And we're here for the b a q A, the b a q a, the b a q a. Mm hmm, go ahead, Mandy, I'm gonna.
I'm sorry, I didn't know what the second.
So it's time for Brown Ambition Question and answer. If you've got a question and you need an answer. We're not your financial advisors or your financial you know, I don't know legal legal jargon jargons to your grandma. We're just girlfriends here who are sharing what we might likely do in this situation, and you will take it with a grain of salt and meet with your said financial expert person in your life that you pay money to and decide if that's if that's you know what fits best for you?
Okay, I mean ak baqa.
Yeah, Q and a light lowercase A. All right, let's dig into this reader listener email. Okay, so again you can reach us, out reach us out. You can reach out to us at Brannambition Podcast at gmail dot com, or go to Instagram and slide into our dms Brown Ambition Podcast on ig. Try to keep them, you know, succinct, give us information, but not too much information, okay. It just helps us answer them in a timely manner on the show. But what do we have for our first question today?
Tiv So first we have let's see, Oh she'd like to be called Eve. Eve says, Hello, ladies, Love Love Love. I've been a listener for years and I'm happy to watch and hear all of your recent accomplishments.
Thanks Eve. Here's my dilemma.
I purchased my first home, a condo in the DC area in the fall of twenty nineteen. At the time, my credit score was just good air quotes in the high six hundred, so the interest rate I was offered from my credit union was five point two five percent with no PMI, which actually is not bad for that with a three percent down payment. I was in experience
and made the mistake of not shopping around. Over the past two years, I've been working really hard to improve my credit in the hopes of refinancing, since I plan on keeping this property and passing it down to my family. Love that my credit score is now in the high seven hundreds, perfect and with interest rates at record lows and area housing prices at at all time high, I feel like now it's the perfect time to pull the
trigger and begin the refin process. My situation gets complicated because I'm also looking to change jobs in the next ninety days, and from my experience back in twenty nineteen, making any major life changes during the housing process is generally frowned upon. So my questions to you are, should I refine now while still seeking new employment, wait until I land a new job to begin the refin process, or refine now and put my job search on hold
until I finish refinancing in a few months. Bonus question, knowing I don't have twenty percent equity in my home yet, so a lot of lenders may require PMI, is it better to take a lower interest rate and pay a couple hundred and PMI for years or get a slightly higher interest.
Rate with no PMI.
Okay, Eve, if we're going to focus on your main question, right, should I rEFInd now while still seeking new employment? Here's the thing, Eve, It's not generally frowned.
Upon to quit your job during the home brian process. They will cancel like sis. Think about it.
Let's pretend that Mandy is the bank, hey, bank of mandra Hi, and I'm just Tiffany. I've been teaching for ten years, which they love. By the way, you know, and I've come to you and I would like to borrow some money from you, right, we have that, right? And so I've got a job, very stable, love it, ten years as a teacher, amazing, and I'd like this house.
Can I borrow some money?
Sure, we'd love to give you lots and lots of money.
Okay, So halfway through the process, ooh, Mandy, you know how I said I had that job?
Yeah? We love that.
Yeah. Yeah, so I kind of quit, but I do have a new job. We didn't even plan that skit, you see how me and Mandy we just did sync. We just did sinc So, Mandy, why does that happen? Why would that happen?
Because you, when you are, when you're getting a mortgage, you and your credit and your income, all of it is like a delicate little house of cards, and if anything changes, the bank does not want to lend money to you anymore, even if you're changing for a good reason, you got a higher paying job. They go through such a rigorous underwriting process that them having to go back and recalculate things just messes them all up, gets them out of whack.
They don't like it.
So I would definitely say open door number three out of these options, which is put the job search on hold for now, at least officially changing, I would say, interview, do all that cute stuff until you finished your refine process in a few months. That way, you can take advantage of these low rates right now and hopefully the job that you're seeking will be out there and they can be a little patient for the next couple of months.
Because you have to think about this Eve that even if you, to Mandy's point, you get a job that pays you more, the bank doesn't care.
You know what the bank cares.
About stability, Like I make significantly more than my husband, but he's been at his job for twenty years. Do you know when At first, because y'all know, I bought this home and we paid cash for it because we happened to find a foreclosure that was like fifty percent off. But before that we were looking for homes that we were going to finance. The bank was like, I don't give a what about what tivity make. It had whole
old ramshackle budgetista up down left right. They're like, now, mister Smith, you are very attractive with your twenty years of service.
I was like, I made one of him. They're like, we don't care. We don't care.
The bank like stability. They like to know this person is highly likely to have my coin. And if you have a new job, who knows how long that that job will have you, versus like being at the job where you are now. So I actually had a friend that did this. They actually moved. They he knew that he was going to be quitting his job and he was going to get a new job. He wait, he waited until he closed, was in the new house, and then jumped to the new job. They can't do anything
once you're already at your new place. So yeah, to Mandy's point, wait, sis, don't do nothing crazy. And I love the fact that your credit score is high seven hundreds. Anything over seven forty, it's considered perfect credit, which is awesome. And yeah, I think that you know you're in a great position, But don't don't get a new job just yet. I love.
Can we take the bonus question really quickly? Because she says, a bonus question is knowing that I don't have twenty percent equity in my home yet. So a lot of lenders may require private mortgage insurance. Is it better to take a lower interest rate and pay a couple hundred dollars and PMI for a few years, or get a slightly higher interest rate with no pm I. So my favorite thing, especially when you're because I almost called him Superman.
That is not my husband, Husban Husby and I we actually did refinance our mortgage last year around this time, last up August or September, when rates were going really low. What rate did you get if you don't mind, shoot, I don't remember, I don't remember. I don't remember.
I'm sorry.
A low one. But when we were doing it, there was so much conversation around because our rate was really good to start with, and I think it was four point three. It wasn't terrible. We got that in twenty eighteen, so we had to get it below three percent. I want to say two point eight seven five seems to be a number that feels good to me.
I'm amazing.
Yeah, the rates were really good and our credit was great,
so we refinanced. But because there wasn't that much room in between the two rates, I mean, two points is a lot when you're talking about thirty years worth of interest, but we still had to make sure it was going to be worth it, because not only are we talking about doing the closing costs all over again, you know, saying for the origination fee, and yes, some lenders will waive that kind of stuff, but you have to pay for your legal fees and all that kind of crap,
So there's upfront costs to it. So how we decided the break even point, which is, you know, how much are we going to save versus how much are we going to spend and is it worth it? We actually used a handy calculator from lending Tree. That's something called the break even calculator, which we can link to, and also the when you're shopping around for your VIFI and I definitely encourage you to shop around the same way you do with your mortgage, go to multiple lenders so
that they compete and give you the best offer. We had two lenders, you know, going head to head, and we went with the one that had the lowest rate in the best customer service. But anyway, when you have them compete, they will also help do a lot of that math for you and they can tell you, you know,
here's what makes the most sense. So I don't have a specific answer, but what I'll say is, there's calculators, and then you can also ask the lender agent whoever you're working with, to help you with that math as well.
Hmmm, look at the math. Make sure to math maths. E Okay, but we're proud of you. I think I love the fact that you know, you got this great condo, you want to pass it down, and you're you worked hard to get your credit score up.
You know, just wasteis you could You.
Could abandon shit as soon as you as soon as you get your your money tight abandoned.
Something feels very adult about something refinancing a mortgage that was like the most adult thing I've done outside of having a child. Like, nothing is more adulty hardly than refinancing. I mean a mortgage first time cute, but refin so you're really on your grown is right now and I'm here for it.
Yes, but be mindful this because my friend got my friends got like kind of kind of side not sidetracked.
What is that person when they side sidewiped words?
So because their house was worth much more when they refinanced, their taxes went up, So just be mindful that that might be something because you know, home prices have gone up astronomically that it might affect. So they were able to save four hundred dollars a month in refinance and their taxes went up six hundred dollars. So they were like, are you kidding me? So just be mindful of that as well about like, you know, will your taxes potentially go up? All?
Right, next question.
I'll take this one. I'll read it anyway. This comes from listener Ayana, Ayana. We'll say hi, Tiffany and Mandy. I love the podcast so much. I have a question about how to calculate net worth. We just started tracking it in January and hit a major milestone positive net worth mini dance party. We're dancing with you a but I do want to make sure we're calculating it correctly. I know that net worth is our assets minus our liabilities, but I'm not quite sure where the mortgage falls in that.
Do I simply subtract how much we owe on the house, which is how we're currently tracking, or do we include what Zillo told me is the worth of the house. We would love y'all's assistance. Thank you so much for your help.
Ayana.
This is a really good question, very good question.
It is It's one of the chapters in my book gik with Money gig money dot Com. You know I haven't plugged it in a while. Yes, but go ahead, man, I just want to have.
You have the giant poster of yourself playing you. But yeah, sure, it's been a minute. Gig himmay dot com.
Y'all.
This is a good question.
No, you're you're right though. The key is when you're calculating your net worth as far as your home is concerned. You can't just look at how much you owe on a mortgage or how much your home is valued at in a vacuum like separately. You have to subtract one from the other to get your equity. So what I would do. It's hard because it's difficult to understand what your home is valued at now because until someone buys your home, you don't know for sure. Your home is
only really worth what people will pay for it. There's ways that you can estimate it. One way is Zillow, which is not necessarily the most accurate, but it can give you a It can give you a ballpark. Another way is to ask a realtor in your area or see you know, do a quick little survey of home similar square footage amenities in your area that have sold recently and what they sold for price, price per square foot and then kind of try to suss out your
value from there. Once you have your value, you can subtract your mortgage or how much you owe on it from that value, and you have a general sense of your equity it equity estimate, I would say, and that can be added on top to your your network.
I want you to think of like I think about like like when you're doing a network for people who are doing your network, that it's like two columns. There's the asset column and there's a liability column and so and at the bottom, it's like you're adding up all your assets. At the bottom, you're adding up all your liability. So assets are things that are putting money into your pocket. Liabilities are things taking taking money out of your pocket.
And then at the bottom those totals you're gonna subtract, you know, what's taking money out of your pocket from what's putting money into your pocket. So if I was looking at it, like you know, you're creating this chart on the asset side, I would have the like Maddy said, the estimated value current value of my house on the asset side. On the liability side, I would have current
the current balance site oh on my house. So there has to be a balance when it comes to mortgages or cars, you know, things that you owe money on because you have to have on one side what it's worth, on the other side what you still owe on it.
And that's how it balances.
So like for any of you, like budding accountants, you know, that's just balancing your balance sheet.
And so that's how you'll know.
So knowing for your home, your car, and maybe you own a boat or whatever, that you should have something on both sides of that of that column, and it will help you to know that you are at least fairly accurately deciding you know, how much your your net worth is.
But you know that's awesome.
A positive network just means that you own more than you owe. That's really key, owning your assets, owing your liabilities, and that's the ideal that you're wanting to The only way to really raise your net worth is you have to eat their own more and or oh less. And if you do that, you know you really because people can have a ton of money. I mean we've seen it. People have a million dollars you know, in the bank, but they owe ten million, so their net worth is
negative nine million dollars. So you can have a lot of money but have a terrible net worth. To me, net worth is one of the numbers, like a credit score or debt to income ratio that it helps to really gauge like the health of your overall finances and so like, congratulations on a positive network. Iyaha, that's awesome, So keep going and keep like.
Student loan debt is the secret killer of net worth in this for millennials and Gen xers for sure, and increasingly senior citizens, which is pretty damn sad. And there's been like very little movement on the whole student debt cancelation front. But I mean, if you look at your net worth, truly, I guarantee you, for a lot of people, it's student loan debt that's holding them back.
Which speaking with speaking about holding people back, we got an interesting how are we gonna do this?
And here's the thing.
Okay, so I'm i'm we're gonna rename her because I don't want to put you maybe you put it, gave a fake name. We're gonna name her Sincere okay from Arizona. Now maybe you gave us so Sincere from Arizona. I thought yes. So she's sick of her Sincere from Arizona. Look, she's sick of you. She's sick of you, your boss, her boss. She's sick of you, she's sick of your mess. She's sick of your foolishness. She's sick of you having.
Your right hand.
And you don't even want to lean into the fact that she's amazing. She's about to be out anyway, you know, because you don't really acknowledge her accomplishments. Sincere is sick of you and your foolishness. Now that's not her name, that's not where she lives. You know. We I don't even know if these names and things are right, but we we feel you Sincere. Well. I can't read this out loud because I do not want where you work to let you go before you are ready to be let go.
But she's here. We wish you well, We wish you peace. Girl.
Don't let don't let them talk to you crazy. Don't let them make you feel crazy. Sincere, me and Mandy are rooting for you. I see you've been at the job for some time. But that's the right though. You're dope, girl. Don't let them make you feel less thing you you are the job. See how they do without you.
Okay, so yeah, this is the This is the one excerpt that's maybe safe to read, but the core, the core thing is clearly Sincere it just wants to vent because they have been working at this job for a long time. Don't feel appreciated, They say, I don't understand why every year I have to provide a list of accomplishments to prove why I should get an increase when I think my work speaks for itself and I am doing the work of four people while being underpaid. This
is this is, this is the thing, Sincere. If they you have to believe who people are when they show you the first ten times, okay, at least the first one, two, three, four, ten times. And in this case they have shown you that you know you're You're work isn't valued you, you aren't getting support that you need. So I feel like, as angry as you are and as hilarious this is, I just want you to be happy, Sincere. So I'm saying, get your resume dusted off and don't feel you have
been there a long time. Don't feel a lick of shame for going on your merry way and working for a place that hopefully values you a hell of a lot more than this place has. Yeah, virtual hug, I kind of wish this was tequila. Now it's just water.
Don't let them, don't let them stress you else. Listen to get your kiky on.
This was a healthy venting, you know, strategy though coping mechanism. You can y'all convent to us, I mean, maybe not so much, but vent to us.
Put it, you're not here, Yes, we are not here that we will not if we think there's anything in here that maybe you're not really thinking through that, Like, oh wait, my boss or whomever might be able to tell us me we're good enough to be Like no, I'm not gonna say that part.
And I really hope there's no one names since here in Arizona, we don't mean you like no not.
Her boss is like, oh words here, I heard about you on the b A.
Pseudonym pseudonym.
Okay, So if you have a QA for the b A, then please submit it to us at Branna Vision podcast dot com and click ask us anything. Certainly you can send us a d m on ig We like that as well. And if your thought this is really helpful, please share this podcast with three friends. Literally copy paste the link and say you need to listen. I laughed, I cried, I learned, I grew Okay.
Oh god, that put that on a put that on a poster. I need that right behind me. I laughed, I cried, I learned, I grew from brown ambition. All right, until next me a Sam Bye,