Tulsa Mortgage : Podcast 26 – Part 2
Tulsa Mortgage Steve: Well, if I’m paying the realtor. I’m paying all that. I didn’t put any money down.
Steve: Are you not killing yourself while there’s still cash in the bank?
Steve: So, does anybody know how mortgage insurance works? How the factor works? I bet you didn’t know this. If you don’t need conventional loan and you have really good credit, you’ll pay a lower premium. Do you know why, Tyler? Because your risk threshold is lower, because your credit is good. So, the fact is, you’re probably not going to default on your mortgage since you have an 800 credit score, it’s just how it goes.
If you have a really bad credit score, your mortgage insurance is going to be higher. The reason why it’s higher is because your credit’s bad and you’re likely not going to pay according to statistics. Did you know that 67% of all people that buy a house end up falling behind at some point during the loan process?
Tulsa Mortgage Steve: Did you know that 67% of all statistics are made up on the spot just like that one? So, hey, we should have said that was story time. Story time is .com making up statistics because — but I decided I like The Careless Whisper, for story time.
Steve: I wish the people could hear that.
Steve: That’s right. Josh Harrington’s on, what’s up, Josh Harrington? What if I just purchased a home a year ago what if I just purchased a home a year ago and want to move not worth it or is there a way out? Yes, there’s a way out call .com, what’s wrong with you? Of course, it just depends, you put some money down, it depends on your market, where you live, you want a different house you might break even but maybe you’ll make a little bit of money, so just depends.
Tulsa Mortgage If you bought right that’s the problem that’s what we talked about in the previous podcast is if you had a really crappy realtor hi Gary Knox I don’t mean you are a crappy realtor Gary Knox did the audio/video all that stuff for big truck.
Tyler: Yes. Remember Gary Knox.
Steve: So if you bought right Josh, then you probably have some equity and rates are still low actually, rates are a three-year low now, three-year low. So that everybody knows like a three-year low means like when I bought my house and the whole reason I bought my house was because rates were low. So, your time 2013 when rates were ridiculously MLS number 10343976, I just dropped that bomb in there, bam. There aren’t bams on here, I didn’t hear a bam. So, mortgage insurance isn’t terrible.
Tyler: No, not at all.
Steve: It’s not bad, but if you want to pay less mortgage insurance what do you got to do?
Tyler: Put more money down
Steve: Put more money down or?
Tyler: Have great credit.
Tulsa Mortgage Steve: Have great credit. We just closed one, I think it was — or no I just locked one that is paying mortgage insurance that is conventional and they have a 780 or an 800 credit score and their premiums way low, way low, way low. So, when you’re looking at mortgage insurance just make sure that you look at all of the options when it comes to mortgage insurance.
Now, what a lot of people don’t know — Hi Jill Alcott, yeah Josh you if you do another FHA loan which you can do, your rate’s going to be lower than that just saying, so you can actually buy now and have a lower rate, but okay, here’s the way you should pay mortgage insurance. Pay monthly like with conventional, we’ll talk just about conventional right now, you pay monthly. You can pay monthly and at upfront which they call the support premium or you can pay just a single premium.
Tulsa Mortgage Single premium Tyler, is I’m going to put 10% down and then instead of paying .3% monthly or whatever the number is, I’m going to pay a one-time a factor depending on my credit score my loaned value, all that goes into it, one time I pay 1% of loan amount. So, for 700, 000 of loan I’m going to pay two grand. Caller-lender that’s a very complicated calculation to determine whether up-front is better versus acing a premium. But, call your lender and find out, we can do that calculation for you to see if it makes sense and see if it works.
Now, FHA you have a choice because you’re going to a 1.75% up-front and you’re going to pay .85 monthly unless you’re putting more on 5% down in which case that’s going to drop down to .8 monthly right? If you’re doing something like USTA , USTA is going to require that you have a — they’re going to change this, but right now it’s 2.75% up-front mortgage insurance and then you pay .5 monthly. And ask me later I’ll tell you what they’re changing that too but it’s going to go down a lot lower than that.
Then on VA, you know it VA does they charge you 2.15% up front, no monthly for the first time you use it and then any subsequent use it increases to 3.3%. Unless VA doesn’t require a down payment, but that a lot of people don’t realize that they can get two VA loans. I’m doing one right now for my sister. She’s got two VA loans bet you didn’t know that. Do you know that you can get to VA loans?
Tulsa Mortgage So in their case, if they were going to put more money down that single premium would go down. Also, if you are depending on the type of military that you were you might have a higher or lower, and if you’re a disabled veteran who is receiving benefits you’re disabled, you might be exempt from the funding fee.
So 2.15% on VA or 3.3 for subsequent years and then which one are we missing? Section 24 the American Law they modified theirs as well, 1% and then they have a monthly that’s .15%. So, everybody’s different, all the programs are different and that’s why you just want to make sure that you’re getting with the lender that’s going to explain that to you because mortgage insurance is not all that bad.
Here’s my thing what I tell people every day Tyler is, “I know that you called me and you want to do a conventional loan you want to put 100% down because that’s what you were told you need to do, but I’m the professional here, and it’s my responsibility to tell you what’s available to you. I don’t care what you pick; I don’t care what you do.” But who am I to just say, “Okay here do 20% down.”
Because everybody has been sitting around having a beer at by around the fire talk and they go they’re sitting around, “I just closed their loan they got 20% down, they got a good rate. They’re talking to their buddy they’re bragging about their interest rate because by the way, that’s the only — other than you know your rate’s low most people want a low-low rate. They don’t care about the cost so they can brag on their back patio when they’re drinking a beer on the weekend about what the rate is, so it’s kind of silly but whatever.
Tulsa Mortgage So, when they’re talking to everybody and their buddy says, “Oh, I only put 5% down and I paid a single premium mortgage insurance and it was only a thousand bucks.” And then guy goes, “What? I could have kept my cash?” You know why? Because he went to a lender that doesn’t have the gonads to say “Love you stop. Here’s everything that’s available to you.”
Steve: How hard is that? It’s not hard Tyler, it’s not hard. You just have to get them looking for a good sound to play for.
Tulsa Mortgage Steve: I think I like to hear that more.
Steve: And the other thing I was thinking is, I like the juicy music but why is it juicy?
Tyler: Maybe it’s the name of the song.
Steve: Maybe it’s the name of the song, Juicy, Juicy. And by the way, there is one of them on the board that I always think it says saloga, but it’s Galaga, just so you know. Thank you, Harry, Harry said he likes my outside the box approach so, think outside the bun.
Tulsa Mortgage Listen also, your rates tied to that there’s lots of factors obviously that go into that so just make sure that you get with a lender that can explain mortgage insurance for you so that you understand it and you can make the best decision because I got news for you. I’m not going to have your mortgage; I’m not going to make the payments I’m not here to do any of that.
I am just responsible for making sure that I set you up appropriately, and you’re the one that has to live with it. If you’re the one that has to live with it then I want to make sure that you make the best decision because otherwise, you’re going to be on the back patio with your body mad at Steve because Steve didn’t explain all your options.
Tyler: Right, oh yes.
Tulsa Mortgage Steve: Explain all the options. That’s stevekerrington.com and we are out. Have a great day peeps.
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