Welcome back everyone to Ready Set Sold. I’m here I’m your host Bryan Vogt.
Thanks so much for joining us this Saturday morning. As I mentioned earlier in the opening segment I’ve got some special guests and they’ve been on the program actually a couple of times Deb rust and Dave Hohe of new American funding and they’ve got some really exciting news. That’s perfect not only buyers but also sellers too.
First off hey guys how’s it going? hi good how are you hey Brian how are you sir. I’m doing great I’m doing
great you know I guess I’ll turn it over to you because you’ve got a product wetalked off-air that really virtually that your company you know might be about the only ones left being able to do it and we wanted to get you on here just so you can talk about a what you call I guess a 1% program maybe you can kind of fill in the details yeah.
So essentially what we’re offering is we were able to get client into a home with conventional financing with only 1% of their own funds for down payment so new American funding we’re servicing the loan which gives us the ability to gift the other 2% of those funds so the borrower’s not coming in with that so you know for easy math on $100,000 purchase instead of the borrower bringing in three thousand dollars plus closing costs they would actually just be bringing in a thousand dollars and obviously as the purchase price of the home goes up you know percentage is going to tell you that they’re going to be bringing in far less than they would normally would with the standard three percent down reduced mortgage insurance minimum credit score’s 640 which is really low.
Actually for conventional financing as well so it just gives us a lot of flexibility and you know fires as well so Deb who would this best server who are you seeing this using taking advantages program the best yeah so we’re seeing it is you know we’re in an area where first-time homebuyer grant programs are you know something almost everyone asks about but not everybody fits into the grant guidelines via credit score just what they’re deciding they’re going to it how long we’re going to live in the home if they’re you know planning on.
Only living there a few years the grant you know sometimes you have to pay them back so it’s not you know an ideal there’s a recapture also you know the grant programs have gotten you know smarter and they put restrictions on debt to income ratios as well as credit scores and with this conventional 1% down program the credit score is less than what the grant normally requires the debt to income ratio is able to you’re able to go a little bit higher on the DTI so we’re just finding a lot of people that you know are hesitant about the grantor on the fence about the grant and don’t really have you know the full down payment to offer the 1% down conventional and it just it’s just a no-brainer it’s a really good really good program yeah.
And if I can add to that Brian you’re just as a buyer there’s a lot going on in the process when you’re purchasing home obviously and you’re talking through hoops and we try to make that as easy as possible obviously here but with the grant programs you have a lot more of that paperwork and sometimes the buyers can you confuse I mean they’re great programs but with this conventional 1% down program is far less paperwork less time less hassle and obviously less money so it’s really a fantastic program we’ve seen it we’ve captured a lot of business here recently with it so what I’m hearing is is it’s not only more economical for a buyer as far as not having to have that down payment but I’m also hearing is that it’s it sounds like it’s a smooth transaction so PMI and Ed you might want to maybe tell some of our listeners know what PMI is a PMI is mortgage insurance for the lender so whenever you don’t have your 20% down payment there’s always mortgage insurance on the deal until you do reach that equity position.
And that’s just insurance for you know ask in the event that people stop paying yeah so it’s an added cost to the buyer each month and you obviously want that to be as little as possible with this program you’re going to pay less than you would other standard programs where PMI is required so it’s a really really good program in a lot of different areas but you know obviously that’s certainly one as well you know and one of the things that we hear from buyers working with buyers and even you know sellers become buyers also at ninety nine per 90 to 95 percent of the time but one of the things we hear in anyway reason why I wanted to bring up PMI just a little bit on that was this look unless you’re putting 20% down which is quite frankly rare it just doesn’t happen very often PMI is a is a useful function.
And that sometimes I think there’s misnomers that buyers say this is a terrible thing and what have you in reality and I think I think you guys could speak to it more than myself it’s actually a blessing because if you literally did not have PMI you literally would need to have 20% down that hasn’t change as it right now you know it’s just like any insurance car insurance medical insurance it’s you know it stinks to pay for it because you know 90% of the time it goes towards nothing but it’s you know when you need it and when it’s there you know you’re happy to have it awesome.
And now my understanding too that we talked and just so you know we’re talking with Debra’s Dave Coulier do American funding this morning and we’re talking about this 1% loan and as I mentioned that you especially in the Metro East area and I’m sure you guys are nationwide are one of the few companies that still are able to offer that because unfortunately some of the things have changed and they will what’s exactly change is the program I understand is coming to an end yeah so we are actually there were two different versions of it.
Freddie Mac and Fannie Mae which not to get into all the details of that but Freddie Mac had quit doing it so there are a lot of lenders doing it several months ago and they were all kind of pulled off the table when Freddie had decided to quit offering the program so we had as a company had foreseen that would maybe happen so we actually signed up with Fannie Mae as well which probably most companies get in so we’re say it’s still able to offer it but we just got notification that Fannie is pulling the plug on it as well at the very end of February so we’re trying to take advantage of it while we can over the next 62 you know 75 days or so.
As far as getting deals working and getting them into the underwriting pipeline we’re averaging about a 21 to 22 day clothes so as long as we can get the contracts by you know probably the beginning to the first week of February we can still get them closed and get the kids one percent down for that buyer buy or sell and it’s a great point of leg and where’d you clarify that so Deb I’m hearing from Dave is that you have to be able you have to be able to close by the end of February you can’t write the offer February 26 or 27.
Is that correct right yeah we’d like to get the offer of it and as you said we can you know we’re not scared of a two-week or it’s really close but we you know we need to get that offer in writing by you know the first or second week of February and it’s a perfect time to do it you know everybody you always see the business flow down around the holiday season and that’s just because people are you know spending more money gifts and whatever then they normally would throughout the year so this is kind of a good way to keep you know keep the business going.
If they know that’s actually no I loved what you said there and I if you’ve got it guys have some more time I like to maybe talk if you can say over for the next segment one of the issues that we’re having a rash of and there’s a couple things I really want to talk to you about but one of them is that pre-approval pre qualification letter and knowing the difference and if you’ve got the time I like you to talk in the next segment a little bit more about that because I know you guys have some fantastic programs that you can get that done very quickly for buyers which is a blessing for sellers.
Naturally because everyone wants to know where the money is so you guys have a few extra minutes to talk the next segment right they setting out to an appointment but I’ll be happy to stick around for you.
You’re listening to Ready Set Sold with your host Bryan Vogt and why you’re going and listening to the
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Ready Set Sold with Bryan Vogt #28-02: Dave Hohe and Deb Rust of New American Home Loans: Time is running out for great down payment programs for buyers and sellers
December 9, 2017