Guest Mortgage Broker Jason Rosenthal

Guest Mortgage Broker Jason Rosenthal

Episode Transcript

(00:00):
The following is a pe commercial programon ninety four three WSC. The views
expressed by the host of this programdo not necessarily reflect the views of iHeartMedia
and ninety four three WSC it's advertisersponsors or Management. This is the Real
Estate Show with Rick Willis. Ishow about home sales, mortgage issues,
investing at everything about the American dream. And that means the one as someone

(00:23):
who enjoys radio and really enjoys yourprogram. And now the Real Estate Show
with Rick Willis on three in tellingyou sc Hello Charleston. This is Rick
Willis, host of the Real EstateShow. This recording is being done in
the hospital in East Cooper. Aboutthree weeks ago, I had a stroke

(00:44):
and I thought to myself, amI going to ever get back on the
radio? And here I am.I'm gonna be have a guest speaker with
me today named Jason Rosenthal. Jasonis a mortgage broker, and I'm gonna
ask him some questions about financing.Jason, are you there, yes,
sir? How are you Rick?Getting better? Thank you? Jason.

(01:10):
I would like for you to tellpeople what a mortgage. Are you a
mortgage broker or a mortgage banker,I could actually act in both capacities.
The real difference is as a mortgagebanker, we own the right and fund
our own loans in house. Ifit's a product that we do not do

(01:32):
in house, we could act ina broker capacity, which is basically doing
the loan through a third party whoowned the rights and funds the loan.
Okay, And how is that benefitof consumer compared to just going to the
local bank. It offers a lotmore programs, It offers a lot more

(01:53):
competitive interest rates because there's multiple institutionsthat we have access to. From a
fine standpoint, it becomes easier becausewe know certain sweet spots that certain lenders
have. So it just it opensup a lot more opportunities because you have
the potential to do business with manyinstitutions instead of just that one. So

(02:15):
in other words, if somebody justwent to Wells Fargo, they're only getting
Wells Fargo's programs, but you haveaccess to a lot more different lenders.
Correct, yes, sir, andincluding Wills Fargo. Okay, got you
so, Jason, how long haveyou been doing what you're doing? Over

(02:37):
twenty years at this point, Rick? Okay, And by the way,
for those of you just tuned inor listening. I'm speaking with Jason Rosenthal,
who's a mortgage broker and also amortgage banker with his firm, and
I'm asking him questions about loans today. And Jason, Mike, let's talk

(03:00):
about the rates rate now as theyare well, we give us some update.
You know, unfortunately, rates areprobably the highest they've been in over
twenty years. The FED has hadmany meetings over the last eighteen months and
pretty much as lifted hip their ratesalmost every time. It's keeping a perspective.

(03:23):
Back in March of last year,the prim rate was only around three
and a half percent. Today itstands at eight and a half percent.
So rates have literally increased almost fivepoints over the last eighteen months. So
they are elevated at this point.And Jason, are people still buying houses
in this interest rate market? Yes, sir, they are going to buy

(03:46):
houses probably in every interest rate market. The challenges are more so for you
know, people looking to refinance arelooking at higher rates than maybe they already
have. You know, sometimes it'sa situation of folks would want to otherwise
sell and buy in a lower interestrate market, and you know, maybe

(04:09):
it said, it's some challenges tothat standpoint, but yes, we are
still doing business just like we alwayshave a lot of people. It's no
matter what the interest rate is goingto be, it's still a better alternative
than renting. So, Jason,you mentioned the word refigh Tell everybody listening
what exactly is involved in a recommands in a refinancier paying off your existing

(04:34):
loan and replacing it with a newloan. Normally, the motivation would be
to say, lower the interest rateor maybe lower the term of the loan
for say a thirty year to afifteen. Most of the refinances we're doing
at this point are what we callcash out refinances because of all the appreciation

(04:57):
folks have had in their homes andthey're looking to take hash out of the
homes get to do other things withOkay, now, for refinances, it
the same paperwork required as a normalloan getting the first time loan. Yeah,
I mean a lot of the samedue diligence that a lender has to
do would go into the refinance aswell. A lot of times we could

(05:20):
do what's called an appraisal waiver andnot require that aspect. But as far
as the buyer's qualification, credit,income, and asset making sure debt inchor
ratios are in line. Yes,all that still remains true for the most
part. Okay, So Jason,I know I've been telling first time buyers,

(05:43):
in particular, if they're going tobuy, buy now all the prices
are where they are, because theprices are still going up, but also
know that they can do it.The expectation is that in the next several
years interest rates will decline, sothey get the best to both worlds.
They can buy it today's prices andyou know, freeze the price before the

(06:04):
places increase, and then refinanced whenthe rates come down. Is that a
good policy? I think it's it'sit's the best policy. And the reason
being is you only have a oneshot at this particular sales price. You
have, you know, the restof the time you own that property to

(06:25):
refinance for the lower rate. SoI think the best hedge would be to
buy the property now knowing that thesales price. You're stuck with that,
but you're not necessarily stuck with yourinterest rate. So yes, I believe
wholeheartedly in what you just said.Okay, And when we were preparing for
this segment. You said you wantedto talk about buy downs, if you

(06:48):
would please talk about that now.Yeah, and you know that's a good
lead in for buy downs because youknow, that's been a lot of the
conversations we've been having with our clients. Is okay, well, rates seem
to be a little elevated. Nowyou know what strategies are there, you
know, to possibly lower that interestrate view, and that brings us to

(07:09):
the buydowns. Buydowns can come intwo ways. You could have what's called
the temporary buydown, or you couldhave a permanent buydown. Permanent buydown is
the more traditional buy down that peoplethink of. Typically, you're going to
pay extra fees up front. Wecall them points. One point equals one

(07:30):
percent of the loan amount. Solet's just say your loan amount is a
three hundred thousand. One percent ofthree hundred thousand is three thousand dollars,
so you'd be paying one point threethousand dollars to lower the interest rate.
And generally speaking, one point inextra fees up front would lower the rate
around a quarter percent for the likesof the loan. So that's one strategy,

(07:56):
is what we call permanent buydowns.Because that lower rate will be there
for the life of the loan.The difference between temporary and permanent buydowns is
with temporary buydowns usually they come inone of two ways. We have what's
called two one buy downs, andthen there's three two one buydowns. And

(08:16):
to really explain what that means,let's just say today's regular interest rate is
seven percent. In the two onebuy down, you're lowering the interest rate
in the first year two points,so instead of seven you'll pay five percent
in the first year, and thetwo one the second year, it's reduced
by one point, so you're payingsix percent in the second which rate you

(08:39):
qualify jation, Well, you're stillqualifying at that seven percent, and the
reason being is because for the remainingterm of the loan you are paying at
that seven percent, So you know, you still have to be able to
demonstrate the wherewithal to be able tomake that seven percent payment. You mentioned

(09:00):
that the minor pays that the sellercould contribute also, right, yeah,
in the in the permitive buydown,it can be paid by the seller or
buyer. In the temporary buydown,most lenders will actually only allow the seller
to pay it. And the waythat works is in the first year when
you let's just say you're paying youknow, that two percent reduction in the

(09:24):
first year. Really what's happening isthere's an escrow account being set up at
closing that the seller contributes the differencein interest between the seven and five percent
in the first year and the sevenand six percent in the second year.
That difference between what the interest paymentwould have been from paying the note rate

(09:46):
of seven percent goes into an escrowaccount. The buyer gets billed for the
lower rate, and then out ofthe escrow account comes the difference between that
five or six percent and the sevenpercent. In perspectively, I just had
to kind of, you know,just quantify it. I recently had one.
It was the loan amount was aroundfour hundred thousand, and the rate

(10:09):
in the first year was around fivepercent the industry in the second year was
around six percent. And the waythat worked was in the first year there
was about a five hundred dollars reductionand payment from what it otherwise would have
been for the buyer had they beenpaying seven percent all long, and in
the second year at six percent,it was around two hundred and fifty dollars.

(10:31):
So when you put all that extramoney that the buyer is saving each
month into an escrow account. Itwas the equivalent of around nine thousand dollars
that the seller was contributing towards thebuyer's interest payments. And but it's a
great tactic, you know, maybefor a seller to attract a buyer,

(10:52):
you know, it's to offer somethinglike that about it. Got it?
Okay, Jason, We're going totake a break right now and we'll be
back and talk more of financing withyou. Folks. You're listening to Rick
Willis and my radio show, TheReal Estate Show, and I want to
make sure if you want to reachme. Even though I've had a stroke

(11:13):
and I'm in the hospital, I'mac actually doing business here talking with lots
of people about buying, selling,investing into financing real estate. So any
questions that you have, please don'twait for me to get out of the
hospital. Call me here eight fourthree three two seven three zero one seven

(11:37):
and my email address is the letterr Willis Team r Willis Team at gmail
dot com. So please reach outto me. I'm bored sitting in the
hotel in the hospital anyway, soyou'd be doing me a favor by calling
me rather than trying to think you'rehelping me by waiting. So reach out

(11:58):
to me my email address or bya direct phone call. And if you
want to check out my website,Rickwillis dot com, you'll find direct access
to multiple listing as well as mybiography. To check me out, We'll
look forward to talking with you rightback, right back after this break.

(12:20):
If you have real estate questions orif you need a market analysis on your
property, call Rick right now ateight four three three two seven three zero
one seven, or you can emaillimit Rick at Rickwillis dot com. Check
out Rick's bio and access all propertieson the MLS at Rickwillis dot com.
Welcome back, Welcome back, Charleston, Welcome back to the second segment of

(12:41):
the Rick Willis Strill Estate Show.We're talking with Jason Rosenthal today, who's
a mortgage proker, mortgage banker,and he can provide many more loan programs
and better rates than most everybody elsein the marketplace. I have first use
Jason for my own loans, andhundreds of other people that I have recommended

(13:05):
to him, and all of themsay great things about Jason. So there's
lots of places you can go toget a home loan. What matters is
the person that you deal with andthe loan programs that they have access to.
And Jason can do better than mostall other people that sh'll talk to,

(13:26):
so make sure you reach out tohim. Jason, why don't we
stop at this moment and tell peoplehow they can find you? That's safe
to do is give me a call. My phone number is eight four three
nine zero one zero six sixty eight. That's nine zero one zero six sixty

(13:46):
eight. Yeah, it would loveto help, would love to discuss your
plans. Okay, And for allof you that are listening, regardless of
whether you own a home now orhave never owned a home, you always
want to start off your home searchwith a pre approval letter. And a
pre approval letter can be obtained rightover the phone, right Jason, Yes,

(14:07):
sir, and tell the folkus whatthey would be meeting before they call
you. What should they have preparedto talk with you about? My initial
analysis for most folks, everybody's situationis a little different. If you're let's
just say, you know, letthings get a little bit more complex.
You own multiple businesses, you ownmultiple properties at that point, I probably

(14:31):
have to do a little bit moredue diligence as far as as looking at
some of your documents, but mostfolks who are either salaried or hourly,
it's really simple. I have totake down your vitals. Whether I take
it verbally over the phone, Icould shoot over a link, or you
fill it in online. We couldalways meet in person and it's going to

(14:52):
capture your vitals. What you'd expect, name, date of birth, social
where do you live, where doyou work, what are your sources of
income, how much do you makeany savings that you have. I get
your blessing to run your credit andthen I could tinker on scenarios and get
back to you with everything you'd everwant to know. Okay, And my

(15:13):
recommendation Jason is always to get anapproval letter of a maximum you can afford,
even if you don't want to spendthat much. So if you are
qualified to buy five hundred thousand orapproved for five hundred thousand, but you
only want to buy three hundred andfifty thousand, get the letter approved for
five hundred. Because we still arein a market where sometimes there's another offer

(15:39):
on a property and you want tolook better than everybody else. It's okay
to be overqualified. And Jason,along the lines of qualifying, tell me
how parents can contribute to their childor grandkids qualifying for a loan in terms
of either cash down pay or beingon the loan as a co signer.

(16:02):
Talk to fultured people about that.I'll often add parents as co signers if
there's certain weaknesses in the primary borrowersapplication. More often than not, it's
really to overcome what we call debtto income ratios. In other ways,
just you know, the qualifying incomefor the borrower is not enough to support

(16:27):
the home purchase that they want tomake. You know, the go to
solution is ad cosigner co signers,most often parents, just to add more
income to the equation. Uh.Sometimes the weakness isn't necessarily our debt to
income ratio. You know, sometimesit's you know, to have somebody with

(16:47):
better credit on the loan. Butyou know, those are really the two
instances that adding the parents could help. Short of that, you know,
parents could give a gift for downpayment. Uh, the gift typically does
have be documented, whereas the parents, you know, I have the funds
in their bank account, but yeah, I mean parents could certainly help their
children a chief homeownership with co signingand or down payment, And a lot

(17:12):
of times parents should give the mentalsupport and you know, you look at
properties with them and just give advicefrom their experiences. So parents could be
very supportive in this process. AndJason, do the parents have to be
on the loan or not on theloan? If they offer support financially.
If it's a situation of just contributingtowards a gift for down payment and or

(17:36):
closing costs, they do not haveto be on the loan. If it's
to overcome say debt to income orcredit issues, then they would be on
the loan. Some loans do requireall co signers to be on the deed
and title of the property, andother loans just because they're the co signer,
they don't necessarily have to be onthe deed. So if the parents

(18:00):
on getting the loan and they areon the deed, is there a way
that in the future, when I'llsay the kids income increases or the debt
decreases, that their parents can dropoff. It would take a refinance to
not have the parents on the loananymore. But do you have to change

(18:22):
the loan program or there's the interestrates stay the same. You would have
to go to where market rates areright at that time. Got it.
But if they're lower, that wouldbe a good thing anyway, that's for
sure. Yep. Now, Jason, occasionally you tell me, and I
experienced myself some stories of people thatsabotage themselves in buying, like the contract

(18:48):
for a home and then they goout and they buy a truck and have
a truck payment on their credit thatthey didn't have when they started the process.
Do you have any stories like that? Unfortunately, it does happen.
I think I think the best thingto do is it's just you know,
you as a realtor, me asa long professional. You know, we

(19:08):
have these conversations up front with theborrower, just as far as you know,
don't take out any new debts withoutdiscussing it with me first. And
I've had borrowers who have come tome instead, you know, listening,
you know, my my drug,you know, it just got totaled.
I don't have a choice. Ihave to buy something new. And then
we could go through scenarios together andsay, okay, you know, let's

(19:30):
figure out what the new payment couldbe before it becomes an issue, and
then that could be okay, Andthen all they have to do is,
you know, just stay within thoseconfines of what the new payment could be
and everything's fine. But it comesdown to communication. Any large expenditures,
any large deposits in the bank account, pulling cash out of mattress, not

(19:56):
being forthright with your information up front, but certainly as you indicated, you
know, taking out new debts.You know recently had a borrower change occupations
in the middle of a mortgage process. So it's and that could be an
issue, especially if your paid wentfrom something that, say it guaranteed salary

(20:19):
to a more variable structure, whereasyou know, sometimes your pay would be
a salary plus bonus, and thenyou go to a new employer where it's
commission plus bonus and things change.So your pre approval is only as good
as one of the information you've givenand the information remaining the same. So

(20:41):
if there's going to be any change, you know, all it takes is
just communication so that we could discussthe aspects of that change. Sometimes it's
no big deal, but it's justyou have to send me back to the
drawing board. This way I couldconfirm that there's going to be an issue
or not be an issue, andif there is an issue, here's some
solutions on that overcome it. Jason, how does the property condition impact someone

(21:07):
getting alone? Okay, an appraisalon a purchase is pretty much almost always
going to be required when we,as the lender, assign the appraisal.
We don't like to accept third partyappraisals. Normally, we have a roster
of appraisers that we've done due diligenceon. We trust them and we will

(21:33):
typically rotate between the appraisers on thatapproved roster, and when the appraiser goes
to that property, there's really they'llhave their clipboard. And there's really two
things that we're looking for. Oneobviously, when you think appraisal, you
think evaluation. So yes, forthe most part, we want to make
sure that the buyer is not overpayingfor the property. But then, like

(21:56):
you indicated, the condition of theproperty. So in the appraiser report,
the appraiser tends to apply at conditionrating. They call it C one,
C two, C three, Cfour, C five, C five generally
being the best, C one generallybeing the worst C three being in the
middle. Most lenders will only lendon a property that's C three or more,

(22:18):
which basically means that the property isan average condition. Give me some
specific examples of things that have nextan appraisal recently in your experience. Oh,
I mean little cosmetics, you know, in and of themselves, as
long as you know they're not predominantin the house. You know, can

(22:42):
be okay. You know, alittle hole in she rock here, you
know, something cosmetic. You know, if the walls are torn up,
that's an issue. Broken windows,Health or safety issues. Most recent one
that ran into was a pool thatwas not operational. There was a lot
of growth in the pool, andthe appraiser and the on the writer basically

(23:06):
looked at it as a health orsafety issue. You know, somebody could
fall in there and hurt themselves.So basically had to give the seller and
the buyer an opportunity to address thatadverse condition. They could either fix the
pool. They could fill in thepool. This one had to have been
an above ground pool. They couldhave just taken it out of the deck
that it was built into. Buthealth or safety issues are the biggest things

(23:30):
that could come back as a mandatoryrepair that could be required prior to closing.
Usually the little nitpicky cosmetic stuff isnot a big deal, right Jason,
We're going to take a break andcome back and talk some more,
folks. I'm talking to Jason Rosenthal, a local mortgage broker mortgage banker,
and this is Rickwelless, hosts ofthe Real Estate Show and movie. Right

(23:52):
back after this, segments start moreabout financing of real estate. If you
have real estate questions, or ifyou need a market analysis on your property,
call Rick right now at eight fourthree three two seven three zero one
seven, or you can email limitRick at Rickwillis dot com. Check out
Rick's bio and access all properties onthe MLS at Rickwillis dot com. Welcome

(24:17):
back, folks, Welcome back tothe third segment of today's Rick Willis Real
Estate Show. Folks. I announcedwhen I first started the show, and
I'll repeat again, I'm doing thisshow from the East Cooper Hospital. I
had three weeks ago. I hada stroke and my left side is pretty
much not functional. But I'm heredoing rehab and I'll be released and going

(24:41):
home this coming week next week,But I did want to touch base with
you and let you know that I'mstill doing business, still answering people's questions,
and so anything that you need fromme or want information about real estate,
please reach out to me. Youcan call me directly eight four three

(25:03):
three two seven three zero one sevenor email me. My address is the
letter R Willis Team R Willis TeamR W I L L I S T
E A M at gmail dot com. And I am doing business and I
prefer to have people talk to meand call me and welcome to Eve and

(25:25):
come see me, but don't waitfor me to get over my stroke or
wait till I can get out ofthe hospital. I appreciate people calling me
and inquiring about real estate. AndI'm doing business here, So anybody that's
thinking of buying or selling, theywould like my advice or help my wife
as a licensed realtor and can dothe things that I can't do. So

(25:52):
we're working as a team. Sothat being said, we're going to complete
the segment of the radio show.So Jason Rosenthal has been my guest today
and we've been talking about things relatedto financing real estate. Jason, a
new question for you, and thatis if a property is in such bad

(26:12):
condition that it's not just cosmetics,but there might need to be a kitchen
remodel or a route for other thingslike that. Tell the folks how it's
still possible to get a loan,Well, you would, you'd really have
to do a renovation loan to satisfythe lender. This way, the lender
knows that the repairs will be completed. Typically they'll give you depending on the

(26:37):
renovation loan program, most of themthe ones that are really just cosmetics nothing
structural. Typically you have to completethe project within the first six months.
You know, if we are talkingabout moving walls or something structural, typically
you'll have up to a year.But the cost of the renovation are going

(26:57):
to be rolled into on top ofthe loan that you would get just to
acquire the property. But because there'sgoing to be some type of monitoring making
sure that there's going to be inspections, they have the closing showing that the
contractors are doing the work that theycommitted to doing the front. You know
that you could still get a renovationloan and be able to purchase a property

(27:19):
that is in some type of disrepair. Now there's a lot of times I
talk to people that are handing mein themselves and they want to do it
all themselves. Can they do thator they need to hire outside people.
It really depends on the scope ofwork. Generally speaking, as a lender,
we do shy away from that ifthe buyer can demonstrate some type of

(27:44):
professional proficiency in the scope of workthat they want to do. Let's just
say you're a plumber and you wantto do all of the plumbing. That
could be okay, but we're notgoing to let you do the electrical The
other thing that comes into it isthat when you're going to do the work
yourself, the cost for that particularscope of work that you're going to do.

(28:07):
Typically you can only take draws forthat scope of work for materials and
not get paid to yourself for yourlabor. But but yes, it does
get consideration, assuming your license inthe scope of work that you want to
complete yourself. So Jason, whenpeople apply for a loan as different from
getting pre approved, what do youverify exactly? What do you verify?

(28:33):
Okay, there's really three buckets ofverification putting the property aside just to borrowers
qualifications themselves. It really falls intothree buckets that have to be verified credit,
income and assets. And when itcomes to the income, we're going
to assuming that you're now self employed, we're going to send a form or

(28:56):
make a phone call to your employerbasically just saying, okay, does this
particular individual workfare, when did theystart, what is their position? And
in some cases, if you're gettingsome type of compensation that would be variable,
maybe it's over time, maybe it'sbonus, maybe it's commission. If

(29:18):
you're getting any type of variable compensation, we actually have them fill in a
form, a verification of employment formthat breaks down the different components of variable
income that they've received over the lastcouple of years. This way, those
variable compensation items can be averaged overtime. In addition, current documentation will

(29:40):
normally ask in that situation these mostrecent day, thirty days of paced ups
and W two's for the last twoyears. When you're self employed, it
tends to be a little bit morecumbersome. We're g going to, of
course request your tax turns ourselves,so we could do an initial analysis.
Behind this scenes, we actually senda form to the IRS that confirms that

(30:03):
they receive the same tax returns thatwe did, and oftentimes we're also going
to get some type of notification fromyour CPA that they completed your tax returns
and maybe some other things if thereis any inconsistencies in the tax returns themselves.

(30:25):
So that's that's the basic verification ofincome that we're going to do for
most borrowers. If you're if theway you receive funds is more they'll passive
types of income, pensions, socialSecurity disability. In those situations, there's
really not an employer to contact.So we're going to prove that you receive

(30:47):
these funds. It should show thatyou get a direct deposit in your bank
statement. Oftentimes you'll get an awardletter that basically says, look, here's
the monthly amount you're going to receiveand how long you're going to see before
and oftentimes with those passive types ofincome, you'll get ten ninety nine and
we'll ask for the last two yearsof ten ninety nine as well. Education.

(31:11):
Often times when you buy a propertyand there you have some unique programs,
particularly for people that may not wantto show a tax return. What
are those special programs? The mostcommon moan we call the bank statement loan,
and in that situation, you're selfemployed, we're still going to confirm

(31:37):
that your business has been around forat least two years, and depending on
the bank statement program, some areless twenty four months of bank statements,
some are less twelve. And whatwe're looking for is just the deposits that
are going into those bank statements,and we're going to do a calculation based
on the average deposits that go intothat Bay Bank account to determine what you're

(32:01):
qualifying income is. So when you'redoing those types of loans, because it's
not a traditional bank loan products,you need to be prepared for higher rates,
higher fees, potentially higher down payments. But it's certainly a way for
a self employee borrower to qualify withoutsolely going off of what they showed on

(32:23):
that tax returns, all right,And there's even special programs for if you
have a certain amount of income thatwould cover the debt service ratio, right
for an investor, Yes, sir, absolutely, it's in that case we're
completely throwing out the borrowers wherewithal tobe able to qualify for the property and

(32:46):
solely basing it on either current orprojected rental income on the property and your
rates, fees and down payment isdetermined on the relationship ship between what the
monthly payment on the loan plus taxesand insurance would be in comparison to the

(33:06):
rental income. And that's certainly away to qualify. But at the same
point, just like I was sayingabout the bank statement loan, because it's
not a traditional bank statement, becauseit's not a traditional bank loan program,
be prepared for higher rage fees andpotentially down payment. But yes, that's
another opportunity for an investor without usingtheir own waywith all to qualify. Okaking,

(33:30):
When I'm talking about somebody that wantsto invest in a lot of real
estate and perhaps choose it as anopportunity for their future retirement, they often
ask me, well, how manyloans can I get? And I appreciate
if you address that question. Mostbanks are going to put a firm stop

(33:51):
at having ten finance properties, sonot ten properties necessarily in total. You
could have a hundred property, butonly ten that have mortgages on them is
the general cap for traditional bank programs. Once you go beyond those ten finance
properties, you know, then thingsget a little stickier as far as higher

(34:14):
age fees potentially down payment. ButI would say ten finance properties is going
to be the most common you know, cut off that you're going to run
into. J that's the Fanny Mayrequirement. Freddie Matt correct, Yes,
sir, that is Fannie May talking, okay. And people oftentimes wonder also

(34:36):
how much of the income from theproperty that they buy counts towards shoot your
income for qualifying. If you're buyingan investment property up front, if there's
an existing tenant in there, well, there's really two things we look at.
We have the appraiser do a rentalanalysis for what they would project,

(35:00):
and if there's an existing tenant inplace, what does that currently show,
And the underwriter is going to calculatebased off of the lower of the two.
If it's vacant, then they're justgoing to go off of the appraiser's
rental analysis for projected what is fairmarket rent? Generally we're going to count

(35:21):
seventy five percent of whatever that numberis. So let's just say somebody is
currently paying two thousand dollars a monthon a lease, or let's just say
it's vacant, so there's no existingtenant, but the appraiser fields two thousand
is appropriate as far as what monthlyrent should be seventy five percent of two
thousand, it's fifteen hundred dollars,so we'll count fifteen hundred dollars of income

(35:46):
to offset any expenditures. I knowoftentimes they are surprised when get a loan,
whether it's an investor or a primaryproperty. They make their first payment,
the payment is made, is somebodydifferent than where the loan was originated?
Can you comment on how that works? Yeah? Hey, Rick,

(36:06):
do you mind us carrying it overbecause I know we're pretty close to your
break time and I want to go, you know, a little expand on
that. Okay, then yeah,well we'll carry it over. We'll just
come back after the break and we'lldo this part. If you have real
estate questions or if you need amarket analysis on your property, call Rick
right now at eight four three threetwo seven three zero one seven, or

(36:27):
you can email limit Rick at Rickwillisdot com. Check out Rick's bio and
access all properties on the MLS atRickwillis dot com. Welcome back, Welcome
back to the fourth segment of today'sRick Willis Real Estate Show. My guest
is Jason Rosenthal, a local mortgagebroker mortgage banker Jason. For people that

(36:49):
don't have much money and don't thinkthey can buy a house, there's still
ways they can. If people canbuy, please talk to our audience about
how people can buy with very littledown payment or no down payment. Yeah,
that's actually the biggest challenge for mostfirst time own buyers is coming up
with the funds. The down paymentsrequired for most loans typically the most lenient

(37:13):
putting aside to no money down programs. If you're a veteran and you're doing
the VA loan, as long asyour debtan care ratio is supported, you
may not have to put any moneydown at all. USDA loan is another
type of loan products where if you'rebuying in a more rural area, again,
as long as your debtin care racialis supported, you may not have

(37:34):
to put any money down. Generallyspeaking, you know, without those two
minimum down payments tend to be aroundthree or three and a half percent or
five percent down, And the biggestchallenge for first time own buyers it's coming
up with those funds. There's alwaysopportunities. Do we talked about parents giving
gifts earlier, you could take loansout against for a one. Kay,

(37:55):
maybe you're going to sell something andwe could always document at But there's also
a program that's sponsored by the statedown payment Assistance program where they'll actually give
you up to eight thousand dollars togo towards, say that minimum three percent
down. And if you did themask and said, okay, well,
if I'm trying to come out ofpocket with as little as possible, and

(38:19):
I have to put down three percent, and the state's only willing to give
me eight thousand dollars, and that'sbasically going to end up capping you in
the low two hundreds. And inthis market, you know, most folks
are you looking at some higher pricehomes, you know, three hundred,
three hundred plus. So if thethree percent down ends up being, say
more than the eight thousand dollars thatthe states wanting to give you, you

(38:43):
could always come up with a differenceon your own. But it's certainly a
way to achieve homeownership, you know, without having the wherewithal to be able
to facilitate that down payment on yourown rick You've been a master as far
as negotiations go for a buyer,where maybe building it into the price getting
some type of seller concession to coverthe closing costs, and a lot of

(39:05):
times we could structure it where thebuyer is coming out of pocket with little
to no money at all. You'reprobably gonna want to still get a home
inspection. Maybe that's four or fivehundred dollars. The appraisal tends to be
around five hundred dollars. Maybe needa little bit of money even in a
true no money down loan, butthere is opportunity to in essence the chief

(39:27):
home ownership with really little to nomoney at all. When you have something
like H or VA. What arethe maximum loan amounts with VA? There's
actually no cap. You do getwhat we call an entitlement limit. If
you already have an existing VA loanout there, there could be a cap.

(39:49):
But assuming you do not have anexisting VA loan on another property,
you could end up barring into themillions as long as your debt in coremery
shows could support it. FHA inour area right now is in the low
five hundred thousands as far as acap on loan amount. So if you
did the mass and said, Okay, I'm wanting to do an FHA loan,

(40:13):
where I get the maximum home purchase, but come out of pocket with
the minimum three and a half percentdown. You're basically looking in the load
of mid five hundred thousand dollars range. You know which you should satisfy most
folks out there, you know lookingto do it down payment loan. FHA
tends to be the most lenient ofloan programs, especially for first time home

(40:36):
buyers. Allow them for that loaddown payment. They tend to be one
of the highest as far as debtincome ratios could go, so FHA tends
to be a go to program perSe. You know borrowers who you know
aren't the strongest from a credit scoreor debt to income ratio standpoint. And

(40:57):
Jason, most people aren't aware ofit, but you can act. We
have two VA loans at the sametime, if you can take some comments
on that. There's generally no limitto how many times you could use the
VA financing. There is a limitgenerally it's two VA loans outstanding at one
time, but your entitlement. Theamount that you can borrow with a VA

(41:20):
loan can be affected if it's outstanding, but you can have to it just
there has to be a reason whyyou need to use the VA again.
So, because whenever you get aVA loan, it has to be to
facilitate a primary residence for the veteran. So you can't use it necessarily to
only have intent of putting together areal estate portfolio of yourself. But you

(41:45):
know, sometimes you're being related relocatedto a new area. Sometimes your family
grew, you had some kids,you know, and the current home is
inadequate. I've had situations where it'sjust, you know, the health was
conning and they had to go froma two story to a one story.
So as long as it's justifiable whyyou need another primary residence, then yes,

(42:08):
you can use the VA again,even if you haven't existing V alone
on another property. Now, Jason, earlier we talked about property condition,
but we didn't specifically focus on ruralproperty that might have a well and septic
or other things like that. Wouldyou comment on those items that maybe we

(42:28):
didn't touch on on property condition.Yeah, Manufactured homes come to mind.
Most loan programs are going to requirean engineer to go out to their property
and basically say that the foundation ispermanent per HUD guidelines. What does that
really mean? Typically, it meansthat old tone equipment had been removed,

(42:51):
So no trailers, you know,no trailing equipment, you know, no
axles, no tires. Generally it'sgot to be dropped in masonry. Light
perimeter is what's most often wanted.So don't picture you know, the general
vinyl skirting that you see. Youknow, most lenders are going to want

(43:12):
to see that it's bricked in ormaybe some type of treated wood for just
extra stability under there, keeping crittersout. So manufacturing homes the foundation.
Like you said, well, it'ssectic if more of than not. A
water analysis could be required on aon a well, so basically it's taking
a water sample to a local laband having them checked for back areas,

(43:37):
metals, leads, things like that. As far as the setic goes,
normally speaking, septic is not reallysomething that's going to have extra requirements unless
there is an issue noted in theappraisal, like if the appraising notes concerned,
you know, then maybe a secticcompany is going to have to come
out there, maybe do a pump, maybe recommend some repairs or even a

(44:02):
license plumber could do that. Butgenerally speaking, the well water would have
to be looked at condos tend tocome with some more property condition restriction is
usually there's a questionnaire that will sendout to the h Way managing agent is
checking to see, you know,if there's anything that's a little funky as

(44:23):
far as just repairs needed on theproperty or just the health of the community
itself. Seal one hundred is reallythe biggest on the property condition that comes
into play, and in that situationwe're looking for is there any known termite
damage? Is there any type ofwood infestation, access, mold, standing

(44:45):
water, those types of things.Rick, I just want to tell you
I appreciate the opportunity if you tohave me on here. I appreciate the
opportunity to work with you always.I know I speak for a lot of
people when I say that we'll phonefor a speed of recovery and just anything
I could do at all. Pleasedon't hesitate. Folks out there listening,

(45:07):
anything I could do at all,Please don't hesitate. My phone number is
eight four three nine zero one zerosix sixty eight. You can email me
J Rosenthal j R. O.S E. N. T. H
A L at sweet Grasscapital dot com. And I'd love to help, all
right, Jason, appreciate you beingon the chair today. And folks,

(45:30):
yep, those of you that arestill here, please reach out to me
or Jason for any help on anythingto do with financing or buying any kind
of property. I would love tobe the real or of choice for you
to help your buyer's agent. Youwant to make sure you have a buyer's

(45:51):
agent anytime you look at property.And again, my life and I work
as a team. And I mentionedearlier in the show because I had a
three weeks ago, but although Iam in the hospital, I am doing
business. My wife becomes my legsand arms, so anything that's required outside

(46:13):
of talking to me, she canshow property as well as help you if
you want to sell your property.My mind is still functioning and sharp,
even though my left side of mybody was affected by the stroke. So
please get a hold of me foranything to do with real estate. Call
me directly. I'd appreciate a call, particularly now that I'm in the hospital.

(46:37):
And eight four three three two seventhree zero one seven, And you
can go to my website Rick Willisdot com and you can see my bio
as well as access multiple listing.My email address is our Willis Team at

(46:59):
gmail dot com. Please reach outto me so we can talk and chat
about how I might help you inbuying or selling. And if you're a
parent or grandparent, reach out tome and I can show you some very
good tax advantage ways that you cansupport other members of your family. Better
to do it now than wait tillyou pass away and they inherit something.

(47:22):
Look forward to meeting you. Lookforward to talking with you at a future date.