that's not an issue.

Chelsi Frazier: [00:19:18] That's nice while you're out and you're looking at the house and. I don't want to look at this if I can't even buy it.

Matt Bassett: [00:19:23] Exactly. You don't go to the grocery store to buy groceries if you know can't buy it. You may have that concern if you can buy it. This is obviously a lot bigger investment than groceries. When you're looking at houses and find out that you do qualify for this house, that's a sense of relief knowing that I do qualify for this house. I'm not going to have any issues. We can answer monthly payments right there on the spot. Let's say this house is $310,000.00 and we give you the monthly payment. You say, we are kind of uncomfortable with that payment. We can get you to where you need. John Houston Custom Homes can work with you as well. Where you need to be to find that perfect floor plan and perfect house to make it work for you.

Whitney Pryor: [00:20:11] It's not just about finding out how much you can qualify up to. It's also talking through what you're comfortable with, based off of what maybe vehicle payments and other things that you have. What are you comfortable paying per month? You might be qualified for $400,000.00, but that doesn't mean you want to spend all of it, right?

Matt Bassett: [00:20:31] Exactly. Exactly. It's kind of based off the customer. Let's say you have a customer who's putting down a lot of money on a loan. We'll give you the recommendations in the sense of, hey, maybe you shouldn't put down this much money. Put down this amount and then apply the other funds towards paying off these other debts. Overall, you'll save a lot more on your monthly payments. Instead of saving $600.00 on your monthly payment with the house, you may be able to save $400.00 on monthly payments on your house and pay off $500.00 worth of monthly payments on your other debts. Overall, the net amount of your monthly payments is a lot less. When we get your application, that's when we can figure out what programs you qualify for. We see that pretty fast, so we can answer those questions for you. We can get you how much your estimated cash close is going to be.

Whitney Pryor: [00:21:25] I purchased a home with Trinity Oaks Mortgage, my first home, last year. I can say I was scared to death, even being in this industry. I was scared to death of the mortgage loan process. I think a lot of younger folks are probably too. Where do I start? I don't know how it works. I would research to death YouTube videos. How does this work? What does it do? It was really simple. It was not as complicated as I thought it was going to be. The pre-qual came back so fast. I was like, that's all, that's? I'm just really surprised by how easy that was. Combine that with your mobile app is amazing because it's literally step by step of every document you need. I was able to kind of prioritize and say, okay, I need to work on getting this and this. I haven't uploaded that, so I need to go find that. It was one place to have all the documents. I just felt like it was very smooth and a very easy process to go through.

Matt Bassett: [00:22:27] I think a big thing about that is, when you're purchasing a house through John Houston Custom Homes and you're working with their preferred lender. Trinity Oaks Mortgage, you have multiple people working with you to accomplish the same goal. We all want you to get into this house and we all want you to be happy while doing it. If you have a question on the home side, you can always ask me that. I would be able to answer it as best as possible. If you have a question on the mortgage side, you can ask your salesperson, but they'll probably refer back to your loan officer. At least you know that somebody's looking out for you where if you were, possibly working with a different lender, you may call them, but you may not hear from them. We have our cell phones on us. You can text us. We're always available. Any information that we get, we can always relay it back to the salesperson. You know that at least everybody is touching that one piece that you're trying to accomplish.

Whitney Pryor: [00:23:18] I always know when you're at the office because I see you doing laps around the building. He's always on his phone on your Air Pods, walking around, pacing around the building. I can relate to that because I have a worn pattern in my house where I just walk in circles around my house on the phone.

Matt Bassett: [00:23:37] It's one of those things where when you get a phone call , I'd rather go for a walk while making that phone call, than sitting at my desk. I've learned since working a desk you put on weight. I've tried my best not to be that dad with the dad bod. Unfortunately, I am not accomplishing that goal. We'll see how many walks it takes in the day to hopefully melt this fat away. I have two daughters. I have an eight month old. When my other daughter got to 5 years old, we could do a lot more outside. We could run around. Now, I got the 7/8 month old. You can't just set her down on the ground outside.

Chelsi Frazier: [00:24:20] I can see you strapping her into one of those backpacks.

Matt Bassett: [00:24:24] A little papoose on the front. I have her in there. We go for our walks together. I have her little sunglasses on. She's a rock'in the shades.

Chelsi Frazier: [00:24:34] In closing Matt, tell us a little bit about Trinity Oaks Mortgage. What makes TOM, as we affectionately call it, stand out amongst the rest in the industry?

Matt Bassett: [00:24:45] First off, we have an awesome acronym, TOM. Not many companies have a first name for their acronym, so that's a stand out point itself. More from a company standpoint, we actually care about our customers. We're not saying that other loan officers don't, but we strive to make sure that we give the best customer satisfaction possible. To put it in an example, if we get less than a 9 out of 10 on our customer surveys, we truly break it down. Our branch manager calls the customer. We sit with them and we take notes on what we could have done better for next time. We know some people aren't going to give 10's, but it's more of a learning standpoint. Communication wise, we work probably 24/7. It's one of those things where, unfortunately from a family standpoint, but fortunately, from our side, that means we actually care. We actually want to get the job done. We truly do want to make sure that we're there for the customer. I mean, you shoot us the text, you're going to get a response back. You give us a call, we don't answer and you leave a voicemail, you're going to get a call back and email. As I mentioned before, we have other loan officers who will help you out. Let's say I'm out of town, someone else is going to step up to the plate. Where, somewhere else if that person is out of town, you may not hear from them for 3 or 4 days at another company. That's another thing that, you know your file is always being looked at and your loan is always being concerned for. We have in-house underwriting. We have in-house processing. You don't have to worry about timing in the sense of, your information's going to a whole different company to do different steps in the loan process. Our company has the technology basically to hopefully make it customer friendly, with the mobile apps and our applications online. You download a mobile app, you can fill the application out on your phone and submit it. It takes 10 minutes, super easy and you know that it goes directly to us. Another thing is, you can upload documents through that mobile app and know that it's secure and encrypted. You have the document in front of you, take a picture, scan it and it goes directly to our portal essentially with your loan. You don't have to worry about somebody hacking into our emails. You don't worry about faxing it or mailing it. You know that document goes directly to us in our system.

Chelsi Frazier: [00:27:04] I'm surprised you know what a fax is.

Matt Bassett: [00:27:06] My grandma talks about it sometimes. It's one of those things where she says something about dial up or whatever that means. I'm not really sure, honestly.

Whitney Pryor: [00:27:16] She rides the dinosaur fax machine.

Matt Bassett: [00:27:19] I tell her she's put more fuel in her horse and wagon when she goes into town. It's just exciting, honestly. We truly love our job and we truly do love working with these customers. When most people buy a house, they buy and they close within 30 days. When they're buying a house with John Houston Custom Homes, we work with them for a 9 month period, s not only are we helping them from a business standpoint, but we get to know you on a personal basis. We get to know you. You tell us stories about your kids or your family. We just want to make sure that the whole process fulfilling for you and that we didn't miss anything or could have taken the opportunity to go the extra mile in the end for you.

Chelsi Frazier: [00:28:02] Well, thank you so much, Matt, for being on the podcast. It's been very helpful today.

Matt Bassett: [00:28:05] Yes. Ladies, I appreciate. Thank you for having me. It's been a blast!

Whitney Pryor: [00:28:09] Well listeners, that's a wrap on this episode of the Welcome Home Podcast. We thank you for listening to us today. If you want additional information about Trinity Oaks Mortgage, please feel free to visit their website at TrinityOaksMortgage.com. We will also leave information for Matt Bassett in the show notes of this episode. If you need additional information about John Houston Custom Homes, please also look at our show notes. Our web site is johnhoustoncustomhomes.com or you can call us at 866.646.6008.You can also find us on Instagram and Facebook to keep up to date with the latest homes we have available, any new four plans we release and communities. Thank you for joining us again and we'll see you soon.

Whitney and Chelsi: [00:29:00] Welcome Home.