The Value of Owning a Home with Todd Niizawa

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Interview Transcription

ADRIENNE:
Welcome back, and thanks for listening to the Team Lally Real Estate show home of the guaranteed sold program or we’ll buy it. I’m Adrienne. And I’m Attilio. If you have any question just give us a call at 7999596 or check us out online at Teamlally.com.

ATTILIO:
Our guest today was born and raised in Hawaii. He graduated from Pearl City High School and the University of Hawaii at Manoa.

ADRIENNE:
He bought his condo at a young age, even when he did not know much about the process. And this is a large reason why he’s in the business today. He was previous He was previously a loan consultant with loan depot and just recently became the sales manager. Please welcome our guest, Todd Niizawa.

ATTILIO:
Hey, Todd. Hey, gang. Thanks for

ADRIENNE:
having me. Yes, of course.

ATTILIO:
Yeah. And Adrienne, you mentioned something when we interviewed Todd before his connection to the Hawaii Homeownership Center.

ADRIENNE:
Oh, yes. I know that that was not in the the intro. But um, yeah. Todd’s been around for quite some time. And we’ve crossed paths many, many times before. I think the first time was when I was buying my house. New Construction and this was like 16 years ago. And he was, he was my loan officer. And he’s just had a lot of different hats that he’s worn and worked in a lot of different, you know, lanes within the loan industry. Yeah. And also, you know, we’re both, we’re all supporters of the Hawaii Homeownership Center. I know that the golf tournaments coming up. And, you know, Todd has been real passionate about, you know, promoting that and getting sponsors and golfers out to participate.

ATTILIO:
Yeah, so yeah, Todd, why, tell us tell us more about how come you’ve been in the loan industry for so long? What do you like about it?

TODD:
Why are getting? Well, like Adrienne mentioned before, I was fortunate enough to buy my first condo at a relatively young age. And I wasn’t in the business at the time, I don’t remember anything about the transaction. The only thing I really remember was the data and I got my keys. And I was just just so excited about it. I was I was to the moon and back. And I went home, I gather some stuff up like a pillow and blanket some food. And I went right to my condo ate dinner and spent my first night there. And, you know, it was we’re gonna show my age a little bit, but that’s when the time is. Obviously there was no TV since I just got lucky that day. And that was days before iPhone smartphones, or iPads and things of that nature. So it was just me and my condo. And it was a glorious night. I think part of me, that’s, that’s why part of me what I like is working with first time homebuyers, because because I know what I experienced. I know what they’re experienced on the closing of their first home as well.

ADRIENNE:
So I mean, so Todd, it was it at a young age. How young was it?

TODD:
I think I was either 21 or 22. Wow, something like that? I can’t, I’d have to look it up to know, I don’t know exactly what it was before my birthday was but somewhere in that area, 21, 22 years of age. And I say fortunately, because I think a large part has to do with my parents and them instilling financial knowledge into me. And that’s what because it was based on their guidance that I became a homeowner, I didn’t do it on my own. I didn’t come up with the idea myself myself. So it was them who kind of, I guess, pushed me in the right direction, if you will. And I just kind of, you know, wholeheartedly believed in them. I think they have they had, and I believe they had my best interest in mind. And that’s what came up from it. And so

ATTILIO:
now we’re reporting our the, yeah, now we’re the parents for all the listeners, encouraging them to get into homeownership, hey, boy, girl, go buy some real estate, what you waiting for. And then Todd, fast forward to today, you still own that condo, and it’s worth like $1.5 million, right?

TODD:
Just shy. I actually I still do own the condo. But it is not worth that. But I still own it. And I’m completely happy with it. I mean, I just can’t be more happy doing it. And part of the reason I’m still in the business today, part of reason I’m individuals, I believe in education, and communication. So the education for me came from my parents, and now that I’m actually in the business, my goal is to pass the education on to others that may not realize that they have the potential to become owning homeowners.

ADRIENNE:
So, So Todd with this, you know, like you’ve continued to maintain this condo and build wealth and educate your your borrowers on your story. So you’re like you’re practicing what you preach.

TODD:
I try to, unlike, you know, I wouldn’t the information and suggestions and education I give is the same thing that I would do. If it was to my mom, or my sister, or my best friend, you know, everything I see and do is where I have your best interests in mind. And I strongly believe that as well.

ADRIENNE:
So So what kind of tips do you have for our listeners during the beginning of the show, Attilio and I were talking about the kind of market that we’re in, and the interest rates. So if you could give some advice to our listeners that are maybe on the fence about jumping into this market, what would you tell them?

ATTILIO:
What would you what would you tell them if Hey, I don’t want to buy right now the interest rates are too high. What would be your response to that?

TODD:
You know, I if people were realizing what happened in the market in 2020 and 2021, and even in the beginning of 2022 when rates were low. It was a crazy market and you guys know about it If I had clients that were putting in offer after offer, they would go 1015 or even 20% of the sales price sometimes and still losing out. And it is heartbreaking and emotionally draining to keep putting your love into a home and putting an offer and not getting it. And it was because of rates were low it was spring, the market right now the rates are higher, the market is a little bit different homes are staying in a market longer value sales prices are dropping, and sellers are even offering credits. Right. And I know you guys, I’ve heard you say that, you know, you marry the home, not the mortgage, right? So get into a home today, when there’s no there’s less competition. And then when rates drop, you refinance into the lottery loan, and then you have the home and a lower monthly payment. If you wait till the rates drop, then you’re gonna go back into that competitive market and be competing against 10 or 15 other buyers out there and setting yourself up for heartbreak again, well, I think,

ADRIENNE:
well, you know, Todd, when you helped me with my mortgage is back in 2007, rates rates are about the same that they’re at now. And I remember, you know, using some of my commission to buy down the rates, and I was still, you know, in the high fives. And as you know, the market continued to shift, I just kept refinancing getting lower, lower, lower. And of course, I capitalized on those 2% rates. So you just gotta be patient and have a strategy.

TODD:
Yes, I think that everyone just remembers what was, you know, they remember 2020 2021 and the 2.5% 30 year fixed rates that were out there, you know, when you talk about me buy my condo back when I was 20, or 21, I had a seven and a half percent interest rate way higher than the rates are today. But that was what it costs to buy a home. If you wanted to buy a home. That’s where the rates are. And do I regret buying that home? Absolutely not. Do I regret having a 7.5% interest rate? Absolutely not. Everything in the end financially turned out 100 times better than I did get into a den not getting into it.

ADRIENNE:
So, So lesson learned, right for our listeners, when is the best time to to buy a home right now?

TODD:
Yeah, there’s that old Chinese proverb that says when’s the best time to plant a tree? And it was like, it’s just 20 years ago. When’s the next best time? Right now? Exactly.

ATTILIO:
Get into the market. That was that was Confucius and taught Dino Confucius is number one quote. I did not say. I didn’t say that. Because Because everybody’s quoting Confucius. He’s like, I didn’t say that. But, ya know, start now. Right? Your number one advice to people thinking about buying, you know, stop renting or buying or get off of mom and dad’s couch by now. Plant the tree now

ADRIENNE:
just at least have the conversation. Just start the conversation. Todd and his team over there at loanDepot are just all about the education and I know you guys do seminars, you do the VA seminars right at the end of last Thursday of every month.

TODD:
Correct. So we do VA sermon seminars, and I’m sorry. My apologies. Okay. Sorry, we do a VA seminar at the last Thursday of every month. And we have one coming up in May. It is on Thursday, May 25, at 6pm. At our offices in Honolulu at 677 Ala Moana Boulevard, suite 600. Once again this Thursday, May 25 6pm 677 Ala Moana Boulevard Suite 600

ADRIENNE:
its Todd, Attilio and I were chatting with you earlier. And there’s some there’s some buzz that’s happening on social media and in the news about these credit scores and what you’re going to pay based on your credit score as far as the closing costs. Let’s let’s let’s dig a little deeper on what’s actually happening there.

TODD:
Sure, sure. So to give you let’s start with what’s been happening. So the FHFA Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, have changed the fees associated in buying a home and getting a loan. Okay, it’s called your loan level price adjustments LLPA. And to give you an example of what I’m talking about is some of them Some of the miscommunication that’s happening out there is some communication is that the someone with a lower FICO score would have less fees than someone with a higher FICO score. That’s, that’s not actually the case, it is still the case where the better your credit score is, the less fees you pay. So please do not let up on keeping do not stop working on having great credit, because that’s still going to be beneficial to you in today’s market. Okay, so the difference is between the old matrix or the old fee schedule versus the new fee schedule, is that those who had great credit or good credit, are going to pay a little bit more for their loan, and those with average or less than average credit will pay a little bit less for their loans. Let me give you an example of this. So here’s a general scenario, a sales price of $900,000 with 15% down and a loan amount of $765,000. Under the old matrix, a borrower with a credit score of 740 would have a loan level price adjustment fee of .25% or $1,912.50. Okay, under the new matrix that seen 740 FICO borrower will have a loan level price adjustment or fee of 1%, or $7,650. Increase of five,

ADRIENNE:
you said from about 2000 to 7000.

TODD:
Exactly, wow, exactly my point. It’s crazy. I mean, these are ones these are more extreme of an example. But this is an example of what’s the difference in matrix, the pricing and the matrix fees, the fee structure of the matrix LRP matrix. So that’s almost $1,500 difference for the 740 borrower. Okay, now let’s jump to the 640 borrower 640 FICO score borrower under the old matrix. Same scenario $900,000 15%, down loan amount of 765 765,000. The LLPA or fee for a 640 FICO borrower would be 3.25%. Or in a dollar amount, $24,862. That’s under the old matrix, under the new matrix or fee schedule. For the 640. borrower, the cost would be would jump from 3.25% to 2.5%, which is also a drop of almost 50 $100 in cost. So it’s actually identical drugs. So whatever the 740 bottle paid more, the 640 Borrow paid less under the new versus old.

Interesting now, like I said,

ATTILIO:
like a seesaw

TODD:
extreme case, it kind of is Yeah, and I’m not insinuating that they’re one is paying for the other I’m not, I don’t know what or how they came about with their new formulas. So I can’t hide I’m not educated to comment on that. But like I said, it is on the more extreme as a live example is to have the changes, but understand that they are quite huge. If you put in a $2 month,

ATTILIO:
well, you know, I’ll stick my neck out there, you know, you know what opinions are. Everybody has one they’re like noses and Oh, call is everybody got two. And so it’s just an opinion, and no one can refute an opinion because it’s just a perspective. But you know, I doing the math, I can see where if you have, you know, it’s if it’s $5,000 more here and $5,000 less there, I can pretty confidently extrapolate that that’s what happened is we’re you know, I mean, in plain English, we’re having the people with good credit and responsibility taking care of the people who don’t have good credit, and weren’t responsible. And that’s a lump sum statement. So I’m not saying everybody who’s got a 660 credit score is is not responsible. Maybe they had a child that went in for some, you know, medical procedures, and they just didn’t have the insurance are the money. And if it’s a choice between your credit score and taking care of your child, I’m gonna tell you take care of your child. But those questions aren’t being asked in that process. It’s just across the board. So it is what it is. I hope it works out. But again, it’s the you know, it’s the government trying to affect human behavior. Doing this, it’s not going to make people more responsible. It’s just rewarding some people and penalizing others, but that’s just my opinion.

ADRIENNE:
So So Todd with these new guidelines, any idea how long they’re gonna be in effect for are they kind of testing it? Or is it like, this is what it is and you’re stuck with it?

TODD:
Yeah, that’s a great question. I actually don’t know the answer to it, there has been no talk about changing it. There is one thing though, that they did under the new fee schedule, they were going to hit borrowers of all FICO scores and all loan to value ranges, regardless of your FICO or down payment, if your debt to income ratio, so your debt to income ratio is the amount of debt to the amount of income you have, as an example, if you just to make the math easy, I’m using $10,000 monthly income if you earn $10,000 a month, and you have $4,000 worth of debt a month, your debt to income ratio is 40%, your debt payment to them on a moneymakers 40% of your monthly income. Now, though, another proposed change that FHFA is is proposing is anyone with a debt ratio above 40% will add another quarter point to their loan fees. They received a huge amount of pushback on that when the proposal came out. So instead of implementing on this May 1st rollout, they push it back to August 1st. So I can’t tell you if they’re going to they’re going to keep it. They did push it back, first of all, so they might I guess they’re deliberating on whether you’re going to keep that change or get rid of it.

ADRIENNE:
Wait, so what do you have, if you have a higher debt to income ratio higher than 40%? They’re gonna penalize you for that, and make you pay more correct. You’re already like struggling to get the loan. And then they’re going to like, kick you a little bit more. Because you’re, you know, you just yeah, like, how does that make sense? None of this makes sense to me. Well,

ATTILIO:
it’s very confusing. You know, the thing that I want to add in there is we don’t want to sound like these super conservative people like, hey, that doesn’t make sense to reward bad behavior, responsible credit scores, and then penalize people who have good credit scores. And we’re responsible, I don’t want people to take that run with that and get all p owed about it. Here’s because it’s like, it’s like you hear on all of the other pundits on social media and media, they complain about something, but they don’t propose a solution. So my solution would be, I’m fine. If I got the credit score, and I’m being charged more. Here’s what I would be completely 100% okay with that, that extra fees, be used by the federal government to go towards nonprofit organizations that help people with homeowner home ownership, education, downpayment assistance, and, you know, help with their getting them into special loan programs. I will be 100% okay with that.

ADRIENNE:
I agree with that. And I know that the Hawaii Homeownership Center, which we all support, provides exactly that. For first time homebuyers, or even if it’s been a while, you know, they educate you, you come up with a budget, you come up with a plan, they prepare you to be a responsible homeowner. You’ve got the programs. Yeah. Yeah. So,

ATTILIO:
yeah. So that’s the what is it? The loan level price adjustment?

TODD:
Anyone can Google it? If you went to Fannie, Google Fannie Mae LLPA a loan level price adjustment, and you probably the first thing that shows up will be the proposed the new matrix fee matrix. If you want to find a older fee matrix, you might have to do a little bit more research, but definitely find it a new fee matrix will be pretty easy.

ADRIENNE:
Yeah, or you can always email us and we will send it to you. So you can email us info@Teamlally.com. And we’d be happy to provide you with the old fee structure. And Todd is referencing a new one. Yep. Just email it to us. Well,

ATTILIO:
we have well, we have we have Todd GPT.

To call up and talk to Todd, that’s all you got to do. I got one question. What is the that old level price adjustment? Didn’t go smoothly? I do. I’m not an AI. I’m actually a real person. I will help you with that.

TODD:
Absolutely. education and communication like I said before,

ADRIENNE:
so So Todd, we are heading near the end of our show. Is there anything more that you wanted to touch on before we wrap it up?

TODD:
Can I be the did mention the Hawaii Homeownership Center Can I can I put a plug in for their

ADRIENNE:
golf? Fundraising? Yes, please do.

TODD:
Okay, so the Hawaii Homeownership Center is having a fundraising golf tournament is on Thursday, August 17th, at Hoakalei Country Club. If you want more details on it, obviously you can reach out to me or you can also go to the Hawaii Homeownership Center website. And if you just Google Hawaii Homeownership Center you should be able to find a website at and all the information about the golf tournament is there as well.

ADRIENNE:
Awesome. And then the business owners they’re looking for sponsors Team Lally always sponsors a hole. So yeah, yeah. Even if you don’t, don’t go

ATTILIO:
Yeah, we don’t. We just like writing. We just like riding around on a golf cart golf carts going the wrong way and drinking beer. No, no, no. We’re not going the wrong way. Because we drinking beer because we don’t play golf. And we don’t always we don’t know the etiquette. We just drive in all over the place. That’s fine. Absolutely.

ADRIENNE:
Thank you, Todd, for being our guest and sharing with us what’s happening in today’s market. Really appreciate it.

TODD:
Thank you guys for having me here today. Appreciate as well. Aloha. Thanks, Todd. Alright, so

ATTILIO:
just a quick mention on that golf tournament, this will be their 16th year doing that Chip In for Homeownership Golf Tournament.

ADRIENNE:
And if any of our listeners want to get a hold of Todd and his team, they’re on our Experts We Trust page on the Resource tab for Teamlally.com. Alright, so we got it. We got a couple minutes. I wanted to share a review. Read a review. Yes. From Angela. Angela says this amazing group of professionals super helpful and knowledgeable that with Attilio and Adrienne for advice on how to assist my father in law with his home. They offered advice and direction for my husband and I when we didn’t know where to get the much needed help. We truly appreciate you guys feels like we’re family.

ATTILIO:
Yeah, you know, I want to make a comment on that because we Adrienne, and I personally helped Angela and her family and the thing that I want to share with you guys, and it is kind of tooting our own horn a little bit. But that wasn’t anything to do with selling a home or collecting a commission or making money. It was just purely about serving this client and educating the situation and educating them and bringing in our expertise of that situation and providing them guidance, which we are happy to do so. Don’t think that if you’re having some challenges, whatever your real estate challenges are, call us. We want to help you doesn’t if you think ah but you know, it’s not really something that they’re gonna make money on. That’s beside the point. That’s okay, because we’re here to serve people. And we learned this from our PSI, PSI people Personal Self Improvement Institute, about personal growth is that givers gain givers gain

ADRIENNE:
just the right thing to do. So give us a call 7999596 and we’re happy to help you with any of your real estate questions, needs, concerns. And that’s it. So thank you for listening and thank you to our sponsors.

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