First Time Homebuyer:

First Time Homebuyer Final: this mp4 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
We are live at our first time home buyers call, so thank you to everyone that came. I'm Maria Phelps of Black Diamond Mortgage. We are showing this online online through Facebook, so you'll see us

Speaker2:
Looking at the actual computer a little bit. But if you have questions, let me know. We'll do a Q&A at the very end. But if you have something that you just can't wait, just definitely just raise your hand and we'll talk about it. This is Jean. Thanks for coming. And I'm with Crown Real Estate Real Time. I've been realtor for just under a year, so I'm still getting my feet wet and figuring things out. I have lived in the valley for twenty eight years, though, so I'm familiar with the area and can answer a lot of questions. And then David Boye, who's the other owner of the mortgage? We're going to kind of rotate around a little bit as we go through this presentation. So again, I'm Maria Phelps'. I'm one of the owners at Black Diamond, and we're excited

Speaker1:
To be here and to teach you guys homeownership. I do want to start out with one of the things that I get really excited about because I was a first

Speaker2:
I was a first time homebuyer as well

Speaker1:
I actually purchased my biggest asset.

Speaker2:
It has literally helped me in so many ways.

Speaker1:
It was very scary, very scary to buy first, buy a first home.

Speaker2:
So it's an adventure and it's scary,

Speaker1:
But it has allowed me this current house has allowed me to actually pay off my student loan debt and we're virtually we just have a mortgage.

Speaker2:
So it's great. So it's been a really good asset. It's scary to get yourself into the door, but we're here

Speaker1:
To help you. And that's part of this class.

Speaker2:
Like, let's get you in the door, buy that asset, and it can really help you in the future. Did you have anything else to say on that?

Speaker3:
Don't be afraid to buy a house, no matter what you see going on out there. If you look back 30 years because I'm old, you'll see that even now it's a great time to buy a house. And I've owned this company with Maria, and I've been doing it about 15 years. I look forward to sharing some things later in the presentation.

Speaker2:
Awesome. Ok, so I'm going

Speaker1:
To start out with just sharing what we call the Three C's. So if you're here, you'll see the outline here. It talks about the Three C's. I actually stole this from Dave.

Speaker2:
It is kind of a general like a lot of people know about the three seats, but I still kind of stole the details from here. But you look at the three C's that

Speaker1:
You need in every mortgage transaction, credit income and collateral credit is your credit score. Do you have credit? Now it's OK. If you don't have credit, it's actually better to not have any credit that have really bad credit. But one of the things to note is that

Speaker2:
Whatever, wherever you're

Speaker1:
At, whether you have a 580 credit score. Five hundred credit score, you need to talk to a loan professional to figure out how you can actually move forward.

Speaker2:
It's not the end of the world. We can help you. We can create that path.

Speaker1:
So credit's important. And you know, when you have a low credit we can, there's things we can do. So if you do have that low credit, we might have to do a higher down payment. So just know you have options, income, cash flow. Do you have a job? What? What do you what do you do to make money? How are you going to be able to pay off that loan and then collateral the property? What kind of property is it? So we're going to go a little bit into more details on

Speaker2:
Those those items, but those are the three main things that you

Speaker1:
Really need in order to get a

Speaker2:
Mortgage. And then do you

Speaker1:
Guys have any questions on that? Just general, OK? So I want you guys to flip to the steps to homeownership. This is actually kind of one of the keys to our presentation today.

Speaker2:
It's actually might be the last page there.

Speaker1:
So let's say you want to buy a house, OK?

Speaker2:
Everybody here wants to buy a house. So what is the

Speaker1:
First thing you think you should do? Should you go out looking for houses right away?

Speaker2:
Go do some showings.

Speaker1:
Probably not. Right? You need to see what you can actually afford. Not everybody can afford a five hundred thousand dollars house or a one million dollar house. And actually,

Speaker2:
I'm assuming as a real estate agent, you want to make sure that they're qualified. Right. So the first thing we ask is for you to get pre-qualified, work with a lender. Melinda, I know, went in and did a first time homebuyers class, and she figured it out on her own. I didn't help her too much, but she might be able to help you out with that information, too. So I just had a lot of help from my church point of view, lots of people over first-time homeowners through that through the church. That's where I found places to go and get help. And so glad about this class right now. Yeah, but we'll help you. That's what we're here for is to help you guys. I'll figure it

Speaker1:
Out. So and then in that package, it talks about a pre-qualification and a pre-approval.

Speaker2:
They're almost one in the same.

Speaker1:
So one you might have a little more documentation. We might even submit it to an underwriter. So some. Yeah, no. Perfectly good question.

Speaker2:
So I'm a mortgage broker, so then I am actually not.

Speaker1:
I'm looking at your

Speaker2:
Documents, but I'm not the one to sign

Speaker1:
Off from the lender to make sure

Speaker2:
That your documents are correct.

Speaker1:
So I'm going to filter out some things and then I'm going to present it to the underwriter, making sure your job history is good, and then they're basically checking the boxes

Speaker2:
And double checking my work. Ok, so all right

Speaker1:
Now, once you're pre-approved now, it's time to actually start to go shopping. So you have that pre-approval in hand. And oftentimes what we

Speaker2:
Like to do is we like to give you a pre-approval

Speaker1:
With an amount, but we don't necessarily put that pre-approval amount on that piece of paper. What we don't want is the seller to think, Oh, they're approved for six hundred thousand, but they're offering me five twenty five. Well, I'm an accountant for six hundred because that pre-approval says six hundred thousand. So it's something to work with your real estate agent on. And you know, you may be approved for six hundred thousand, but you don't. You don't necessarily need the seller to know that you don't need. They don't need to know that information. So that's where Jean will actually be able to help you as you start hunting for these properties. Now, Jean, what are some things when you're helping a client find the right property? What are some things like? Do you do a questionnaire or something to help make sure you're looking for the

Speaker2:
Right properties for them? I do. You know, I get the basics, what area, how big of a house budget, that kind of stuff. And then we just start the search and it's only the knows. It's tough right now, but you know, we'll we'll work with you and try to figure out whatever we can, you know?

Speaker1:
And that's another reason why it's important to get pre-qualified because you want to have that pre-approval

Speaker2:
Letter right

Speaker1:
Away. These houses are going quick, like you want to be able to throw that at the table and say, I am pre-approved. I have seen a lender, they've seen my W-2s. They know I make money. I am qualified for this house so that that's another important piece of it. So once you find the house, we have to do a

Speaker2:
Purchase agreement, right? Right. Well, obviously we go look at the house, do inspections, all that kind of stuff, but we do write up an agreement. What is your offer and submit it to the sellers? And I'll go more into detail when we actually get to that point. But you know, how much are you paying? What are your what do you want out of the deal and what do you have to offer them? Can you get close right away if you're a cash buyer, which if you're pre-qualified when understanding is, that's basically like having cash? Yeah, what's really funny is actually we've had I've had conversations with bankers who have

Speaker1:
Literally had people come into their door and say, I just put a cash offer on the house. Now I need money. It's like, Wait, that's not quite.

Speaker2:
How is it?

Speaker1:
Yeah, getting a loan, you're a cash buyer. So there's this perception that if you have three hundred and fifty thousand

Speaker2:
In your pocket that you can close in a couple of days, like there's still things that have to happen.

Speaker1:
We are back steps to homeownership. Ok, so purchase and sale agreement now, once you have an actual purchase agreement now you officially have a live application, so you did a pre-approval. But now like we, we're triggered. We need to start rolling because you're going to be moving into this house in thirty to forty five days. So we get our loan application going and on there. Has a few details where we're going to be taking documentation, we're going to double check. I might may have pre-approved you two months ago, so I might ask for some updated pay stubs and updated bank statement. We're going to get some updated information. And then also one of the things too is when I prequalified you, you may have told me that my grandma and grandpa are going to give me a gift. I don't always need your grandparents gift fund documentation on the pre-approval. We're going to get that throughout the loan application process, so you don't necessarily need all your ducks in a row to to pull the trigger on that application. Because we've done a lot of work in the pre-approval and then we're going to finalize it in the application. And also another thing when you're thinking of down payment, we have a lot of clients come to us that they're doing a low down payment, but they just really need to finish up two paychecks.

Speaker1:
Well, I don't want you to wait to get under contract if we're just waiting for two paychecks because that's the loan process. Like we're we're going to close your loan and then that next paycheck will be the rest of your down payment. So I always tell people come in early and we can finalize the details once we have all the documentation, I order the appraisal and this is actually another point where Jean can come in and help with the appraisal process. So when an appraisal appraiser goes to the property, they're a little different than an inspector and inspector is actually going to look at every little detail and you need an inspection. We don't need it on the lending side, but you're going to want one for your own, for your own safety, especially as first time homebuyers. Or you could get a good friend that knows what they're doing. But really, be careful with that. You want to make sure you have good electrical, so get a home inspection. Did you have a question on that?

Speaker2:
So the inspection goes after the order appraisal. You know,

Speaker1:
I recommend it because if there's a problem on the house, then we want to make sure that we don't have the appraiser go out. Like, let's say, the electric is terrible. Let's not even send the appraiser out there.

Speaker2:
Yeah, okay. So get

Speaker4:
The inspection done and get things fixed up

Speaker2:
As you can or OK? Yeah, exactly.

Speaker4:
And one thing with the inspections is there are major things like Maria was saying electrical, you know, and certain kinds of paint peeling like exterior. You were saying that's that can be a problem. They're looking for things like leaks, scuffs on the wall, not a big deal. You know, they'll look for cracked windows leaks in the house, that kind of stuff. They're not going to be nitpicking every little thing. Mm hmm.

Speaker1:
And so once we once you determine after the inspection, we can get the appraisal because on the lending side, we want to make sure the house is actually going to a that you're not overpaying and that they can resell it if something happens. So the appraisal is important now. For the most part, first time homebuyers don't have a huge down payment, but if you can get 20 to 30 percent down, we've actually had appraisal waivers. So there's different matrix that happened, different loan programs that will allow that. So on a conventional loan, you can get an appraisal waiver on a purchase. It just depends on the down. I don't 100 percent recommend it, but for a first time homebuyer, you're not quite sure that there's just certain things that you just need to watch out for. You need to make sure you're not overpaying. Now, once we have the appraisal ordered, I've got your documentation. We are submitting things to underwriting and we have to do a title search. Now I look at a title commitment and I review liens and items on the title commitment. But Gene is actually your real estate agent is actually going to go over the title commitment and the line items, the covenants. Do you want to go over some of that?

Speaker4:
So when, excuse me, when you make an offer on a house, we will, we call it sending it to title. And that's just when they the title companies research the history of the house. Who owns it, that kind of stuff. They're looking for things that are. I guess red flags, and

Speaker1:
I have a quick example, we actually have had several loans come in where it's a it's a new we're a client's purchasing it, but then the old lean never got reconvened. So there was like a double lean on there and it didn't get caught the first time. So then it had to get re conveyed before we could close, right?

Speaker4:
So we we get the title commitment from the title company will go over it and make sure everything looks OK and that the seller is actually legally can sell a house or that house, or if there's any problems and we work with the title companies to get it fixed.

Speaker1:
So, yeah, because you want clear title it.

Speaker2:
Definitely.

Speaker1:
And then also on the title commitment, won't it show like covenants and

Speaker4:
Yeah, different. They do a whole packet that has the covenants, the if there's hoya's, that kind of stuff, any of the stuff that you are going to be responsible for once you take the property.

Speaker1:
And speaking of Hoya's, you, you want to make sure you're working with an agent that knows to catch those things. Some there's not a lot of properties that have expensive homes, but you might find the perfect house and you realize the HOA bill is one hundred and fifty dollars a month. You want to make sure you catch that ahead of time. So just something to keep in mind when you're working with somebody. And then, OK, we kind of went over a property inspection and then processor reviews. So that's our team going over your documents again and then we're going to get into underwriting. So all of these things, literally that middle column and part of that second column are really all done simultaneously. We order the appraisal right away because we want that appraiser to get on the schedule. But then gene's helping you schedule the inspection like we're doing all this simultaneously. And so there's a lot of things working in the background while you guys are starting to pack your

Speaker2:
Boxes

Speaker1:
And then the underwriter reviews and we get the approval back and the approval is oftentimes contingent on certain conditions. So everybody has stuff that they have to explain. It's not the end of the world, that's why we're here to help you. You might have decided to shop around, which is fine, so you may have for credit inquiries. We just have to make sure you're not finalizing for other loans while you're finishing this one or you didn't just buy a car and all this stuff. So we're going to ask you questions you might have deposits on your bank account that we have to source. So all those things, like anything you do as you get into the loan process, just know that we are trying to help you get a house. We're not trying to investigate every nitty gritty little thing in your life. Ok, like we just we want the common goal. We want to help you get a house. So we are going to look at bank statements, but we're not looking at every line item. We're looking at big deposits. We're not going to look at how many times you shop at Amazon.

Speaker2:
Ok. But we but we

Speaker1:
Need those documents and we need your help with them because it's it's not our guideline. The big pool of money, Fannie Mae and Freddie Mac, they have those rules. So we're just helping facilitate that. So we'll gather documents after that underwriter review. And then hopefully we have the appraisal by then and we can make sure it's valued right and we'll start getting you finalized for closing. We might have a few final things it highlights on that sheet insurance. So there's a few different insurance homeowners insurance. So as a lender, we'll help you find a good agent to help you get a good policy. And and as a rule in our office, if we are looking at a policy and it looks really expensive because we see hundreds and thousands of these policies, we will let you know if we think you're paying too much for a policy because we've seen it enough where a lot of times you shouldn't be paying over a thousand for homeowners insurance, but it depends on the situation. You might want to add some personal property. There might be some unique characteristics. So all those things that will help walk you through and make sure that you feel comfortable with that homeowner's insurance policy as well. And then this isn't really in there. But some of our loan programs, most of the first time homebuyers, unless you have 20 percent down, you have mortgage insurance. This is where it kind of gets a little confusing because some people think they paid their homeowners insurance.

Speaker1:
I shouldn't have mortgage insurance two totally separate things. Homeowners insurance is to help if there's a fire or damage and you need to get those things paid for. Mortgage insurance is literally like an insurance policy. For the lender in case you default, so it depends on the loan program and Dave will actually go over some of the loan programs. Each one of them have different tiers of mortgage insurance and we will walk you through that. I've had clients come in that actually, it's more beneficial for them to do an FHA three and a half percent down than it is for them to do a conventional three percent down because potentially their credit rating or their debt to income is making the insurance the mortgage insurance higher on that conventional loan. So then we'll walk you through that process and make sure that we're giving you like, OK, yes, you can go conventional because some people have this fear in their head on government loans, but we like to educate you and say, OK, well, you can go conventional, but you're going to pay three hundred and fifty dollars a month on mortgage insurance. But if you go FHA, that's actually going to be two seventy or something, you know, like we'll go through those details with you to make sure that you're making the best decision.

Speaker2:
That's good to know. Yeah, yeah.

Speaker1:
And and again, there's so many loan programs just getting in front of somebody and just talking through it, we can figure out what works best for you. And then once we finalize all those details, we get to go to signing and you get to sign on your house. Now the the thing with signing is that just because you signed, we still have to record. So if you sign at nine o'clock in the morning, it might not record until later that afternoon. So it's not like super instant. It's pretty darn fast. One of the things I do want to also point out is when you're getting ready to close there, the closing date that you guys put on the buy sell is kind of a moving target. There's a lot of variables that happen, and we absolutely try to hit those closing dates. But the appraisal could be delayed or there's an inspection contingency. Something happens, you know, or the or the down payments delayed. Grandma and grandpa didn't get their withdraw from their retirement that they were going to do to help you with your down payment. We're delayed a couple of days, so I always like to caution people like don't don't schedule a moving truck until we know for sure we're clear to close. So that way, we know we've got all of our ducks in a row and you don't have people waiting at your house trying to move you across the state or yeah.

Speaker2:
So just we were talking about simultaneous closing. Oh, those are the best where

Speaker4:
You're selling the house the same day that you're buying a house. And yeah,

Speaker1:
It's it gets crazy.

Speaker2:
I'm sure that I was

Speaker1:
We were at the beginning of a five transaction deal and it was literally the way, the way the agent's schedule, the everybody's schedule. It was like we had to close and then we were really only like a few hours late. Like I couldn't sign in the morning, but we had to sign in the door in the afternoon. But then it was like the snowball effect of like everything else, and it was literally five transactions. And I was just, yeah, it was really fun to be the very first transaction. And then once you sign the four, for the most part, the funds it gets sent to title once docs go out. Once you're at signing, the funds are there. We might be waiting for the seller to sign or just, I mean, titles busy too, so they might not be able to push the record button right away. Then you get your keys and the recording happens and then you get to move in. So that's just a quick snapshot of the process there. The one other sheet on there that I want to point

Speaker2:
Out

Speaker1:
And then we'll get into a little more nitty gritty here in just a minute is the dos and don'ts. So you do want to call if you have questions? Absolutely. Call if you want to tell your friends and family about us. Of course you want to get a good night's sleep. You referred to our team for a reason. So now the don'ts, don't change jobs or quit jobs

Speaker2:
Like please don't do that.

Speaker1:
And if you're going to become self-employed, you need to talk about it and don't do that in the middle of a transaction. Don't buy or trade a vehicle. Don't increase your debt. Do not open new cards. We've actually had many clients call us from target one in particular called from Target and said, Is it OK if I open the store credit card? No, I'm glad she called me. It was like the week of closing, but I was like, Absolutely not. But then I've have had clients where they don't call me and they just open a store credit card. Yes.

Speaker2:
Yes. I'm getting ready to get credit cards. Ok, increase my my credit score because I just paid all my debt off. Ok. All right. So. Very cool. I'm getting a couple of credit cards, so to start getting my credit. Yeah. So that's good.

Speaker1:
We should talk about it and see what cards you do. You have current cards. No, they're coming in the mail. Ok. Yeah, no. That's cool. Yeah, we should have just a quick conversation. Very cool. Now, don't buy furniture every place you go. It seems like can finance you for something, whether it's a table. I was online buying a pair of running shorts and I could literally finance them. It would have been for it would have been four dollars, four dollars a month. Yeah, no interest. I'm like, This is ridiculous. So you can virtually finance anything, so please don't do that. Yeah. Don't allow credit inquiries. So it just be really careful. Like, like I said, you, if you're shopping around and you're looking at a few different lending options, there is a window like about 10 days where if you're going to do some shopping, have them have the mortgage companies or the banks, pull your credit within that window. Typically, it doesn't affect your score more than like the first poll would. The part that's really hard is when you go shopping for vehicles and you go shopping for a mortgage and then everything like the different trade items are going to decrease your credit score. Yeah. And some loan programs, we we do have to do a credit refresh, so we don't want your credit to go down. So don't make large deposit or transfer funds. I had a client in that. Literally, this happens often and it's totally OK. We have money in our mattress. A lot of people do. We can't just have you deposit a couple grand that you've been saving. So talk to us about it. There are ways we can do it. We just have to. We just have to have that conversation. And then don't change bank accounts and don't co-sign on a loan. If you cosign on a loan, it is now your debt, right?

Speaker2:
So right.

Speaker1:
All right. So that gets

Speaker2:
Us through those two. Yeah, yeah.

Speaker1:
Yeah, I could probably name a few more. All right. So I'm going to go into that next section on how to prepare. Now, some of this is just this. It's a little more detail of the do's and don'ts. And I think we're still good on time. Do you guys have any questions so far

Speaker2:
On what we've talked about?

Speaker1:
No, it's kind of a lot. There's a lot of information.

Speaker2:
Yes, you have a cookie. All right.

Speaker1:
Ok, so we talked about don't open new credit lines. One of the things like you were talking about increasing your credit score. You want to pay down those credit cards to 30 percent. So if you come into my office and you're about ready, we're about ready to pull the trigger. But maybe you're kind of in the the three to six month plan and you're not 100 hundred percent ready and you say, you know, my credit cards are maxed out. We might actually want you to pay off some of those credit cards instead of save up for a down payment. Because when you pay down those credit cards, it might actually put you into a better loan situation. And we don't need as much down payment. So there's all these factors that come into play when we're talking about money. So don't you don't necessarily have to pay off things. But if it helps your credit, so we'll we'll talk about those things. But kind of the the golden spot is that 30 percent. So if you have a thousand credit card, make sure it stays below three hundred dollars. You can use it, but just pay it down and get keep that balance under that three hundred dollar mark, keep your minimum payments low. That will actually help you when you pay down to 30 percent. So the cool thing about credit is that you could actually have a five thousand credit card, and it's if it's not maxed out, it really helps your credit score.

Speaker1:
So I've even yeah, so I've even had clients where we've been on the cusp, like, let's say, we're at a six ninety five and to put them into a little better credit situation, I need them at a seven hundred. They could probably get a credit increase that one of their credit card companies. So that's a conversation that will also have because maybe you've had a good history with them and they're like, Oh yeah, your credit cards only five thousand five hundred dollars, I can increase it to two thousand here today. So that is a way that you can actually help. That 30 percent is by just potentially increasing your credit line. You want to have active trade lines. So as I mentioned earlier, no credit is actually better than bad credit. If you don't have any trade lines, you will have no credit. It's not that it's. Unmanageable, it's just a different loan program, it's a different animal. We absolutely do it, it's not a problem, but if you can, like, try to have some credit. Have a few revolving credit cards. If you have a vehicle, that's those two trade lines will help. You don't have any late payments. Make your payments on time. Let's see.

Speaker1:
And then we already talked about don't have your credit pulled a bunch of times. All right. So we get into assets now. Assets are pretty flexible and the reason I say flexible and Dave's going to actually talk about that a little bit more on our down payment options. When you're thinking of buying a home, you should start saving your money. I, as a loan officer, will try to not empty out your bank account. I don't want you to be broke when you go to buy your house. But saving money will help you because oftentimes you're in a rental situation. Your monthly rent might be twelve hundred dollars a month. Well, your new mortgage payment might be eighteen hundred dollars a month, so it's just having that money in the bank account will really help you to understand that. Ok, first of all, you're buying an asset. So this is a really good thing, but my payment is going to be higher, potentially depending on your rent situation. Now, if I have money in the bank that in your it's actually it's going to help you to to be OK with that. If that makes sense, it's going to help you to understand like, OK, I can make that eighteen hundred dollars payment because I do have ten thousand in the bank. So just start saving money, just just start saving

Speaker2:
Money and then

Speaker1:
Don't transfer money around. I was, I like to say, and Dave will actually say this when I went to buy my house, I was probably the hardest, worst client ever for a few things, and I had like 10 bank accounts. I had gas accounts, I had grocery account. I had my husband's like his spending account and I had my spending account. And does anybody else do this or just me?

Speaker2:
Ok, yeah. And so, yeah,

Speaker1:
And so then, OK, you're going to buy a house and you've got five hundred here, two fifty here and all this stuff. And then you start moving it into that account and you think you're fine, you're not fine unless it's been sitting there for two months, if it's been sitting there for two months. Great. I see that money in there. It's great. However, if you throw all that money in and you've got a couple thousand here, whatever, I have to see all those bank accounts. So just show me all the bank accounts and then we'll talk about what we need to move around. So and then OK. And then we oh, and then large sums of money as to like, don't do large deposits. So each loan program has a little different rule on this conventional loans. If you make five thousand a month typically, then if your deposits are half of that or less, they're not even going to look at that. But if I start looking at five thousand dollar deposits or six thousand dollar deposits and you only make five thousand a month, we have to look at it. That's on conventional rule development, completely different. We look at every single deposit, every deposit that you if you sold something on Facebook and you get a deposit from PayPal or Venmo, you're having lunch with friends like we're going to actually ask you like, OK, because the reason why is because that particular loan program is income driven.

Speaker1:
So we have to make sure that you're not making too much. So if you've got five side jobs and you're actually making an extra two thousand a month, that might disqualify you. So it's one of those things like we're we're going to want to see your bank statements and just make sure that you're you're going to not disqualify yourself from a loan program. Yeah. And then oh, and then don't switch jobs. We talked about that. We have actually had clients switch jobs at the very end on literally the day before closing where we call and do a verbal verification of employment and they no longer work. They're not kidding. The cool thing is is we can solve that he, this particular gentleman, was able to he he already had a job lined up and he's like, Oh, I didn't think anything of it. So we were able to just slow down, and then we waited for his first paycheck and then he was able to close. So it's possible, but it's complicated sometimes. Yeah.

Speaker2:
So I have a steady job. One job that's steady. I have one. I have the house cleaning that I start doing and may is when I start doing it. So that's OK. Yeah, it's not quitting my job. It's it's adding jobs that I do. Yeah.

Speaker1:
A job like my steady job, so OK. Is that something you've been doing for a couple of years? Yeah, that's going to be fine. We see that a lot. So one of the things that we work with is a lot of seasonal or people who have multiple jobs, especially waitresses where they're busy. Season is in the summer. It's it's not a problem. We usually on the lending side, we just look at a two year history. Those kinds of things are normal. So we would be able to navigate that pretty easily.

Speaker2:
You're welcome.

Speaker1:
Oh, do not work less hours than you're required shift. So when we're looking at these loan programs and we're trying to qualify you when you call us and you say, yes, I work full time. Typically, that's 40 hours. Now some of the if you're a nurse, some of the nursing jobs thirty two to thirty six hours is full time. And that's acceptable because that's pretty typical for the hours that they work. But if you're working full time, you need to say I actually work 40 hours a week or thirty eight hours a week because we actually have to calculate your income differently. So just something to keep in mind. Oh, and tip income, does anybody here get tip income

Speaker2:
Times in the summer? Ok, so

Speaker1:
You should claim that on your tax return, I won't be able to use it for income qualifying, but if you make an extra two thousand dollars or let's keep the math well, let's keep the math simple. So let's say you make twelve hundred dollars a year in tips that could actually increase your lending power by ten thousand. So if you claimed that twelve hundred dollars, you're getting an extra hundred dollars a month, I could increase your buying power. So just something to keep in mind. Yeah. And then also with commissions, overtime bonus seasonal jobs tip income. We normally need to see a two year history. So when you come to us, we'll look at your whole work history and we'll set up a plan. We I've had clients come in where they're like, Oh, I just do that part time on the summer, in the summer, it doesn't matter. Well, actually, yeah, it does. He this particular person made five thousand a summer and I was able to increase his buying power with his job that he didn't think really mattered. So, yeah, it makes a big difference. So all those things? All right, and then we get into a collateral, so just going into a little more depth of that, those three seas. So we we are able to lend on most property types. So oftentimes we get people coming in and they're like, Do you do manufactured homes? Yes, we do.

Speaker1:
We do actually a lot of loans and a lot of manufactured homes. There are guidelines, so depending on how old it is, like it needs to be newer than nineteen seventy six and it depends on if it's a single wide or double wide. We're in an environment right now where you, you kind of have to be creative and be willing to kind of do some out-of-the-box stuff to get a house. So more manufactured homes are becoming available and we just have to talk about it to see if it fits into a conventional loan or a government loan. But we can do both on manufactured homes. We do condos too. We condos can be a really inexpensive option for first time homebuyers. If that fits your lifestyle, it doesn't fit everybody. Talk to your agent about it, see if it if it works well and then modular homes to so modular homes are not manufactured. Manufactured homes are built and assembled offsite and then transported fully assembled to the site. They are a different, basically a different animal because their integrity is different because they're they're fully put together and they're moving. So they are a higher risk loan for lenders. But a modular home is actually lent on exactly the same as a single family residence. Because it's like a kit house it's put together. It's not put together. I'm sorry,

Speaker2:
It's the kits

Speaker1:
Put together and shipped over unassembled and then it's built there. And so the integrity is similar to a single family home.

Speaker2:
So being part of that?

Speaker1:
Yeah, I think it's just the risk. I mean, they've made manufactured homes better and now we have since nineteen seventy six. They made HUD. Hud made guidelines for manufactured homes, so they have to be built a certain way. So but their integrity is different and and that is and not all lenders will do it, too. So it's something if you're looking at a manufactured home, absolutely send us the address and we'll do some digging. They have to be on a foundation and they have to be detailed, but they're absolutely stuff we do. And then we've had a little more interest in more unique homes and I say unique homes because we see these tiny homes. Tiny homes are unique and I'm not saying we can or can't lend on them. The hardest part about tiny homes is finding sales comparables, because when we go to get an appraisal, if you're the only tiny home in the neighborhood, it's going to be really hard to to get a lender to want to bite on it. So just again, send us the address. We'll do some digging and we'll see if if it's something that we can do. I am going to have Dave talk about the different loan types down payment.

Speaker2:
And yeah, we'll go from there here. Thank you.

Speaker3:
Let me go, Maria. So is anybody in here getting ready to buy a house? I'm hoping you're hoping to. Are you guys getting ready to buy a house? Ok. So Maria said the word government. So just to kind of give you an idea of what that is. The VA is a government loan or the Veterans Administration. So if you served our country, they have the best loan period. It's zero down. There's no mortgage insurance and you get a great interest rate. So if you're a veteran, use the VA program, at least check into it because some people are like, Oh, it's it's harder to use or whatever, and I say it's a great loan. You've earned an entitlement for your service and you should use the loan. Sellers can love a VA loan, too, as long as they understand why they should love a VA loan. So we like to help encourage sellers to accept a VA offer another one that's also zero down as U.S. rule development. It's available in Montana because in Congress, when they look out to Montana, they think we're just sitting out here on the prairie and there's nothing else going on. And so in town in Kalispell, as of right now, you can use a farm administration loan at zero down. The main thing about that loan, Maria mentioned it is it has an income ceiling and then a minimum income to qualify. So you have to fit.

Speaker3:
You can't make too much, but you've got to make enough. So not everybody can use it. But if you can use it, it's basically almost as good as the VA loan. So when you're buying a house, if you're not a veteran and you want zero down. Great program. It either works or it doesn't. But you should check it out. And there's no disincentive to that zero down piece, so U.S. role development, great loan program. Then you move into the more traditional options. There's one through FHA. Some people call it HUD or FHA. That's basically a government backed loan. And their main mandate is to help you put very little down. Or if you have credit issues, they are going to stand in the gap for you for those credit issues. And it's usually three and a half percent down. And then there's a conventional loan that's three, five, three or five percent down. Usually, your credit's a little better if you go conventional, so credit's one of the reasons you go FHA or conventional. If you don't have that down payment, it's not the end of the world. So let's say that you're you can qualify for the three and a half or the five percent down, but you're not quite all the way there on the down payment. There are options, but if you have those down payments, you're going to fit right into those programs.

Speaker3:
So the next thing we'll talk about is, well, what? What if you don't? So there are down payment assistance options. And so basically you have some entity loaning you or gifting you or granting you this down payment. And then also family can step in and make the down payment as a gift. You can sell something and use that money as your down payment so you can go sell the car and immediately have the down payment money. That's OK. So lenders aren't going to penalize you for not having the money in your pocket if you're able to find a way to get it by closing. That's a way to get a down payment. So one thing to note is when you do get the the free down payment or the the government comes in and stands in the gap and tries to help you with the down payment, they add some red tape. So you just need to make sure you look at it and go, Is it good or bad? So it's good in the sense that they're giving it to you, but they might put a restriction on it about whether you can rent the property in the future, or they might put a restriction on it about when you sell this property later, it has to. Maybe some of the profit goes back to them because they gave you that down payment. So I like people to read those things because sometimes they're they're close or within a couple of thousand bucks and it's easy to get down payment assistance right now.

Speaker3:
But I like to show them, you know, maybe in three or four years are going to be buying another house. What's that going to look like then? Because maybe it's worth it to go find $2000 right now, you know? And so we'll go over that when you're going through the loan process. Main thing is down payment is not an obstacle literally to getting a house. It's just something you've got to work through. So if you don't have one, there's a way to get a house. If you have one, you're just getting more options, you're getting stronger loan approvals. So when Maria said save as much money as you can, even if you're not going to put any money down, save as much money as you can because you get more options, you know, getting into one last thing, I'll just talk about down payments and those kind of things that I was going to talk about is if you're going to be getting it out of like a retirement account or you're going to be getting it from a family member or sometimes even an employer or somebody who's going to help you with the down payment, get the lender involved early because there are just things that have to be checked on to make sure that it all makes sense.

Speaker3:
You know what's going? You don't want to be at the last second coming in with a gift or coming in with an employer, you know, whatever it is. One thing I will say is I've seen this a couple of times recently, and then I'll hand it back over to you. Ladies is a couple of times recently because of the employment market being tough. Also, employers are more willing to help with the down payment than I've ever seen in my 15 years of doing this job. So imagine if you're an employer, your employees thinking about moving out of the valley because they can't get a house. But then if they could get a house, they're going to stay in the valley. And what's the difference between that whole scenario? Let's say it comes down to five thousand bucks. If you're a good employee, your employer might be like, You know what? I'm going to help you with that because I want you to keep your employment here. So if you're in that little window, in the past, it wasn't even something that I really saw very much of. But recently I've seen employers saying, You know, if you'll keep working for me for the next year, I'll help you buy the house, you know, so I'm going to hand over to one of you guys. I think we're going to

Speaker2:
Talk about

Speaker1:
Just some if you guys have any questions on that, but then we're going to talk about current market conditions.

Speaker2:
No. So, Jean, do you want to take it from here?

Speaker3:
Add something. Why should we buy a house right now? It's awesome,

Speaker4:
Right? Yeah. As you as you probably know, the market has been kind of crazy. Prices have gone up. I think what did I do 20 percent

Speaker2:
Increase over last year? Yeah.

Speaker4:
So and it looks like it's going to continue up. So a really good reason to buy a house now rather than waiting. You're going to get that much more equity if you wait. They might continue going up, it's going to cost you that much more. Interest rates are low right now, which is going to help you get more money, qualify for more money and get more health. So you know, if you can get in and do it now rather than waiting. That's the thing to do. And everybody's like, Well, prices are just, you know, it's going to it's got to crash sometime and it's not looking like it. I mean, from what we've seen, it's I think it's gone up 20 percent since last year. I think it's gone up almost a hundred percent for a lot. Some places in the last two years. So people want to move to Montana. It's a great

Speaker2:
Spot. So, yeah, and I'll

Speaker1:
Just add so another reason why you want to come to our office right away and start talking about your options, because if you're in a situation where we have housing, prices are just a little higher than you feel comfortable. Let's have that conversation. Maybe we need to look at having a co-signer so you can potentially borrow more money. Maybe our mom and dad in a position where they could help cosign and to put you in a position because ultimately what you need to know is a first time homebuyer is you just need to get your foot in the door. You need to get your foot in the door because you're you're going to lose out quicker like I. I helped a client that was very close to me that literally they were going to try to buy a year and a half ago, and they weren't quite ready. They didn't have the down payment and it was literally the only thing that was stopping them. So then a year later, they were able to get into a house, but it's actually they had to move outside of Flathead Valley. So it was very frustrating because they waited. So ultimately, like, get your foot in the door, potentially get a cosigner, get help with the down payment. You can always once you get your foot in the door, you can always we can always restructure the loan later and get your family member off, you know, but just have those conversations with your family. And yes, there's a question from the audience

Speaker2:
Ok,

Speaker3:
Either you or I can take it. Question on self-employment.

Speaker1:
Oh, OK. So just

Speaker2:
Like what? What does that

Speaker1:
Mean? Yeah. So that's a really good question. So self-employment, typically we need to see two years. However, we do have some options for potential one year self-employment if you've been in a related industry. But let's say that's not even an option, let's say you just started self-employment, but you have a really good cash flow. So we can potentially go into some non-agency types of loans where we're just looking at the deposits into your account. So yeah, we've got is that maybe answer the question or maybe

Speaker3:
Just also plug the hole one hour class?

Speaker1:
Oh, self-employment class. When did we do that in November? We did that. Yeah. So the cool thing on our website, I have all of our trainings and so we have a full hour of self-employment class from November and everyone who's here I can, I'll send you the links to that as well. So then you can get access to that. We've got self-employment. We even have a construction loan class as well, but it goes into more depth about self-employment. And then, yeah, just the current market conditions, OK? Rates are actually still really good, so don't get scared what the market's telling you. When I first bought a house, the rate was six and a half percent. We're not there.

Speaker2:
So yeah, it was nice.

Speaker1:
Yeah. How how high was it for you, Dave?

Speaker2:
I beat her at eight. Ok, so

Speaker1:
Rates are still really good. So that's where we just have to have the conversation. Maybe we do some creative things, and that's another way I can help you. Like, let's look at a renovation loan. Maybe you can buy a house in downtown Kalispell that needs some repairs, but you're able to spend within your budget and then you get to fix it up. You get to do some remodels and we can do a loan like that as well, so we can get creative on some of those things. But the biggest thing is to really talk to us so we can get you in the right step. And I guess that starts into like, how can we help you? Like I've said it many times come into our office, talk to us. There's so many options and every one of you guys are individuals and very different. So we're going to help match you up with what fits with you. Whether you have a family member that can gift you a down or you want to pull from retirement, or you just don't have any down, and there's no way that you can afford your mortgage payment, you just don't have enough cash flow to save up. We will help you with that. We can absolutely help you with that. Do you have something to add to that?

Speaker2:
Sure.

Speaker3:
Just and I'm going to let you kind of endorse it, but how long are you planning on being in real estate now that you're just getting started?

Speaker4:
I've got another almost 20 years.

Speaker3:
Exactly. And so I'm going to be doing this for at least about that long. How long are you going be doing?

Speaker2:
I'm in for the long haul because

Speaker1:
I just became business partners with Dave,

Speaker2:
So I have a lot of work to do. But I plan on being in it for a long time.

Speaker3:
What that means if you're a consumer or somebody is thinking about buying a house as if you come in to see any of us, it doesn't have to be today. And there's a roadmap and it's from here to there. And as far as I'm concerned, if we're talking about it and it's going to land in a transaction in five years, I want to talk to you about it today because I want you to be ready in five years. And in the meantime, if I know about what you're doing and if you know about what you're doing, we can be looking for that. So if it's a house that's not available today, but we know that it's the one that you're looking for when it comes up, you're going to get first dibs on it so you don't want to wait until everything is perfect to enter the arena.

Speaker1:
Yeah. And then just to add on that loan programs change, guidelines change. So if you talk to us and then I maybe we can't do it right now, but then I get a notice that something has changed every year. The loan amount limits change. So I mean, things change. So talk to us, get get us on each other's radar right away and we can help you guys out. Any more questions?

Speaker2:
No, you guys are great.

Speaker1:
You're ready to buy a house.

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