In Episode 25 of Intelligent Equity, host Ryan Kiefer welcomes back Ashok Ghildyal, Loan Officer at PrimeLending to discuss the effects of the COVID-19 outbreak on the real estate and mortgage lending business.

Episode Highlights:

Ashok Ghildyal has been in the financial industry for over 40 years.
The biggest difference that Ashok sees between past large market events and what is currently happening with the COVID-19 outbreak, is that nothing is fundamentally wrong with the economy. In fact, the economy coming into the COVID-19 outbreak was very strong.
Ashok feels that once the situation surrounding the virus stabilizes, we should be able to quickly get back on the economic track.
However, there is pain and uncertainty surrounding how long the outbreak is going to last.
Refinancing and debt consolidation loans may be in some consumers best financial interest at this time.
Ryan Kiefer feels that we are moving towards a recession, but believes it will be cyclical instead of structural.
That difference means it won’t stretch out 4-5 years, but instead will be short and deep.
Ryan feels that the economy will bounce back quickly, and the housing market may be insulated from the downturn.
There are still a lot of buyers in the housing market, and with interest rates still at an all-time low, that’s going to encourage those buyers.
In the $150-250k market, where there is limited inventory and homes are going fast, a lot of sellers are just listing their homes as-is, without any updates or changes.
However, if there aren’t as many buyers entering the market, that may force sellers to go back to staging and updating their homes before going to market.
Open houses may cool off, but technology can reduce housing market interruptions through virtual showings and e-signings.
People often correlate “Wall Street” and “Main Street”. Ashok feels that Wall Street is not always indicative of the underlying strength of the economy.
Younger buyers may not be as invested in the market yet, so they may not be feeling the “wealth effect” of the stock market, and their home purchasing plans may not be affected as long as their employment is insulated.
Ashok gives an example of re-financing on a $200k home. Refinancing was able to save the clients around $160 a month, but even more of interest that most consumers don’t take into account, is refinancing removed $35-40k of paid interest.
The overall benefit of refinancing isn’t limited to just cash flow and reduced monthly payment, but increased net worth and reduction in interest paid over the life of the loan.
Ryan delves deeper into an example to show how refinancing can benefit homeowners.
Ashok feels that refinancing may be the best investment decision people can make, at this point.
This is a great time to do some out-of-the-box financial thinking.

3 Key Points:

COVID-19 has caused fear and uncertainty related to financial markets, but this is a great time to do some out-of-the-box financial thinking.
Younger buyers may not be as invested in the market yet, so they may not be feeling the “wealth effect” of the stock market, and their home purchasing plans may not be affected as long as their employment is insulated.
The overall benefit of refinancing isn’t limited to just cash flow and reduced monthly payment, but increased net worth and reduction in interest paid over the life of the loan.

Resources Mentioned:

Ryan Kiefer: LinkedIn, Facebook, Website
Ashok Ghildyal website, LinkedIn, Facebook