Stop Reacting To Fed Interest Rate Cuts • Learning With A Lender • Joel Schaub

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Welcome to the November episode of Learning With A Lender with Joel Schaub!

In this episode Joel Schaub discusses the recent rate cut by the Federal Reserve and how this is NOT necessarily going to reflect mortgage rates decreasing. Often these cuts are predicted (in-advance) and lenders already have baked them into current rates. Also, Joel provides a strategy about asking your loan officer for a no-cost loan, and why that often is preferable than the lowest rate (plus fees). You’ll be able to call your contacts with this information and provide incredible value!

Joel Schaub can be reached at joel@rate.com or 773.654.2049.


D.J. Paris 0:00
This episode of Keeping it real is brought to you by Joel Schaub at guaranteed rate. As a realtor it’s important to partner with only the most trusted name in mortgage lending. Joel has 1000s of satisfied clients and gives $1,500 of his commission back to your buyers on every closing. He is known for his ability to close even complex deals start to finish in only 14 days to learn what 1000s of others already know. Make a note to call Joel at 773-654-2049 or email joel@rate.com Guaranteed Rate is an equal housing lender licensed in all 50 States Consumer Access Number 2611 And now on with the show.

Welcome to another episode of Keeping it real the largest podcast made by real estate brokers for real estate brokers. My name is DJ Parris. I am your guide and host through the show today we have our our regular episode learn with a lender with Joel shop. Now if you’re not familiar with Joel Joel is the vice president of lending at guaranteed rate. He has been doing loans at a high level since 2003. And it’s gotten to that level because of what he does directly for his agents. And what he does is he gives back part of his commission to the buyer your client on every transaction. Last year alone, Joel gave back over $271,000 in closing costs to buyers who worked with him and that put Joe’s volume in the top 1/10 of 1% nationwide. Now out of 380,000 loan officers in the country. Joel is ranked number 181 year to date, he has done 268 transactions for just under 98 point 6 million in closings. In the month of October alone, Joe’s closed 14 million in sales averaging over 10 million a month. And by the end of this week, Joe will hit a huge milestone in his career, and it will close over $100 million in one year, not even a full year in loans truly incredible. If you’re looking for a mortgage professional, Joel is the very best in the industry. And he can be reached at joel@rate.com Again, joel@rate.com and also on telephone and he answers the phone at 773-654-2049. So let’s say hello to the biggest Cubs fan that I know Joel Schaub Good afternoon.

Joel Schaub 2:39
Thanks for having me on DJ every time I hear the numbers, it just reminds me of how much We’ve both grown since the first time I’ve done the show,

D.J. Paris 2:47
we were just talking about this, I couldn’t believe that you’ve grown to $100 million. That is, it’s almost like a fantasy number. And you’re there. So this is what you’re 16 for you in the business, something like that.

Joel Schaub 3:01
16 years, it doesn’t happen overnight. But it’s all about that giving back and teaching and educating. And that’s really what we pride ourselves in. So it’s not just the numbers and the accolades. That’s all great. But you know me, you know me off air. And it’s I’m the same way on these as I am. If you meet me in a room, I’m I’m open, I want to give back and want to see how I can help these agents achieve the numbers that I’ve been doing. And I think we got a good show today. We got some good stuff coming up.

D.J. Paris 3:33
Yeah, and I’d like to tell the listeners because this is a big milestone for Joel hitting 100 million in 11 months, which is truly incredible. And I just want to tell people who might be newer to the show how Joel got to be on this podcast, talking about giving back. I met Joel at an event that he was a sponsor for. And I didn’t know Joel and Joel certainly didn’t know me. And I knew he was working the desk when people were coming. And he was saying hello, he was greeting people and giving them their name tags, because he was one of the sponsors. And he said to me, he says, I listened to your podcast, you don’t have a lender on your show you need I need to be on your show. I have so much great information to give to your audience. They need to hear this. And it was I will tell you, I’m listeners that every single day, a lender will reach out and say I want to be on your show. I want to be the next guest on your show. And but what they never say is here’s all the great information I offer. And as soon as we met Joel, we’re like, Well, that’s it. Joel is our guy. And that is his passion is really giving back. And as Joel will tell you, he is a lending nerd. And so he comes on every month and tells us careful, be careful. Hey, I love nerds. I’m a nerd too. Yes. So we’re excited to have you. All right. What do we want to talk about today? Oh, actually, I would I have a thing I want to bring up so and I want to get your thoughts on this because I did a little research on what’s going on in lending right now. And I saw an article on MSNBC just published today that said refinances are up. As of last week, I believe up 188% over last year. Can we let’s talk about that.

Joel Schaub 5:13
No, it’s absolutely true. I mean, the roadmap for the show today is I am going to talk about the Fed cut that just recently happened. I’m going to discuss the winter market and the opportunity for buyers and some things that they actually don’t think about. And then I’m going to wrap up with a prediction on rates for 2020. Just so that we can kind of get a roadmap of where we’re going. And you’re right, the refinance volume is up almost 200% year over year, and to kind of do a little deep dive and kind of understand what that means. I was telling a story last week, and and this really hit home to the buyer. I explained remember when you bought in 2018. And our focus was all about the rate, isn’t it? So true. DJs people are just so focused, when they’re closing, what are your rates, right? There’s 100, things that go into a transaction or more, sometimes they just get stuck on that one number. And they feel like I gotta call five different places and find the bank, that’s gonna give me the lowest rate. That’s not necessarily the best way about going about it. We’ve discussed this in years past on the show, maybe finding the person that has the lowest rate is equivalent to finding the cheapest eye surgeon

D.J. Paris 6:25
Exactly. And I will tell you, when I got my laser eye surgery done 10 years ago, I did not go with the lowest cost provider. And there are places that we were doing it for pennies on the dollar. And I spent a significant more because I wanted the surgeon that had done 1000s of these. And he charges a little bit more because of that experience. And that was worth it to me.

Joel Schaub 6:47
So what happened here was no matter what year, you know, what they bought in the last three years, so 2015 1617 and 18, that’s four full years. Rates today are better than any time they close. That means all of the time that they went in, they spent shopping trying to find the lowest rate, just with one simple phone call today, the market rates because of the recent fed cuts three in a row, the markets better. And so there’s an opportunity, and that’s why people are flocking back and taking advantage of the refinance rates right now.

D.J. Paris 7:20
So what should Realtors be doing to not take advantage of have the courage but but to see the opportunity that lies in this scenario?

Joel Schaub 7:32
I have my agents going through and doing a very specific thing for most of you, you’re looking for touch points, if you’re a good agent, the idea that you could reach out with some value is paramount. Can you find something that you could reach back out to those clients that you closed? And provide them some value? Okay, so how many agents? Do we have that? They’ll call back? And they’ll say, Do you know anybody buying or selling? I’d be a great referral.

D.J. Paris 8:00
That yeah, I’m never too busy for your referrals, that kind of thing? Yeah.

Joel Schaub 8:05
That one? Well, sure. Yes, I bet. But that doesn’t, that doesn’t do anything. For me, I loved you when you helped me buy the house. So I’m a big fan of educating the buyers and providing something of value. So the conversation looks like this, you take your list of the last two years, and now that it’s getting close to the holidays. In even if you’re a really busy agent, you don’t have hundreds of closings, right? You take the last two years, if you have 50 or 100 clothes, you’re You’re doing good. For the average person, you might have 50 clients that you closed over the last two years. It’s a really manageable number. Okay. And the conversation goes like this, you reach out to them and you’re providing value, and you’re letting them know something that you learned today. And here’s the takeaway. You can refinance your mortgage, you can lower the interest rate, but nine times out of 10. When you call the bank, they want to charge your fees, right. And that’s the way they advertise everyone advertises interest rates, okay. They rarely talk about closing costs, they want to kind of bury it, or hide it or not talk about it. Okay. So here’s the takeaway, there are two different types of mortgages that you can get when you refinance, the one that makes the bank a bunch of money, and the one that’s better for the client. So let’s think about it. If the best rate in the market today is three and a half percent, and you call up the bank, they want you asking for that three and a half percent rate, because they’re gonna charge you two or three grand and fees to refinance your mortgage. And they’ll say since you’re at four and a half, it definitely makes sense to go from four and a half to three and a half. And you’ll make that up in a couple of years. You know, maybe you save $100 a month and over $3,000 It’s 30 months if you’re going to be In the house for 30 months, great. Okay, that’s what the banks want you to do. Okay. And here’s the little secret. Once you call your own bank and you say I’d like to refinance, you ask them what the best rate in the market is no, provide it. And then you’ll say, now what rate? Can you get me if you don’t charge me anything, and you cover all of the costs, the title fees, the appraisal and the lender fees? Bingo. Now, the now the mortgage guy will go, okay, yeah, I’ll tell you what that is. And the idea there is maybe it’s 375, or 3875, maybe it’s more than the three and a half percent. And they will be. But I can go from four and a half percent, down to 3.875, for free. And I’ll still save $150 a month, or I could pay a ton of money and take the best rate in the market. Now.

D.J. Paris 10:53
I will take the gamble that you’re going to be there for that amount of time before the break even.

Joel Schaub 10:58
I love a no cost refinance, I love being able to educate clients on a no cost refinance. I think that most mortgage guys don’t want to talk about a no cost refinance, it makes them a lot less money. In the end, that’s the reason that I do so many transactions in a month, you know, it over 14 million, that’s a good year for a lot of mortgage guys.

D.J. Paris 11:21
And that’s a that’s a just an average month for you.

Joel Schaub 11:24
That’s a good month. That’s that was you know, that’s it’s because of the education piece of it. So here’s the second piece of what we were talking about here. So now that you know, you can do a no cost refinance, I talked to agents all the time. And they say, and I didn’t know that or I thought about that. But I didn’t know the components or the exactly how that worked. And so again, it’s very straightforward. It doesn’t have to just be me, whoever you got the mortgage through, you call up the mortgage company and say, What’s the best rate you can get me right now? Once you determine that, you’ll say now what rate can you get me if you cover all the fees? If the rates lower than what you’re paying, it probably makes sense to take the no cost rate, especially since we think rates may be continuing to come down. So we don’t want to pay for a rate that a few months from now or next year, we could get for free. And we don’t want to just wait. Okay, everyone says Should I wait, hey, things are gonna go down further. They might, but there’s a very good chance that they do not. So let’s take the best way you can where you’re not paying anything right now. If it goes down further, great. But at least you didn’t pay any money and you got instant savings.

D.J. Paris 12:33
That makes perfect sense. And I want to let’s bring that I want to bring this back for a moment to the listener because Joel just said some really profound things. So we’ve always said whenever rates have dropped, I’ve always with the brokers we haven’t even our own company and certainly other brokers I mean, and on the show though all of our listeners we say call your clients call everyone you know that owns a house and is paying a mortgage and say hey, rates have dropped great time to call your loan officer and see if rates refinance is a good idea. But what Joel just gave you a second level conversation, that by the way, this is not an email, you should be sending your client Hey, great time to refinance. By the way, here’s how you want to ask for a no cost loan. And here’s how to compare that is not an email that is a phone call, and maybe even an in person meeting if, if, if possible, but certainly a phone call. So this goes so far beyond Hey, great time to refinance. And by the way, when you call your your lending institution, here’s what you want to ask for. And boy, Joel, that is really, really great.

Joel Schaub 13:33
Take two three hours, guys, literally, this is an action plan. After you listen to this. You get your database for the last two years that people that had closed, okay. And the conversation is as follows. I know rates are down, you probably see it everywhere. I was just listening to a podcast, I got some really insight information, some real high level details. Did you know that you could call your mortgage bank back in once you get the best rate in the market? Ask them, what’s the rate you can get for free? Right now there’s a really good chance that you can actually save some money. Okay, that right there leads to one or two things. Wow, that’s so great. My sister is getting ready to buy a place. Can you help her? Right? This is what it does. givers gain if you literally are out there providing value and I am a dork for this type of stuff. But if you’re out there literally giving good to the universe and you’re giving back in all these ways. Agents tell me left and right. I took one of your techniques. And I have three new buyers or I got a new listing off from it. And you have to you just have to set some time. And while it’s slow, this is a great phone call. And that’s how you do it. That’s the easiest one. Right now rates are low. I want you to call back. You know Jim who did your mortgage remember he helped us he was great. Call him. But do this trick where you ask him what’s The fees, what’s the rate you can get with no fees?

D.J. Paris 15:03
Why what is it’s great. And this is again, this is why Joel is on the show. And I will do I want every one of our listeners to consider using Joel for their clients, or even their own transactions with their own investor, or just pricing or refinancing their primary residence because by supporting our partners like Joel, you help support our show. And it keeps Joel wanting to come back. And he has got deals from people who have listened who have reached out to him. So Joel, what is the best way that one of our listeners can reach out to you to to start that relationship?

Joel Schaub 15:37
And I’ll say it, but I want to preface that it’s not a sales pitch for us at all. I really want you guys, if you had a good relationship with that last lender, that’s what you do, you stick with it, you’re build loyalty, you have a relationship. And that’s paramount having that. Now if you have a really bad lender on the last one, call me, I definitely want to help them out. If it’s a brick and mortar bank, and they took a long time to get your paperwork or nobody answered at seven or eight at night or on a weekend. I’m here to help those types of things. So yeah, people can always reach me, I mean, it’s joel@rate.com, it’s J OEL at r a t e.com. And the direct line to me from 9am to 9pm, is 773-654-2049. And the focus here on that phone call guys wasn’t to say, Hey, call Joel, it’s literally you’ve provided value. And what I want you guys to get out of it is it really truly will pick up, especially around the holidays, you’ve called them before, they get to see friends and family and they have people in their house and they’re traveling. And if they actually take advantage of this, and do the work and make a phone call. They’re going to be talking about it around the Thanksgiving Day table. You know, hey, my realtor called me and gave me some real value. And now my payments down $150 Less. Don’t you think that’ll get you some more listings?

D.J. Paris 17:07
I would certainly hope so. And guys think about this, too. So the the holiday seasons coming up, we have Thanksgiving, we have the December holidays, and everybody who sends out something sends out a card on the holiday at the holidays. And by the way, that’s great. That’s fine. That’s better than nothing. But now you have this great opportunity before the holidays to do what nobody is doing. And I’d say even if it’s not somebody that you worked with, in the past, just call everybody you know who owns a house and say, Hey, I don’t know your mortgage situation is certainly none of my business. However, I’ve got this little trick that you can use to take advantage of the current dip in the rates. And here’s what you want to ask for. You know, I want to just pass this over to you thought you’d find it helpful. By the way, happy holidays, right? That’s so much value you’re providing. And the funny part is, what’s that expression, it’s never crowded along the extra mile. Just like Joel said, spend three to four hours. I mean, if it was me, and I was a producing broker, I’d spend like three to four days doing this because it is the biggest no brainer win in history, right? It’s a reason to pick up the phone and deepen that relationship.

Joel Schaub 18:15
That’s exactly what you do, you’re gonna get a lot of voicemails and just so to add a little extra value here, what it sounds like is Jim Suze, it’s Joel, I’m giving you a ring, hey, give me a ring back. I just wanted to connect with you. I know there’s a lot going on interest rates in the news, I have something that would be very valuable to you. Give me a ring back when you have a moment. And then you get them on the phone and you go through it, you’re going to get a lot of voicemails people don’t pick up I don’t pick up the phone. When it’s the cell phone, right? I pick up my business phone all the time. But these are consumers, they just bought a house, they’re not like us as far as real estate professional, so you’re gonna get a lot of voicemails, and you just, you provide the value, you let them know I have something that would be helpful for us. Can you give me a ring back and then you can share that information? Beautiful. Alright, so there’s that. I’m excited. Okay, can we talk about the Fed cut?

D.J. Paris 19:09
Let’s do it. So this is the big news, right? The Fed just cut rates. What does that mean? Okay,

Joel Schaub 19:15
I’m gonna blow everybody’s mind here for a moment. And I’m gonna let you know that just because the Feds cut rates that didn’t have an impact that they had mortgage rates that one bit,

D.J. Paris 19:27
but it’s, it’s every headline, every headline is saying that the Fed cut rates and you’re saying Yeah, well, maybe that’s not so important today.

Joel Schaub 19:37
So let’s talk about why what did the Fed do the Fed that day cut the prime rate, okay, Prime was at 5% and they lowered the 475. Remember, rates are already below four. Okay, so mortgage rates right now are in the threes. They did not call the mortgage banks and say, Please lower your rate today by point two 5% Okay. But that’s what the headlines say rates are down. So everybody that’s buying a house tomorrow, they think, Oh, my rate should be a quarter point less. And that’s not the case. Okay? Those rates have been baked in for months now, we knew that the Fed was going to be cutting rates DJ. So that’s a little bit of controversy where people think, Wait a minute, the Feds cut rates in the mortgage rates didn’t move. It’s really true. What we knew that was pretty baked in meaning there was no announcement, it actually that they slightly worked against mortgage rates, because we kind of have an administration that wants us to cut rates even further. Okay, I won’t get into all the politics buying anything, I always like to stay right in the middle. But since the Feds didn’t cut rates more, that’s why the rates were slightly flat to the upside.

D.J. Paris 20:54
Got it. So the bottom line is, don’t be that concerned about rate movement. As it’s happening.

Joel Schaub 21:05
REITs speak with a trusted professional know exactly where you stand. And the point is like on a 30 year fixed rate. If the rate is 3625, or 375, it’s still so much lower than it’s been, at any period of time, don’t get caught up in these small little moves. It’s a long term thing that we’re looking at right now, the trajectory is flat to lower.

D.J. Paris 21:31
So this could also go into the voicemail that you’ll likely be leaving, as Joel said, you know, people outside the real estate world don’t always answer their phones. So you have to figure out a strategic way to leave a message that’s engaging. And again, this is something to mention and say, Hey, you might have seen news about the recent fed cuts, I actually have some insight, or I wouldn’t say inside a fridge, but I have some additional information that I think would be really valuable to you, that can help you possibly even save, give me a call back. So

Joel Schaub 22:00
it’s exactly right, DJ, you’re providing value. And you’re making sure the agents know exactly what’s going on in the market.

D.J. Paris 22:08
Well, this is a great, I don’t I want us to end at this. Because at this point, everyone listening should have a whole bunch of great, exciting work for them to do, as we all know, as real estate professionals, that one of the hardest things to do is think about reasons to contact your existing clients that have already bought a home from you six months ago, it’s like, okay, why do I call them? How do I call them, we know that if you stay in touch, you’re gonna get referrals. But as Joel has said, time and time again, every month, you have to come with value, you have to bring something of value, otherwise, you’re just asking for referrals. And nobody really wants that. Nobody really wants to be asked for referrals. They want somebody in their life that’s consistent as providing value, as Jill just said. So this is by the way, how did Joel get to 100 million in 11 months, it wasn’t by accident. It’s because Joel is constantly providing value, not just on this show, Joel is on WGN. Constantly, he is out and about. Everybody here in our local market in Chicago obviously knows him. Because he is constantly out there and what he’s what he doesn’t do self promote. Nothing turns me off more than self promoters, right. That’s just me personally, but I think it’s a lot of people. What I love is people that come with value. That’s what this show is all about. That’s what Joel is all about, which is of course why he’s such a no brainer to have on the show every week and every month rather. And if anyone listening is looking for a new lending professional, Joel is a great fit. He won’t do a commercial for himself. But I always will, because I’m his biggest fan. So Joe, one more time, if anyone out there is looking to speak with you what’s the best way should they should reach out?

Joel Schaub 23:47
If you found value in what was going on today, it’s fine. Let’s reach out and just have a conversation. And I want to hear more about you and what you’re doing in your business. And we can do some of these many one on ones where I can actually help you in the buyers that you have navigate the mortgage business in a much easier way than what you’re probably used to. So 773-654-2049 or just an email. It’s my name, Joel JOE l@rate.com.

D.J. Paris 24:18
And by the way, for those listening who aren’t here in Chicago, because our podcast is listened to nationwide, but I guess worldwide, really, but nationwide. If you’re somebody who’s not here in Chicago doesn’t matter. Joel can help.

Joel Schaub 24:31
We’re licensed in all 50 states. When I started there was 171 guys at the company and now I’ve helped build it up to over 5700. We have 300 offices nationwide. And we’re all about value. It’s trust. We are one of the biggest mortgage companies that you’ve never heard of. So that’s what we do.

D.J. Paris 24:49
Well here in Chicago, everybody knows the name guaranteed rate because they just have come in like like a hurricane or a slow hurricane and just come pletely built up. And so if you’re not familiar with them, they’re huge. I’ve used them in my own refinancing, and they were amazing. And again, you should use them too. So reach out to Joel and, guys, everyone who’s listening couple of quick items, before we wrap up, please tell a friend. So as I’m saying, reach out to Joel for all your mortgage needs. There are lots of realtors out there that need to hear this information need to hear what Joel just shared. So please, if you know any other realtors that could benefit, pass this podcast over to them. Boy, that would really help us out we’d super appreciate it. So definitely send that over. Also, you can stream every episode we’ve ever done, including all the jewel episodes from our website, which is keeping it real pod.com. And lastly, and we’ll talk about value, how do we bring value to our listeners? Well, obviously through these episodes, but you might not know this, every single day, our producer Liz goes online and looks for an article Realtors could or should read that will actually give you an actionable strategy that you could take advantage of immediately to help grow your business. And we post it on our Facebook page. So Liz was just in here an hour ago. And she said you have to tell the listeners to start following us on Facebook. So go to facebook.com forward slash keeping it real pod. And every single day you’ll get a tip that shows you another way to grow your business. And Liz also does her weekly Liz lesson video, which we’re going to post shortly as well. So guys, tell a friend, follow us on Facebook. And of course, subscribe on iTunes or Stitcher, anywhere, Spotify, anywhere podcasts are found. And Joel, thank you once again for being a part of the show. We couldn’t do it without you. You’ve been a great partner, and we want to keep doing these episodes. So everyone listening. Thank you and Joel, thank you.

Joel Schaub 26:43
Thank you so much for having me on every time we do it. It is absolutely a pleasure. And just big shout out to you. It is what you do that keeps everyone tuned in. You’re amazing. And I look forward to doing it again soon.

D.J. Paris 26:56
Well, I will say we were both amazing. That’s easier for me to say. But I’m just the guy who asks people like Joel to be on the show who really provide the content. So guys, again, thanks for listening, Joel, thanks for being part of it. And we’ll see everyone next month.

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