Mastering Mortgages: 5 Essential Insights from a Real Estate Expert

Stephen Schmidt (00:03.662)
Welcome to the show where we interview the nation’s leading real estate entrepreneurs. It’s your host, Stephen Schmidt, and I’m back at it like a bad habit. And I got another one from the Chicago land area here in the studio today. I always love my folks from up North in the Chicago area. It’s always a pleasure to speak to them. Had quite a few on the show from all different types of people, while property managers and inspectors and real estate investors. And today we got a cool one.

Antoinette M. Baranek (00:10.864)
Thank

Stephen Schmidt (00:30.552)
We got Antoinette Baranek in the house and she’s a really successful mortgage originator. We’re gonna get into maybe some tips, tricks, and industry insights from her about that portion of real estate and how it can help you whether you’re looking to purchase a home to live in or whether you’re an investor looking to continue growing your portfolio. So we’re gonna get into a great conversation here today.

But before we do that, just remember here at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, 2 to 5X their businesses so they can build the businesses they’ve always wanted and live the lives they’ve always dreamed up. With that being said, Antoinette, welcome to the show.

Antoinette M. Baranek (01:08.132)
Well, thank you. Thank you. That was a wonderful introduction. Thank you. I’m happy to be here.

Stephen Schmidt (01:12.032)
You bet. Well, I’m glad you’re here and you’ve been in, I didn’t say how long you’ve been in the business for, it was before the 2000s. We’ll just put it like that. So you’ve seen all the ups downs and workarounds of every single season practically the last three decades. So let’s start here. If you could let our audience know, tell us exactly like what got you into the business originally and then how did things evolve to where you’re at now today?

Antoinette M. Baranek (01:42.032)
Wow, okay, so when I started in the business, we had pagers, I’ll just start there. I didn’t give any years, but I’ll let you know, I had a beeper. had a beeper, but nonetheless. So honestly, I was always interested in banking and finance from a young age and I went to college and got a degree in accounting and then I started working in the field and I was bored out of my mind. So yeah, a very long time ago, I…

Stephen Schmidt (01:46.766)
I love it. That’s amazing.

Antoinette M. Baranek (02:09.508)
was speaking with a friend who was purchasing a house. I was in my early twenties. I’m like, wow, this is really cool. That’s really cool what they walk you through, right? And back then everything was paper. You you had the credit reports, everything was hard paper. And that’s where my interest started. And I interviewed with a couple of companies and then just took a job, moved from Michigan to Illinois, greater Chicago land area and never left.

Stephen Schmidt (02:16.557)
Hmm.

Stephen Schmidt (02:36.557)
Wow, that’s amazing.

Antoinette M. Baranek (02:37.56)
Yeah, so I moved around. I moved around pretty quick, like right away.

I moved up into management within a short amount of time and then I moved into managing a team and then I moved into the wholesale arena and then now I’m back onto the retail side of it. So I’ve been around the block a few times but I’ve still been in the business and I love it. As much as it can be an aggravating business and sometimes you just want to rip your hair out and all of that, there’s something about it that keeps us here. I think a lot of it’s opportunity, you know, being able to be your own boss.

Stephen Schmidt (02:52.972)
Mm.

Stephen Schmidt (03:10.733)
Hmm.

Antoinette M. Baranek (03:13.442)
to some extent. And then doing the right things. mean, helping first time home buyers get into their house. mean, there’s, for me, that’s very exciting. Like that’s a wonderful feeling or getting someone, closing on a deal that maybe someone else couldn’t close on, right? They couldn’t get it done because of, for whatever reason. And then all of sudden, you know, you come in and get it done. You kind of feel like a little bit of a hero. You want to put your cape on. yeah, no.

Stephen Schmidt (03:23.287)
Totally.

Stephen Schmidt (03:35.857)
Totally now, so what do you what do you enjoy most about helping people finance their homes?

Antoinette M. Baranek (03:41.646)
I’m sorry.

Stephen Schmidt (03:43.019)
What do you enjoy most about helping people finance their homes?

Antoinette M. Baranek (03:47.76)
I like walking them through this in our technology age now. So a lot of people are super happy to just sign and click and move on and not read anything. I like to take the time to make sure they understand fully what it looks like, all of the fees and costs and what takes back through the process. And I take the time to do it even when don’t, sometimes don’t want me to go over.

Stephen Schmidt (03:57.335)
Mm-hmm.

Stephen Schmidt (04:12.523)
wanna breeze through it. Yeah.

Antoinette M. Baranek (04:12.664)
information in that depth, right? They just want to sign and move on. But the minute I do it and they they understand it and then they go to the closing table, it’s a much easier transaction and they’re very comfortable because I can’t tell you how many times, you know, even within my space, I’ve seen people go to closing and they don’t really understand and then they get all these random numbers in front of them. They don’t know what’s going on. And then they’re, you know.

You never want them to leave the table feeling like, wow, was that really a good deal? You want them to leave the table like they’re a winner. They got the house they wanted. They understood the process. They knew what their fees were. And then building from that as well.

Stephen Schmidt (04:40.45)
Hmm.

Stephen Schmidt (04:50.893)
So was there like a defining moment that made you realize like I’m in the right business at some point in your career?

Antoinette M. Baranek (05:00.56)
Yes, absolutely. So after the crash, was a wholesale account executive. There was no jobs, right? So I ended up working. I took a job at a credit reporting agency. I’m not going to say the name, but I worked in the financial end of it, right? So I had a lot of mortgage clients. So I still stayed in it and we did predictive analytics and marketing for them.

And what I will tell you is data people and data business itself is a much different business. But I did well there because I I understood the back end of it, the mortgage business and the finance business. But that whole time I was out, I had people calling me, hey, would you come over and help manage this team or would you come over here? And I was like, you know, I’m going to just stick with this for a while. But I wasn’t happy. I mean, I did well, but I wasn’t happy. I was quite bored. I learned a lot about

Stephen Schmidt (05:36.565)
Right.

Antoinette M. Baranek (05:51.162)
predictive analytics, automated decisioning and all of that sort of thing. Then COVID happened and I was working for another data company and I ended up having to find another job and a call came in and it was 2020. So rates had just gotten down while a friend called and said, I need help. I’m like, you know what? Okay, let’s do this. Let me get back in it. And it wasn’t…

Within 60 days, I’m like, I don’t know why I ever left this place. I don’t know why I ever left this space, to be honest with you. I just, I love it. I love everything about…

Stephen Schmidt (06:22.978)
Hmm.

Antoinette M. Baranek (06:26.544)
trying to figure out a deal and trying to figure out your guidelines and how to structure something and make it work or what have you. mean, for me, was more about this is where I belong. This is where my passion is. And as nerdy as that sounds, I guess I’m a nerd. I don’t know. Like, I really do enjoy.

Stephen Schmidt (06:41.837)
There’s nothing wrong with that. Nothing wrong with that at all. like how do you help clients figure out like what they can truly afford before shopping for a home?

Antoinette M. Baranek (06:56.018)
gosh, yes, you have to go through the pre-approval process with people, and you have to walk them through it. Sometimes it’s helping them with credit. Sometimes there’s people where we gotta start somewhere, and they might not be able to buy a house now, but maybe in about a year and a half they can, but maybe we have to start with credit, and maybe we have to start with understanding income, and then debt as well. But yeah, it’s usually a pretty quick process. You start an application, you get a couple,

Stephen Schmidt (06:59.885)
Sure.

Antoinette M. Baranek (07:25.742)
stubs understanding their income. But not everybody gets paid a W-2 and gets a pay stubs. know there’s a lot of self-employed people out there as well so you sometimes you have to do a little bit more digging.

Stephen Schmidt (07:34.445)
Totally.

On that note, think a lot of the audience of our show at are generally 1099 income earners. mean, I’m 1099 income earner, pretty much everybody on my team is. like, you know, my business outside of here. and you know, it’s great because there’s a lot of benefits to that.

Antoinette M. Baranek (07:57.68)
I think it’s awesome.

Stephen Schmidt (08:03.141)
on the tax perspective, but like there are some hairy challenges when it comes to purchase of property, especially for like real estate investors, right? So on that note, like what are some of those misconceptions some people have about like, well, if I don’t have a W-2 income job for at least two years with consistent, you know what I mean? Like what are some of those misconceptions in your industry for those that are 1099 looking to either get into their home, get into a new home or

Get approved. What are some of those things that pop up?

Antoinette M. Baranek (08:33.872)
There’s a multitude of products that you can use. as self-employed people, lot of bank statements. So there’s a product where you analyze bank statement deposits and you use that for qualifying purposes. And you can use, whether it’s personal bank statements or you can even use your business bank statements. So you can use that. There’s some products out there. You can just use a 1099. There’s products out there where you can just give an audited profit and loss statement and you can use that.

Stephen Schmidt (08:45.473)
Mm-hmm.

Antoinette M. Baranek (09:00.336)
When it’s a non-traditional product, the only thing that you have to keep in mind that, you know, because there’s a little more risk than it is with a traditional mortgage product, you’re typically going to have a bit of a higher rate and you’ll probably have to come in with more money down. But I think it’s kind of understood, especially when you’re not able to show that you earn on your tax returns or, you know, you’re receiving a steady W-2 paycheck.

Stephen Schmidt (09:24.685)
Totally.

Antoinette M. Baranek (09:26.68)
Yeah, but there’s plenty out there. There really truly is. And there’s plenty out there for people who just do it as their business. There’s plenty of people who have real estate LLCs. They buy in an LLC. It reports under the LLC. So it’s not on personal credit. There’s a ton of that going on as well for, but those are the, the investors that actually buy more than one property. They typically have like a few. It’s anywhere from like two to 10.

Stephen Schmidt (09:51.895)
sure.

Stephen Schmidt (09:55.275)
So can you, on that note, like I actually have more of a personal question than anything so I can get some deeper understanding. Can you break down the difference? I think people are starting to, I don’t know what the right word would be or exactly how to say it. Not so much awaken, but I think people are starting to realize.

Antoinette M. Baranek (10:01.144)
Yeah, please, like, you could fuck me with anything you got.

Stephen Schmidt (10:19.756)
For whatever reason almost 20 years later like oh, this is why the crash in 2007 2008 2009 was like really prevalent Etc and one of the big things that pops up a big buzzword right now that people are kind of scared of is is an arm, right? Adjustable rate mortgages. Can you like break down the differences between like fixed rate and adjustable rate mortgages and how they work and like when it would be appropriate to have one or the other

Antoinette M. Baranek (10:26.36)
Mmm.

Antoinette M. Baranek (10:47.152)
Yeah, I can actually share a story like in the very early beginnings of my career. So first, my very first LO job, very first one. I think we were selling rates like at seven and a quarter. It was like seven point, seven and a quarter, we’ll just say whatever. I know. And.

Stephen Schmidt (10:49.931)
Yeah.

Stephen Schmidt (10:56.011)
Mm-hmm.

Stephen Schmidt (11:01.672)
Which by the way is what they are now. Not everything gets more expensive with time.

Antoinette M. Baranek (11:09.122)
So there was this, and then we started having this rate increase and it was pretty substantial, not like the one we had a couple of years ago, but it was pretty substantial. And so then as a sales person, or really I didn’t even see myself as a sales person, I started asking questions like, what’s your intention with this home? Are you gonna stay in there for 30 years? You want a 30 year mortgage? Actually, no, we aren’t gonna be in the home more than three years. I’m like, well, have you considered a five year arm?

Stephen Schmidt (11:14.23)
Mm-hmm.

Stephen Schmidt (11:33.919)
Hmm.

Antoinette M. Baranek (11:34.16)
you’re gonna get a lower rate, you’re locked in for five years, and then it becomes adjustable. And you have to be able to explain those adjustable margins and how those work. But there’s a lot that’s set up that protects the consumer, even if you end up in an adjustable rate. Like you go past your initial fixed period of three or five years or seven years, right? And then all of a sudden something changed and you’re still in the house. You can always just refinance into a fixed rate, but even the adjustments are very limited. So it’s not like you’re gonna go from like a

Stephen Schmidt (11:41.366)
Totally.

Antoinette M. Baranek (12:03.728)
I don’t know, a 6 % interest rate and all of a sudden it’s going to go up to 9%. It’s a very limited and they’re very capped. So it’s not a substantial increase. they’re certainly, and if you’re one of those people who think the rates are high and that rates are going to come down, which we all certainly believe, maybe you would take an arm knowing that you’re going to refinance in the next, you

Stephen Schmidt (12:07.756)
Mm.

Stephen Schmidt (12:11.649)
Sure.

Right.

Antoinette M. Baranek (12:30.102)
years or so waiting once the fixed rate opportunity presents itself. So a lot of times people just it’s you know asking the intention you know what are you going to do with your home like are you do you want to keep it for 30 years and then it’s also you know payment. Payment is very important so maybe having a lower payment for the first three years is more important than having a fixed rate.

Stephen Schmidt (12:35.692)
That’s a good point.

Stephen Schmidt (12:56.396)
Sure. So what are some things that investors should be considering with the different types of lend products that are out there? Do you work with investors quite often or is that kind of just as a case by case basis? Like how much of your business would you say is retail versus like investor buyers?

Antoinette M. Baranek (13:14.0)
I would say investor buyers, it’s about 20%. But, and I’m sorry, could you, the question was what would be my?

Stephen Schmidt (13:19.563)
Okay, sure.

Stephen Schmidt (13:26.284)
Yeah, so like what are some things that people that are investors that are actively investing in real estate To make a profit not because you know, ultimately everybody’s investing in real estate. I don’t believe that personally if you buy a house but like The people that are in it as a business, right? What are some things that they should really be considering about the different options and loan products that are out there when they’re going to get their next loan?

Antoinette M. Baranek (13:38.8)
Bye.

Antoinette M. Baranek (13:54.544)
There’s a lot of short term loan products, especially if you’re buying investors. Investors will typically look for a home that needs a little, you know, needs some work, right? So they’re going to get it under market value. They know that they’re going to sell for profit after they go in and do whatever it is that they’re going to do to it. There’s some six month loans and 12 month loans available for them that where they’re not having to take out this 30 year fixed mortgage and they’ve got to come into this big construction or rehab loan.

Stephen Schmidt (13:59.309)
Hmm.

Stephen Schmidt (14:04.918)
Sure, totally.

Stephen Schmidt (14:11.21)
Right.

Antoinette M. Baranek (14:24.196)
right, because those are a bit of a process as well. But there’s short-term loans that they can take just to get the property into a condition where they can sell it. And that’s typically what an investor does. Either they come in, they buy under value for whatever reason, the property’s under value. Typically it’s because it needs work. They bring it to a point where it’s, you know, habitable. They either sell it for their profit or they keep it and run it out and then just continue to build equity and then build their book of business that way.

I think a lot of people think that there’s just a one path, like, okay, I’m going to have to put 25 % down, I’m going to have to take out this mortgage, and then I’m going to have to take out another loan to figure out how I’m going to get all this work done to the property. There’s a lot of product out there that helps you buy the property and base it off of the actual future value of the completed rehab property. And you use that as your asset and collateral that you lend against. And then you pull money from it as you continue to.

know, rehab the property or update the property.

Stephen Schmidt (15:26.348)
Right. Yeah. How often do you because I know a big deal for a lot of investors is using what’s called the BRRRR method. If you’re familiar, you know, buy rent, rehab, et cetera, refinance. And so do you see investors tapping into things like

key locks in their properties? Is that something that the mortgage side of the business handles? Or like, what are some of the unique things that you’ve seen investors do throughout the year to get creative, to get access, maybe even just to more capital to continue growing their businesses via the traditional bank route, because that’s what you’re in, right?

Antoinette M. Baranek (16:03.212)
Yeah, we, yeah, yeah, more mortgage bankers so we have access to other products outside of what a typical like bank like, you know, your big black building bank would have. There is a lot of HELOC product that’s being offered.

Stephen Schmidt (16:14.857)
Totally. What is a black building bank? I’ve never heard that term before, actually.

Antoinette M. Baranek (16:20.548)
block, I’m like, you know, like the, like, I don’t want to say names, but like, know, your big banks that sit on the corner and they’re

Stephen Schmidt (16:26.984)
Okay.

Antoinette M. Baranek (16:29.336)
Yeah, so they’re limited to whatever they have, but as a mortgage banker, have absolutely more options here. there is…

Stephen Schmidt (16:32.394)
Sure.

Stephen Schmidt (16:36.329)
What’s the difference between a mortgage banker and a mortgage broker? I’m interrupting you a lot, but like, this is sparking questions that I’m like, interesting. What’s the difference between a mortgage banker and a mortgage broker?

Antoinette M. Baranek (16:40.974)
All healthcare, you can totally like cover me. So a mortgage banker, a mortgage banker typically funds their own loans, right? So they fund them. So there’s more risk for them. they have their own underwriters, processors, funding team. A lot of times mortgage bankers also broker loans, cause we do that as well, because there’s some stuff that we’re not gonna put on our bank lines, right? But typically,

Stephen Schmidt (17:07.883)
Totally.

Antoinette M. Baranek (17:10.884)
The mortgages don’t, we can retain servicing, but we typically end up selling the mortgages in the end, right? Whether it’s Fannie, Freddie, or whoever the end investor is, but we just will retain the servicing on it. But we actually are the ones that do the underwriting and then the financing at the table. A mortgage broker has the option to send it out to lenders. They work with multiple lenders as well. All lenders have different regulations, guidelines, products, programs, or whatever the mortgage broker can.

send that deal to that particular lender, they underwrite it and they fund it. I just prefer, I know there’s some places they love that broker model, they just love it. I prefer the banking model just simply because I feel like I have a little bit more control over the process. I have a little bit more control over making sure it closes on time. I don’t wanna go to a third party that I don’t have a relationship with.

and say, hey, can we close this a couple days earlier, whatever the situation is, right? I want to just have a little bit more control. But when I do broker loans, you know, we just have to work through their guidelines. I just try to manage expectations better. But normally I’m, you know, wanting to push things to close much faster.

Stephen Schmidt (18:18.859)
Totally.

Stephen Schmidt (18:23.499)
So what advice would you have for buyers in today’s market? What would be the biggest piece of advice you’d have?

Antoinette M. Baranek (18:32.847)
Depending on your location, I think there’s a lot of fear. There’s a ton of fear going on right now. There’s a lot of people sitting on fences right now that they don’t want to buy.

Stephen Schmidt (18:40.395)
Let’s focus on, before you answer that, let’s focus on 1099, like self-employed people, just because that is an audience and that’s more of a selfish thing for me because eventually I’m gonna buy a house.

Antoinette M. Baranek (18:46.64)
Mm-hmm.

sure, sure, didn’t. Absolutely. Personally,

I think that knowing if you’re a 1099 individual and you’re wanting to own a home, right, you can certainly do it. You should come in with the thought knowing that you’re probably gonna put a higher percentage down. You’re not gonna get a 3 % down payment type deal. You’re probably gonna get between at least 10 % up to 20, even 25 % depending on what your intentions are with the property. I also think that investors should not shy away from properties that need a little work.

I’ve seen more investors make money by taking on properties that might be a little challenged, having the right people at the right price doing the right type of work, and then flipping those properties over. I think that’s also something that should be considered. But I think you shouldn’t be afraid of trying to go out. If there’s a home, you want to own a home. And even though you’re 1099, I think you should still do it. Just be prepared that you might.

you’re not going to get the best interest rate and you might have to put a little bit more money down. But if you take a look around at everybody and you take a look around at even other investors, like use somebody that’s been a real estate investor for a long time and then look at their wealth, look at how they built their wealth. Did their wealth come from their W2 job? Maybe. Or did it come from the fact that they gained a lot of equity in real estate or they were fixing and flipping or doing a combination of both?

Antoinette M. Baranek (20:25.548)
Absolutely, I don’t think anybody should shy away from it. And I think interest rates concern people and there’s a lot of talk in the media and I think the media is sometimes are not a friend to us at all in any way, or form. think a lot of misinformation comes out. know, all these foreclosures are happening. Like you’ll get all this negative news. Like, my God, values are going backwards. It’s not really happening. It’s still not happening. Just FYI, there’s still a housing shortage out there. Maybe particular areas.

Stephen Schmidt (20:53.802)
Yeah.

Antoinette M. Baranek (20:55.214)
But for the most part, it’s the quickest way to gain wealth. Absolutely, hands down, the quickest way to gain wealth.

Stephen Schmidt (21:05.802)
Well, thanks for coming out. We appreciate you coming on the show and sharing some insights. Where can people connect with you for more if they want to learn more about you or see what you’re working on?

Antoinette M. Baranek (21:15.144)
can I give you a So the best way to reach me is… I know, I know, I could leave a cell phone or,

Stephen Schmidt (21:19.016)
If you want all seven million of our listeners to call you, you can drop your cell phone, but no, I’m just kidding. It’s always funny when people do that and then I say, Hey, I know you don’t know this, but we do have a million listeners and like, you’re probably going to get called a lot now. And they go, no, can you edit it out? And I go, no, I’m just kidding. But really like social media, website, things along those lines. Those are usually the best resources probably to share for folks. We do have a large audience.

But that’s why I say I’d probably not give your personal sell out.

Antoinette M. Baranek (21:52.752)
So there’s also email. The other challenge is my name is not common. It’s Antoinette Baranek. So it’s Antoinette Baranek at SPMC.com. So that’s Sarah Pacific Mortgage Company, SPMC. So it’s Antoinette Baranekat SPMC.com. Or yes, I have my LinkedIn. Antoinette MB is my Instagram. And then obviously Facebook, Antoinette Baranek. I have a business page as well. So I’m everywhere.

as far as that goes. If you can spell the name, you’ll find me, I promise.

Stephen Schmidt (22:26.398)
You’ll be able to spell it because it’s going to be on the title of the show notes, folks. So just go look for it there and then go at the SB whatever it was she just said dot com. All right. Well, anyways, we’re super appreciative for coming on the show and thank you guys for listening.

Antoinette M. Baranek (22:30.871)
wonderful.

Antoinette M. Baranek (22:40.236)
Well, thank you for the opportunity. think you guys are doing, I think what you guys are doing is awesome. I think it’s wonderful. Yeah, just getting getting the information out because again, we’re dealing with sources that maybe aren’t necessarily giving us all the right information.

Stephen Schmidt (22:56.522)
Well, thanks so much for hopping on. For those of you that want to connect with us for more, obviously go follow Investor Fuel and the Real Estate Pros. I know if you’re returning to the show, you’re already doing that. But if it’s your first time listening, I know you’re gonna go drop us a follow. We’re gonna be your go-to source for all things real estate. And we’ll see y’all in the next episode. Thanks a ton, Antoinette.

Antoinette M. Baranek (23:15.396)
My dear pleasure.