The Deal Isn't Dead: 5 Financing Plays for a High-Rate Market

Opening and the state of the market

Erica McGarvey: Hello, everyone, and thank you so much for joining. My name is Erica, and I'm the Customer Education Manager here at Homebot. I'll be your host today. We have about sixty minutes blocked for this session, so please add your questions to the Q&A as we go, and we'll leave plenty of room at the end to answer them.

Erica McGarvey: The title says it. The deal isn't dead, and I think we have just the right person here to show you exactly why. Nicole Rueth leads The Rueth Team out of Colorado. She has more than twenty-four years in mortgage, and Mortgage Executive Magazine ranks her among the top 1% of producers in the country. She's also a repeat 5280 Magazine Five Star Professional.

Erica McGarvey: Before she was in mortgage, Nicole was an executive at Andersen Consulting, where she was redesigning how businesses run, and that's exactly what she does with a stuck deal in mortgage. She restructures it. In her words, she's a passionate educator, a seasoned lender, and a fierce advocate for financial independence through real estate. With that, Nicole, welcome, and thank you so much for joining us.

Nicole Rueth: I am so excited to be here. This is such an interesting market. I refuse to call it a challenging market. I refuse to call it a difficult market. There are winners in every market. It doesn't matter what the market is, somebody's going to win. Sometimes it's not your client. Hopefully it is, or you restructure.

Nicole Rueth: This market is challenging us to become better skilled at what we do. We have to be the experts. We have to be the advisors. We have to be the people that our buyers and sellers, real estate agents, financial planners, CPAs and referral partners can come to knowing that we're going to do so much more than squeeze a thirty-year fixed into a three-week close or quote the lowest rate. Ultimately, rate is the last thing I talk about in this market.

Nicole Rueth: I'm going to give you some tools today, and I do this every Friday at 9 AM Mountain time on Market Moves. I go through everything going on in the market in a jam-packed thirty minutes so you can have the best conversations with your clients and help them decide to move forward, or get out of your pipeline so you can help somebody else who wants to be helped.

Erica McGarvey: That makes perfect sense. I've been at Homebot for about six years and a homeowner for three of those years, but I still have plenty of questions. So today, think of me as the buyer in the room. If something needs a plain English answer, I'm probably going to ask for it.

Erica McGarvey: We'll be covering five strategies. Each one starts with something a buyer is already saying to you, and each one ends with a question you can take straight to your lender if you're a real estate agent. For each play, Nicole will cover when it works, when it doesn't, and what to ask for. You don't need to become a loan expert by the end of this. You just need to recognize the moment when one of these plays fits the scenario you're working with. Before we start, Nicole is going to let us know what's going on in the market right now.

Nicole Rueth: Anybody watching the market knows what's going on, and certainly those of you who join me on Friday for Market Moves. Interest rates popped up. At the beginning of 2026, our buyers were getting used to 6.25%. They had broken through the idea that we were going to see the mid fives, and they started buying again. I had a great spring market. Then the Iran war kicked off in about February, and it changed the dynamics of everything.

Nicole Rueth: Now we've pushed interest rates up, and Fannie Mae just came out and jumped their 2027 expectation from 6.8% to 7.5%. So we're expecting interest rates to be squarely in the sevens for the rest of 2026 and into 2027. A lot of it has to do with Iran. When we find some sort of a peace agreement, the MOU got thrown out, when we get to that point again, rates will come down, because the conflict is affecting inflation and fuel prices.

Nicole Rueth: You've also got the AI trade happening right now that's dropping our interest rates slightly. We saw it go from 7.6% to 7.4%. I'll take it. On top of that, there are a lot of conversations around our debt. The debt is spiraling out of control, and that is going to put upward pressure on interest rates for a very long time. So we have to get used to having the conversation that this is where things are. We're not seeing values bust. We're seeing interest rates stay high.

Nicole Rueth: So how do we help our clients, in what is now our normal, make a decision that impacts their future? We hook it on their vision. We hook it on a reality check of today's market, and we try to give them confidence, sometimes borrowing ours until they find their own, to make that decision. Because waiting is only costing you more. In fact, 41% of the people polled now regret waiting in 2025, and they're still waiting. I don't think 2027 is going to be any better.

Nicole Rueth: So we're going to talk about how to use these five levers to start conversations. If there's one thing you walk away with from this entire presentation, it's this: I've got to think more creatively in today's market. I have to help buyers see strategy beyond the rate, so they look to me as the strategist, the advisor, the expert. We cannot just be loan officers. We cannot just quote rates. That no longer works in today's environment.

The poll result: the payment is too high

Erica McGarvey: Thank you for that update. I'm seeing results from the poll, and out of the 70 people who answered, the number one answer was "the payment is just too high." That is the number one objection they're hearing, so let's spend a little extra time on that one today.

Play 1: Buydowns

Erica McGarvey: Rates are where they are, and the first thing we can change is the payment. So let's start where most deals stall: the monthly payment. Your buyer loves the house, the price works, and then they see the numbers and say, this payment is just too high. A buydown is one of the most common answers right now, but there's more than one kind, and not every deal can support every version. Nicole, when you hear that objection, where do you start?

Nicole Rueth: A lot of times we start with the math. And yes, Brian just asked about ARMs. We're going to be talking about ARMs. It's one of the five strategies. But as far as buydowns go, it is the number one conversation. If you're not having that conversation, I don't know what blanket you're under, and we're going to pull you back out from under it right now.

Nicole Rueth: We're working with a lot of listing agents putting together flyers and marketing materials specific to their listing based on what the seller is willing to give, what the lender is willing to contribute, and what a buydown looks like. Ideally, we're hyper-focusing on the payment. Mortgage News Daily is quoting interest rates in that 7.4% to 7.5% range. My people, and hopefully your buyers too, are not paying 7.5%. That's not what they're locking in.

Nicole Rueth: So when we talk about buydowns, I go in knowing what payment the buyer needs to make work for their budget, and we work the conversation backward. Rate is the very last thing we talk about. We talk about their lifestyle. We talk about their budget. We talk about what this move means to them, and how we anchor the right house with the right monthly payment to that vision. The lifestyle they're trying to live brings them to the kind of house they want to buy, and then I back into the rate that makes it work.

Nicole Rueth: If they have champagne taste on a beer budget, we're going to have a different conversation, because that's not the reality we're living in. But if I can show them how their lifestyle fits into a $600,000 or $700,000 home, and we can buy that interest rate down from 7.5% to 6.5%, that changes how much more they can buy. They might otherwise have been limited to $550,000.

Nicole Rueth: You don't stop there. We also differentiate between a price reduction and a rate buydown. As a general rule of thumb, a price reduction is about a $60 benefit to the monthly payment for every $10,000 you negotiate off the purchase price, because it reduces the loan amount. With a permanent rate buydown, the rule of thumb is that about 1% of the loan amount buys the interest rate down about a quarter point.

Nicole Rueth: Then there are temporary rate buydowns, which were used much more during the pandemic. They're set off to the side right now because nobody really thinks interest rates are going to come down, so why on earth would I do a temporary rate buydown? It's strategy.

Nicole Rueth: You use a temporary buydown when you're talking with somebody who may be stretching into a house. Maybe the third baby was just born and mom is going back to work in a year. Maybe it's a new job with a year-long training ramp before they go to full pay. Maybe it's somebody moving into a new neighborhood who is building their sales community. Whatever that ramp-up period is, a temporary buydown can cover it.

Nicole Rueth: I've got a builder up in the mountains doing a builder-paid permanent rate buydown. On top of that, I'm doing a lender-paid 1-0 temporary rate buydown, because it's a second-home community. We're giving those buyers the ramp-up year to get their Airbnb or midterm rental income going, and then they move into the payment from the permanent rate buydown.

Nicole Rueth: You've got to know your numbers. As a lender, you've got to be able to grid it out for your agents. As agents, you need to tell your seller how these buydowns shift which buyers can enter their home. Know the breakeven point, when it works, when it doesn't, and the strategy behind it.

The buydown leverage math

Nicole Rueth: I took a minute and put together this graph because I think it's really important. As a lender, you can create a graph like this that shows not only are you impacting a buyer's payment with these buydowns, you're impacting their price point. This is especially critical if you're anywhere near a new-build community, because those builders are offering massive interest rate buydowns. New home starts and permits came out just this morning, and all of it is dropping because buyers aren't showing up while rates are high. The builders are going to slow down on building. They've got to manage this like a business, and they're giving incredible rate buydowns.

Nicole Rueth: So if you've got a seller with an existing home anywhere near new homes, or a buyer looking anywhere near new homes, knowing this matters. If you have a buyer today at a 7.4% interest rate, and a $3,500 a month payment fits their budget, the house they can afford is $562,000. If I can buy their rate down to 5.5%, I'm not only managing the monthly payment to the budget. Flip the script. I'm also offering them a much nicer home for the same payment.

Nicole Rueth: This can also hurt a seller who's not willing to give concessions. If they have a home in that $550,000 to $560,000 range, they've got to know that a seller offering concessions on a $685,000 home gives that buyer the same monthly payment. So as a buyer, I can go shop almost $700,000 homes instead of $560,000 homes. You can't tell me a $700,000 home isn't going to have a nicer, more luxurious feeling when I walk in the door. I'm going after that if I'm getting the same payment.

Nicole Rueth: So we've got to structure these buydowns to help a buyer get over the hump on monthly payment and match their budget. Then flip the script and say, this is what you can afford with a rate buydown, which lets you move into the right home, the right neighborhood, the right number of bedrooms, or even a nicer home than you thought you could afford at today's rates.

Erica McGarvey: So if I'm understanding, a buydown stretches what a payment can buy. Anything else you want to add there?

Nicole Rueth: Exactly. Pre-pandemic, we had interest rates at 4.5% and 5%, and nobody was talking about buydowns. Affordability was there and appreciation was at normalized levels. The pandemic threw everything off. We had skyrocketing appreciation, we're not seeing massive price reductions, and on top of that we have higher interest rates, so all of our conversations have to change.

Nicole Rueth: Honestly, we could see an 8% interest rate. We could see 9%. Paul Tudor Jones was on CNBC last week saying he could see the price per barrel going up another $25. If that happens, it moves our needle toward 8%, 8.5%, 9% interest rates, and more buyers will sit on the sidelines. My buyers aren't. 30% of my pipeline is investors, which is a totally different conversation, but they're seeing opportunity in this market, and they're using strategic buydowns to regulate their monthly payment or step into more home, because they're getting a lower-than-market rate.

Question: What do you tell buyers about their future payments when they buy the home that is $123,000 more?

Nicole Rueth: In this example, the permanent rate buydown is dropping that payment. A $3,600 a month payment on a $562,000 home at 7.4% is the same monthly payment as the $685,000 home bought down to a permanent rate of 5.5%, which you're seeing builders give. I've got a builder who does infills. They come out with a 5% credit and I tack on another 1%, so every buyer who comes in gets 6%. We're dropping into the high fives. Builders are getting into the mid fives. So that $685,000 home has the same payment, and it's fixed for thirty years.

Play 2: ARMs

Erica McGarvey: This one's for you, Brian. Sometimes the problem isn't the payment. It's qualifying at all. That's when you hear, "I can't qualify at today's rate." Some agents reach for an ARM right away, and some won't touch it at all. Nicole, who is an ARM actually right for, and who should stay away?

Nicole Rueth: That's a great question, because ARMs are becoming sexy right now, and you've got to be careful. We have a firm policy on our team that if we bring up an ARM, or somebody comes to us bringing up an ARM, we show them the pros and cons in every conversation, even if we think they already know. I told the team it is not ours to assume.

Nicole Rueth: An ARM can be structured in a great way. I have an ARM. I built a home and put it on a seven-year ARM, and I'm going to have that home paid off in seven years. That's a very different strategy than a lot of the buyers who come to us. An ARM is really good for somebody who is expecting a big income jump, or who is less worried about their economics in five, seven or ten years, whatever the ARM term is. Maybe it's a physician who just graduated, or somebody in sales who's been seeing big increases year over year and is stretching their budget knowing they'll get there, or somebody with a short-term plan for the home.

Nicole Rueth: Who an ARM is not good for is anyone on a fixed budget, and anyone who is using the ARM to stretch that budget. ARMs are about a half a percent lower than what we're seeing on the thirty-year fixed, so it sounds sexy, especially in the high sixes versus the mid sevens, but it can bite you at the end of that five, seven or ten-year term. An ARM is not for a family moving in who plans to live in that home for a long time, somebody on a fixed budget, or somebody with W-2 income who doesn't expect a lot of variability. It is for somebody who is educated, who can assess whether they'll pay it off, who is planning on selling another home, or who is going to deeply discount the principal balance and recast. In those situations we talk about ARMs aggressively and help our clients get the biggest bang for their buck.

Erica McGarvey: One follow-up question. What's the difference between a 5/6, a 7/6 and a 10/6, and which do you use most right now?

Nicole Rueth: Mostly I'm using the seven. The number of years is the amount of time the rate is fixed. You might have a seven-year ARM at 6.875%. It's fixed for seven years, and after that it's tied to SOFR and typically moves every six months. It has an initial cap, an annual cap and a lifetime cap, so you need to understand how those work.

Nicole Rueth: A three and a five-year can have lower interest rates because they're tied to short-term rates, but they also have to qualify at 2% over the note rate, so you have a harder bridge to cross on qualifying, and a shorter period of protection. With the seven and the ten, I usually go for the seven. It gives people a lot of wiggle room, it's tied more toward longer-term rates, and it's about a half a percent lower, fixed for seven years, and then it starts changing every six months after that.

Erica McGarvey: So an ARM can help when the rate is the problem.

Nicole Rueth: Absolutely. It can drop their payment, and you can do a permanent rate buydown on an ARM as well. I also saw a comment about who pays, so I'll add: in almost every situation, those buydowns are seller paid. You can do a buyer-paid buydown if you want.

Nicole Rueth: For the lenders on this call, you can look at a rate sheet and there might be a series of rates that are super tight, and then a jump. You work that rate sheet to the benefit of your client. The seller might only be willing to give a certain amount, and the buyer might want to squeeze in a little more to get to the next lower rate. But I'm in the Denver market, which is a very strong buyer's market right now, and every single one of my deals has a seller-paid buydown.

Play 3: Non-QM loans

Erica McGarvey: I'm seeing quite a few questions about buydowns, which we'll get to a little later. Hang tight. But sometimes the problem is the paperwork. What are agents missing with these types of buyers, the buyers who don't fit the box?

Nicole Rueth: Would it surprise you to know that non-QM is now almost 12% of the market? In August, 11.3% of all locks were non-QM. So if you're not working non-QM loans, if you don't really understand them, or if you're a real estate agent without a lender who knows how to get creative with non-QM, you're missing about one in nine buyers right now.

Nicole Rueth: Probably 30% of my deals right now are investors, and easily another 15% of my closings are saves from lenders who, God bless them, know their lane but don't know the non-QM space very well. I have 64 investment doors myself, so I talk to a lot of investors and a lot about non-QM. If something went awry with another deal, we can get it closed very quickly. Lenders, if you are not currently an expert in that space, spend some time every single day. Learn the guidelines. Learn the niches. Start talking about it.

Nicole Rueth: So many buyers today show declining income on their tax returns. I've had buyers who haven't filed tax returns. I'm not judging, I'm just supporting. We've got the P&L loan, which is based on a buyer-supplied profit and loss statement. We have bank statement loans, where they give us twelve or twenty-four months of bank statements. We have no-doc loans for both primary homes and investment properties. The investment property version is called the DSCR loan.

Nicole Rueth: The bank statement loan and the DSCR loan combined are 35% of all non-QM loans. So if you're going to learn two right out of the gate, learn the bank statement loan inside and out: what you can do, what you can't do, what the deposits need to be limited to, how you help people who transfer money back and forth. And then learn the DSCR loan for investors.

Nicole Rueth: DSCR loans are a lot of fun. We have DSCRs down to a 0% ratio. Typically we're looking at rental income compared to the mortgage payment. Best case, rents cover the mortgage or better, and you get the best interest rates. If rents are underneath the mortgage, we've got solutions for that as well. There's a lot of opportunity right now with investors aging out and selling their portfolios, and this is a way for a buyer to get in.

Nicole Rueth: Often clients come to me and say, I've been doing a lot of research online and I need a DSCR loan. I'm like, but do you? Is there a reason you're telling me that, or have you watched too many TikToks?

Nicole Rueth: So we go through all their documentation to verify whether I can take this conventional, because we're going to get much better rates and terms with standard financing. If they can't do that, we go through a series of solutions: first a bank statement loan, then DSCR, and if they still can't, a no-ratio loan. We go in order from the best terms to the terms that fit the risk the lender has to take on.

Nicole Rueth: There are so many opportunities, especially with some of the recent changes. Fannie Mae and Freddie Mac removed the 620 credit score minimum. That's huge. The new VantageScore gives better interest rates, so more people can qualify than before. Another study just came out showing that 80% of FHA buyers who had down payment assistance available didn't use it because they didn't know about it.

Nicole Rueth: Numbers like that make you wonder: are people getting into non-QM because they don't know better? Do they even know non-QM is an option? One of the things my team and I say all the time is, it's never a no. It just might be a not yet. So we structure it so they can walk into the loan.

Erica McGarvey: When would you tell an agent that this buyer really isn't ready yet?

Nicole Rueth: We tell agents that all the time. We have a very long tail on communications and marketing, so I have clients coming back to me years later. I sit down with every client. We structure their budget, and we talk about expectations in this market and the opportunities they'll get because of less competition. If somebody says, I'm not ready to make that move because the payment is outside my budget and that is the home I need, I can't rightly say it won't be harder to get in by the time they wait. What I can do is put them on a plan. The agents love that if it's a not yet, I have a plan for every one of those buyers, and I hand the agent that plan so they know the touchpoints I'll be having and can have them too.

Play 4: Assumable mortgages

Erica McGarvey: Next up is one that might be harder to find, but I'm hearing it's gold when you land it. Your buyer looks at the rate the seller locked in a few years ago and says, "I wish I could get that seller's rate." Sometimes they can. Nicole, let's talk about assumables.

Nicole Rueth: Assumables were really popular, and then they waned. A lot of lenders figured out it's really hard to do the gap financing. There are a couple of solutions, and if you've got the niche in that, go for it. I'll send all my stuff to you. But let me back up the train and make sure we're all on the same page.

Nicole Rueth: Assumable loans offered by the seller are government loans: FHA, VA and USDA. Conventional loans are typically only assumable in court scenarios, like a divorce. A government loan is assumable, but the buyer has to go through the servicer, not their lender of choice.

Nicole Rueth: Servicers are not built to be lenders, and they are very difficult to work with. It can take anywhere from thirty to ninety days, so agents need to give enough time on the contract to get it closed. The buyer also has to be fully preapproved. You're not getting a DSCR loan on an assumable. You have to be full-doc approved with that servicer, and then you have to figure out the gap financing.

Nicole Rueth: Say the seller bought a home a number of years ago, paid $400,000 and something, and has a $430,000 loan left, but now they're selling it for $600,000. You have to figure out that gap, and typically the buyer has to bring that money. In the Denver market, a lot of credit unions have stepped up to fill that gap financing. They're running between 9% and 9.5%, and they're all requiring 10% down. So there are solutions. Even if I'm not the lender, I support my agents first. Just because I might not be the best solution because of the gap financing restrictions, I'm still going to tell my agent how to get it done and where to go.

Nicole Rueth: Assumable loans can be extremely financially beneficial if the numbers are right. If I've got a home for sale at $600,000 with an assumable loan at 2.5% or 3%, that looks great, but if there's only $100,000 left on the assumable loan and you've got to take out a loan for the difference at 9% or 9.5%, it does not make sense. It's a no-go. Just finance that home with current financing terms. But if you've got that same $600,000 house and the loan balance is $480,000, $500,000 or $550,000, that's a phenomenal opportunity.

Nicole Rueth: Now, Roam is gone. You can still look in the MLS for assumables, and for FHA, VA and USDA. You can also tap into the Homebot search tool. You have an assumable filter you can click on, and I think that's brilliant, especially with Roam out of the market. Being able to have that conversation supports your buyers. And ultimately, if you don't get the loan as a lender on this call, you've just got to know that an abundance mindset brings so much more opportunity than a scarcity mindset and trying to hold on to things that aren't yours to hold on to.

The blended rate math

Nicole Rueth: You should have some sort of calculator for this. Whether you call it the life rate, the balanced rate or the blended rate, whatever you call it, we have an Excel spreadsheet that I'm happy to share with anybody who reaches out to me. It's very easy to put together. I give it to my real estate agents so if they bump into an assumable loan, they can plug in the balance of that loan, the rate it carries, the 10% down, and the gap financing at 9% to 9.5%.

Nicole Rueth: I had one recently. A $600,000 purchase price with the buyer putting $60,000 down, which is 10%. Weighted by the balance on the two loans, and with FHA mortgage insurance staying with it, the first mortgage at the assumed 2.875% plus a second lien at 9% still came out so much further ahead. The first and second together were about $2,885 a month in principal and interest, versus $3,773 with new financing. That's $890 a month. You've got to be able to educate and speak to it, even if you're not the one who can originate it.

The assumable button and the abundance mindset

Erica McGarvey: Thank you for tying in Homebot there with the assumable loan feature. I have a question for you, because I get this a lot. I talk to a lot of loan officers about our home search experience and the fact that their clients can easily find listings with assumables and seller concessions. One request I get a lot is that lenders want me to remove the assumable loan button, and we can do that on the back end. What I hear is, it's a waste of time, I don't want to deal with that. What's your response?

Nicole Rueth: Absolutely not. This market is going to get tougher before it gets easier. You have to sharpen your saw and become the expert, the advisor, the one your agents and buyers know they can rely on, who isn't playing a shell game on them but is literally just trying to serve them. I promise you, without a shadow of a doubt, if you give up that assumable loan, and that buyer goes in that direction, and you've educated that buyer and that agent to have massive success, you're going to have tenfold the opportunities walking in your door. It happens every single time.

Nicole Rueth: We have to remove the negativity: the naysayers, the negative vendors, the lenders, the real estate agents, everybody around you. I present to real estate offices in the Denver metro all the time, and one of the first things I'm telling people is that you have to get very clear on who you're surrounding yourself with. I'm drawing a very dark line between those who stay in my circle and those I have to remove, because I want to win. The only way I'm going to win is by giving it all away, by serving all of the clients whether or not I do the origination, and by giving more value every time I'm in communication with those partners. So pull away the people who tell you to scrap for every deal and hide the things that would serve your clients. That's my two cents.

Erica McGarvey: I appreciate that. I hear it quite a bit, and now I have a little extra ammo when I come in with it. I always tell people, Homebot is a conversation starter. It provides opportunities to have more conversations with your past clients and your buyers. If you see somebody clicking on assumables, that's a conversation you can have to present yourself as the expert, the person they should turn to when the time is right.

Nicole Rueth: Agreed. And you probably already know this, but I'll say it in case you don't. VA loans are assumable by everyone. FHA and USDA want the owner to live in the home, because they are owner-occupied loans. VA has opened that up, and I think a lot of investors have jumped in on that because of it. The one big negative is that the veteran's eligibility remains tied to that loan if another veteran isn't the one assuming it. So there's a little bit of risk on the seller side, but it can be a win-win in either case.

Play 5: Equity plays and buy before you sell

Erica McGarvey: You're getting a lot of thank-yous for that positive growth mindset. Now let's talk about equity plays for move-up buyers.

Nicole Rueth: Buydowns are part of every conversation now. I don't even tailor it as a separate conversation anymore. It's part of our financing strategy. We tell a buyer exactly what to ask their agent for in seller concessions. We arm them.

Nicole Rueth: I don't let the agent tell me what they're asking for. They say, we want to go in with $10,000, and I say, why $10,000? We actually need $16,000 to get this buyer to the interest rate that fits their budget with this home. I'm structuring and tethering it to their budget, their lifestyle and their goals.

Nicole Rueth: The equity conversation, though, is easily the biggest standalone strategy conversation I'm having. I'm literally having buyers call me from the house. This is not 2021. They didn't get preapproved ahead of time because they're locked in at 2.5% or 3% on their current home and had decided they weren't going to sell unless the perfect home showed up.

Nicole Rueth: Then they find the perfect home, because in Denver we have a lot of inventory. Maybe the seller is offering concessions, and it's within the budget I talked with them about originally. Now they're calling me saying we need to do a loan application right now.

Nicole Rueth: So we're talking a lot about how to buy before you sell and how to tap into equity. We have $11.7 trillion in tappable equity right now, and that's just mortgaged homes, not the homes owned free and clear. Tappable equity is usually measured to 80% loan-to-value, but I've got loans that go all the way up to 90%, and HELOCs we can close within seven days. There are a couple of strategies with buy before you sell, and it depends on the buyer.

Nicole Rueth: Say they're ahead of the game. They're forward thinking, they know they want to do this at some point, they haven't found the right home, and they have a lot of equity they don't want to give up by living in temporary housing or buying the wrong home. With interest rates and prices where they are today, nobody's sacrificing.

Nicole Rueth: If they're not willing to move until they find the right house, the first thing we look at is a HELOC. Super cheap, super easy, but your home cannot be listed. So this is the seller, or possibly the new landlord who's keeping the home. I've got 64 doors, and I talk to people about converting their home into a rental all the time. But even if they're going to sell, if the home isn't listed yet, get a HELOC. They're dang near free. You just have to pay an early closure fee.

Nicole Rueth: We have them in house, but I also partner with a lot of credit unions. I don't need to do every deal. A credit union is great for a W-2 employee who has thirty to thirty-five days to get it done. If it's any kind of DSCR, bank statement or investor deal, I'm doing those HELOCs in house. But we do those before your home is listed, and that's a phenomenal opportunity.

Nicole Rueth: We also have bridge loans, anywhere from four months to twelve months. This is for when your home is already on the market, you didn't think about it ahead of time, and you didn't get a HELOC or don't have access to one. Bridge loans typically go to 80%. We've got one that goes to 85%. They pull that equity out, use it as the down payment, and buy the other home. They have to qualify with both homes.

Nicole Rueth: This is where we get into buy before you sell programs, because we have contract-only offers you can pair with a bridge. You get the equity out, you put a contract offer on the home they're selling, and that lets us exclude that debt on conventional and jumbo financing. They can purchase the next home non-contingent, then list their home, or take the time to declutter and stage it if it's already listed. We can also use bridge financing for remodels or debt payoff to help them qualify for more.

Nicole Rueth: Or we have bundled buy before you sell programs. The bundle is really nice. Typically it's a little more expensive, but it'll pull the equity, sometimes it'll pay cash for the new home, and it'll put a contract offer on the existing home if you need it. As soon as your home sells, you pay off the buy before you sell program.

Nicole Rueth: Another option for forward-thinking people with a low interest rate is converting the home to a rental. We talk a lot about how to optimize that: renting it by the house, by the room, or by the month. There's money in multiples. I have the spreadsheets and the calculator they can digest, and I have the property manager and contractor partners to convert it successfully so they don't end up in a negative cash flow position.

Nicole Rueth: Some guidelines recently changed with Fannie Mae, and honestly, they made it more straightforward. If you can show three market data points to support the rent you need, you don't need a lease. Or you can use an appraisal to determine market rent. There are still some loan programs that let you use a lease, which is an advantage for some buyers.

Nicole Rueth: The last advantage of the equity play is the recast. A lot of our jumbo loans allow it, and conventional allows it. Say you buy a home with 5% down because that's the money you have liquid. You put your old home on the market, clean it out, stage it, and move into the new home. You sell it, and now you've got $300,000 in equity from that home.

Nicole Rueth: You can put that down on your new loan and recast for about $250. Same terms apply. You drop the total loan balance, which drops the monthly payment, which puts your buyer back into their budget for the long-term hold. You can always look at refinancing down the road too, but especially if you used a seller-paid permanent rate buydown and want to hold on to those terms, you're going to want to recast. And there is no EPO, no early payoff penalty, on a recast.

Erica McGarvey: Very informative. I learned something, and I hope everybody else did too.

The five seller asks

Nicole Rueth: To summarize all of this, let's make sure we're asking the seller for the right things. With buydowns, we're asking for seller credits. We're getting 3% on average here in the Denver market, and five out of six of our financed closings have seller credits on them.

Nicole Rueth: With ARMs, ask the seller to cover closing costs. If you don't want to do a buydown, you can do closing cost coverage, and make sure the buyer is in the best position from a cash liquidity perspective to offset any changes they might see.

Nicole Rueth: On non-QM, we all know the interest rates are higher. Have the honest conversation from the very beginning: if we have to go bank statement, asset qualifier, or assets as income, which is a Fannie Mae product, that may come with a slightly higher rate. So we want to ask for the full interested party contribution limit in seller contributions. That's dictated by the loan program, whether it's 3%, 6% or 9%, and we want to use it to buy the rate down on the non-QM.

Nicole Rueth: On an assumable mortgage, if you've got an offer going in, make sure you're getting enough time. The biggest hog on those is time, and then having a list of the banks that will do the gap financing. Be a partner for your agents. Don't push them aside. Help that client and that agent get to the closing table.

Nicole Rueth: On the equity play, know your program options. There are a lot of them. Don't just sell the program you know best. Go through the whole suite. I usually put it in a spreadsheet and show them least cost to most cost. The most cost is going to have the nicest Cadillac feel: no risk, only one mortgage payment until your house sells. The least cost means you're carrying two mortgages and tapping a HELOC. We go through those options so the buyer makes a very conscious decision on both benefit and cost.

Knowing which clients need a play: the Homebot segment

Erica McGarvey: Nicole just gave you the five plays, and knowing them is a big part of the job. Another piece is knowing which clients need one. Homebot gives your buyers a safe, private, nationwide home search, and their data is never sold, which makes it a great alternative to the big portals. You see what they're doing: which listings they're clicking on, what they're favoriting, whether they're sharing anything with friends, family and neighbors, and whether they're crunching numbers in the financial calculators, where they can learn about buydowns and come to you with a more informed conversation.

Erica McGarvey: In our example, look at Jordan and Sam. Today, they filtered for seller concessions. Yesterday, they saved three homes marked assumable. They haven't called you yet, but they're already telling you which play they might need. That's the engagement data you get when you're on Homebot and you drop your database in.

Erica McGarvey: Your past clients send signals too. Homebot helps you find move-up sellers before they start shopping. When you provide Homebot to your homeowners, you'll see what they're clicking on, whether they start looking at listings, and whether they're exploring markets locally or in another area. So when you pick up the phone, it isn't a random check-in. You can get more intentional with the conversations you're having.

Erica McGarvey: For loan officers on the call, Homebot goes even further. We have a new AI tool called HomebotAI that tells you who you should be reaching out to, provides strategic talking points based on each client's individual scenario, crafts emails for you, and more. If you want to see how Homebot can support you, your buyers and your past clients, you can book a demo, watch a demo, or join one of the live sessions for real estate agents or loan officers.

Q&A: Helping agents with listings that won't move

Question: What are you saying to agents right now who are having trouble moving their listings? How can we best help them?

Nicole Rueth: I have seller strategy conversations all the time, and I've gotten more agent opportunities because I'm willing to talk about seller strategy. We offer a lot of 1-0 buydowns and 1% permanent rate buydowns. As the lender, if the seller is willing to do something, we put together flyers for them and information they can put in the MLS and in the listing photos. We support them. A lot of agents have come up to me saying, my lender doesn't know how to support my sellers.

Nicole Rueth: Again, it's an abundance mindset. When I put together a flyer for a listing that says I'll give a 1% permanent rate buydown credit, that buyer might go back to their own lender and get them to match it. I'm fine with that. You have to be okay with the fact that you might not get that deal. You're building a relationship, you're being a good teammate, and you're showing up.

Nicole Rueth: I say this all the time: I am lifting up the entire industry. All boats rise with the tide. The more we lift up the industry, the more buyers and sellers feel comfortable coming in, because they feel supported and not agitated. This is a very agitated economy. We have to be the lighthouse, the positivity they're drawn to.

Q&A: Buydowns without a builder credit

Question: If we are not working with a builder offering all that credit to buy down the rate, are you saying to have the agents build a hefty buydown into the offer?

Nicole Rueth: Those sellers who live right by a new-build community are in a tough, tough spot. My empathy goes way up for sellers who are right there, with homes still going up behind them, because those builders have very deep pockets and they're still advertising 4.99%. It's costing them more than it used to, but they're still doing it.

Nicole Rueth: So you've got to go in and help your agent, who's trying to help that seller, and who hopefully becomes your buyer on the next transaction. Help the seller understand what they're up against. Show them what their house costs at current market rates, and how much more house a buyer can afford with a buydown: a bigger home, more bedrooms, more garage spaces for the same monthly payment. It's about managing the payment and managing expectations. We do that a lot with our agents.

Nicole Rueth: Then put together the pros list for the home: the upgrades they did, the things they finished off, and the costs a buyer would incur to get those in a new build. And be ready to offer a seller concession. You can't price it up to bake the concession in, because if you overprice it, you won't get any showings. You've got to price it right and give a seller concession. We've got to be super honest with our sellers right now, and as a lender, I'm super honest with my buyers and my agents. You're either going to hate me now or hate me later. I'd rather be fully transparent from day one and help you get across the finish line.

Q&A: Recasting jumbo loans

Question: What lenders do you work with who allow a recast on jumbo loans?

Nicole Rueth: We work with a number of them. A lot of jumbo loans allow it, but it's case by case and scenario based. We have jumbos in house, and we also use a lot of affiliate partners for jumbo loans, so we keep a grid of which lenders allow it.

The 48-hour challenge

Erica McGarvey: We are at time, Nicole, so I'll hand it to you to close us out.

Nicole Rueth: I want to leave you with one thing. It's great to listen to something like this. It's motivating and exciting. It's another thing to say, where am I going from here? So I want to give everyone a 48-hour challenge. Not a five-day, not a week, not a month. 48 hours. What can you do right now to exercise some of these conversations and start cementing the change, so we uplift the industry and keep supporting those relationships?

Nicole Rueth: First, call five buyers who paused this year and ask them what they're waiting for. Help them. It's going to cost them more to wait, but find out what it is. Is it the right time? The right price? The right rate? Become their champion.

Nicole Rueth: Second, pick one listing that's had no offers, one you've been watching sit on the market, and call that agent. Ask how you can help them as a lender create marketing and show the seller what a rate buydown will do for them. Be the advocate for moving the market, not just getting a deal.

Nicole Rueth: Third, get on Homebot and search for all the assumables. Let your database know what's available. Hey, I found an assumable at a $600,000 purchase price with a $580,000 assumable loan. It happens. Let people know. Be the advocate.

Nicole Rueth: I promise it will pay multiples, but do something with this information in the next 48 hours. If you sit on it, a week from now you'll think, man, that was good, and nothing will have changed. I want this to move the market. I want this to help you.

Nicole Rueth: My information is everywhere. If you can't find my cell phone, that's on you, not me. Follow me on socials. Call me or text me if you want to dive deep. I do a lot of coaching, we have Market Moves, so just reach out. I want to help everybody. Again, all boats rise with the tide.

Erica McGarvey: That's a beautiful way to end. Google her, everybody. You'll find her number and you can get in contact with Nicole Rueth. Thank you so much for your time today, Nicole. I think we've answered all of the questions, so we'll go ahead and wrap up. Have a great day, everyone, and thank you.