MORTGAGES: Advice from the EXPERT An interview with mortgage lender, AMY BRAZIL
Amy Brazil Interview
Mortgage Lender, Senior Loan Officer
Guild Mortgage
I recently had the pleasure of sitting down with Amy Brazil, a seasoned Senior Loan Officer at Guild Mortgage in Reno. Amy shared valuable insights into the ever-evolving real estate market and her passionate mission to help renters become homeowners. The following is a recap of our conversation.
RK:
Amy, thank you for taking the time to meet with me today to discuss the services you provide and the value you bring to prospective homebuyers.
To start, what is your official job title?
AB:
I’m a mortgage lender.
RK:
And what types of services do you provide to clients?
AB:
My primary role is to assess a borrower’s ability to purchase residential real estate—up to four units. I evaluate their income, assets, and debts to determine whether they qualify for a mortgage and, just as importantly, identifying which loan product best fits their unique situation.
This varies greatly depending on the client. If they’re a first-time homebuyer, there are specific programs and considerations tailored to them. If they’re an investor with multiple properties, that comes with a completely different set of guidelines. Understanding where the client is coming from—and where they want to go—helps me match them with the most appropriate loan product.
In addition to guiding clients through that decision-making process, I ensure that we comply with all applicable rules, regulations, and lender guidelines. It’s critical that every “T” is crossed and every “I” is dotted so we can stay in full compliance and, ultimately, help the client close on their new home.
RK:
What are some of the minimum qualifications required to be approved for a mortgage?
AB:
Let’s take the example of a first-time homebuyer—someone who’s never owned a home before. I love working with first-time buyers! They’re usually excited, optimistic, and fun to work with. When it comes to qualifying for a mortgage, the first thing we look at is income.
Different loan products have different limits for how much of your gross monthly income can go toward debt. For a conventional mortgage, your total monthly obligations—mortgage payment plus other debts—can go up to about 50% of your gross income. For an FHA loan, that number can be as high as 55%.
Now, do we want someone to go that high? Not necessarily. But I’m also a big advocate for homeownership, and if that’s the only way someone can get into a home and start building wealth, I’m not going to tell them not to. That said, when we calculate those ratios, we include all debts: mortgage payments, car loans, student loans, credit cards—everything.
For VA loans, the guidelines are even a bit more flexible. The VA really goes the extra mile to help veterans become homeowners, and they may allow higher debt-to-income ratios if the situation calls for it.
After income, the next big factor is credit score.
The minimum FICO score is typically 620, but there are some programs that will allow scores as low as 580. That said, individual lenders may impose additional requirements—what we call “overlays.” At Guild Mortgage, for example, we require a 620 score unless it’s an FHA loan. Lower scores usually mean a higher interest rate, so of course, the better your credit, the better the terms you'll receive.
Then we look at how much the buyer has for a down payment. First-time homebuyers often have between 3% and 5% saved. And that’s okay! Years ago, it was common to think you had to have 20% down but saving that much is just not realistic for most people—especially on something like a $400,000 home. That would take years to save.
Putting down less than 20% means you'll need to pay mortgage insurance, which protects the lender in case of default. It’s a common misconception that mortgage insurance is something to avoid at all costs. In reality, it’s made homeownership possible for millions of people. Yes, you want to get rid of it eventually, but if you have good credit and put down 5%, the cost could be less than $100 a month—well worth it to get into a home and start building equity.
We evaluate all these factors:
Income
Credit score
Debt obligations
Down payment
Possible gifts or grants
Eligibility for first-time homebuyer programs or down payment assistance
That’s why I always tell people—even if you're just thinking about buying a home, it’s never too early to talk to a lender. You could be 25 years old, thinking you’re years away from buying, but if it’s on your radar and you start working on your credit, saving 3%–5%, or having conversations with family about a possible gift, you could be ready much sooner.
It’s much better than coming in at 30 and realizing you now have to start fixing your credit, saving for the down, etc. Honestly, I think they should be teaching this stuff in high school and preparing young people much earlier.
RK:
Where do the funds for loans come from?
AB:
All mortgage lenders operate under a similar model: once a loan is closed, it's typically sold off to investors. By selling that loan, we recoup the funds to lend to the next borrower. I always explain to clients—it's not like we have a vault full of money where I walk in and pull out funds for each person. Instead, we sell those mortgages to investors or trusts. Once purchased, the loans are packaged into mortgage-backed securities and sold as investments. Because of that, these investors have specific rules, regulations, and underwriting guidelines set by Fannie Mae, Freddie Mac, FHA, VA, etc., that all lenders must follow in order to be able to sell the loan.
If a mistake is made—by me or by the underwriter—and the loan doesn't meet the investor’s guidelines, they can refuse to buy it. In that case, the loan stays on our books. While we might retain some loans, we can’t keep too many—we don’t have unlimited capital. That’s why it's so important for me to understand the investor guidelines thoroughly and ensure a borrower truly qualifies. Then our underwriters go even deeper, double-checking everything, because we must ensure we can sell that loan and free up funds for future borrowers.
Have you ever watched The Big Short?
RK:
Yes!
AB:
It’s actually an excellent example of how mortgages are bundled and sold as mortgage-backed securities—and, of course, how things went terribly wrong during the financial crisis. It’s a pretty technical film, so you have to pay close attention, but it does a great job illustrating how the system works and how it can fail.
The core issue back then was that lenders were approving borrowers who weren’t truly qualified. After that crisis, a wave of new regulations was introduced to prevent it from happening again. Some of those rules are being scaled back now, but overall, the regulatory framework that came out of that time has made lending much stricter. As a result, today’s borrowers are far more qualified—and foreclosure rates are extremely low. That’s ultimately a good thing for the market.
RK:
What are some of the common misconceptions people have about the mortgage process, especially if they've never been through it before?
AB:
One of the biggest misconceptions is that buyers think they need at least 20% of the purchase price for a down payment. That’s probably the most frequent myth I encounter. Another common one is the belief that you need a perfect credit score—something like 800 or higher—which simply isn’t true.
People also tend to assume they’ll need to provide their entire life history. While it’s true that the process can be more involved for self-employed individuals, for W-2 wage earners, it’s relatively simple: pay stubs, a W-2, and a bank statement. That’s usually it.
There’s also a misconception that the process is long and time-consuming. In reality, it’s often quite efficient. If someone called me today and completed the application and submitted all their documents tonight, I could have them pre-approved by tomorrow—assuming their situation isn’t overly complex, like owning 10 or 20 businesses. From there, they could find a house and close in as little as 30 days. The biggest delays we see aren’t due to the process itself, but rather people not responding promptly to document requests.
Another challenge, particularly with self-employed borrowers, is frustration with documentation. I’ll occasionally need to ask for additional paperwork, and the response might be, “Didn’t I already give you that?” or “Why do you need that?” I always explain—I'm not asking for fun. I’m asking because underwriting requires it. I didn’t lose it; I genuinely need it.
But again, the 20% down myth is the one I fight the most. I’ve created so many videos on social media addressing this, and I still run into people who believe it. Someone will say, “My kid wants to buy a house and is saving up for that 20%.” I probably should share content on that topic at least once a month.
Even people who know they don’t have to put 20% down often still believe they should. And that’s a huge misperception. Sure, some buyers may have 20% saved, but that doesn’t mean they need or want to use all of it. Maybe the house needs work—they might choose to put 15% down and keep 5% in reserve for renovations. In that case, private mortgage insurance could be very minimal, and they’ve preserved cash for upgrades like paint and carpeting. Many buyers are thinking about how best to leverage their money—not just spend it all upfront.
RK:
What are some common mistakes that potential homebuyers make, aside from the misconceptions you mentioned earlier?
AB:
One of the biggest mistakes is waiting too long to begin the loan process. Many buyers start by looking at homes before they even think about financing. But the first step should always be getting pre-approved with your favorite lender. There’s nothing worse than falling in love with a house, only to come to me and find out you can’t actually afford it. It’s incredibly disheartening—not just for the buyer, but also for the realtor who’s worked hard on their behalf.
When I was a realtor years ago, we used to do very rough pre-approvals—ask what someone made, do a little quick math—but that’s no longer the standard. These days, most realtors require buyers to be formally pre-approved before they even begin the home search. Still, there are people who jump ahead and then face disappointment when I tell them, “Actually, you’re looking in a price range that’s $100,000 too high.” That’s a tough conversation to have.
Another common issue is that people don’t monitor their credit as closely as they should. Credit scores can quickly spiral if you’re not careful—missing payments, not keeping an eye on your report, or letting balances get too high. Your credit score is a major factor in not only qualifying for a mortgage but also determining your interest rate, private mortgage insurance, and even your homeowner’s insurance premium. It has a huge impact, so I spend a lot of time educating first-time buyers about the importance of managing their credit wisely.
RK:
What are your top three pieces of advice for someone starting the mortgage process?
AB:
Get pre-approved. This is the most important first step. It gives you a clear understanding of what you can afford and makes you a stronger buyer in the eyes of sellers.
Check your credit score. As part of the pre-approval process, I’m going to need to see your credit score. It’s helpful for you to have a general idea of where you stand beforehand.
Understand how I work. I don’t get paid until the loan closes—and I’m very transparent about that with my clients. Whether it takes two weeks or two years, I will work incredibly hard for you. I’ll answer calls on weekends, run every possible cost scenario, and make sure every detail is accurate. I’m extremely analytical and meticulous.
That said, I do ask for loyalty. If you’re committed, I’m all in. And if we’re in it together—we’ll get it done!
RK:
How long have you been working as a mortgage lender?
AB:
I’ve been a mortgage lender for nine years. Before that, I worked as a realtor for 20 years, which I think gives me a unique perspective. It really helps me support my realtor partners in a different way, especially when it comes to crafting contracts. I have a solid understanding of the process from the buyer’s point of view, and I know exactly what they’re going through at each step.
My realtors appreciate that. Sometimes they’ll call me and I’ll say, “Okay, I’m putting on my realtor hat now,” because they want to ask a question in a way that might not sound quite right if asked directly to a lender. There’s a strategy to how things are phrased and structured, and I think I’m good at helping people navigate that.
RK:
Is there any one type of mortgage that’s the most common?
AB:
Yes, by far the most common is the 30-year fixed-rate conventional mortgage. I'd say about 75% of borrowers go with that option. Years ago, adjustable-rate mortgages were very popular—no income verification, no documentation required. That led to a lot of bad loans. Lending is much stricter now.
What we’re seeing now, though, is an increase in what are called non-QM loans—that stands for “non-qualified mortgages.” Conventional loans follow qualified mortgage rules. But if you step outside that box, non-QM options open up, and they’re typically offered through brokers. Guild is large enough that we can offer some most of those brokered products. These offer more flexibility in terms of eligibility and underwriting criteria making them a great option for borrowers who may not qualify for a traditional mortgage.
Take bank statement loans, for example. These are great for self-employed borrowers who write off so many expenses that their tax returns don't reflect their real income. With a bank statement loan, we only look at your deposits—either over one or two years. We apply an expense factor based on your type of business, and we typically can count much more income compared to what your tax returns show. Yes, the rate is a little higher, but for business owners, it's worth it—less paperwork, less hassle, and they qualify for more.
Another option is the DSCR loan—that’s Debt Service Coverage Ratio. It’s mostly for investors buying income-generating properties. It works like a commercial loan: if the property's rent covers the mortgage payment, you qualify. So, if it rents for $2,000 and the payment is $2,000, you’re good. It’s much simpler than traditional investment loans where I’d need to see all your tax returns, mortgage and insurance statements, rental income calculations, and more. DSCR loans require fewer documents, just some asset reserves, and they’re very popular with investors.
We also offer asset depletion loans, which are great for retirees. Let’s say someone is retired, gets a few thousand a month in Social Security, and has strong investments. From a lender's perspective, that investment income doesn't count unless you’re actually drawing from it. With asset depletion, we calculate income based on your assets. For example, if you have $300,000 in an IRA or 401K, we can divide that by three years to determine a monthly income—and you would need to set up a distribution. For non-retirement assets, like brokerage accounts, the standard rule is to divide the balance by 30 years, which gives you a much lower monthly income.
However, with brokered products, we can use a five-year rule instead of thirty—that's a game changer. It's been a lifesaver for some of our retired clients who want to buy a new home but don’t want to liquidate their investment or don’t have that much in an IRA or 401K.
One of our favorite products right now is the reverse mortgage. These had a terrible reputation in the past, but that’s changed dramatically since the financial crisis. The rules were updated for the better.
Most reverse mortgages are backed by the FHA, so they’re highly regulated. Seniors, who are considered a protected class, are required to go through a one-hour counseling session with an independent party to ensure they understand how it works.
Here’s the key: with a reverse mortgage, you don’t have a monthly mortgage payment, and it allows you to age in place! Qualifying is based mostly on your ability to pay property taxes and homeowners insurance. It’s a powerful tool for seniors whose net worth is tied up in their homes. They can access that equity without selling or taking on a payment.
Some use it to pay off an existing mortgage, freeing up monthly income. Others use it like a line of credit since that line of credit grows. And here’s the really smart strategy, let’s say your investments are down, and you don’t want to pull money from a down market. Instead, you draw from your reverse mortgage line of credit for a couple of years, then switch back when the market recovers. It protects your investments and extends their longevity.
There are strict limits—you can’t take out more than about 30 - 55% of your home’s value, even at age 90. That’s to ensure you don’t end up underwater. Past issues came from people not understanding they still had to pay their taxes and insurance, or from predatory lenders who let them borrow way too much.
Now, reverse mortgages are gaining popularity again, and I love them. Just like helping first-time homebuyers feels amazing, helping seniors unlock their home equity and live more comfortably is incredibly rewarding. We’ve had clients who only receive $2,000 a month in income but have $700,000 in home equity. They don’t want to sell—they want to age in place. And a reverse mortgage gives them options.
It takes some education to overcome old misconceptions, so my business partner and I created a webinar we send to clients first. Then we follow up with a meeting to go through their questions and options.
So, whether it’s first-time buyers or retirees, I love working on loans that truly change people’s lives. That’s what keeps me going.
BK:
How do you keep up to date on the ever-changing regulations governing mortgages?
AB:
It’s really challenging. When people ask, “What do you hate most about this business?” I always say there are two main things.
First, the rules and regulations change constantly. It’s incredible. Just when I’ve learned everything there is to know about a program or product, I’ll get an email from the company the next day saying, “FHA just changed this” or “Guidelines for that have been updated.” So I always tell people, “As of right now, yes, you can do A, B, and C—but let me double-check that.” I double-check everything because it changes all the time.
Sometimes the changes are for the better, sometimes not. It’s just tough to stay on top of it all. Guild offers so many products that it’s impossible to be an expert in all of them. So I focus on really knowing four or five core products inside and out. When a client comes in with a unique situation, I’ll reach out to my internal resources and say, “Hey, I’ve got this scenario—anyone know if we have a product for this?” We have a great support system, which I really appreciate. If I need to, I’ll then go and learn that product thoroughly. But the reality is, no one can know everything.
My business partner has been in the industry for, gosh, probably 40 years. She knows an incredible amount and can pull out the most obscure facts. But even she will say, “I’m pretty sure this is the answer... but double-check.”
So that’s the first thing I don’t love about the business.
The second thing? You're constantly looking for new clients. It can be exhausting. What does that mean? It means calling realtors, reaching out to past clients, attending events, sending mailers—always marketing, always networking.
It didn’t used to be that way. When I was a realtor, I got to a point where I didn’t need to do open houses anymore. I stayed in touch with my database through a newsletter, but I didn’t feel like I was constantly hustling. There was more client loyalty then. That’s really changed.
These days, I might work with a client I never even meet in person. I do insist that first-time homebuyers come into my office if they live locally, or at least do a Zoom call, so they can look me in the eye and know who I am. For repeat buyers, that might not be necessary. I also go to every signing because sometimes that’s the first and only time I meet the client face-to-face—even though we’ve spent a month talking, laughing, and working through their loan.
It’s just not like real estate, where you're driving clients around, attending inspections, and spending months together. That in-person time really helps build a strong connection. Without it, it’s easier for people to shop around or jump to the next “best deal”—usually meaning the lowest rate.
But focusing only on the rate is one of the biggest mistakes people make. There are so many other factors. Can the lender actually get the loan closed? Sure, someone might offer a fantastic rate—but you might go through hell, face delays, or the deal might fall apart.
I once had a realtor tell me, “I can’t be the best and the cheapest—what do you want me to be?” I loved that because it’s true. I’m really good at what I do because I care. I’m loyal to my clients, and I want the best for them. I want them to succeed, come back to me in the future, and refer their friends.
I’m not interested in being the cheapest if it means sacrificing service or support. I wouldn’t want to work for a company that treats people like numbers—like some of those big online lenders where you call an 800 number and just get whoever answers. There's no relationship, no loyalty—just volume.
And that’s not what I’m about.
RK:
How does your company get compensated for closing the loan?
The company gets compensated when we sell the mortgage into the secondary market and we make money on servicing the loan – handling the processing of the monthly payment, distribution of taxes, etc. We also charge underwriting and processing fees which basically pays everyone’s salaries, the rent, utilities etc.
For me – I am not paid like a realtor who is paid a percentage of the sales price by the seller or buyer. I am paid a percentage of the profit of the mortgages we close. And I only get paid if I close your loan.
Importantly, my pay doesn’t change based on whether you get a higher or lower interest rate. I’m always focused on finding the best rate for the client. But keep in mind: the lowest rate isn’t always the best rate. Every rate has a cost, and that cost can either be an upfront charge or a rebate.
Let’s say rates are currently around 6.875% with one point. If you tell me you don’t have the money to pay that point, we might look at a higher rate, like 7.5%, which could come with a lender credit to offset your closing costs. Think of it as a tiered system: higher rate, lower cost; lower rate, higher cost. Investors who buy mortgages have to make money—they’re not doing this out of charity.
They also know that as soon as rates drop, most people who bought in the past few years will refinance. If investors don’t account for that, they lose money. So, they hedge by charging points upfront, which is essentially prepaid interest. During the financial crisis, when rates were 2.99% or 3.25%, no one paid points because those loans were going to stay on the books for a long time. But now, with rates higher, points are back.
Everyone expected refinancing to pick up by now—but it hasn’t. That’s been a bit of a surprise.
RK:
So, are you seeing people do anything else with their mortgages in this rate environment?
AB:
Yes, we’re seeing a lot of homeowners who have significant equity in their homes looking for ways to access it without giving up their super low first mortgage rates. For example, someone with a 3% interest rate may say, “I’m never moving—this rate is too good.” But they might still need cash—maybe they want to renovate or consolidate debt.
That’s where products like a HELOAN come in. A HELOAN is a home equity loan—it’s a second mortgage on your property. It has a fixed rate and a set term (10, 15, 20, or 30 years) with principal and interest payments. It allows you to keep your original mortgage intact while pulling out equity.
Compare that to a HELOC (Home Equity Line of Credit), which is variable-rate and interest-only for the first 10 years. HELOCs can be risky because the rate fluctuates, and the lender can freeze or call the line due if the bank gets into trouble. A HELOAN is safer in that respect—it’s fixed, fully amortized, and cannot be called due unexpectedly.
Now, rates for HELOANs are currently in the 8% to 8.5% range, depending on your credit. That sounds high to people at first—but then we walk through their full financial picture. I’ve had clients with car payments, credit cards with 29–30% interest, and when we do the math, consolidating all that into a HELOAN makes total sense.
For example, they might take on an $800 monthly payment through the HELOAN but eliminate $1,500 in other debt payments. That’s a $700 monthly gain. Plus, they still have equity left over. So for a lot of people, it’s a smart move.
We’re seeing more and more interest in HELOANs—especially from clients who don’t plan on moving. Some are even considering home improvements: adding a bedroom instead of upgrading to a new home, which would mean giving up their amazing 3% first mortgage.
In some cases, I’ve even run scenarios where refinancing the entire loan (cash-out refinance) still made sense financially—but emotionally, clients just couldn’t let go of their current rate. It was a close call.
But HELOANs have become a really interesting and powerful option right now, and we’re seeing a lot of success with them.
RK:
Are you ever asked, "What's the difference between the APR and the interest rate?"
AB:
Yes, I am—and honestly, I find APR to be quite confusing for most people. The interest rate is straightforward: it's the cost you pay annually to borrow the money, expressed as a percentage. This rate directly affects your monthly mortgage payments, covering both principal and interest.
On the other hand, the Annual Percentage Rate (APR) encompasses not just the interest rate but also additional costs associated with securing the loan. This includes lender fees, underwriting and processing fees, and any points you might pay upfront to lower your interest rate. The APR provides a more comprehensive view of the total cost of the loan over time.
However, comparing APRs between lenders can be misleading. For instance, it assumes the loan will be held for the full term, it doesn’t always account for all closing costs as there is some discretion in what fees are included, different loan types can impact it, etc. This makes it challenging to compare offers accurately. I advise clients to focus on the lender's fees, and the interest rate and points separately to get a clearer picture of the loan's cost. Especially if they are comparing lenders.
Often, clients come to me saying they've found a better rate elsewhere. When I review the cost estimate, I sometimes find that the difference is minimal—perhaps an eighth of a percent. It's essential to consider the overall relationship, customer service quality, and can the lender close the loan - it is not just the rate.
RK:
Are there any challenges in the current market that are more significant now than in previous years?
AB:
Absolutely. One major change is the evolving regulatory landscape. There have been discussions about restructuring entities like Fannie Mae and Freddie Mac, which could impact mortgages and availability. Additionally, technological advancements are transforming the mortgage process. While digital applications and automated verifications can streamline procedures, they may also reduce the personal touch that helps tailor loans to individual needs.
It's crucial to balance efficiency with personalized service to ensure borrowers receive the best possible guidance.
We’re really curious to watch the buyers coming into our market, because Reno is not an inexpensive place to live. And people say all the time, “I’m just waiting for prices to go down.” I just scratch my head and think, I really don’t think they’re going to. First of all, we’re not building enough homes. On average, about 5,000 people move to the state each year, and we’re building, what—maybe 2,300 homes if we’re lucky?
And that doesn’t even account for the obsolescence of homes that fall out of circulation. It also doesn’t account for people who don’t want to sell because they’ve got a super low-interest rate locked in. On top of that, we’re not considering the wave of population that’s still coming. Millennials, for example, are way behind the average age of homeownership. It used to be 30 but now it’s 36. That’s a big delay. But there’s still a large number of millennials who haven’t bought yet.
Then you’ve got Gen Z. They’re a really big group, and believe it or not, even 18- and 19-year-olds are already thinking about buying homes. Studies show that this generation wants to buy—and they’ll likely do it earlier than millennials did. We expect the average age of first-time buyers will probably drop back toward 30 again.
Millennials, in contrast, saw Gen Xers and late Boomers go through some really hard times, especially during the financial crisis. That created a lot of fear, so they’ve been hesitant, and now they’re a bit behind the eight ball.
So, you have to look ahead at how many new household formations are coming, not even counting the people moving here from other states. All that to say—prices aren’t going down.
I actually run a “Cost of Waiting” analysis. It goes something like: Let’s say you wait two years. Sure, rates might be lower by then. But even with just 4% appreciation, you’re potentially leaving $45,000 on the table. I recently ran one of these analyses, and that was that number—it really makes you think: Does waiting make sense?
In my view, you should be buying today. The house will go up in value, and rates might come down. But here’s the catch: for every 1% drop in rates, 5 million more buyers become qualified. So now your competition level just skyrocketed.
People are convinced rates will drop and prices will fall. While I do hope rates come down I do not expect home prices to fall substantially any time soon, if at all. —and I suspect we’ll eventually get back into the 5% range for interest rates but I do not think we’re heading back into the 3’s or 2’s. If we do? That means we’re in a pandemic again or in a severe economic depression. And that’s not good news. Rates that low come with a lot of baggage.
Historically, we’ve seen rates as high as the teens. The average over the last 50 years? About 6.75%. So really, 6.5% to 7%—that’s the normal range.
We just have to get past this mindset that says, It should be in the 2s or 3s.
RK:
What’s the best thing about being a mortgage lender?
AB:
Oh, it’s just such a great feeling when you help someone get into a home. People are, for the most part, really excited and incredibly grateful—it’s heartwarming. Sure, there are some difficult clients out there, people who shop around and can be a bit challenging. But overall, it's a happy day for most.
I’ve always loved working with buyers. Even when I was a realtor, that was my favorite part—buyers are typically excited. They’re making a move for a positive reason. They’re not selling because of a divorce, or financial hardship, or because they’re forced to relocate. They’re buying because they want to. It’s usually a joyful, hopeful moment in their lives.
And that’s what I love about it. It’s deeply gratifying.
And I’m helping people build wealth. There’s a statistic that says when you compare a renter to a homeowner, the homeowner’s net worth is 40 times higher. That’s mind-boggling when you think about it, right?
Let’s say you’re 30 years old and you’ve been renting at $1,000 a month. That’s $12,000 a year—$24,000 over two years. And the thing is, you are paying a mortgage… just not your own. You’re paying your landlord’s.
So, do you really want to waste another $36,000 after three years of renting—when that money could have been building equity for you?
I think renters need to understand the massive disparity in wealth-building, especially in a market like ours. Homeownership isn't just a roof over your head—it's a foundation for financial growth.
I can invest $10,000 in the stock market, and let’s say I earn a 10% return in a given year. By the end of the year, I’ve made $1,000, so my total investment is now worth $11,000.
Alternatively, I could use that same $10,000 as a 3% down payment on a home. Assuming the property is worth $300,000 and the real estate market appreciates 4% over the next year, that’s a 4% gain on the entire $300,000—not just on my $10,000. That’s a $12,000 return. I have leveraged my investment.
This concept can be difficult to grasp at first, especially for first-time homebuyers. That’s why I always take the time to draw it out and explain it clearly. Once they see how appreciation works on the full value of the property—not just what they put in—it starts to make more sense. It’s one of the main reasons why homeownership has long been considered a cornerstone of wealth-building in America.
The real estate market in the high-cost areas of the country pose unique challenges. But regardless of location, the core message is the same: if you can find a way to buy—even modestly—the long-term financial benefits often far outweigh the costs.
That’s why I emphasize this to every first-time homebuyer I work with. Homeownership isn’t just about having a place to live. It’s about building equity, creating stability, and accelerating your path to financial independence. When people begin to understand that, everything starts to click.
RK:
What resources or advice do you typically provide to a first-time homebuyer?
AB:
Kindness, care, attention, availability, communication—and I’m really big on education. As I mentioned, I insist that my first-time homebuyers come in for a pre-approval meeting. I usually spend about an hour and a half walking them through everything.
We talk about the market—why it is the way it is. I explain how appreciation works, how to leverage your investment, and why it can be smart to keep that first home down the road, so you eventually own two properties.
We cover the pre-approval process, how mortgages work—it’s a whole educational session. And I’m good at it. One, because I truly enjoy working with first-time buyers, and two, because I believe that education is absolutely critical. I want them to walk away feeling empowered, not just going through the motions.
I also emphasize how important their team is. Your team includes your realtor, your lender, your title company, your inspector—these people are all working on your behalf. So, you want a team that performs.
If your realtor refers you to their preferred lender, there’s a reason for that: they trust that lender to keep the deal together. Same thing when I refer you to a realtor—I do it because I know that person will get the job done. That trust and collaboration are essential, and I make sure my clients understand that.
RK:
Well, thank you. This has been great, and we could talk so much more about this!