Unfortunately, as we all grow older in age, we begin to realize how much money people have wasted, which Russ described, mentioning himself, with one of the sole issues being ignorance. Jonathan Payne, the SVP of Operations at American Financing called into the Russ Parr Morning Show to pass along some financial advice, particularly for those who have mortgages.
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A mortgage will probably be the most expensive decision you’ll make in your life, so obviously that natural fear of the unknown and commitment sparks fear in those, and Jonathan explains how American Financing is a company that works for the people and is not based on commissions.
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Besides explaining how American Financing can help out with your financial questions, they also discuss two terms you’ve probably heard often, but may not know exactly what they mean, and they are MARKET VOLATILITY & EQUITY.
Jonathan offers up a real-life example to put what equity is into context by explaining, “You’re right, equity, like it’s kind of like your own savings account, right, your house, let’s say you bought your house for $300,000. And you put down $20,000 $20,000, that you put down is technically your equity at that point in time, then as you pay down your mortgage, and the house value goes up, that equity increases by the amount that you paid it down, versus the amount that you that it’s gone up to. So it’s really the difference in the value of the house versus what you owe. So if you owe $200,000, and it’s worth $300,000, that’s $100,000 in equity, wow, that you could potentially access. So there’s a lot out there, especially with house prices increasing so much lately.”
Listen to the full conversation in the player above.
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Read the full transcript below.
Russ Parr
Well, on the phone line right now, his name is Jonathan Payne. He’s the SVP of operations at American financing. And first of all, I just want to say, thank you very much for for agreeing to pop on with us. Because I think part of the issue is that I think ignorance and including myself, has cost people tons of money over the years, because they don’t know what questions to ask or how to go about it. Because I guess, finances and talking, discussing refinancing and things like that there’s a little fear factor involved. Did you find that to be true?
Jonathan Payne
Yeah, I think that people are scared, it’s a big transaction. You know, it’s the biggest financial transaction with a mortgage, you know, most people are going to make in their lives. So there’s a lot of nervousness about it, that we see, you know, we’re doing we do our best to reassure people. But I definitely see the fear for people that especially they haven’t done it before, right for a transaction.
Russ Parr
Right. Now, I know, at American financing, that you guys actually have folks that give advice that people can talk to on a regular basis, and they don’t work on commission, they work on salary. That’s a big difference and tell people why that’s the case.
Jonathan Payne
Yes, absolutely. I think that’s really one of the things that sets us apart from everybody is that our consultants are salary based, that means that they really have your best interest in mind. Because regardless of if you do a transaction with us or not, they’re getting paid. They’re not worried about, you know, like most mortgage people out there or commission, they need that to feed their families to take care of themselves. So they’re really trying to get the deal done, or we’re just trying to look out what’s best for you if the deal makes sense for you. Great, if it doesn’t great, what other we want, we want the best for the customer.
Russ Parr
Well, you know, the market has changed so much so much volatility.
What Changes Are You Seeing Happening In The Market Right Now?
Jonathan Payne
Yeah, it’s definitely been a quick change to you know, just beginning of this year and 2022, we were still at historic lows and rates are low threes. Now, interest rates are closer to 5%. You know, there’s less people out there looking to refinance, because the rates have taken such a different turn. But there’s still plenty out there looking to purchase homes, there’s still people looking at to refinance, that are, you know, maybe are in a tough financial situation, and they need to access some of the equity that they built up, you know, home prices have been going up over the last few years. So there’s a lot of equity in homes that we could still take advantage of pay off high interest, credit cards, home remodels, whatever it is, but that’s kind of where we’ve shifted from, from people wanting to low rate to the pulling equity out.
Russ Parr
Now I’m gonna now I’m gonna hit you with something that’s gonna seem like a very it’s an important question. When you say equity to people. And there’s somebody listening to us for the first time and they’re thinking about their they tell me I have equity in my house. What does that mean?
What Does it Mean To Have Equity?
Jonathan Payne
That’s a great question. You’re right, equity, like it’s kind of like your own savings account, right, your house, let’s say you bought your house for $300,000. And you put down $20,000 $20,000, that you put down is technically your equity at that point in time, then as you pay down your mortgage, and the house value goes up, that equity increases by the amount that you paid it down, versus the amount that you that it’s gone up to. So it’s really the difference in the value of the house versus what you owe. So if you owe $200,000, and it’s worth $300,000, that’s $100,000 in equity, wow, that you could potentially access. So there’s a lot out there, especially with house prices increasing so much lately.
Russ Parr
Yeah, you know, I have a relative that’s been looking for a home for quite a while, and, and it’s so competitive right now. And I said, Well, here’s what you do, guys. Why don’t you look, Hamid, see how much equity you have in your own home? And take that money? And just maybe redo your house? Or, or buy down some debt that you have? You know, don’t just sit there and wait on it, because you’re having a difficult time finding something, because the houses are getting priced up there right now.
Jonathan Payne
Absolutely. And I think that that’s very good advice. You know, if you take that equity, you invest it back into your home, you can even increase the price a little higher, make your house easier to sell, what’s the point in time when you’re wanting to sell or you just enjoy it more, while you’re staying there? Paying off? high interest credit card debt is definitely a huge suggestion that I would make to people out there, you know, as the Fed raises rates, it’s not only impacting mortgage rates, it’s impacting credit cards, everything that’s going up. And if your credit card interest rates 20 24%, and you’re making the minimum payment, you’re never going to pay it off. Whereas if you could use that equity to pay it off into a much lower interest rate that actually is an appreciating asset versus something that has no tangible benefit. I think it makes a
Russ Parr
lot of sense. So listen, if somebody wants to get in touch with you guys, what is the best way to do it?
Jonathan Payne
I would call three a 3695 7000 or American financing. dotnet. So our website hit us up. Talk to us. We’ll be here for you.
Russ Parr
Jonathan, thank you so much, man. I really appreciate you taking the time. This has been very valuable.
Jonathan Payne
Thank you so much for having me on.
Russ Parr
It was a pleasure speaking with you. All right, you take care now.
