Welcome back to Ready Set Sold with your host Bryan Vogt I’ve been talking with all this morning with Deb Rust of New American Funding and getting some fantastic information about the lending process and in a nutshell it’s really easy if you just reach out you’re freaked out and talk to a lender summer to Deb Rust or Dave Hoyt at New American Funding it’s that’s just that simple they’re here to help and that’s what you’re looking for in any lender is the ability to just listen to your needs concerns and put a game plan together most the time it’s going to work out but if it doesn’t at least you know that upfront so you don’t get any high hopes and only find out that you can’t pull the trigger so what that said I can’t move into what I mentioned the last time entities is the biggest myth.
As realtors we still hear this we hear this from buyers that they would buy a home but they haven’t quite got their 20% down in order to buy a house and Deb that’s not a bad thing but it’s not the only way in fact it’s rare that people have 20% in today’s market isn’t it oh absolutely and you know 9 times out of 10 I will talk people out and if they’re selling a house and profiting and they want to put that money back into a new house perfect but for first-time homebuyers especially or just you know younger people it’s much more lucrative to keep your cash on you that it is to put it on a mortgage loan I’m borrowing money is cheap even with a little bit higher interest rates that we’ve been seeing lately borrowing money is still very cheap.
And what people forget or what people aren’t educated and I guess is that when you hit that 20% equity mark yes you lose mortgage insurance and everybody thinks the mortgage insurance is this the big evil but what you’re doing basically is you’re taking the lender is taking a risk on you the whole payback of the loan falls on the borrower and there’s no protection on the lender so a lot of times 20% down loan could build a higher interest rate than a 10% down loan solely because if the mortgage insurance is absent the lender has no protection so we have we’ve structured deals at times where we have done maybe 15% down or 10% down as I mentioned and the interest rate is ridiculous cheaper.
So yeah you’re paying that little bit mortgage insurance which are saving on rate and it’s always easier to pay extra you know on a lower rate than it is you know every other month pay down your principal and lose the mortgage insurance at a later date and then still be locked into that lower interest so those are things that people forget and I do hear it so often with people that listen to maybe their parents and you know Mom and Dad want to gift them so that they’re at that twenty percent mark is from an underwriting standpoint I can’t stress enough it is so much better we want to know that when you buy this house you have X amount in reserve in the bank for you know losing the first couple months of living in a home or the most expensive obviously and the last thing we want to do is get into a situation where your first payment comes and you don’t know where it’s going to come from so yeah that 24 so those days of 20% down are over.
And I probably have seven out of ten phone calls still from people that think that that’s the best deal are going to get and it just simply isn’t it true well that’s a good point too and I’m talking with Deb Ruston American funding today and but I also again and I know this is how you guys operate if somebody wants to do that they’re in that situation or twenty percent or even higher or whatever it is that’s perfectly fine well I’m hearing from you is that believe it or not there are a few occasions where it can actually hurt you a little bit so again you know in a nutshell three and a half percent which is FHA loan is still the number one buying is what would buy reviews but for first-time homebuyers as far as the country goes that can change a little bit here locally but again there could be other options but the fact of the matter is that you don’t need to have those big numbers,
And that’s really important because if you if you think you do you simply get into delaying the process and look right now and I think you know well you know this the depth that interest rates are creeping out it’s not a good time you know it’s not panic time you still get in your house and all that but that’s not really what you want to be looking at and why would you pay whatever amount more it doesn’t matter what the amount is more if you didn’t have to that if you could move forward with it with a 5% or three and a half percent or maybe a VA or wherever you’re looking to do for r14 yeah don’t forget we have our conventional 1% down program that’s still hanging out there and probably go to the end of the year it’s an amazing deal that my companies are really giving us a break on the mortgage insurance on those 1% down so we’re seeing it replace a lot of grant programs and it’s just a really good deal.
So yeah 0% pheromones are there 1 percent 3 percent 5 they’re all they’re here we’re at a time depth of talked with Deb Rust of New American Funding thank you so much for your insight and your experience and I’m sure getting down the road sounds great thank you have a great day it was seem to Ready Set Sold so we’ll see you in a period.