[00:00:00] Corinne Foxx: Welcome back to another episode of Am I Doing This Right? I'm Corinne Foxx.
[00:00:08] Natalie McMillan: And I'm Natalie McMillan.
[00:00:09] Corinne Foxx: And we are best friends, confidants, millennials, and the hosts of Am I doing This Right? A life how-to podcast from the perspective of non-experts.
[00:00:19] Natalie McMillan: And each week we cover a new topic and we drink a new bottle of wine.
[00:00:22] Corinne Foxx: Yes, we do net. And this is, this is, this is for the adults out there. The adults. There we are talking mortgages 1 0 1, but don't worry. You guys, this is a basic bitches guy. Yeah. So buying your first home, if you know nothing, even if you're listening right now, like I'm like, I'm never, I'm not going to buy a house anytime soon.
Like, we need to know this
[00:00:44] Natalie McMillan: as an adult. Just need to know what are the bare bones of this operation? How does it
[00:00:48] Corinne Foxx: even work? Okay. We're going to be starting at. Basics. What is a mortgage key words? We love a key word. I love a definition like down payment, interest rate, any of that. And then we also have a special edition investigation episode as to who are Fannie Mae and Freddie Mac.
And where are they? What are they up to? What are they doing? And what's going on? What's what's happening here? Who are these
[00:01:13] Natalie McMillan: people? Who are they and why are they up in and around mortgages?
[00:01:19] Corinne Foxx: And we're also, we playing a little wrap-up game, a new one today, the episode facts and hacks guys. We had to do it and been talking about facts and hacks for so long.
[00:01:30] Natalie McMillan: You got, make merge. I know backside racks. We
[00:01:35] Corinne Foxx: need that. We need it. It's coming. You guys, don't you worry first now let's get into the wine that we're drinking this epi. Yes. Okay.
[00:01:44] Natalie McMillan: We are drinking. So this is, I don't think we've ever had. I think it's salt turn. I don't think it's . I think it saw a term and it is a Chateau.
What lewd do. Wow, what does that.
[00:02:04] Corinne Foxx: the wrong litter
[00:02:05] Natalie McMillan: off. It's a 2007. So it, I'm not sure if it's over the hill or not. I will say
[00:02:11] Corinne Foxx: that the color is that. Maple syrup. Yes.
[00:02:14] Natalie McMillan: I do think that these are kind of like dessert wines. Oh, okay. So I think it has supposed to
[00:02:20] Corinne Foxx: be that color. Okay, great. Because we had, remember we had that dessert widened before and I was
[00:02:25] Natalie McMillan: very confused.
Like, why is it so don't something's wrong? I think these are less sweet. I'm not sure I'm going to find out. We
[00:02:32] Corinne Foxx: don't deserve. Why shouldn't they be more? Because they are for dessert.
[00:02:36] Natalie McMillan: Well, I mean, this saw turn or saw turn a, I really have no idea. I think that it's like a dessert wine, but like a little less sweet than the one we had.
Okay. I'm
[00:02:47] Corinne Foxx: just so curious, like color
[00:02:49] Natalie McMillan: the age, everything. I also don't know if I'm, I could be completely wrong on everything. Let's let's take a step. Whoa, whoa.
[00:03:01] Corinne Foxx: Wow. We cause our. I was on point with syrup. I could put that on a sec.
[00:03:07] Natalie McMillan: Pigs, it's a breakfast, but it's a breakfast cereal commercial, but it's a breakfast, Syria.
It was on, in like the early two thousands. Not you texted me
[00:03:21] Corinne Foxx: this morning and before we have our episode recordings, we always think of like the things we're going to talk about. You texted me. Oh, he talked to me last night. You said, remind me to tell you my theory about 26 to 38 year olds in regards to rap.
And I just wrote LOL. I'm very curious. This was at 10:00 PM. She sent this
[00:03:43] Natalie McMillan: to me. Yes. I was just doing my thinking as I do. And I was realizing that the group of, I don't think it can be younger than 26, 26 to, I'm going to say 38 40
[00:03:57] Corinne Foxx: max millennials. That's literally millennial
[00:04:02] Natalie McMillan: millennials, but it's, it's dipping into gen Z, but also some millennials are like 45.
Gen Z's are
[00:04:09] Corinne Foxx: not 26. They aren't now they're 25
[00:04:12] Natalie McMillan: right now. Oh, okay. Well then it is exclusively millennials. Yeah. So this is the one thing we have guys. That's the thing we have. So I was thinking about how rap dances. No, we are the only generation that can actually say we grew up with rap. So like rap didn't become popular until like the late eighties, early nineties ish.
Right. So our first memories, it was like biggie, Tupac, all that. Then we moved into like Dr. Dre and w. Then we were around for the rise of G unit 50 cent, M and M, right? Like all of these people that like defined these areas of rap, we were there when they came. I could
[00:04:56] Corinne Foxx: see that. Yes, I totally see that. Like I
[00:04:58] Natalie McMillan: remember when Eminem came out, I remember when 50 cent came out with candy shop, I remember all these things.
And then even going into like Kanye. I remember when Kanye came out, Kendrick Lamar, T-Pain all of these people that like were revolutionary. We were there. And we always will be like, until we die, we'll have been there for the evolution of rap music
[00:05:23] Corinne Foxx: exists. Yes. Well, the birth of rap, I'm looking, okay. This is the birth of rap.
It was 1970s, but I see what you're saying, where it wasn't like popularized in the same way until really maybe like the late eighties
[00:05:36] Natalie McMillan: because of MTV because
[00:05:38] Corinne Foxx: wow. Because
[00:05:40] Natalie McMillan: music videos, or were you
[00:05:41] Corinne Foxx: thinking about this at 10:00 PM yesterday?
[00:05:43] Natalie McMillan: Oh, cause I was listening to. Oh, my God. I was listening to soul survive a con and young Jeezy.
Remember? No, a Connie young Jeezy sole survivor. Oh yeah, yeah, yeah. That song I was listening to it. It's
yeah, I know what you're talking about. First of all, where is Aycock? Cause this is a
[00:06:06] Corinne Foxx: bop. Oh, he's like saving
[00:06:08] Natalie McMillan: Africa. I know, but like he had banger after banger, after banger and then kind of like disappeared a little bit on the whole
[00:06:13] Corinne Foxx: like light initiative, lighting Africa. I remember that getting electricity to like skier
[00:06:19] Natalie McMillan: areas.
I love him. I love him. I love econ. I once saw him at a hotel in Sandra pay. Oh my God.
[00:06:27] Corinne Foxx: Life of luxury. Y'all with.
[00:06:30] Natalie McMillan: With a con, but like, so then I was thinking, I remember when econ came out, I remember when this song came out and then I remember when auto tune came out, like we were there
[00:06:39] Corinne Foxx: for that. The crazy thing is, I don't know if you guys have.
Seeing this T pain, even though he's the king of Auto-Tune, he's an amazing singer.
[00:06:48] Natalie McMillan: And he was on,
[00:06:50] Corinne Foxx: he was on messenger. Yes. But we'll link it. Maybe I'll link it in the newsletter this week. If you guys send them for a newsletter, the clip of him singing, like buy you a drink, what? He's like actually singing
[00:07:02] Natalie McMillan: it.
Oh my God. Oh my God. It's also Chris brown. Wow. All these people that came out and
[00:07:08] Corinne Foxx: defines RMB, he's a singer. That's true.
[00:07:12] Natalie McMillan: Drake J Cole. We were there for
[00:07:15] Corinne Foxx: all of this. We were, we were like, when people, they could never, they could never,
[00:07:20] Natalie McMillan: that's what I'm saying. It can't be younger because they can't remember like the biggie Tupac, puffy.
It was puffy at the time than it was P Diddy than it was Diddy. Like they can't remember that because they're too young. Cause we were barely
[00:07:33] Corinne Foxx: anything. I don't think gen Z. Did he, why, why would they, they don't know him. That's why he hasn't put any music out. No offense like in the last 10 years. So
that's
[00:07:44] Natalie McMillan: what I'm saying.
Like we, as millennials can know all of the sudden, this is
[00:07:49] Corinne Foxx: how you know, you're getting all Natalie. I know that only we can now,
[00:07:56] Natalie McMillan: but it's true. If you put on a song from 95, I know it. If, you know, if you put it on a song from now, I know, and every single one in between that's true. So millennials, we kind of got fuckked on everything, but we do have that we
[00:08:10] Corinne Foxx: ever have, Raleigh's have rap music.
I love that. Oh,
[00:08:16] Natalie McMillan: we love rap music. I remember actually, no, that wasn't yet pain. Yeah,
[00:08:21] Corinne Foxx: that was, uh, that was his song with his kiss.
[00:08:24] Natalie McMillan: Kiss, his song. We love,
[00:08:28] Corinne Foxx: oh, the young money song that I know every word to rock bed, rock. It has all of the,
[00:08:33] Natalie McMillan: in it, all of the young P I also think millennials listening to this right now would not know who young money is.
[00:08:39] Corinne Foxx: Millennials and gen Z. Sorry, gen
[00:08:40] Natalie McMillan: Z. Well, no. How would they? It was the supergroup. Lil Wayne Drake Tyga, Nicki
[00:08:46] Corinne Foxx: Minaj. Oh, you guys don't eat little Chucky.
[00:08:51] Natalie McMillan: Sorry. Little Chucky, little Chucky.
[00:08:53] Corinne Foxx: Oh, who else was in that bird, man? I think it was bird man. Now maybe not, maybe not. Maybe not
[00:08:58] Natalie McMillan: like I can take it back.
You know, that was like a whole little air. He wasn't young man, a
[00:09:04] Corinne Foxx: young man. Okay. We, we, we've got
[00:09:08] Natalie McMillan: to move into mortgages. I know this is just these dragging out to talk about mortgages. Okay. Yes, he
[00:09:15] Corinne Foxx: was Birdman was young money, cash,
[00:09:19] Natalie McMillan: money, money, money, billionaires. Yeah. He was a part of
[00:09:22] Corinne Foxx: that collaboration.
Wow. Okay. So mortgages, why we chose this topic, which is just seems like an insane trend.
[00:09:30] Natalie McMillan: It is, but you've got to do it. So, you know, as millennials actually we're at this point in our lives where it seems like we should probably know how this works. Yeah. And even if we're not going to buy a house in the near future, it's still a basic, like, you know, principle.
It's a, yeah, that it's a 1 0 1 that we should probably understand by about. Corrine actually bought a home last year and she still doesn't like 100%. I don't know how this idea, how it
[00:09:55] Corinne Foxx: works. We were researching this episode and I said, I just went through this. I have no idea what it
[00:10:00] Natalie McMillan: was. So yeah, we thought we would do all the research for you.
Figure out what the fuck a mortgage is. Just break it down.
[00:10:09] Corinne Foxx: It's time. It's about time, but
[00:10:11] Natalie McMillan: you know, we love definitions. Love, love definitions. Corrine, what is a mortgage? What is,
[00:10:22] Corinne Foxx: okay. So in basic terms, a mortgage is a loan. Most often used to buy a house, a condo or some other type of property. It's a set amount of money provided by a lender, which is often a bank, a credit union, a mortgage company, and is repaid over a set period of time referred to as a M Morton.
Amortization and motorization, which is often like 25 years or 30 years or something, mortgage loans are really like any other loans in your life. You can borrow some amount, you get an interest rate at which you pay it back. And there's a scheduled that you make your monthly payments. So that's really what a mortgages standards
[00:10:59] Natalie McMillan: vary standards alone specifically for property.
Alright. Like living
[00:11:04] Corinne Foxx: property. Yes. So let's get into even more definitions. I just said some things and let's just back it up a little bit. Right. That's the company that funds your mortgage loan. Okay. Then the borrow. That is you. That is a person receiving the mortgage loan. Okay. Another word we need to know is down payment.
So that's the amount of cash that you bring into the transaction. So down payments may be described in like dollar terms to like $10,000, like $20,000, or maybe like as a percentage of the home sales price. So like you need to put down 10% of the home sales price. So if it's a hundred thousand dollar home,
[00:11:46] Natalie McMillan: 10,000 miles.
Okay. Okay. Also loan amount. So that's the amount of money still owed on your mortgage loan that you still owe on the mortgage loan? So loan amounts are sometimes called principal and the principal is the amount of money you borrow from the bank to pay off your loan. So for example, if you put down 20,000 on a $200,000, I am so sorry, 20% on a $200,000 house in cash, your principle would be 160,000.
So basically the leftover.
[00:12:19] Corinne Foxx: Yeah. So how much you put down whatever's left over that you can't afford to the house right now,
[00:12:24] Natalie McMillan: right? That's your point? That's the principal loan amount alone term is the amount of time you have to pay back the loan and they're usually in year. So like 1530. Or they could even be in months, like 360 months.
Like when people do that with their toddlers. Yeah. Tell me she's three and a half
[00:12:42] Corinne Foxx: she's 97 months
[00:12:46] Natalie McMillan: and then interest rate. So that's the borrowing rate on emo
[00:12:50] Corinne Foxx: luggage. Okay. Okay. So a mortgage has three parts to it. That's the down payment, like we just said the monthly payments and the fees.
[00:13:00] Natalie McMillan: Okay. So the monthly pay.
Is the amount needed to pay off the mortgage over the length of the loan and includes a payment on the principle of the loan as well as interest. They're also usually property taxes and other fees included in the monthly bill. So it's kind of like
[00:13:18] Corinne Foxx: rent essentially. It's like how much you're paying every month to pay off your.
[00:13:22] Natalie McMillan: Mortgage. Yes.
[00:13:23] Corinne Foxx: That loan amount, that principle. But I will say that also. Yes. When I pay my mortgage every month, it also includes like, yeah, the property taxes, like bundles, it's like a little bundle. That's not just the principal. It's like also like other wool things. Yes. Yes.
[00:13:38] Natalie McMillan: And then those fees we were talking about, those are various costs that you have to pay upfront to get the loan.
Yeah. So there's like little random fees to be prepared for. And then there's the down payment. So the larger down payment, the better your financing deal will be. So you'll get a lower mortgage interest rate, pay fewer fees and gain equity in your home, more rapidly. So kind of standard. 20% of the sale price in cash when you purchase that.
Yeah.
[00:14:07] Corinne Foxx: So a lot of people like save for down payment, right. And like the higher down payment can be the lower, your monthly payments going to be. So it's kind of like picking your poison. Like, do I want to pay more now or pay more over
[00:14:18] Natalie McMillan: time? Right. And also common misconception. Cause I really didn't know how any of this worked.
Cause I used to think, oh, if you're buying a million dollar home, you have to have $1 million in the bank. Me too, until last year I thought that. We'll say 20% of that. So if you're like looking at a house that's a hundred thousand dollars and you're like, well, I don't have a hundred thousand dollars. You need pretty much like 20% of that.
Yeah. So that's how it makes it more. It makes it a lot more digestible and makes a lot more sense.
[00:14:46] Corinne Foxx: I don't know why. I never thought that was what it was. Nobody ever fucking told.
[00:14:50] Natalie McMillan: Yeah. That's why we're here. Okay. Okay. So how do people get pre-qualified for a loan and what
[00:14:57] Corinne Foxx: does that even mean? So before you start to seriously, look for houses, you need to contact your bank to get pre-qualified for any loan.
So the bank will tell you how much money you can borrow. And this loan is the amount of mortgage you pre-qualify for. So you might recall hearing other home buyers talk about. Budget like, uh, like we were just saying, like, I'm looking at a a hundred thousand dollar home it's because they've been pre-qualified.
So that's the amount of the loan you get pre qualified for is your budget. And you'll need to look for homes at, or below that dollar amount. So you can even like go looking for houses until you get pre-qualified. Cause you don't know how much house you can afford.
[00:15:35] Natalie McMillan: Right. So you can't like walk in, you can't like get a realtor and them be like, oh, I'm going to show you.
Shaq and this mansion,
[00:15:42] Corinne Foxx: I mean, you could, but yeah, like you're wasting your time. You're wasting your time. You gotta go through this step first, first, and that's how you kind of start to figure out like how much house
[00:15:52] Natalie McMillan: you can afford. Yeah. So it sounds like your budget is the amount you get pre-qualified for from the bank.
And then you look at that number to get the solid understanding of how much house you can reasonably and comfortably pay for.
[00:16:05] Corinne Foxx: Basically, they look at your finances and they're like, well, how much can she pay a month on a house? Right. Essentially rent. Yes. And there was another, there was a thing when I was getting pre-approved it was like, it has to be within like 40% of your income or something like that.
It might not be exactly that, but like, yes, maybe you could afford to spend $10,000 a month on a house, but you would have no room to eat. They also like qualify that they're like, can't afford that, but it has to be. 40% of your income so that you can like actually live your life to,
[00:16:35] Natalie McMillan: right? Yes. Yes. They don't want you to put you in a house that you can't furnish.
Yes, exactly. Okay. So we also learned there are three primary types of mortgage loans
[00:16:47] Corinne Foxx: split those up. Yes. Okay. So first and foremost, there was the conventional mortgage loans. The majority of home buyers pay a conventional mortgage loan at conventional mortgage loan is 20% down and the principal gets paid off for 30 years.
Very good. Well, very, you know, 30 year mortgage. Got it. The second type is the. H a loan. So you'll want to get an F H a mortgage loan. If you have a credit score too low to qualify for a traditional loan, or if you can't put down anywhere near 20%, but you have to be, be aware of extra fees. The F H a may charge you, you will have to pay mortgage insurance with this type of loan as
[00:17:28] Natalie McMillan: well.
Is the FHA, the federal housing association. That's.
[00:17:33] Corinne Foxx: Okay, that sounds about right. Okay. The third type of mortgage loan is the veterans affair loan. So if you are active duty military or a veteran, oh my mom, Ms. SCADA, client Connie claims. So then you qualify for a veteran's affairs loan, the U S department of veterans affairs backs this loan instead of like a traditional bank.
Okay.
[00:17:53] Natalie McMillan: Taking care of our vets, we got it.
[00:17:55] Corinne Foxx: We have to, as we have to do. Okay. So how did the banks and the lenders. Get money for your loan. Like they're giving you all this money, where is it coming?
[00:18:04] Natalie McMillan: They get the money to give you the money, right? So this is where current and I,
[00:18:09] Corinne Foxx: our mine's just about goddamn exploded.
[00:18:12] Natalie McMillan: I thought the crypto episode was gonna just be a doozy. This one, I mean, I I'm telling you, I got a headache with my eyes squinting so hard at. This is very confusing, very confusing, but let's talk about Fannie Mae and Freddie Mac, who are these people? Okay. So the primary function of Fannie Mae and Freddie Mac is to provide liquidity, which I booted the
[00:18:34] Corinne Foxx: little definition.
Throw a big word at you guys and not circle back
[00:18:38] Natalie McMillan: on it. Oh, so liquidity is simply readily available funds in liquid assets. So AKA cat.
[00:18:48] Corinne Foxx: Cash money and young money
[00:18:49] Natalie McMillan: cash money billionaires. Yes. So yeah, they provide liquidity to the nation's mortgage finance system and they are actually two separate companies.
So, okay. Most loans, 90% of loans are government backed. And Fannie Mae and Freddie Mac were created by Congress. They were Congress created, they perform a very important role in the nation's housing finance system, which is to provide that liquidity, stability and affordability to the mortgage market.
Gotcha. So Fannie and Freddie. Who are not real people, but I like to think of them as we're going
[00:19:30] Corinne Foxx: to pretend that we know they're a part of cash, young money, cash money. Are they young Fannie and young Fred
[00:19:36] Natalie McMillan: young Fanny, young Freddy. Yes. I love that. So young Fanny and young Freddy, they purchase home loans made by private firms.
So provided the loans, meet strict. Credit and under writing standards, then they package those loans into mortgage backed securities and guarantee the timely payment of principal and interest on those securities to outside investors, young, Fannie, and Freddie also holds some home loans and mortgage securities in their own investment portfolios.
Also securities are like stocks and bonds and things like that. So not liquidity like cash security. Non-cash assets.
[00:20:19] Corinne Foxx: Gotcha. Yeah. Okay.
[00:20:21] Natalie McMillan: So basically
[00:20:23] Corinne Foxx: how does this work? Okay. Okay. Let's just break it down really quick. Really quick. First homeowners borrow money from banks or other lenders. Okay. Then Fanny young Fanny and young Freddy buy these mortgages.
And like we said, package them into these little securities. Then they sell those securities to investors and then investors buy them because they're considered safe because Fannie and Freddie take on. Of the risks and then the lenders and the banks. They benefit too, since the government takes on much of the default risk as well.
So lenders can make more loans to. More people. So together, young Fannie and young Freddy back about half of the mortgages in the U S so when I was like, so this is why I need to ask questions. Right. I'm getting my mortgage. I kept saying, okay. Yeah, I was talking to a mortgage dude. Right. He kept saying, I got to go talk to Fannie and Freddie.
And I said, who? I was just like, people let me know. Yeah. Well, they'll get back to us and say, if you're approved, It may, I should have been like, why aren't you approving me? Right. Cause aren't you the dude, but no it's Fannie and Freddie, they had to be like, yeah, she's Gucci, we'll back this loan. Right. And then that's the approved, it's all coming from.
[00:21:31] Natalie McMillan: It's coming from Congress then than filtering through young Fannie Freddie. Then they're going to the lenders. Then they're going to the borrowers, AKA
[00:21:40] Corinne Foxx: you. Oh yeah. He puts a whole hierarchy. Crazy. Is that I didn't ask him. I was like, all right, go
[00:21:46] Natalie McMillan: let me know, because logically. It sounds, it should be that he's the lender.
Like he's the one in
[00:21:51] Corinne Foxx: trouble, but he didn't, he needs to get the cash money, young money, cash, money, um, young Fannie and Freddie. Yeah, it makes sense. It makes sense. But there are another sub category. Mortgages once you get like approved from Fannie and Freddie. Yeah. So there's
[00:22:09] Natalie McMillan: a fixed rate, mortgages and adjustable rate mortgages or a RMS, and those are the two primary mortgage types.
So while the marketplace offers numerous variety, In those two categories. The first step when shopping for a mortgage is determining which of the two main loan types best suits your
[00:22:29] Corinne Foxx: needs. So, yeah. So there's fixed rate, like you just said, a fixed rate mortgage requires a monthly payment. That is the same amount throughout the term of the loan.
When you sign the loan papers, you agree on an interest rate and that rate never changes. And this is really the best type of loan. If interest rates are low, when you get a mortgage. Yeah. Because you're locking. Yeah, locked-in tell you like this is what your monthly payment is and it will not change.
That's good.
[00:22:53] Natalie McMillan: That's a good thing. Yes. Then there's the adjustable rate. So the adjustable rate mortgage allows the interest rate on your loan to vary with prevailing interest rates. So if rates go up, so will your mortgage rate and your monthly payment, if rates increase a lot, then you could kind of be in a little bit of a hot water, but if rates go down your mortgage rate will.
As well. And so what your monthly payment. So it's generally safest to stick with a fixed rate loan, to safeguard against any rising interest rates. And if rates drop, you can refinance your mortgage to take advantage of with of the lower rates.
[00:23:31] Corinne Foxx: There are two options.
[00:23:33] Natalie McMillan: You also have to decide on that mortgage term that we discussed earlier, which is the length.
[00:23:39] Corinne Foxx: Yes. So in mortgage term is the number of years you have to pay off your mortgage. A 15 year term means you have 15 years to pay off your mortgage. Again, a 30 year term means you have 30 years and you have to make. Obviously each month, a 30 year term normally has lower monthly payments because you have more time to pay it off then, uh, you know, like a 15 year mortgage.
Yeah. So like a shorter term means your balance is spread over a shorter period of time making your monthly payments higher.
[00:24:08] Natalie McMillan: Okay. That makes sense.
[00:24:09] Corinne Foxx: Now I have a question. This is something I did not know. Okay. So like I have a 30 year mortgage, right? Do I ha I have to live in my home for
[00:24:17] Natalie McMillan: 30. So this is a big question that I also had.
Cause I
[00:24:20] Corinne Foxx: mean, I like it. I don't know if I want to live there for 30 years.
[00:24:23] Natalie McMillan: And the one thing I have never understood is like, when people would like buy a house and then just like sell it a year later, I'm like, well, what happened to the 30 years? Like, are you, you just keep paying it like, right. That's what I thought.
I really had no idea. So. We looked into it. So one important thing to know is that taking out a 30 year mortgage does not mean you're committing to living in that home for 30 years.
[00:24:46] Corinne Foxx: Okay. That seems fair because it seems crazy. It makes more sense, whatever
[00:24:50] Natalie McMillan: move or what, and you don't have to keep the loan until it's end date and pay it off in full.
So that also makes sense that when. I'm still paying a mortgage on a different house that you no longer live in, right? Yeah. But Hey, nobody told us this stuff. Um, and in fact, most homeowners do not. They either sell or refinance their mortgage before the term is up. So if you move and you sell your home before it's paid off, part of the proceeds from the home sale will be used to pay off any remaining loan amount due to your mortgage, to the lender.
So basically. You saw the house. If you made a profit, then you pay off the rest of the mortgage with that. And then you keep the little chisel
[00:25:31] Corinne Foxx: change there for
[00:25:32] Natalie McMillan: yourself. If you decide you want a different type of loan or a lower interest rate later on, you can also, but we've been during this word around refining.
Your mortgage. Yeah. So that involves replacing your existing mortgage with a new loan that benefits you financially. And the process of refinancing a mortgage involves taking out a new loan and using the funds to pay off the existing alone. Okay. This seems very complicated, but you can refinance with the same lender that did your original one, or you can do a different one.
Oh, okay. So yeah, if there's lower interest rates and you're like, Hey, I'm going to pay this one off, but I'm going to start a new. But like smaller, shorter, less expensive one. You can do that. But the big question that I have then is like, okay, so you're paying this person back the lender and they're paying Fannie Mae young money money.
So do you actually own your home? If you have a mortgage?
[00:26:28] Corinne Foxx: Okay. In short. Yes. Yes, you do. You own your home, but that doesn't exclude other parties from having some rights to it. So as long as you make your payments and you keep your house in good condition and ensure it and, you know, pay your taxes. No, no other party can take control of the property, but if you neglect any of those items, okay, we don't buy your taxes.
You don't play your payments. The lender has the right to seize and sell the property. And I believe that. Foreclosure is
[00:26:57] Natalie McMillan: right. I believe that was, and that was a big part of the 2008 financial crisis is that nobody could pay their loans anymore and they, all the homes were being foreclosed
[00:27:06] Corinne Foxx: on. Okay.
Right. And so likewise, if you don't pay your property taxes, your city or county can seize it to pay the taxes. Uh ha yeah. It seemed like you own your home because of these third party rights, but just keep in mind that there's no need to worry about losing any control of the property. If you hold up to your end of the agreement and that's it.
[00:27:27] Natalie McMillan: And that is a mortgage one-on-one for us basic fishes
[00:27:31] Corinne Foxx: B arch
[00:27:33] Natalie McMillan: T uh, too short.
[00:27:36] Corinne Foxx: I love that there's a wrap. That's been blended into the mortgages
[00:27:39] Natalie McMillan: episode. Oh, well mortgages. Oh my God. We need to stop.
[00:27:49] Corinne Foxx: Okay. We'll help you guys learn more about mortgages. Down-payment Ms. May young, Fannie, and young ready, and how to start the process of buying your first home.
Obviously there's a lot more processes too. There's the friggin inspection and all that stuff. It takes a lot, but. This is level one, honestly, though,
[00:28:10] Natalie McMillan: even just re going through this now was, it was way more
[00:28:13] Corinne Foxx: understandable than when we were researching and researching it. I was like, I don't know what this episode's
[00:28:18] Natalie McMillan: going to be, but now that we've gone through it again, I'm like, oh, I get it.
Yeah. And then also this whole hierarchy of like the government and then Fanny from your research. I was like, I do not understand this, but kind of, if you think of it in rap terms, Lil Wayne would be the Congress. Oh, who then, you know, he created, he was young. He was the first guy is young man. Then he created young money with Fannie Mae Freddie Mac.
Right. Okay. Drake Tyga, the whole gang. Right. And then they, they help the people. Under them. Yeah. Like, you know, a little Chucky, Chucky, the new boys, they
[00:29:01] Corinne Foxx: weren't, they weren't in money, you
[00:29:03] Natalie McMillan: know, but yeah. But I think that they were kind of like, and then
[00:29:06] Corinne Foxx: they brought their music to us, the borrower,
[00:29:08] Natalie McMillan: the borrower.
And then here you are just enjoying. Just enjoying it and paying your, your apple music subscription. Our UK stopped paying the apple music subscription. They take it away.
[00:29:19] Corinne Foxx: Yes. Foreclosure
[00:29:21] Natalie McMillan: we're closed on your rap music. Um, we need, we
[00:29:26] Corinne Foxx: need assistance medical professional health. Okay. So now let's circle back on the syrup that we've been drinking, the scissor.
This is for our wrap mortgages.
[00:29:36] Natalie McMillan: So, uh, our little Hottie, our Hottie this week is Mr. Brad Pitt. How have we not done Brad? We hadn't done Brad Pitt, which is interesting. Well, actually not really, because he's not really either of our time. He's not,
[00:29:49] Corinne Foxx: I don't know Mimi either, but he's, he is a
[00:29:55] Natalie McMillan: universal Hottie.
Yeah. Once upon a time in Hollywood though, he different story, he looked great in that, but you know, this guy, apparently according to Google has a lot of
[00:30:04] Corinne Foxx: houses in many homes, but
[00:30:06] Natalie McMillan: it's also not just living in, I guess he. Flips them and S like he invests
[00:30:11] Corinne Foxx: in property property. So Brad Pitt is our. For that reason.
Yeah. Okay. So one, two Brad Pitt. What are we thinking? Well, what what's it called? Okay,
[00:30:22] Natalie McMillan: well, let's do French Chateau. You're going to have to read that one for
[00:30:26] Corinne Foxx: me. Um,
[00:30:32] Natalie McMillan: it's a item. I feel like people say saw term, I could be wrong. I have no idea
[00:30:39] Corinne Foxx: now. Okay. So wonder bread fit. What are you reading
[00:30:42] Natalie McMillan: this? Well, here's the deal? I feel like we're split on dessert wine because I actually love dessert wine. Okay. So I'm not mad at this. Like if I'm drinking it for dessert. Hell yeah.
Let me take another sip here. I'm going to give it a nine. I'll
[00:30:59] Corinne Foxx: give it a six. Okay. So.
[00:31:04] Natalie McMillan: Seven
[00:31:04] Corinne Foxx: and a half. Yeah, right? Yeah. Seven and a half out of Brad
[00:31:11] Natalie McMillan: Bradley Pitt
[00:31:19] Corinne Foxx: All right. This is the part of the episode. We play a little wrap-up game and we're playing a new one facts and hack backs, and which is our. Trademark or, um, it's our little slogan. It's our slogan here. Right? Am I doing this right?
[00:31:33] Natalie McMillan: Providing you with. Hot facts and hacks.
[00:31:37] Corinne Foxx: Yeah. And so Natalie and I will be giving you guys either a fact or hack, whatever we want, and it's just, you know, free advice, free,
[00:31:46] Natalie McMillan: free, free little life hacks and life facts that you should know.
Okay.
[00:31:51] Corinne Foxx: Now what's yours. Okay. So.
[00:31:53] Natalie McMillan: Life hack that I just actually found out this morning and was like, oh my God. So not a fact a hack. You know how I don't know about you. I love audio books because I can listen to them while I'm like cleaning or whatever, but I hate that you have to have an audible subscription.
You have to pay more money to daddy Bezos. And I don't like that guy. I'm just like all this garbage. Okay. If you get a library card, They're all free. How literally go on. Well, for us, I Googled the Los Angeles county library. You sign up online for a library card and then you have access to all of the audio books for free.
What? Yeah, I think
[00:32:37] Corinne Foxx: Joe does this. I do think he does this. I think I've,
[00:32:41] Natalie McMillan: we've been tricked in thinking you have to have like a subscription and all this. No, you just, you got to remember your local library. I like, you can get, like, you can get any book there. Right? You can also listen to any audio book for
[00:32:54] Corinne Foxx: free.
Here's the thing I'm really sad that I've turned my back on libraries because they make sense. They make, because like, there's so many books that I read, but then I put them on my shelf and I'm like, I'm never gonna read this at kin. Yes. So it makes sense to go also eco
[00:33:08] Natalie McMillan: friendly. Gosh. So
[00:33:12] Corinne Foxx: yeah. Our library is going to go to business.
I'm going to literally cry. There are
[00:33:15] Natalie McMillan: government. So the taxpayer money, but I'm like, we need to re support our libraries.
[00:33:23] Corinne Foxx: I forgot about them. That is definitely a hack. That is a hack and a half. Oh my God. I love that. Okay. So I also have a hack. Okay. Something that I. Realizing I never do. And I'm now going to schedule to do, which is look at my finances.
Like I never like checking in. I've been wanting to buy cryptos since we've been talking about crypto, but I never put time in to do that. Right. So I was thinking, I was like on a walk and I was like, I kept hearing in my head, financial
[00:33:51] Natalie McMillan: Fridays, financial
[00:33:52] Corinne Foxx: Friday, and I'm saying financial Friday. And I think it was actually something you kind of started doing.
And then, yeah. So anyways, what I'm going to start doing now is. Putting time in my calendar on Fridays for 30 minutes an hour, whatever.
[00:34:08] Natalie McMillan: Really? You only need the 30 minutes. Yeah.
[00:34:09] Corinne Foxx: I'm just writing financial Friday and just sitting down and going over my, you know, investment portfolio, going up vendors, checking in on things and just putting the actual slotted time to do that.
Because as a very busy person, You know, I can look at my bank account on my phone, but that's not like an actual, like, conscious, like where would I like my money to move? And like, there's no strategy. It's just like, oh, that's how much is in my bank account? Or that's how much my credit card bill is payout right now.
Right. So
[00:34:38] Natalie McMillan: actually another great thing about finance part. I also like to put on really fun music. Cause you know, you open your bank account and you're like, You've put on fun music and it makes it like a little bit of a party. So last Friday, when I was doing my finance Fridays, I was like going through everything.
And I noticed that I had a charge from my plotty studio that I was like, what is this? So I called him and I was like, Hey, what is this? And they were like, oh, that was a mistake. And they took it right off, but I would have
[00:35:03] Corinne Foxx: missed out. I never do that. Oh, my God. I can't wait. I'm very excited for financial Fridays.
Yeah. Okay. Well, if you guys incorporate any of these facts or hacks into your life, please DM us and let us know. We'd love to know if these help you guys. I know.
[00:35:19] Natalie McMillan: Or if you really love helping
[00:35:20] Corinne Foxx: you, or if you guys have a life
[00:35:22] Natalie McMillan: hack, if you have a hack you'd like us to share with the AMA, we'll read it on the podcast.
[00:35:28] Corinne Foxx: Oh my God. How fun would that be? Okay, well, also, if you guys don't want to miss an episode or you're nervous, like, well, I miss an episode. You can sign up for our newsletter on, am I doing this right? pod.com. Get on our mailing list. We send you one email a week just to wrap up the episode. We send fun gifts.
We send, oh, I'm sending the video of. Oh this week, baby angel T pain. So, you know, it's a good time in your inbox. Yeah, it is. And also we have our random advice segments. So if you guys are going through something in your life, personal and your career, whatever, doesn't matter, you can email. You know your little situation and we will give you random advice here on the podcast.
Anonymously, always anonymous, but never call you out like that and
[00:36:10] Natalie McMillan: apologies on us because we were, we were really heavy promoting it and then we didn't do a wrap-up for a long time for it.
[00:36:16] Corinne Foxx: Yeah, we, yeah. You know, we, we got busy, but we're excited and we're, we're, we're prioritizing it. We are for sure. And then also, if you guys liked this episode, if you liked the podcast, please, please, please rate and review our podcast on apple podcasts.
And we might even read your review
[00:36:34] Natalie McMillan: out loud. If you understand mortgages at all, now give us a nice five-star share to your friend maybe, and be
[00:36:40] Corinne Foxx: like I learned
[00:36:40] Natalie McMillan: something today. Share, share, share the knowledge. All
[00:36:44] Corinne Foxx: right, well, we'll be back next week with another episode
[00:36:47] Natalie McMillan: of the cash money millionaires.