[00:00:05] Speaker A: You're listening to casual talk radio, where common sense is still the norm, whether you're a new or longtime listener. We appreciate you joining us today. Visit
[email protected] and now here's your host, Leister.
[00:00:21] Speaker B: Welcome, welcome. And if I come across this a little bit gravelly, I apologize.
I think allergies are just kicking my tail right now because, you know, we're in May and I think allergies are just kind of starting to take over. I don't, I don't know for sure, but it certainly feels like it, it doesn't feel normal or natural for me.
Casualtalkradio.net welcomes you back or welcomes you to the show. My name is Leister. I am your host, and I've got a couple of things that I wanted to follow up on. So I did a couple of episodes so far about the journey to buy a home, and it seemed like these are popular episodes. The information shared seems to be of value to some people.
But it occurred to me that you may have heard me, if you've listened for a while, make certain statements that might have caused you to scratch your head.
And I figured, why don't I elaborate on what I mean? Because I need to make sure that it's clear and why I'm not trying to be, you know, a naysayer or anything. By no means am I, but I think I need to clarify terms. So with buying a home, it ties to buying a home. Buying a home involves largely three things. So be sure to take notes, I don't mean on your phone, but be sure to take notes on this. Number one, most importantly, when buying a home, money, obviously, right. You need money. The key is it's not just the money that you have. It's also the money that you expect to make. It's the money that you've made in the past and the source of that money. It's where the money is right now. It's making sure that you're going to have enough money come closing time. Money kind of drives largely the conversation, but it's not the only thing to think about. It's just the top of the list.
The second, credit. Right. Credit is less important. It's not that it's not important. I'm saying it's less important than money. What do I mean? You'll notice and, or may not even know, but many wealthy people have terrible credit. The reason is because credit's a scam, and you've heard me talk about that, that is going to be the topic of my conversation here today. A little later, I'll get back to it.
Number three, location. You hear it? Location. Location. Location. Well, what does that mean? Well, some markets are easier to buy than others. Some markets are easier to sell than others. Some markets have crime considerations. Some markets have terrible schools. Some markets have lending programs that are designed to help you buy a home. Some markets have junk homes like Chicago.
Some markets have more foreclosures than others. Some markets limit who can buy. Did you know some markets actually have covenants in the neighborhoods, written in the actual documents in the bylaws that prohibit certain people from purchasing homes? So if you're, let's say, native american descent, let's say you're asian american descent, let's say you're hispanic american, let's say you're black american, regardless if you're not white american. In some places, they actually wrote in laws and bylaws and covenants and any document they could justify prohibiting you from purchasing home or from holding property. I should be more clear. It's not even about the purchase. It's about, are you the owner of the property? That's not allowed. Are you here because you're a slave? We'll let that slide.
So location matters. Sometimes you might want to live in a certain place because you're close to family. Sometimes you want to live in a certain place because of military connects. Sometimes you want to live in a place because it just appeals to you and your personal sensibilities. Or sometimes you're looking at it from safety measures or good schools or something. But usually it's my job. Uprooted and went somewhere else. I had a situation where a company I worked for was based out of southern California, and I had, I'm pretty sure I had long left by this point, but they uprooted and went to Nevada, and they offered everybody basically a year's worth of pay if you wanted to come along. The vast majority of people didn't want to go because it's Nevada, and so many of those people loved California for reasons I will not understand. But they offered people a thousand, you know, basically a year's worth of pay to uproot and move. And then that company is still out there, as far as I know. But that may be your justification for why people move, is their job. Took them. That's rare, but it does happen. It's most commonly military proximity to family, more commonly or cost.
These are usually the three.
Why did Leister decide to move? And I've moved a lot. So the journey started in California, it went to Washington state.
I don't regret the move to Washington state, but Washington state, western Washington state should be clear, is a cesspool. Terrible place unless you can work from home. I should be. I need to be emphasizing that. If you can work from home, I think there's great places in Washington state. The tri cities, the far western side, Blaine up north. There's really nice. What is it? Bellingham? I believe it is. There's really nice places in Washington state if you can work from home. It's when you cannot work from home that it's a cesspool, piece of garbage to live in.
And unfortunately, I was working for an organization that didn't let me work from home. And then by the time I. Because I assumed I was going to be there a while, I got settled. I bought a home up there. I think I told the story. I bought a house up there. I regret the house I chose, not the experience. But then the one person who was my advocate at the company retired rather suddenly. So now I can't stand hardly anybody I work with, but I'm stuck with this house that I just bought. I found another opportunity, consulting. But I was working for somebody else. So I'm beholden to their rules, and I own this house that I got to pay for. Then I got scammed with that state program, which goes back to the whole money thing.
The state program is for people who don't have enough to put 20% down, which I didn't at the time, and I could have saved it, but to do so would have taken me a long time, because the town home I was in raised the rent from $1,500 a month to just over $2,200. And I told him to gfy as ElON Musk liked it. So I ended up buying the home, which, again, I couldn't have known that the person my advocate was going to retire, couldn't have known that at the time, outside of the fact that I had to go into an office, I wouldn't have minded if I could have worked from home. It'd have been perfectly fine. So when I got this consulting gig and it's work from home, I'm excited, because I figure I'll be there for a while, and then I can build up enough money to eventually live where I really wanted to live. Well, that consulting, because I'm working for somebody else now. They're trying to ship me all over the nation. I was never actually home. So I'm paying for this amazing house that's 2600. I'm never there because I'm constantly on a plane flying from location to location, out of pocket, up front. So it's a reimbursed model, and it takes basically two weeks to get your money back. Well, they fly you two weeks at a time.
I'm a tall dude, so I'm not sitting in sardine seats. I'm having to do first class. And so, you know, you're. And then hotels, especially when I went to Boston, sometimes it's $2,000 minimum for the trip, and it builds up. So I don't have a lot of money discretionary for this. And then all sorts of stuff happen. I get to another one. That one is, it's essentially a consulting, but I'm full time. And that was a nightmare, because although I have a American Express corporate car with no credit limit, they allowed the customer to dictate how much I can spend on it. And the customer was allowed to dictate what hotels you stayed at to control the spend down to the dollar, which wasn't going to work. So I have to leave these, and I get a different opportunity. So now my next journey is Colorado. This is the fiasco that was. And that was my fault, because I was. I wanted to get settled, and I didn't realize what I was walking into.
Story behind that is, I get the situation presented to me. It was actually full time, but came through an agency. So I do the presentation. They flew me up there, the whole nine. I like it. I certainly wanted to be out of Washington. Great. I accept it. They're told, I'm telling me you're gonna run the show. I get in. They had already started down the wrong path, so then I had to course correct. And unfortunately, I lost track of it, because there was so much to do, because they had gone so far wrong. I lost track of it. So my car was left at the parking, the airport parking, for countless months. I think I didn't get it back. I want to say it had to be like two or three months. It was a while that it was sitting at the parking, so I'm paying for it, the meters running. So I finally go get my car. Now I got to drive my car up there. And unfortunately, because of the situation with the house, and I'm not going to give over specifics, but suffice to say, I misunderstood that u haul's u box was a piece of crap. That's my fault. I should have understood how bad they were, because I had a situation with them before, and I didn't think it through. So they don't for you, FYI, they don't allow you to do same day drop off and pick up of the crate like Upac does Abf.
So there was a fiasco trying to get all my stuff packed in there, all of my critical things. And it's just me and I gotta get back to work. It's only over a weekend, only got the two days. And there was other stuff happening with the house. So I didn't get all my stuff. So I lost a lot of paperwork from like my video game business and some old tax stuff that I don't really need, but it was nice to have it. I lost a lot of that critical paperwork. I lost my whole stereo setup that I had. I lost my. I kept one of the blankets, but it wasn't the good one. I lost a lot of valuable things. Nothing that was critical, nothing that I could do without.
But I lost a lot of stuff that I probably shouldn't simply because I misinterpreted you box with U Haul. And I overestimated how jacked up it was going to be when I got to Colorado.
So fine, I finally do that and I had to let stuff go and it was what it was. And then I get to kind of Colorado. I had to shack up in an executive place situation rental because although I was going to make good money, it wasn't the money I really wanted yet. I think I only started at like $86,000 or something. It wasn't that high.
And I know some people are listening like, jeez, are you crazy? It wasn't that high because I was already making 80 something thousand dollars at the previous. So for me, relatively speaking, it wasn't a significant enough increase. I got to the point that I wanted, but it took some months, it took some years to get to that point.
So now I'm in Colorado. I rented the entire time I was in Colorado. I was never at a point comfortable of buying a home. Mostly for credit reasons. That's why I said it ties back when I talk about credit and why it's a scam. It was mostly credit reasons. Now, for renting, credit was perfectly fine. I never had a problem renting anything based on credit. And out there, they didn't care about references, which is really good because I don't do references. I think it's stupid because people just lie. They just call a buddy and say, act like a reference. You can't prove it, so it's a waste of time. We know everybody frauds the system. That's why I think it's stupid. Go off the credit if you have to. I think that's stupid because you're not lending me money.
So now I'm trusting. I'm telling the story about how it's a scam in Colorado. I didn't have to deal with those reasons why it's a scam, which is one nice thing about Colorado.
However, I started. A new boss came in. I started having issues with this joker because he doesn't understand, and he's bowing down to the client. The client. They don't know any better because somebody prior to me had screwed up, and they don't get it. And so it's a chaotic mess, and I was making significant progress, and I was having fun doing it, and I thought it was good, but at the same time, there's stuff that I'm not cool with. So I decide I'm gonna leave. I gave the guy warning, and he laughed in my face. All right, cool. I'll show you. And I decided to leave. So then that was the mistake I made to go to Oregon now. And I accepted that. When they flew me out again, I should have known something was up when I went out for the interview, because when I. This is full time. Because when I flew out there, there's a hotel that's, like, walking distance from the place.
And I got there late night. It was like 11:00 or something. I still have my jacket on because it's rainy, it's cold. I have my hat on. And the lady behind the counter. I told the story. My things up on yelp. Still. The lady swore she couldn't find my reservation, that the place had set up for me. And I even gave her. I offer her the number. Look it up by the number. I guarantee you it's there. And she swore she couldn't find it by my name. She couldn't find it by anything at all. So now I had to go down to. I'm pretty sure it was a Howard Johnson. I don't know if anybody stayed at Howard Johnson. Howard Johnson does not make you feel at home unless you live in a slum, because Howard Johnson is the worst, slummiest, rattiest, other than Travelodge, rattiest hotel I've ever stayed in in this business. But I have no choice because I didn't carry. I didn't carry significant money on me or in the banks. I just didn't. So that was the only place I could go because it was like $40 a night. So I go down to the Howard. It's down the road. I go to the Howard Johnson. I stay there. The toilet's tiny, it's noisy, it's dirty. I didn't see any insects, but it was horrible. And I could tell that some sort of sexual activity was going on. So I do the Howard Johnson business, and then the next day, I go and to the place to do the interview because I can't. It was like a Sunday night. Now, Monday, I go to the place and I tell they're, they're waiting for me because they don't know where I was because they tried to call the hotel to check on me, and I wasn't there. The other hotel, I get there and I'm telling them. They swore they couldn't find the freaking thing. Sorry. And then you guys are closed on Sunday, so there was nothing I could do. Apparently, they talked to the other hotel and they apologized profusely because they were trying to search against my last name as the first name. Now, I gave her the appointment number, so I know the excuse was a bunch of crap. That's number one. Number two, I specifically said, I'm pretty darn sure there was not anybody else there that had my name as their first name. I'm guarantee if you take the time to look, I'm guaranteeing you it was not the case. I know she's lying. I know she's lying. What happened? I can guarantee you. And it seems like it's a pattern. In some places, they saw, I'm sorry, a black american wearing a black coat and a black hat. And they profiled me. That's what happened. She profiled me as if I don't belong there. And this is a high end swank, you know, like a $300 a night hotel. This was not a simple hotel. That's. I. That's how I know that's what it was. They tried to offer me, okay, you can go get some, some meal, and it's $10 off. I'm like, no, you're gonna do the meal for free. You're gonna do the room for free, or screw you. They finally said, well, we're sorry, and we'll give you the room and this and that. The other, and I actually, I'm pretty sure I said, I'll do the last night just because I'm not going back to the Howard Johnson, but I'm just doing the one. I'm not going to stay longer than I need to. I don't want your dinner. I don't want none of that. Because you're just going to profile me at the dinner count. And they got all pissed off, and it's like, look, bro, sorry. Your lady profiled me. That's what happened. It's the only logical explanation because she couldn't. You're telling me you couldn't find it by a reservation number. That means you didn't try. It's not possible. The reservation number takes you straight to the thing. So if you didn't just check, and I even gave her my driver's license, the whole nine. She didn't check. She didn't bother. That's what I'm saying is it can only be profiling because there's no way with a reservation number, you're not finding it. So I don't want anything to do with them. They're apologizing, all that. When I got there, I wasn't trying to hear this, but that incident should have told me, this is. This isn't going to work. And the phone call I have with the manager, he lied because he said, nope, you're reporting to me, and this is what I need. And as long as you do that, we're all good. And I get in there. So I accepted the position. And I remember during the interview asking him, I'm struggling to understand how I can help. I'm struggling to understand what you need. And he said, they're screwing up in another department. We need somebody to get it done right because our customers are pissed off, essentially, is what he said. And your role is designed to come in here and make sure our customers are getting what they need. Okay. I treat that as authority. I treat that as you're gonna give me some authority and autonomy to do it. Right. That means whoever's over there, they're gonna have to follow my instructions. And he's like, yes, that's what we need. We need it done because they are. They are the customer. We got to take care of them. Okay. I'm cool with that. The money was good.
I didn't ask for too much money. It was the same. It was actually less than I was making before, but it was my threshold at the time, full time. And then Oregon has certain tax benefits that made it, you know, seem like it worthwhile. And then rent wasn't that high. Now, there were other issues, but the point is, the money seemed to make sense. So I accept the offer. I get up in there, and he's telling me again, now, here's where it's shifted. All of a sudden, I'm reporting to this other chick. And I'll call her a chick because I couldn't stand her. I'm reporting to this other chick, and I don't even know who this, I think she was in the interview, and I just didn't put two and two together. I thought she was just some lowly worker, but apparently she's the supe of this group and I'm reporting it to her. That wasn't what we agreed, and I really don't like her. You know, she's a black american, or at least mixed, so I'm assuming there's something there. But again, this was not disclosed to me beforehand, and she never interviewed me as a boss, so I could get a chance to assess her ability to lead. So I didn't know she was capable or competent to be able to lead somebody with my energy. Turns out she couldn't.
Okay, he's emphasizing again. No, what we talked about is what it is. Meet with them. Let's get this thing going now. This is a new setup that this hasn't happened. This is just whatever I get in. And instinctively they're all put now, all, mostly it's one person, but there's resistance because they weren't told I was coming in and they weren't told what my role was going to be. So they're pushing back, naturally, because they don't know what the hell's going on. I'm telling my boss, hey, they don't, they don't seem to want my help here. I'm sitting in rooms wasting time. This organization has mandatory furloughs. In their case, pretty much every, it was like every other week or something else. There's a mandatory furlough day forcing you to go unpaid, even though it's like, wait a minute, I'm ready to work. I'm salaried. You can't do that. By law. FLSA if I was ready to work and I worked at least an hour that week, you will pay me the full week. And they were essentially violating the law at will. And nobody's questioning this business, okay? That's not going to work. They won't let you work from home. Everybody else started at six. I'm trying to start at eight because I'm not waking up at six out here. They won't let me dial in, you know, to say, I'll just dial in. If your meeting's at 07:00 I'll just call in. They wouldn't let me do that, even though all we're doing is talking about, what did you do? I didn't do anything because you're not letting me. So it's a waste of time. I don't need to be in the room, back and forth. The place I rented, and this will freak some people out. And that's okay. That's what I want. So the place I rented looks nice on the surface, but then sometime, and I want to say this was. I want to say it started in summertime. There were these little brown. I say little spiders that started coming in through the cracks of different doors. It had a major ant problem. Like, I've never seen ants to that degree before. But the spiders, I actually have pictures of these things. I may even do it on the. On the thumbnail if I can track it down. But they're these little brown spiders. I want to say they're like, quarter size. So I say little. I'm not. I don't. They're little in, you know, retrospect, but they're like quarter sized spiders that are coming into the cracks of the door. And there was a lot of them. There was a lot of them. I had to think there was at least six or seven that I found purposely and killed in this business. So it's got pest issues. It's got the ant issues. The neighbor upstairs, it's like two guys, and they were constantly arguing late night. This one guy's yelling at the top of his lungs, and he sounds like he's slow or somehow, I don't know what going on, but. So there's that. So I can't really sleep because of this business. You got the ant issues. You got the spider issues. There's no air conditioning in it, so that's a problem. It's hot as all get out. I had to get up. You can't put a window ac. So I didn't know all this stuff right when I'm running this. So I got that. I can't work from home like, I think I should be able to do. I've got a soup who's incompetent. I got this manager who lied. I got this group who's screwing up, but they won't let me fix it. And I'm essentially collecting a check doing nothing. Okay, that's cool. I'm getting money, but I need to be engaged. I need to be doing something, and I certainly need to be satisfied where I'm living and what I'm doing. And there's a taco shop, but it's kind of crap. Like, it's getting bad food ratings. There's everything shutting down. It's kind of like a slum area.
I'm just not happy. So I was only there. I was only there from that January all the way through at this point. August officially, but I formally moved in, like October ish. Yeah, October is when I formally moved. I was still renting it, but I finally moved. That's where I headed to Nevada. And I only went to Nevada because my client is in California at the time when I left this other place. So I left that place in April because of the joke that was going on and went and became a consultant, my own business. So that's what started my journey of being my own, working for myself, making my own money. And then I ended up in Nevada to be close to the client and get away from all this garbage as. So then COVID hits, right? COVID. That what COVID taught me is it absolutely doesn't. Your credit just simply doesn't matter as much as it used to. It's all about the money. Not just the money you have, but the money you can produce and money you can prove it doesn't mean that it's a guarantee. Sure bet. Because a lot of people who are renting, they are coming. They're renting because the credit's not enough to purchase. However, I want to tell. I want to school you on a couple things. Did you know that in some states, not all, but in some states, it's actually easier to buy something than it is to rent?
Did you know that depending on how much money you can produce, and you can prove you probably could buy something, you know, something simple like a condo or something that would result in a monthly payment that could be half of what you pay in rent. Do you know why? What I'm saying is you can prove this, you can go and look yourself. Do you know why I'm so confident in it? And you heard me say about the 20%, even counting, not doing 20%.
The reason is because the loan programs, they want your money, the banks want your money, the FHA needs your money. And so they're willing to come down on the credit requirements and they're less picky about the minutiae of what your credit says. So in other words, let's say you work with a local bank. Let's say you work, I don't know what banks you have local, but whatever local bank that's not like a Bank of America. I'm talking your regular community banks or credit union or something.
They're going to check your credit scores primarily. They're going to look at the credit score and look for a number that's 620 or greater on your score.
I've heard people, and I've worked at credit bureaus. This is why I know this is the case. I've talked to people who swore up and down that their credit score was in the low four hundred s. And I'll tell you from life experience, I struggle to understand how that's even fucking possible because I've gone through a lot. I've gone through a lot, and I'm talking even before when I was in California, I've gone through a lot to where I didn't know any better because I was younger to damage my credit. And I'm pretty sure my credit score never went blower than 590. So when people tell me that they had a credit score in the fours, I don't even know how it's possible.
Unless if you had, you know, like liens or something, you know, tax liens or people talking about medical bills, even medical bills wouldn't do too much of this.
So I know there's people out there that have extremely low credit scores and I struggle to understand why it is. But most people are at least 620, let's say six to 620. Most people are at least this on a loan for a mortgage.
620 is kind of the bottom they're looking for.
The key is, can you produce a credit score that's at least 620? Ideally 640, let's say ideally higher for lower rates, but just to get approved. Can you produce a credit score that's 620? That's what they ask. 1st.
2nd they want to make sure that you have enough money to pay for whatever home that you're trying to do. But the credit score just says, can we even make a dang deal? The money tells them how much home can you afford?
Are you going to have enough money to be able to close it? Answers other questions about getting it done, not necessarily the approval, although it matters. I'm not suggesting it doesn't. I'm saying that it's kind of in that order. The credit score is usually number one in the way they assess getting, you know, making a loan. But the money is the key for your so called buying power once you get past the credit score. So let's take it on face, and I'm not attributing this to everybody, but let's take it on face that the vast majority of people are coming in with a 620 credit score. Bottom if you've been renting for a while, if you don't use a lot of credit cards or if you do, you pay them off. If you have a car loan and you don't miss payments on your car loan, if you have student loans that you pay on or are not in repayment. And right now there's options for you not to be in repayment.
If for the most part, your stuff's getting paid, chances are you have a 620 credit score or higher, not guaranteed. There's a lot of other conditions to what I just said, but chances are you probably have a minimum of 620. You can't pull your own credit score to know that.
This is why I said it's all going to come connected because what I'm describing, there's different scores depending on who's pulling it. The score you pull for yourself is not the same score that the car dealership will get. That score is not the same score that the mortgage company is going to get. That score is not going to be the same as the credit card company is going to get. The factors as it's described, they're looking for different things that generate a different score because certain things are weighed more seriously than others. Bankruptcy is always severe. It's always bad if you filed, but the bankruptcy only stays for a certain number of years. If you've missed payments on a home, your mortgage company is going to care a hell of a lot more than the credit card company will. A credit card cares if you missed hardly most anything they care about. Inquiries. There's certain things they care about. Then there's certain things they care about less, like your car payments. They don't care as much they care, but not as much as your car company. The car dealership would care. The car dealer almost to a t. They'll make a deal. They'll get you in a car, they'll make it happen. It's just that the rate goes sky high. You'll end up with a 20 plus percent rate. So you're paying out the nose for that car for endless years, which essentially is burning money if you think about it, especially if you have a car that does not appreciate or depreciates at a more rapid pace than others, which happens in the mortgage situation. Then if you can come in with a 620 credit score, they're going to call out, here's the factors that dropped the score, right? Here's the things that we saw that lowered the score. It doesn't mean we can't work with you. It means it lowered the score. With the lower score comes a higher rate. The higher rate is a bit painful, but it really only matters based on the amount of home that you're trying to buy. If you said, you know what, in my area, I just need a little condo or something because it's just me and, you know, a spouse or something, right. And I only need like, $100,000 condo, but you make together, you know, $90,000, you can pull it off. And so think about does that make sense to try to make that happen, or does it make sense to stay renting? Nobody can tell you the right answer. I'm saying that credit is no longer the barrier that you might think it probably was and likely was.
It's really now about the money saving, saving up for this and considering that transaction as an investment.
When you rent, that money's not invested for you. They're doing things like rent track that's designed to benefit you on the credit report. It doesn't really. It really doesn't. Utility bills don't benefit you on the credit. It really doesn't. If you can purchase something, it becomes an asset for you. As an asset, it extends other opportunities for you as you build equity. That's other assets for you. Net worth is an asset for you. These are things that can help you, especially if you do have credit cards. Of course I don't. But if you do and you can pay on the home, you can use that in lieu of credit cards or use it to help pay off credit cards. It opens up opportunities for you that you don't have when you're renting. But it all starts with the question, can you walk in there to whatever bank? And I would recommend one of the smaller ones, not the bigger ones. But I've had situations with Chase, one of the largest, that said, yeah, no problem. And my credit wasn't stellar at the time. So it's not just the small ones, it's just that the smaller ones are more willing to work around any issues they find. And then, of course, FHA is there to help you. You know, if you're not able to make it work on the conventional lending. Let's talk about those loan programs with FHA and with certain state programs that I'll recommend you avoid, unless you have to.
Their goal is to lend money. They want more people to be homeowners. That's their goal. That's their purpose. You have to be careful, because if you're not coming in there with 20% down, they attach what's referred to as mortgage insurance. Mortgage insurance is a misnomer because it doesn't really insure anything. Think of it as a form of Social Security for the home market. You're paying into a fund that's used to help other homes that might go to foreclosure. That's essentially what you're doing. So they'll tack on an extra couple of $100 or whatever to your mortgage payment in exchange for not having to have 20% down, not having to have the full percent. Some state programs will offer down payment assistance. They'll offer closing credits. Some sellers will offer closing credits. There's all sorts of opportunities for you to offset the money part of a thing.
If you accept what I'm saying and you can research it, and I encourage you do. It tells you that the money is the key. The money is all they really want to make sure happens. Everything else can be worked around the money. There's multiple ways to deal with it. This is not to suggest it's easy, simply that there's a lot of programs, more than you might think. There are programs that are enticing people to purchase in certain counties that you might not want to live in. But if you work from home, what's the problem, right? And they'll pay, they'll pay down payment assistance, they'll pay closing credit assistance, they'll do all sorts of stuff because they want more people buying homes in those areas. The downside is by taking those programs, you're acknowledging to the governments, the local governments, that you're not capable of paying it on your own. And so then the rate goes higher because you are at risk, because chances are you're going to foreclose.
If you're renting right now and you're happy renting, continue renting. This is not a sales pitch. I'm describing to you the power of money now that wasn't always there before.
And the power of putting 20% down, should you choose to buy, is to offset other expenses that you don't see, but also the strength of, if you can buy the strength of those assets adding to your net worth and helping to grow your situation, you might not realize it's actually easier than you think. I would argue, and you might shake your head, and that's cool. I would argue. See, a car dealer will sell you a car no matter what. They'll figure it out. I've never had a situation where I was denied the ability to buy a car. It was always, you can take this car, but the rates gonna be sky freaking high, or just don't take the car. I've never had a situation where I was denied for a car. Ever. So as interesting as it is, this financial situation, I say credit's a scam and have done. And the reason I've done that is because credit, by its very nature, is used as a predatory tool.
If you have high credit scores, it means that you're just, you're following the system. You're doing what the system wants you to do. You're taking out credit. So you're taking out loans, you're taking out credit cards, you're buying cars, you're doing credit and you're making payments, and they don't want you to pay too fast, they don't want you to overpay, they want you to do steady money flow for them. And in exchange, they tell the credit bureaus who are in the pocket of these orgs, to go ahead and give them a numeric score that tells other lending institutions, hey, this person is a sucker, and they're willing to pay you streams of money over time. The truth is, just because you have a high credit score does not necessarily mean that you're going to pay this company back. Things happen during COVID The government didn't step in and say, no, you're not going to be allowed to ding people's credit due to factors outside their control. They allowed these organizations to damage your credit at will and didn't think twice about it. Meanwhile, people who continually paid their bills during COVID what do they have to really show for it? All they really have to show for it is they already have those loans, they already have those homes, they already have those cars. So they don't really need the score.
When I say credit's a scam, I'm saying that the whole concept of punishing somebody for something outside of your control is a scam. I'm saying that enriching somebody with a high credit score that doesn't really need the enrichment is a scam. It's a separation of wealth. And all the while, there's only one difference between a higher credit score and a lower credit score, and that's if you have a lower credit score, it's more punitive against you, it's more predatory against you. That's why it's a scam. It's designed to take advantage of you, to encourage you to play by their rules.
And that's fine if you choose to do it. This isn't saying don't. I'm explaining why Lyster says it's a scam. It's a scam because the whole point is to get you to fall in line with what they want, which is recurrent income.
If you're the kind of person who makes a lot of money on your job to the point that you don't need credit, you don't take credit cards, you pay cash for cars, you refuse to take out loans, you pay cash for everything. The system doesn't like you. The system doesn't like you because it's not recurrent income. It's not steady streams of income that they're bleeding from you. So they don't reward you for being financially diligent. They don't want people like you. They want people who are willing to be saddled to a system constantly streaming money over to them so they can collect that interest over time and so that they can bank on it. It's basically a house of cards. They can bank on streams of income, years and years and years and years and years. So they reward you by the way of a high credit score. And that score is simply used to attract other lenders and banks to do the same thing and exploit you. That's why it's a scam.
If you buy a home with a high credit 780, let's say credit score, which is very shy of the highest you can get, you're going to get the best interest rates possible, very low interest rates.
But consider if you come in with a 620 credit score, you get a higher rate.
Perhaps the only reason you have a low credit score is because you chose not to do any credit cards because you were too busy saving to buy a home and you didn't think it would make any sense to extend new credit because extending new credit drops your credit score. Applying for credit drops your credit score.
Do you understand?
This is the scam.
Going after said credit is a pun. You're punished for this.
Not going after it, you're punished for it.
It only benefits certain segments of the audience who don't need it in the first place. That's who it benefits. And the rates that they get are offset by the fact that they're going to get punished.
By the way, you're just applied for a new loan, so we're going to drop your credit score because of the inquiry that comes in your credit score. It doesn't last for a couple of years, but the point is it punishes you for even applying, so you can't win other than you didn't need it and you don't go after it. That is why the wealthy generally have bad credit, because they don't bother. They just pay cash and say, screw it, I'm not going to go with the system. Some wealthy who are no longer wealthy take out loans to offset the outbound spend because they're creating their own house of cards. But what happens when that money starts flowing in there? Now, their credit agencies are not going to cut you a break. They're going to tank your credit like nothing. And it's a lot harder to build your credit up than it is to allow it to drop. Your credit can drop hundreds of points with one mistake, and that happened during COVID to a lot of people.
So in summary, if you're considering buying a home or if you're not and hadn't thought about it till you heard the show, all I'm saying is credit's a scam because it's slanted towards people who don't need it. If you're at the point that you're considering buying a home after not being sure that you can afford it, chances are your credit's not up to snuff. But you can still buy a home because the credit programs by and large are looking for a reasonably low score. It's not, doesn't have to be crazy high to get into a home, but you're going to be nailed on the interest, which means your buying power. That should be lower. Consider a lower home price. Don't go all in. The downside is, of course, security, safety, schools, crime. You know, things that you all have to compromise if you choose to do it or stay renting, understanding that the rent money is going in a black hole, it's not benefiting you directly.
Later, after you buy a home, you're going to see your credit score to start to go up. As you make payments on that house, your credit score is going to start skyrocketing.
Because the other factor to this that I didn't talk about is diversity of credit. If you have a credit card, let's say you only have the one. Let's say you have one loan and then you get this mortgage. The diversity of types of credit are actually calculated in the score factors.
So what does that mean? That means that people who have never bought a home and hadn't planned to can never have a credit score close to somebody who does have a home, who did have a home loan.
This ties back to shadows of the past, people that are older, who were able to get into those homes, who were able to get into those programs when homes were cheap and then generate generational wealth later.
And we know that a segment of the audience was not able to do that. So then credit scores. It's a glass ceiling. You could never get past a certain level. No matter how good your credit card payment history was. It didn't matter because one of the factors is, do you have different types of accounts? Age of accounts is a factor that plays in if you're a 20 something or a 30 something who got your credit card, you know, not that long after you graduated high school, you don't have enough quote age of the account.
And even then, the age doesn't play significant of a factor positive compared to how much negative an inquiry is. It's all a game and it's all a scam.
The key is, can you use it to your advantage?
Buying a home when you're ready is a way to put it to your advantage. It just when are you ready to do it? And I'm stressing that the money is the key to being able to do it. Less so than the credit. Less so the credit. So if you can get enough money to make it make sense, you can offset the credit expectations. It doesn't make them go away.
But think about it. If you're trying to get something that's, you know, I don't know where you live, but let's say you can get something for 100 grand, little condo or something, instead of an apartment for 100 grand, 20% of that's what? 20 grand? Okay, so can you save up $20,000 to put on that, to get it in there? And then your monthly payments, I guarantee you gonna be lower than your rental payment. And if you can do that, that builds up an asset for you. You build up equity in it. You're in something that you own, something that benefits you directly. You take on more expenses in some cases, because some of the utilities might have been paid before by the apartment complex. And so you do need to balance that out. But if you can do that, you're building in assets and equity, and you can use some of that equity at some point to grow your credit profile and to consider other purchases. Right. If you're trying to up, let's say you're building a family, you know, you can buy something larger once you have enough equity in the home a sell, it spends, go something else just to start somewhere. One thing I wish I had done, I didn't, but I wish I had done is to sell the home that I had in Washington state and use that to then buy a different house somewhere else that was not Colorado.
I didn't do it because I wasn't sure I would be able to. And perhaps I wouldn't have been able to, but I should have at least tried, and I didn't try. But if I had tried, because it was an asset, I owned it. It was my house. But if I had tried, who knows what might have happened as a result. Where I wouldn't have had to have as much struggle during the pandemic because I would have had that asset in the back pocket. If I had still had my home during the pandemic, it wouldn't have been as hard because part of the reason that it was a struggle is I was renting. And with rent, they want it when they want it, it's talking about money. With a house, you kind of have a couple months to play around a little bit before they, you know, have to, you know, shut down the house. So hopefully that's beneficial and clarifies why I say credit is a scam. It's a scam because it's slanted towards people who don't really need it. And it's designed to benefit certain people. We're talking lines of wealth benefit certain people at the expense of other people. It doesn't mean it doesn't matter. I am saying that when you're going to buy a home, I think that money matters a lot more than you think that it should. It certainly matters more than credit.
The way it used to be. The way it used to be was, if the credit was toast, it didn't matter how much money you came. But I think it's getting. They're starting to understand it's harder for people to get these high freaking credit scores, so they're just offering better rates. But it's no longer a closed door. And that may create an opportunity for somebody who might be interested in doing that, who.
