Back to the Basics
Kevin Krall 0:00
The content of this program is paid for by Monique Buchanan LLC. The content of this program does not reflect the views or opinions of 91.5 Jazz and more, or the University of Nevada Las Vegas. You see me?
Unknown Speaker 0:25
Good morning. This is Monique Buchanan, the host of the welcome home with Monique show. And on this show, I talk all things real estate. Listen, I want to thank you for tuning in. Well, happy Saturday, Las Vegas, it's Monique began in the host of the welcome home with Monique show. And let me tell you, I've got a wonderful show for you. Today we're going to take it back to the basics. So but before that, I want to share something with you today. I've got my little girls in studio, Malia and Sasha. Hi, girls, they're looking at their mama. So I've got them in studio and let me let me share this with you guys. I've got them in studio. Earlier today. We had a little incident. I have a furbaby as well Kenzo. He's a he's actually a gift from a client. He is a Yorkie. And we just love him so much. And I made the mistake of letting him walk with me and my little girls as we went to their their school today. And literally put him down for maybe one minute you guys literally one minute to let him run a little bit with the girls and play. And listen, I picked him up, put him back on my shoulders because I knew it was too hot. You know, it's pretty hot, but he wants to get down. So did what I had to do was going back home, and he went into convulsions. You guys, my baby's only about three pounds. I was freaking out. I ran full speed, you know back to the house, put them in the sink ran water over him. And thanks be to God. I did say a prayer over him. I'm not gonna lie to you guys. I laid hands on him because he was still seizing up. You guys scared me to death. And I just I'm just feeling so grateful because our puppy Kenzo. He survived but it just made me want to mention something on the radio because I literally only put him down for like one minute. So I did not realize how quickly our pets can overheat. So please keep your little love for babies in the house because man, it is real out there. So anyways, while I'm feeling grateful, I'm thankful that the Lord kept my little puppy Kenzo. And now I've got an amazing show for you. Now listen, the reason it's amazing is we're going to rewind and take this thing back to you know, two years ago when I first started the show, and just get back to the basics because it's a great time for our buyers to still purchase. And that is why I have brought on none other than my one of my go to lenders, Dennis Thomas. Hi, Mr. Thomas, are you there?
Unknown Speaker 2:44
Hello, Las Vegas. This is Dennis Thomas with CMT financial.
Unknown Speaker 2:47
You sound so excited. No, Dennis has been in the business for years. You guys he is a guru at what he does. I'm excited to have him on the show today because Dennis we're just going to take it back to the basics right? One thing right, right so one thing I want to tell all the listeners maybe you've never heard my show before, so maybe you don't know that you are a first time homebuyer if you have been renting for the last three years. Is that right Dennis?
Unknown Speaker 3:18
That is absolutely correct. Why does that even matter? So much ready? You have been purchased in the last three years you're considered a first time homebuyer
Unknown Speaker 3:27
Okay, yeah, so you have not purchased or you currently do not own any property. So if you're on big momma's house yeah, you know, you sign for Big Mama to get that house within you now you are you're a homeowner. So you're not a first time homeowner. But if you guys sold that house longer than three years ago, you are a first time homebuyer Is that right, Dennis? That is absolutely correct. But why does it matter? What what do they qualify for? What does that what does that look like for them to be? What are the benefits of being a first time homebuyer
Unknown Speaker 3:56
or being a first time homebuyer, it gives you the opportunity to qualify for the programs offered that the state in Nevada has for you. They have several downpayment assistance programs. FHA has a program where they only allow you require you to put 3% down that's basically for first time homebuyers and also Fannie Mae, you can get away with 3% down again being a first time homebuyer. So that's what it grants you. With FHA, the underwriting guidelines guide underwriting guidelines are very flexible. The ratios mean the debt to income ratio, meaning your housing ratios and your debt to your income is very flexible, it's very loose going FHA,
Unknown Speaker 4:38
so it means that you can be a little bit more in debt with FHA versus conventional they're a little tighter.
Unknown Speaker 4:44
Correct specially underwrite specialty credit guidelines. Also, for example, going FHA, your back end meaning your debt to income ratio, again, housing plus all your debt at here at CMT will allow you go all the way up to three To 5% Going conventional, you probably kept, you probably kept up at 50%, depending on credit scores, and I need to put this out there. One thing in our industry, everything is credit score driven, everything rates, our credit score driven, qualifying, everything is credit score driven, I must put that out there. And as far as lending is concerned, we base everything on what is the risk factor? What is the risk on this particular transaction that we're doing?
Unknown Speaker 5:36
Okay, and so just so you know, it took me a couple years of being a realtor before I understood what debt income means. So for my listeners, basically, when he's saying debt to income, he's talking about, you know, all that you're paying out your your car, note your house, you know, your rent, they're gonna, you know, calculate all that up, and then explain the 50% thing.
Unknown Speaker 5:57
The 50% thing, they're gonna take your house, let's, let's do something real simple. Let's say you make $3,000 a month. And let's say for example, your house payment is 1000. And your car paid house payment, again, principal interest taxes and insurance, and homeowners association, let's say all that combines to $1,000. And let's say you have a car payment of 500. So that's $1,500. We'll take 1500 and divide it into 3000. Is 50%.
Unknown Speaker 6:32
Okay, okay. So that's good, good information, let's just go ahead and jump into the programs because they, although everything's credit driven the programs, a lot of them don't have very high credit scores that they require. So let's talk about the Assistant Program. I believe that one is at what 600 required.
Unknown Speaker 6:50
We have to we have two downpayment assistance program. One downpayment assistance program is a grant, a 100%. Grant, as long as you live in the property for three years, and make your payment on time. Some of them is three to five years, let me put it after three to five years, and you make your payments on time. They will forgive it after that period of time, so
Unknown Speaker 7:12
you don't pay back. Let me stop, stop you real quick, Dennis. So when you say, you know, make your payments on time, they also need to know that if you accidentally or life happens, and you don't, it just starts the clock back over and doesn't disqualify you for making it a grant and making it basically free money. Right?
Unknown Speaker 7:30
You're absolutely correct. It starts over from that last from that first delinquency month starts all over again,
Unknown Speaker 7:37
guys, this is this is a grant that you do not pay back that he's speaking on right now. So go ahead and jump back into that, Dennis, thank you.
Unknown Speaker 7:44
Okay. And the other other program is basically alone. There's a second program is, for example, if you're doing an FHA, which is three and a half percent down, they're just going to loan it to you, and you have payments tied to that. So that is not a grant your bar technically speaking, you're borrowing your downpayment
Unknown Speaker 8:07
and a portion of your closing costs as well. Right, not just your down, isn't it a portion of your closing costs as well or no?
Unknown Speaker 8:14
Well, no, not? Well, it depends. If you get the 3%. Remember on FHA is required 3% down, if you get the 5% Yes, three and a half percent of that five will go towards the down payment, the one and a half percent will go towards your closing.
Unknown Speaker 8:31
Okay, because guys, remember, I always tell you, when you purchase a home, you don't only have the down to come up with, you have closing costs, which is another 3%. So what he's saying is there's one program that will pay your entire downpayment, it is a loan, he's going to go over the you know the details of that it is a loan for you for your downpayment, the other the other, same program has one that will pay not only your down, but it'll pay 1.5 basically half of your closing costs as well. It is also a loan, right, Dennis?
Unknown Speaker 9:01
Exactly, you're absolutely correct.
Unknown Speaker 9:04
Okay, we want to jump into how that loan works for both options. Okay, basically,
Unknown Speaker 9:07
how it loans how it works, of course, the second it's call a basically a second meaning you have a first lien which will be the first whoever that mortgage company is then you have a second and whoever the downpayment Assistant Program is they're going to record it on the property to and how it works is whatever your interest rate on the first so today, interest rate on that particular program is 6.75%.
Unknown Speaker 9:38
Okay, so let's do this. Let's do this dance. Let's pretend that we're buying a $400,000 house. So that first portion of 400,000 that they're getting the loan for will be at six point what is it seven 5%.
Unknown Speaker 9:50
Way ahead, are you talking based on for it based on a $400,000 home, your payments going to be at 6.75 And this includes taxes and insurances is going to be $3,119.50 cent estimated.
Unknown Speaker 10:09
And that's all four payments rolled in one because your mortgage consists of taxes, right? No. Yes, yes. Right? Taxes, your MIP because you're not putting down 20%. So that's mortgage insurance premium, your fire and hazard insurance and your principal payment, so that just understand that your mortgage payment that $3,000 That is four bills rolled in one, that's what your mortgage payment consists of. But go ahead, so the payment on that 400,000 is, is $3,000 at at the current rate for the program, 6.75%. Go ahead.
Unknown Speaker 10:43
Correct. And then they're gonna come around. And now don't forget that three and a half percent is, is the money that's being borrowed. And that's going to be based off 2%. Again, 2% above the start rate on your first so technically speaking 8.75% for 10 years,
Unknown Speaker 11:05
okay, so whatever the right is, which was 6.75 on your on your $400,000 loan, you just add two points, and that is whatever. Yeah, that's what your second will be the basically, if your downpayment and closing costs end up being like 21,000, you're basically going to get a loan for that. And it's going to be at the 8.75 for 10 years.
Unknown Speaker 11:26
Correct payment 175 separate payment. So your total payment combined your combined payment 3200.
Unknown Speaker 11:35
Okay, so the x so that, so basically, it cost you 200 bucks a month to get that loan for your down payment, your closing cost, half of it.
Unknown Speaker 11:43
I broke it down even further, if you have no debt. If you make 30. If you make $6,400 a month, you can qualify for that loan. If you have debt of $700, meaning car payment and credit cards, you need to make about $7,800 a month to qualify for that loan. Okay, estimate. Yeah,
Unknown Speaker 12:03
that's good. Okay. What about the other one? Tell us about the other one. That's just the 3%. Just the down how does that one work?
Unknown Speaker 12:09
The other one, which we're talking about the three and a half percent down, which basically is is is is a grant. The only downfall about that program there is the sales price of the property cannot be over 349,002 50 Do they
Unknown Speaker 12:27
have a conventional option because they do we can always purchase a condo that's under 350.
Unknown Speaker 12:33
No one thing I can say and again, I'm gonna say no, because I'm not saying they're not there's not any downpayment, Assistant money out there for forgive conventional loans. But what I am seeing what I have found in what I'm seeing, is that that bought it rate going up downpayment, Assistant more money is slowly disappearing.
Unknown Speaker 12:54
Oh, so we better hurry up and grab it while it's still available. If you're just tuning in. This is Monique Buchanan and I've got a guest on Mr. Dennis Thomas. And we were talking about all the programs and you know, just all the grants that are out there to help you become a home owner. That is what we specialize in. Monique Buchanan, you can reach me at 702984 3700 If you are interested in anything that Mr. Dennis is talking about, or myself or what you hear on the show 702984 3700. My My website is welcome home with monique.com. Okay, so let's go on back, we were talking about the 3.5% down grant option. And what rate is that at today?
Unknown Speaker 13:37
That rate today is at six and a quarter with a 4% grant. If I if I can Monique, let me put a disclaimer out there real quick. I want to put out there as bad. You know, there are downpayment assistant programs out there, they'd be very, very careful that the other than the ones I'm speaking in there are others out there too. Right. So I would say basically do your due diligence when you're searching for downpayment assistance program, but be very careful. Like I mentioned before, they're slowly they're slowly disappearing.
Unknown Speaker 14:11
Yeah. And then I've seen it back in the day when you know, people would have a downpayment assistance program, and we're already in escrow and then they run out of money. So that's very dangerous, because now my buyer risk losing their earnest money deposit. So
Unknown Speaker 14:26
you mentioned another Yes. One thing about the first program with the grant, they also have one at 5.875 with a 2% grant.
Unknown Speaker 14:35
Okay, so if you just get less money, instead of getting a three and a half, for your downpayment, you just get 2% Because maybe you have some money saved or you have a 401k You got a little money, you just don't have it all. So you get the 2% grant, which is forgivable. And then you it's only at a 5.875 rate. That's that's almost what my client last week got approved for and she has over a 740 credit score. She was at five and a half with great care in it, so the grant is gonna give you almost the same rate that's amazing and give you 2% For your down.
Unknown Speaker 15:07
Exactly. Now one thing about this program, so you know, on applicate, they're happy to put the disclaimer program we talked about 600 credit score, but we were good. That's the one that is the loan, you're borrowing the down payment, right, this particular program requires requires a 660 credit score, okay? It's in Clark, in Clark County, the purchase of the home cannot be over 349 525. There's 349,525. We have an income limit to people in the family 84,603 people in the family 97,002 91. I mentioned those, we're talking about income, income, maximum income for two people in the family cannot exceed 84,600 maximum income and a family for three people cannot exceed 97,002 90.
Unknown Speaker 16:08
And that's for the 2% grant that can't purchase price and the three, the two and the three. Okay, so, but the initial one where you get a loan and just pay it back, there is no income limit. Am I right? No, it doesn't matter how much money you make. On the first one where you pay it back over 10 years? You're absolutely correct. Okay, so that one you it does not matter. There's no income limit on the very first one that's basically alone. And you just pay it back over 10 years. And we did the numbers, it was only $200 When we did the numbers extra. Okay, so just just so we're all clear, that's those are amazing opportunities. But let's, so there we go. We still have grants, we still have assistant programs, and we can give you more information. If you're just catching the tail end of this. Don't worry. I'll get you with this professional mr. Thompson. And he will Thomas, I'm sorry. And he will go over everything, all your options. He's very transparent. As you guys can see. That's that's who I work with people that are very transparent, and like to explain and educate. We do not want any of our clients in the dark. Am I right? Mr. Dennis?
Unknown Speaker 17:12
You're absolutely correct. Okay, so
Unknown Speaker 17:14
let's move on to the arms. Listen, you were telling me mo arms are coming back, you know, people are trying to, you know, make their house in their home affordable. Because right now these high interest rates are really hurting our pockets, not to mention everything else that's digging into our pockets. So let's speak about arms. And first of all, let's let's talk about the history of arms and how it got such a bad name. You know, the arms loan got such a bad name back in the day. And let's talk about why you got such a bad name. You were you're around back then?
Unknown Speaker 17:49
Absolutely correct. It used to be back in the day when we were doing when we do on ARM loans. That's when the savings and loans and any you guys have been around for a long time ago, you remember, you're gonna know what I'm talking about the savings and loans. Before even so much saving loans, they used to have caps on an end caps, meaning your rate could only go up so much per year. And you also had what is called a lifetime cap, which means that rate could not exceed. So for example, if we started off with a 2% interest rate, your interest rates back in the day didn't have a cap, which means the next year, it could go up to three or four, the following year, it could go up to five and six, the set the following year, it can continue going in back then. People were losing property. Yeah, that's crazy. Like crazy. And so they came along and they put some laws and some bills around saying Hold on a second. So then they start putting caps on it. That's right. That's so what they did was they would do what is called a annual cap and a yearly cap. So let's go back to that 2% interest rate back then you started off at 2%. But the next year, you would go to three and you wouldn't go any further than the following year, you would go to four, you wouldn't go any further. Now remember what I said she had a 5% life cap, which means that that interest rate could not exceed 5%.
Unknown Speaker 19:22
So Dennis man the arms of yesterday, or should I say my Fat Joe voice? Yesterday's arms are not today's arms and my understanding you right? Yes, absolutely correct. Okay, because they put a lot of, you know, just stipulations and laws in place to protect the consumer now.
Unknown Speaker 19:40
Right due to the fact that they were losing their homes, right and
Unknown Speaker 19:43
they were so can you explain how today's arm works.
Unknown Speaker 19:47
Okay, today's arms you have now they've kind of surprises whereas now you have what is called a 357 and 10 and I'll explain that to you. The three year Because basically, your interest rate is technically fixed for three years. Okay? Then it rolls in and it rolls over into an arm. And the other one, as you can see fit for five, six for seven and fix the 10. These are what we call in our industry short term long, short, short term loans.
Unknown Speaker 20:18
Let me ask you a point. I'm sorry, let me ask you a point, a direct question. Just a straight up question. I sign up for you tomorrow, I get a seven year ARM at four and a half percent, right? Are you telling me that for seven years? My mortgage payment cannot go up? Besides taxes, of course, cannot go up at all for seven years? I'm locked in at that four and a half percent? Is that what you're telling me now? You're absolutely correct. Wow. So it starts fluctuating after the seven years, is that right? That's correct. I could technically lock that rate in for seven years. And if if it's an opportunity for me to refinance into a better loan, or maybe the rates drop next year, and I'm able to am I able to refinance out of that, and get into a 30 year fixed? Oh, wow.
Unknown Speaker 21:11
Absolutely. So what you're saying is exactly what I was gonna say, this is a great, this is great product, because the industry changes every five to seven years, every five to seven years. And I hate to say it, I've been doing this business 31 years, and I've seen it, I've seen the cycle, it changes every five to seven years. So that five year and that seven years of good, good product even more. So when I do an interview with someone on a on this is something I always ask them how long you plan on being in your property? Well, maybe a year or two? Well, I think a three year would be great. I plan on living in my property or keeping my property three to four years or five years would be good. And on and on and on. Right sometimes, sometimes, and I want to put it out there sometimes a 30 year fixed rate mortgage, it's not for you because you're losing money. But especially if you can plan on being that property no more than three to four years
Unknown Speaker 22:06
right and a lot of people Max stay in their property for like a max of five years just on average now. Okay, let's jump on in arms are a great product and you will explain those if they have questions. This is Monique Buchanan. 702984 3700. If you're hearing something that interests you, or you want more information 702-984-3700 Welcome home with monique.com. You can also Google Monique Buchanan. Okay, Dennis, now go ahead and tell my listeners about that amazing reverse mortgage story you were telling me about?
Unknown Speaker 22:36
Yes, great. Reverse. First, I want to say reverse mortgage is a great product out there. But first of all, this young lady, she sold her house in California supply about 500,000, she came to Las Vegas to purchase a property somewhere in a range of 600. What she did was she took 300,000. And she put down on that six, which left her with a balance of 300,000. We did a reverse mortgage for her now my new, she's still got to err on the side there. We took we did put that 300 did a reverse mortgage on it. Now to bring it to conclusion. She has no payments whatsoever. And she has $200,000 in the bank, wow, that she did that I had, you know that she can basically live on. But the whole key of it is is that there's products out there that are great for certain people. But this particular product right here works. And it worked for her no payments for 30 years, the only requirement I have to put out there on a reverse mortgage, you must pay your taxes, and you must pay your insurance. That's the only requirement you have to do per year.
Unknown Speaker 23:49
That is amazing. And I know there's a lot of people that's perking their interest in that just like myself, I've always wondered how that works. So if you guys are wondering how that works and want more information on the reverse mortgage, and exactly how it works and get your questions answered 70298437007029843700. Now let's jump on into something now all these programs that we're talking about, let me share with my listeners that you are able to also purchase brand new homes as well. You know, you can use these programs to purchase brand new homes. And don't forget I've got an amazing product out there in the southwest area. They're giving away a lot of incentives at this builder. Beautiful, beautiful homes. They're over 2600 square feet. Many of them go all the way up to five bedrooms. So remember I am your new home source. I also have an amazing product out in Pahrump I've been meaning to talk to you about this Dennis and they're all says community they had just put up. It's all single stories, three car garages 10,000 square foot lots. They're giving $10,000 towards your closing costs in certain situations. But listen, they're all under $400,000 Right there in Parana Bran. New homes all single story, but I just want to point that out they have all the way up to four bedrooms. They're over 1800 square feet under $400,000 So for more information on those products 984 30 700-702-9430 700 But we're talking with Mr. Dennis Thomas last thing we want to touch on is that assumable loans I've got a listing right now you guys an amazing beautiful listing. We are very competitively priced. I want to put that out there real quick. It is on beautiful flower who doesn't want to live on a street name beautiful flower. It's a four bedroom. We've got one bedroom downstairs with a full bath. It tub included you guys very hard to find these huge corner lot. It's been upgraded, it has fresh paint. Beautiful home, you guys huge master with Strip views. You heard me with Las Vegas Strip views and it's in the Centennial Hills neighborhood is actually zoned for Centennial Hills High School. All right, so this is a gem. It's my listing. If you want to see this property or you're interested in it, we've got it listed at around 470. And you can text to 702984 3700 702984 3700 Text the word beautiful flower all together and you will get that listing come right to your phone, you can take a look at it and schedule a tour with me. You can also jump on my YouTube channel to check out a video that I've posted of that property on beautiful flower. My YouTube channel is welcome home with Monique just like the show. Alright, Dennis, let's talk about our last point. Our last you know, awesome thing that with Lola, I can't talk with listings, something that I'm talking to my Yeah, my sellers about listings. So in order for the buyer to assume their low rate that maybe they locked in three years ago at 3.75. There's a way to do that. What does that call dentists? How do they do that,
Unknown Speaker 26:53
you have to do what is called a full assumption. And then from there, you need to apply to the lender, contact the lender and get approval get lenders approval. So once you got that lenders approval, then you have the okay to go ahead and to take over that note, take over that 2% interest rate or to assume that loan
Unknown Speaker 27:11
that is phenomenal. I don't know if you guys heard that. But there is a way to lock in the rate that the person selling your house got that, you know, got their house for so you're like going back in time, you know, and getting that low rate. And Dennis is just now telling you how you could do it hit him one more time because that's an amazing idea. I mean, it was such a creative idea. I love it.
Unknown Speaker 27:34
Okay, again, like I say all you have to do is contact the lender of record. Ask them for an assumption package, qualify with the lender, and they'll let you take over the note once you're approved. It is an approval process.
Unknown Speaker 27:49
Right? So I just want to say to my realtors out there listening, going with their heads blowing up right now. You're welcome. Monique loves you guys too. So this is going to be a blessing for people listing their homes. This is something that is very powerful when you're able to tell the buyer Hey, you can lock in my rate. Listen, I told you your girl is a is an amazing listing agent. So if you're thinking about listing your property, you definitely need to have my number 702984 3700 702984 3700 This is Monique Buchanan and I've got none other than Mr. Dennis Thomas. On with me. He is one of my ace, ace ace lenders. He has been in the business for over 30 years. And he knows his stuff. And that's why we do business together. So thank you, Dennis, for coming on today and sharing your wealth of knowledge.
Unknown Speaker 28:37
Thank you. Thank you.
Unknown Speaker 28:39
All right, we all we hope to hear from you soon. And you guys have an amazing weekend. We love you. All right. Thank you for listening. This is Monique Buchanan my license numbers S 1788 46 and I am part of EXP Realty Tune in next week.
Transcribed by https://otter.ai
