05/02/2025
HAPPY FRIDAY EVERYONE from "Mortgage Pro Jon!"
So often I meet people who are stuck in the mindset of their parents or even grand parents when it comes to buying a home. What do I mean by that? People tend to hang on to things that were thrown around as much as 25 years ago without realizing the advances in the modern mortgage banking industry. Here are some examples.
❌You Need 20% Down to buy
✅NO! With today's government backed loans you can not only get a loan with no down payment but your closing costs can be rolled into the transaction as well. In today's market it is actually possible to get money back at closing. And for loans such as FHA that do require down payment. Down Payment Assistance is available to most buyers.
❌PMI (private mortgage insurance) is BAD!!!
✅PMI is insurance that protects the lender in the event you foreclose. It is NOT homeowners insurance. To avoid PMI all together you must make at least a 20% down payment and do a conventional mortgage loan. The reason PMI is not all bad is because a USDA Loan for example with NO DOWN PAYMENT has an interest rate that is on average a full 1% lower than Conventional. Even if you have a lower credit score. The difference in a an interest rate of 1% from one loan to the next far outweighs the cost of PMI not to mention, you keep the 20% down payment in your pocket.
❌You need to have perfect credit to buy a home
✅You need to have reasonably good credit for the past 12 to 24 months. Meaning that we are willing to listen to what happened. I can help you build a case for your situation to support the obstacles life may have thrown your way and with credit scores as low as 500 being potential candidates for financing there is almost always a way to make it work if you're committed to working with me.
❌You need 2 years on the same job
✅NO, you need 2 years employment history and that 2 years can be spread across several jobs or can include large gaps so long as you have returned to work for a reasonable amount of time. I recently financed a buyer who was a stay at home parent the past 10 years. They re-entered the workforce 6 months ago, we documented the time since they returned and the job they had prior to the 10 year gap. APPROVED AND CLOSED!!!!
❌You MUST have a W2 job.
✅Today's financing options allow for self employed individuals however, if tax returns are not an option self employed buyers still have many options such as, Bank Statement Loans, P&L Loans, DSCR for investors, etc...
❌You can't buy with student loans.
✅NOT TRUE! Student loans can factor in to your overall debt to income ratio but there are several options available for financing with student loans.
❌Pre-Qualification = Loan Approval
✅Pre-Qualification or Pre-Approval means that your initial application, credit, income, employment and assets have been deemed acceptable for the transaction but these documents are still subject to review and scrutiny by the underwriter as well as the title for the home and the property itself by way of Appraisal and possibly home inspection. The process is designed to ensure that you, as a homeowner will be able to not only afford the home you are buying but also, that the home you're buying is in the excellent condition thus mitigating the possibility that you will have costly maintenance and repair down the road. What's good for you is good for the bank. We want you to enjoy your new home with confidence you made a good purchase.
For more information please feel free to message me or send me a text 321-398-3652
Jon Fleege, NMLS 268109
