A Break for Home Sellers?

The summer home buying season is straight ahead. Will sellers get a break on real estate commissions?

Hi, I'm Rob West. The National Association of Realtors sent shockwaves through the industry recently with the decision to drop its standard 6% sales commission. What does that mean for home sellers this summer? Dell Vermillion fills us in today and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, it's always a treat to have Dale Vermillion on the program. Dale is the author of Navigating the Mortgage Maze, the simple truth about financing your home from Moody Publishers. It's everything you need to know about securing a mortgage, all from a biblical perspective. Let me also mention that Dale will be answering your questions specifically on housing-related questions, purchasing or selling a home, also mortgage-related topics during this first portion of the broadcast. You can call right now at 800-525-7000. Dale, great to have you with us again, my friend.

Rob, always great to be with you. Thank you. Dale, before we get into the realtor settlement, the Fed this week of course decided again not to lower interest rates. That wasn't too much of a shock given the latest inflation numbers. Now I know this week the average 30-year mortgage rate rose to 7.22%.

That's of course the highest level in more than five months. So what does that mean for this summer buying and selling season? You know, we really don't anticipate that rates are going to change much between now and the end of the year. Now of course we're in an election year, things could change because of that, but inflation numbers continue to be where they're at. We don't envision seeing rates go anywhere south anytime soon, and if they do not buy a whole lot. So I would think that this summer and fall we're probably going to see rates in the high sixes, low sevens for most of the rest of the remainder of this year.

Yeah. Now if somebody's trying to wait it out, Dale, in the sense that maybe they're finding that affordability is just not there for them, they're calculating that mortgage payment with these higher rates, maybe they're realizing because you know how high housing prices are they need to save more, and so they're thinking well I'll wait a year and save and build up that down payment and hopefully I can get something in the fives. That may or may not happen, right?

That is very true. I mean none of us knows what rates you're ultimately going to do. We do anticipate 2025 to see a little bit better rate structure than we have right now, but you know it could go the opposite direction. There's just nothing that tells us right now that rates are going to change anytime soon, so I would anticipate that we're going to continue to see these rates for a while.

Alright, sounds good. Dale, any changes just in the mortgage industry that we need to be aware of with regard to lenders and are any of the ratios changing? Are they having to adjust anything in terms of qualification with these housing prices? You know, that's the biggest challenge is that you can't and you don't want to adjust too much because you already have debt to income ratios that are higher than many people can comfortably afford that they can qualify for.

As we talk about all the time on the show, you want to make sure that you do a budget and you don't go by just what a loan officer will qualify for, but what you can comfortably afford based on your budget. We're not seeing a whole lot of changes that happen other than more diverse products, more adjustable rate mortgage products are coming out. That's helping a little bit. Those are some of the things that are helping to bring down a little bit some of these rates and costs. Yeah, I know inventory has been a big question. I did see just last week that inventories are growing across the board, but we've got even greater inventories in the new home category on top of some developer concessions that are there. So is that a category that folks maybe who previously wouldn't have considered a new home should consider?

It really is. We saw housing inventory rise by 30% in April compared to last year, according to realtor.com data that just came out yesterday. We're seeing builders provide some great concessions, some great ways that you can lower your rates through buy downs and those kinds of things. So there is some opportunity in new construction particularly. Interesting.

All right, well, we'll continue to unpack this after this break. We're also going to dive into this latest settlement that we heard about a month or two ago from the National Association of Realtors. It has to do with how realtors get paid. There are some changes that are going to take place. Dale will fill us in on what happened with that settlement, what you need to know and how that may affect you as both a buyer and a seller.

That's just around the corner. Dale Vermillion with us today. He's the author of Navigating the Mortgage Maze.

If you have questions on buying or selling a home or securing a mortgage, call right now, 800-525-7000. Back with much more right after this. Great to have you with us today on Faith and Finance Live. I'm Rob West. Dale Vermillion with us today. Dale is the author of Navigating the Mortgage Maze, the simple truth about financing your home. Dale, before the break, we were talking about just housing prices and what's happening with mortgage rates. Let's turn the corner and talk about this recent settlement by the National Association of Realtors.

Just give us the backdrop. What happened? Well, as we know for a long, long time, the standard commission that was happening on a real estate transaction was 6%. That was 3% to the buyer's agent, 3% to the seller's agent. There was a class action lawsuit that came forward where the lawsuit just alleged that that was controlling the pricing on that.

It was against the National Association of Realtors. Due to the settlement of that, now what's happened is, and this is good news for consumers, is now the commissions are negotiable on all of those. By the way, they always were, Rob, just so everybody knows, but most people just didn't realize that. They thought that that was just what it was.

People went with that. Now, you have to actually come into agreement with a buyer's agent in advance of the transaction if you're going to use a buyer's agent. You can establish what you want that commission to be. Now, one of the big differences here is that the seller would cover both the seller's agent and the buyer's agent, typically. It was just kind of understood that if you were selling a home, you would pay 6% and your seller's agent would split it with the buyer's agent, which meant that the buyer didn't have to come out of pocket. They really didn't have to think about it because the seller was covering it.

How does that change now? What does that mean for me as a buyer? What it means for you as a buyer is now you are going to have a pay commission, but what they have just recently... We just had a federal court granted a preliminary approval on April 24th that what can now happen is seller concessions can be offered. Those seller concessions, which you wouldn't be able to use for the paying of a commission like this, they're going to grant it so that you may be able to.

They're still working on the final details on that, but it looks like that's the way it's headed. What that means is you'll want to negotiate those costs into your contract when you put your offer in so that hopefully what will end up happening is the seller will give you concessions for it. Those concessions will go towards that and you'll still be able to get additional concessions for things like rate buy downs and those kinds of things. But could it also mean, Dale, that in certain situations I might need to think about not having 100% of my down payment available because if I've got to come out of pocket to pay the real estate professional, that's going to reduce the cash I have available? It could.

That is very true. What you have to do today is you have to sit down and you have to establish with that agent what are the services they're going to provide, what is the commission you're willing to agree to, and then you want to also figure out how is that going to be paid and can you work that through your concessions in the process. It's a little complex right now until they get this all worked out. There's going to be a little bit of gray area.

I think by July we'll have this all worked out and have a clear path as to what this looks like. Okay, very good. By the way, if you have questions today related to buying or selling a home or securing a mortgage, we'll be taking those in the next segment so you can call right now at 800-525-7000.

Your question is for Dale Vermillion today, 800-525-7000. You can call right now. Dale, as we think about this, we've always said, I know you have as well that a real estate professional is essential. You know, this is the biggest transaction most of us will have when it comes to selling. I mean, having people that you don't know coming in and out of your homes, you've got negotiations, you've got contracts, you've got to get to closing.

I mean, there's just a real value add here. But overall, like so many other industries, do you think where this is going to settle out is that the net amount going to real estate professionals is coming down overall? I do believe it is. I just watched a conversation between two experts in the market that stated that last year commissions only averaged a little bit over 4%.

They didn't average 6% like we thought. I think that's going to be more the norm going forward. I think you're going to see a lot of one, one and a half and 2% commissions happening on either side. The bottom line is it's now negotiable more so than it was before.

And a real estate agent will have to establish the services they're providing and what that service is worth to that buyer and that seller based on the sales price of that property. Yeah, that's helpful. All right, let's take some phone calls today. We've got lines open 800-525-7000 of Vanessa in Indiana.

Go right ahead. Hi, I'd like to know whether or not this is a good time for an equity line. And I'm not particularly interested in an arm. I would rather have a fixed rate equity line. I believe they're just better. Give me the advice. Yeah, great question, Vanessa.

Dale? Yeah, so an equity line of credit by nature is not going to be a fixed rate product. It is a variable rate product, the way that they're set up. And it depends on what you're using the line for. The thing we always try to recommend is be careful if you're taking a line of credit out that you don't take it out for too large of an amount. It can be a temptation that can cause additional debt if you have it. A line really should only be used if you've got a specific purpose that you want to borrow for and then you're going to pay it back and the benefit of an equity line versus, for example, a home equity loan, if that's what you're looking at, which would be a fixed rate fixed term loan, is that you don't have to take the full amounts.

For example, if you're doing improvements to the house, you want to draw those improvements out as the contractor's working. This is where a line of credit is a perfect tool, because you can use that to draw down as you need the money and then pay it back as quickly as you want. And then you only pay interest on the time you actually borrow the money. Yeah, it's great advice.

You know, Vanessa, I would completely agree. I think the key is borrow as little as possible. If taking more on that line than you need is going to be a temptation to continue to pull money out.

We want to avoid that. But Dale, just as a follow up to that, you know, I had always said in this low interest rate environment, we got used to with rates around two and 3%, you know, let's take that home equity loan, let's lock in that fixed rate. But is there a case now for a line of credit with a variable rate specifically, so I can ride the rates down as they come down whenever that happens? You know, I'm not a fan of anything that's variable, I always lean like you do towards fixed rate fixed term, get into what you know you're going to be obligated to. And then if rates change and go down, you just refinance it down to the lower rate.

That's a much better strategy in my book than risking the line because the chances it can go up are as good as the chances it can go down. Yeah, yeah, very good. Thanks for that. Vanessa, we appreciate your call today. 800-525-7000. Through the next segment, Dale will be here to answer your questions about buying and selling homes, as well as mortgages. We'd love to hear from you again.

800-525-7000. Dale, just as folks are preparing to enter, perhaps even for a first time home buyer who's thinking about buying their first home, you know, I'm thinking about my kids. I mean, my oldest is in college, he's going to be entering the workforce here in a few years.

You know, if you're trying to enter for the very first time, it's challenging with the cost of homes these days and the rates. You know, what advice do you give those folks? Well, it is challenging. There's no question about it. In fact, I think you and I as parents, this is why we're elusive of our sleep for our kids and our grandkids that are coming up. You know, I think the fact is you've got to look for what's happening in the market.

Builders are starting to build more homes for the first time buyer, which is good news, and that could create some opportunities for you to buy at a better price. Yeah, that's well said. All right, Dale Vermillion here. He'll be with us through the next segment. So if you have questions specifically on this settlement from the National Association of Realtors buying and selling a home or even securing a mortgage, we've got one more segment for you.

You can call right now 800-525-7000. Then we'll turn our attention at that point to questions on anything financial. This is Faith and Finance Live. I'm Rob West and we'll be right back after this break.

You stick around. Great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions, 800-525-7000.

With us today, our good friend Dale Vermillion. He's author of Navigating the Mortgage Maze. We were talking about interest rates, home purchases. We were also talking about the settlement from the National Association of Realtors. But let's head to the phones.

I know we have some questions on this topic and we'll go to Chattanooga next. Sandra, go right ahead. Yes. Quick question. I have a HELOC that has been paid off, but it's been out there for about four years. Just wondering, is it okay to just leave it out there or should I close it out? Oh, yeah. Good question.

Dale? Well, if there's no eminent reason that you think you'd need it, I think there's really no reason to keep it open. If for some reason you think that you want to have an emergency fund, for example, I would just then ask the bank to make sure they keep the line of credit at a small amount that makes you feel comfortable about that. Just again, we talk about the temptation thing. It's just it can be a real thing where we have so much equity in properties today.

We want to be careful that we're always keeping ourselves in a good position so we can't get too far in debt with any other. Very good. Yeah. I think, you know, the temptation is always there when it's open and available. Now, you could make the case. Well, what if I needed it as just kind of a last resort? I mean, everything else was not available. Wouldn't it be nice to know that I at least could tap it if I had to? And that's true.

But I think the temptation kind of overrides that. And I think, you know, so long as you can get that closed and be out from under even the possibility of taking on additional debt, that's probably the way we come down. Thanks for your call, Sandra. Let's go to Florida. Hi, Terry.

How can we help? Hi, I have a question about the lawsuit because I've bought several homes in the last three years and I keep getting things in the mail saying that I should, you know, send in my information about my closing to be part of the lawsuit. So I'm not sure if, you know, I'm worried about scams.

Is that something I should do? And how does that all work? Hmm. Interesting, Dale. Yeah, I don't know who would be sending you information about providing closing information, but no, I wouldn't be providing anything that's private.

As far as I know, the class action lawsuit is over. And I would just be aware of those kinds of things because there are so many scams out there today. I would hate to see you get caught in a crossfire of something that's happening.

Boy, I would totally agree. I mean, there was an award of nearly two billion dollars that was levied on this. But the, you know, the net result, I mean, again, Dale, just to summarize this, if I heard what you said is number one, commissions were always negotiable. But now the buyers and the sellers are more aware of that.

And there will be fewer people that will just accept the standard six percent and more buyers and sellers will be coming to the table asking about the services of the real estate professional and negotiating what they will ultimately pay. Is that is that a fair summary? It's a very fair summary.

The mortgage industry went through the same kind of thing in 2008 after the meltdown happened where they had to disclose all their commissions. And it was the same kind of thing. And everybody worked through it and got by that.

And consumers benefited in the long run. Yeah. All right.

Very good. Dale, you know, as we think about buying and selling homes right now, you know, should this time of year factor into the equation? You know, if if somebody is thinking about buying or selling or excuse me, selling their home this year, would there be a case to be made that they should try to get that done sooner rather than later so they can get it on the market, you know, well before school starts? Or is that really not an issue?

There's a little bit of an issue there. We do see that sales do drop around the October timeframe, September timeframe and August timeframe when school is happening and people are coming off that side. We also see at the end of the year a decrease. But the fact of the matter is, Rob, there is so much demand out there today for housing that's far beyond the supply that sellers are in a really good position from that vantage point that if you list a home and that's a good home, there's a very good chance you're going to find a buyer very quickly.

So I think just because of the supply and demand issues, a lot of that is going to go away in the coming years. Yeah, we've had some questions today just about this idea of dual agency. I know in the past you've said that's probably something you want to stay away from where one real estate professional is representing both the buyer and the seller and that potential conflict of interest.

Has anything changed there as a result of this settlement? Well what you're going to see, and this is one of the big things that's going to come out of this settlement, is there's going to be a lot more agents trying to become those dual representation agents where they're going to try to control both sides and represent both the buyer and the seller. My advice is always to not engage in a dual representation transaction because again, if they're representing both, that can really debilitate your ability to be able to negotiate the way that you'd like to because you really can't give the realtor then what your bottom line is because they're working on both sides. So that's going to become more prevalent. I would say stick with a single representation just like you would in any other thing that you do. You want to have checks and balances where you've got people working for you on your behalf.

Yeah, very good. Dale, you mentioned that some folks might approve you to borrow more than we would recommend and so just because a lender says you can have it doesn't mean you should. And this is one of those big three categories we talk about so often that can be the budget buster, housing, transportation and food.

So what are those rules of thumb with regard to both payment and down payment that you recommend? Yeah, so let's take payment first because that's critical. You know, there are loans that can go up to 50% debt to income ratio of your gross income.

Think about that for just a minute. If you have $10,000 a month, you can have a $5,000 payment and you can qualify. That's not a comfortable payment at all. So you got to do a budget. You got to see what you can afford back into it from that side and then from a down payment. If you can put 20% down, we want you to to avoid PMI.

Those are just the good rules to follow. Yeah, very good. Dale, last quick question. What's going on in the mortgage industry? I feel for these folks. Are we seeing a pretty big exodus? We're seeing a big accident. Yes, we've seen half of the industry leave and you know, the rest I'm sure we'll do fine. We'll be okay.

Yeah. All right. Hey, God bless you, my friend.

We appreciate you stopping by today. You too, Rob. God bless you. Thank you. All right. That's Dale Vermillion back with your questions on any financial topic right around the corner. Stick around. Hey, thanks for joining us today on Faith and Finance Live.

I'm Rob West. Here's the program where we try to help you understand that God owns it all. You're a steward and that God's word is the very best textbook going for all facets of life. But that includes your money management. More than 2300 verses on money and possessions. The big themes in scripture I think really speak to this idea that not only are there practical issues of how we manage money, but also that money can compete with the Lord for first position in our lives. You know, the world would tell us we can find fulfillment and enjoyment. Our longing for abundance can be found in money and the things of this world.

We just know that's simply not true. And so we want to help you make God your ultimate treasure and then answer those practical questions you have each day in light of scripture. And let's do that right now. Let's head to Iowa. Ray, thanks for your patience.

How can we help? Yeah. Hi. Hi.

I was just calling. I just recently just turned 62 and I'm probably thinking about working for another five years for about 67. I could get at least, you know, and anyways, I'm currently living over here in an apartment and in Iowa with my wife.

She's a little bit younger than I am. But anyways, we have a current home in another state and we're thinking about selling that, you know, it's probably worth like probably like 1.1 right now. But we're thinking about selling that and then paying off the remaining balance, which is probably close to about 300, 350. And we just wanted to see if we could leave some of that money to my three kids. And also whatever's left over, we could have it to be able to, you know, buy maybe like a retirement home over here because the properties are a little bit less expensive than it is in California. But would the money that if we were to leave the kids, our kids, our children, would it be taxed, you know?

Well, so let's talk about these different kind of pieces of this equation. So the first question is, or the first issue is, you know, the tax is due on the sale. Was this your primary residence? If you go back from today five years, did you live in this home as your primary residence for any two of those five years?

No, we we've been rented renting the house since 2018. Okay. Yeah, yeah.

And we've we've recently came back, you know, to the US on 2023 in July. Yeah. Okay. And what did you buy it for? You said it's worth about 1.1 million today.

What do you realize? Do you remember what you paid for it? Yeah, yeah, yeah, we paid about 750 for it.

Yeah. So the difference would be capital gain. So you'd have somewhere around 350,000, you know, maybe in capital gain that you'd have to pay, and that would come down to your income. And depending on what your income is, it would either be 0%, 15%, or 20% capital gain that you'd have to pay and that would be done in the year of the sale.

Because you've owned it for more than a year, it would be a long term capital gain, which again, is either 0%, 15%, or 20%. Now, you take that money and you do whatever you want with it. Let's say some of it goes into savings, some of it goes into another home. You know, it exists in various forms, those assets, and then at your death, based on your will, you would leave whatever's left in your estate after any debts are paid or expenses from probate to your kids. That is not taxable unless you have an estate worth more than $13 million. And your kids wouldn't pay tax on whatever they receive, whether it's a home or a stock portfolio or cash, because there's no inheritance tax. So in terms of taxes, you're going to pay capital gains on the sale because you've got some appreciation. And that's not your primary residence. It's a rental property. And then after that's paid, it goes into your estate.

You can use it however you want. But then at your death, there is no tax paid unless you have a pretty significant estate in size. Oh, I see.

I see. Yeah, you know, because I was speaking with one of my colleagues and, you know, since our remaining balance is like, let's say $350,000, and we would just pay that like if we could sell it for like, let's say a million, I would still I mean, I wouldn't get let's say, like 700 or 650, you know, for for myself and for my wife. Or would I get taxed on that, you know? No, no, it's not income. So you just have capital gains, which doesn't have any bearing on the mortgage that you have. So you sell it, and you realize a gain. And the gain is determined by your selling price minus your original purchase price. And the difference is your gain that has nothing to do with whether or not you have a loan on that property. And then that gain is taxed at either 0, 15, or 20%, depending on the taxable income that you earn in the year of the sale. So for 2024, the capital gains rates are if you're married filing jointly, and you have taxable income between 94,000 and 583,000 for the year tag 2024, then you're in the 15% capital gains rate.

So the gain that you had selling price minus original purchase price would be taxed at 15%. Does that make sense? Yeah, yeah, it does. Okay, very good. Thanks for your call today, Ray. God bless you, my friend. Let's go to Holland, Michigan.

Hi, Carol, how can I help? Yes, just double checking. Thank you for taking on call. What is your opinion of a reverse mortgage and has had a good financial decision? You know, it can be. I mean, I like the idea that we would get out of debt and stay there. I mean, there's clear warnings in Scripture around the use of debt. Borrowing is certainly not a sin. I like to borrow only for appreciating assets that would certainly include your home, but you've got to do it in moderation, make sure that it fits into your budget. And so this idea that we would get out of debt and be completely unencumbered, I think is a great thing.

And a lot of people who have that and are enjoying that peace of mind and that flexibility of being able to respond to the leading of the Holy Spirit without any encumbrances, and it keeps their lifestyle really low. Now, when we get to that season of life, we have to look at the best way to fund our lifestyle expenses. And depending on how much we've saved through retirement accounts, depending upon what's available through Social Security or a pension, many folks that I talk to will say, you know what, I'm ill prepared for this season of life. I'm living on Social Security alone for whatever reason. We don't have any other assets. Our budget is very tight.

We're just not able to do anything. But we're sitting on a pretty significant asset in our home. And so there can be a case to be made for, well, you could convert that equity in your home to an income stream for life. And it's non-recourse debt, which I like a lot. And that just simply means that the you can never owe more than the home is worth. So at your death, even if they paid you out because you live to one hundred and thirty and they ended up paying you more than your home was worth, the government's going to cover the balance. And so your home will satisfy the debt, whatever it grows to. Does that make sense? It does sort of. I'm not nearly as well versed in financing as you are, but as long as it's something that isn't against godly principles, I really feel good about it then.

And that's what I really was looking for. Yeah, I don't think it is as long as you pray through it. And again, you know, it's not that borrowing is ever a sin. The question is just, is it going to deny God an opportunity to work?

Are we presuming upon the future? And in the case of a reverse mortgage, your home will always satisfy the loan. So you'll always have collateral.

You'll never be responsible for anything beyond your home. And if it provides some needed income during this season of life, it can be a great tool. Hang on the line. We'll talk a bit more off the air.

We'll be right back. Hey, thanks for joining us today on faith and finance live before we head back to the phones here on a Friday. Our good friend Jerry Boyer stops by to help us interpret what's going on in the economy. Can can anyone interpret what's going on in the economy these days?

Jerry, is that even possible? Well, I mean, you have to interpret it through the distorted ideas that our governing authorities are using. So I mean, biblical economics is not really that hard. Biblical economics is God created us to worship, to form families and to work.

And then you rest from the work and worship on that day, too. Pretty simple. But modern economics kind of twists it all around, puts government in control. And basically what that means is that markets don't have to just look at the economy. Investors don't have to just look and say, well, what's going on with the economy and how does that affect these companies? But they have to say, how will government react to what's going on in the economy and how will that affect these companies?

So what government does to me, let me give you a very recent example. Let's say that you have a couple that bought a blueberry farm and when they did it, blueberry prices were high and they were able to make a living doing that. And then things changed.

And, you know, a community, you know, the value, the prices went up in value and there's a good high school nearby and therefore people want to do residential real estate there instead. And the government says, nope, once a blueberry farm, always a blueberry farm. You don't really own that land because you can't sell it to somebody to do something else with it. That's government central control. You know, like the story of King Ahab and Naboth's vineyard.

Only in this case, you know, the king is saying, keep it a vineyard, which is just as much a violated property rights as he was saying, don't let it be a vineyard. Well, that's what happens with our monetary authorities. In fact, medieval theologians said that when government debases money, it's like the stealing of Naboth's vineyard by Ahab.

Modern, the free market idea of money being backed and not debased historically comes out of biblical exegesis of that passage. But what we have now is a situation where, because the job with the job report, the employment report today was weak, everyone said, OK, well, the way government thinks, the way you deal with the weak job report is you create inflation. So we need to debase the currency, which means the Fed's going to pump money into the system.

So what happens? Gold goes up, dollar goes down, markets go up. Markets didn't go up because the economy is good. Markets went up because they're dependent on the debasing of currency and the anticipation that the Fed is now they're going to go ahead. They're going to be able to, quote, cut rates, which is just a kind of convoluted way. Everything they say, they say things in ways that don't describe what really happens when they say cut rates. What's really mechanically happening is they are creating money and pumping it into the system. So markets are right today, rode on that news, on the basic idea that the Fed's going to pump money into the system. Yeah, great news. We lost more jobs than we expected and unemployment's rising and the market's taken off like a scalded dog. It's just all backwards, Jerry.

Hey, we've got another minute or two with you and then I've got to get to some calls. But our listeners may not know, you've spent quite a bit of time studying and writing on the book of Genesis and I love what you started with today. And that really comes from your study and understanding God's design of creation, doesn't it?

Yeah, it does. And really, it all starts with Genesis. That's what Genesis means, beginning. If you get Genesis right, you'll get the rest of the Bible right. If you get Genesis wrong, you'll get the rest of the Bible wrong. If you get the rest of the Bible wrong, you'll get everything wrong. And since this is a money and finance show, specifically, you'll get economics, money and finance wrong.

So get it from the beginning. God created, he made us to be creative like him. When we work, it's good. When the unemployment rate goes down, that's good news. When the unemployment rate goes up, that's bad news. When people are working, that's a good thing, not a bad thing. Markets should not be rejoicing because of a weak job market.

They are because the government is going to react wrongly to that bad thing. That's well said, Jerry. Well, thank you for yet again reminding us of God's design for all of this. And may that resonate around the halls of the Federal Reserve.

Certainly wish it would. Bless you, my friend. Have a wonderful weekend. We'll talk to you next week. God bless.

Bye bye. All right. That's Jerry Boyer, our resident economist.

He's the president of Boyer Research. All right. Back to the phones.

We go to Indiana. George, you've been waiting patiently, sir. Go ahead. Yes. After hearing you with Ron Blue, I just felt the Holy Spirit tug at me and wanted to share a little testimony. I'm so glad. Go ahead.

Yes. A few years ago, the wife and I found ourselves struggling to make ends meet. And through a lot of prayer and realizing if we do what Scripture says by tithing, we'll see what happens.

And 10 years later, well, it's probably been a little longer than 10 years, but in 10 years, through a lot of extra overtime and promotions for both of us, in 10 years, our income has over doubled and we are going to be debt free, hopefully by the end of this year, by paying off our mortgage. Wow. Wow. Incredible, George.

I'll tell you, crank it through your calculator. I'm not sure it makes sense. And yet in God's economy, it does. We can give generously and honor the Lord and follow these principles and do it over a long, long time. And we see the fruit and it doesn't mean we won't have challenges along the way. I'm sure you and your wife had challenges.

We all do. But you've lived an applied biblical truth. You've done it faithfully and you've given generously. And that's just the way God's economy works.

And I appreciate you giving testimony to that today. Yes, we're getting the home paid off a year early. And as we're entering our 60s, we're thinking, hey, it's not going to be too far away. And I've been hearing about this. You talk about the Irma score or, I think that's what it's called. That's tied in with Medicare. And so, you know, I just, you know, through God's blessings, I've hit six figures just recently. And so I'm wondering, is that going to affect my retirement?

Yeah, it's a good question. So for the sake of our audience, Irma is what the Social Security Administration does. If you have a certain income, a high income, they add an adjustment to your Medicare premium. And so they determine that, Irma, based on what you reported as income on your IRS 1040 two years ago.

So it's not the prior year, it's two years ago. And that income is your adjusted gross income and any other tax exempt income. And then if you're over a certain threshold, they add something to your premium each month for Medicare.

So let me just give you an example. If you're filing as a married couple and the first place that kicks in is when you have income above equal to or above two hundred and six thousand dollars a year. And if you did again as a couple, it would add one hundred and seventy four dollars and seventy cents to your monthly premium in twenty twenty four. And then it goes up from there when you get above, you know, you know, you get above a certain threshold that continues to move up.

But that that's the number that you need to focus on in terms of that that premium being going up higher than than what everybody else pays for a standard Medicare premium. Does that make sense? Yes, it does.

Yes. I'm just trying to get a good grip on what it's going to take for retirement. And so I just want to try to get as much information as possible before I make that choice. Yeah, that's a good it's a good question. And let me just clarify one thing.

I think I misspoke there. So up to two hundred and six thousand for a couple, you pay one hundred and seventy four seventy when you get above two hundred and six thousand up to two fifty eight, it jumps from one seventy four to two forty four. So it's an incremental increase, you know, depending on what level you're at. The starting point is that one seventy four seventy and then it starts to go up from there.

But it's only for a couple. It doesn't start to go up from one seventy four to the next level, which is two hundred forty four dollars a month till you get above two hundred and six thousand in income. And then there's other thresholds going up from there. So you could find that on the IRS website. You'd see that table there and you could factor it in. It's not going to be a huge amount.

I mean, I realize every amount matters, but we're talking about from the first threshold, we're talking about maybe sixty five dollars a month or something that would be added and then, you know, another eighty dollars after that and so forth. So but listen, George, I really appreciate you calling today and and sharing your testimony. It's been an encouragement to me. I know it has for others as well. Does that cover all of your questions, though?

Yes, for now. OK, good. Well, listen, you call us back any time, George.

May the Lord bless you. Thanks for being on the program today. We appreciate it very much. Well, listen, folks, we have covered a lot of ground today. And I know that, you know, you have questions about your financial lives. We started today by talking about the housing market and what happened with the National Association of Realtors.

And we had a chance to talk about the economy. But here's the reality is that, you know, when we think about managing God's money in light of biblical wisdom, we can have a testimony like George's testimony, he and his wife, as long as we're faithful to live within God's provision. You know, so often what I see is that we we worry about finances and we say we're not going to have enough or what if this happens or what if that happens? And then the natural response to that is to continue to spend beyond our means, which is ultimately a self-discipline issue. And when we spend beyond our means, that leads to debt.

And that's a discipline issue. And that debt leads to no margin, no surplus in our financial lives. And that leads to worry. And then we've got this vicious cycle of worry and spending more than we earn and taking on debt and then not having any margin or cushion in our financial life and then starting over with more worry. It doesn't have to be that way.

If we look to scripture, we live within what God has provided and we give generously and we see ultimately is God being our ultimate treasure. I hope that's an encouragement to you today. Hey, have a great weekend. Faith and Finance Live is a partnership between Mooney Radio and Faith Find. We'll see you next week. Bye bye.