Tulsa Mortgage : Podcast 24 – Part 1
Steve: Tulsa Mortgage This is Steve Currington with a Steven N’ Tyler Show episode number 24.
Announcer: Welcome to the Steve N’ Tyler Show with stevecurrington.com and Tyler Widner.
Steve: Who negotiated a contract for you?
Tyler: [unintelligible 00:00:15]
Steve: You’re pretty smart. Good for you, man.
Announcer: They’re talking about everything you need to know about mortgages, home loans, and more. Nobody knows mortgages like these two. Get ready, because here’s Steve and Tyler.
Steven: Tyler, what’s happening?
Tyler: ¿Qué pasa? [Spanish language]
Steven: What’s going on today?
Tyler: Just finding the bottom of this red bull.
Steven: I’d love me some red bull too, although I try to drink healthier energy. When I’m talking about Tulsa Mortgages-
Tyler: Columbia Mortgages.
Steven: -I try to be healthier. Farmington mortgage; In Farmington, New Mexico Mortgage you got to drink healthy energy. Colorado Springs, they don’t put up with that, okay? Colorado Springs Mortgage, Pueblo Mortgage, they don’t put up with that.
Tyler: Alamosa might.
Steve: Alamosa Mortgages does not put up with red bull, okay? They drink healthier things. That’s right, healthier things. Here we are today and, Tyler, we decided, before we came on, that we’re going to talk a little bit about down payment.
Tulsa Mortgage Steven: For the laymen, as we call it, like for those of you or anybody that might be listening, that just has no clue about down payment, what it is. What is a down payment, Tyler? Is there a definition that you have right there of down — a literal definition of down payment? We should look this up. I want to go look this up.
Tyler: It’s actually pretty short and sweet here. A down payment is your initial money into your purchase.
Steven: Okay, I’m going to Google this. What is a down payment on a home?
Tyler: [laughs] Is it right? The money you put down.
Steven: I’m just telling you. I think maybe people don’t know. Let’s see. This is on a website that will go unnamed. It says, “To explain how bankers and real estate agents talk about down payments, let’s say you buy a house for 100,000. A 3% down payment means you pay the seller 3,000 and you borrow 97,000. With a 20% down payment, you’d pay the seller 20,000 and you would borrow 80,000, if you are buying a $100,000 house. Sometimes you’ll hear a phrase like, “Alex put 20% down on the house.” That means Alex made a 20% down payment.” The money for a down payment can come from lots of different sources. Let’s talk about — since we’re talking about down payment, let’s hit all the loan programs. We’ll all hit them all and then we’ll recap them, and then it will be the shortest podcast ever. Because it’ll take like 13 seconds. Tyler, let me ask you, what is the minimum amount of money – No, I’m not going to ask you that. I’m going to tell you. Do you know the minimum amount of money that you can put down on a conventional, minimum?
Tulsa Mortgage Tyler: Minimum?
Steven: 97%, 3% down. Now, I will tell you. If you’re doing a conventional loan, I would not recommend putting 3% down. I would recommend putting 5% down. The reason is, Tyler, do you know the answer this question?
Tyler: Mortgage insurance?
Steven: The mortgage insurance is very expensive when you get over 95%, so it’s typically more beneficial for someone to put 2% more down than to pay an exorbitant amount for mortgage insurance, in my humble opinion. So we have conventional with 3 to 5% down. Then what do we got, Tyler?
Steven: FHA. What’s the down payment required on FHA?
Tulsa Mortgage Steven: Oh my goodness, you’re correct. That’s exactly correct.
Steven: Tyler, if I was a veteran, which I’m not, but my brother [unintelligible 00:04:32] is thank you very much, and we have some customers that are — by the way, I have one I can’t name who is overseas right now, but when she comes back and she wants to do a VA loan, what’s the down payment that she has to put on a house?
Tyler: Zero dollars.
Steven: Zero dollars?
Tulsa Mortgage Steven: You have no down payment required. That’s good. Okay, so then there’s this loan called the USDA rural development loan, right? RD, right? What else is it called? What would have you heard it called?
Tyler: I don’t know. RD.
Steve: [laughs] Have you heard it called the R&D loan. People call it R&D, USDA, Rural Development, rural loan, rural housing loan–
Tyler: The meat loan.
Steve: The meat loan. [laughs] Everybody calls it something different, but there’s only one loan and it’s USDA, and then they call it a bunch of different stuff, so just keep that in mind. That loan also requires no down payment, right?
Tulsa Mortgage Steve: Then what else do we cover? Native American loan; if you you’re a Native American you can do a — it’s called a section 184 loan, and it’s actually a modified FHA loan. How do they modify it? They require a little bit less money down and the mortgage insurance is a lot cheaper. If you’re Native American and you can qualify, although the qualifications for that – qualifications, getqualified.com — are a little bit tougher than your typical FHA loan. Tyler, when we’re talking about a FHA loan and we’re talking about down payment, if I was buying $100,000 house should I be prepared to just bring 3,500 bucks to the table?
Steve: What should I be prepared for on the onset of wanting to buy a house?
Tyler: I think you should always be prepared for the worst case scenario. I would save up a little bit more than what my required down payment is going to be, because I might need some cash.
Steven: For what?
Tyler: Closing costs?
Tulsa Mortgage Steven: Closing costs, right? Unless you’re going to have [unintelligible 00:06:58], and what else? Earnest money, appraisal.
Steven: You buy a house, you’re going to stroke a check for 500 bucks, typically a minimum for your earnest money, and then you’re going to pay for your appraisal. You can count on that being about 500.
I won’t even go into the reason why appraisals are so expensive, but they are just part of life, just party in it. I can remember 2008 probably. I think maybe 2007 appraisals were like $275. And you know what? They raised them because of the price of gas, okay? No kidding. Appraisers raised their appraisal reports by like 25 bucks because gas was so high; 25 bucks. Now, they are $500. In fact, you know that one we were just talking about, because the appraiser that is on the file that’s outing in Cleveland, told me he charged 600 bucks. Then he charged 125 for two re-inspections, so he made — he tried to want 50 for each of them. He charged $300 for two re-inspects and he charged 600 for the initial appraisals, so 900 bucks.
Tulsa Mortgage Now our customer was protected in this instance, because we disclosed 500 in the appraisal management or the non AMC Company that we use won’t charge them more than that. Thank you, Steven, because they kind of took a hit on that. They had to, because the buyer only paid 500. He charged 600 and he said it’s because it was in Cleveland, and he’s in Sand Springs. That’s literally no different than someone that’s in Bixby driving to Owasso.
Steven: And wanting to charge another hundred bucks, which is why I don’t think he’ll be on our panel anymore, no offence. But anyway, I don’t want to get on a tangent about appraisals, because we’re really talking about down payment. How did I even get there, Tyler? How did we arrive [laughs] at the current place that we’re at?
Tyler: I don’t know. Down the run the hole we go.
Tulsa Mortgage Steven: We’re talking about how much you have to come up with. You’re going to come up with earnest money of 500 bucks. Hello, Shelly. How are you? And Britt Minks is live on Facebook. I decided to bust it up on Facebook, Tyler. So be prepared for having to come up with some cash when you’re buying, even if you’re doing a VA and you’re putting no money down. That’s still a thousand bucks, right?
Tyler: Yes. It gets it gets kind of painful for everybody, whenever there’s no money. Even if we need just a little bit for something, something’s not covered and somebody is taking advantage of a 100% loan, I get that. But at the same time, even with your 100% loan, you might have some cost, be it $200 or be it $1,500. That could be some cost in there. When people have zero dollars in the bank, it’s very difficult.
Steven: Yes. Brian, we just got on Facebook Live and he says it’s kind of early for us. It looks like he was waiting on a drawbridge to go to work, so he’s in Fort Lauderdale, Florida.
Tyler: Must be nice.
Steven: Yes, it is early here, but this is what we do. We can’t be doing a podcast while we’re supposed to be closing loans. We got to do it early in the morning, so that we can take care of our customers. This will be a long day for Tyler and I, won’t it?
Steven: We left the office last night at 6 PM or 6:30 PM. Got here less than 12 hours after that. Brian, congratulations; Thanks for watching online, and for being behind a drawbridge. Hello, Robin in Fort Lauderdale, Florida. We’re talking about down payment and we talked about all the down payment, so let’s run through those again. VA — no down payment, but be prepared for earnest money and appraisal, okay? Then we got FHA — 3.5% down. We have conventional with 3 to 5% down. We recommend 5% down. And then what was the other one? Section 184?
Steven: Down payment on that is two and a quarter?
Tyler: Two and a quarter. Yes.
Steven: Then USDA requires what?
Steven: Zero down. I think for our next podcast — in the office we have this little back scratcher that Ryan used to run around with. Do you remember?
Tulsa Mortgage Steven: Do you remember what Ryan used to do with this little back scratcher? He would come and he would smack you with it. He would smack people with the back scratcher. I need a really long back scratcher, because I think Tyler has a very bad case of ADD.
Tyler: Actually, the squirrel is-
Steven: He’s staring at a squirrel. We’re doing a podcast; Tyler is staring at a squirrel. Hello, Lloyd Eddy Kent. He’s like, “What?” I think he’s [unintelligible 00:12:14]. I think he literally forgot where we were just now.