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Every fourth Sunday, Regana Kooman-Henry discusses various aspects of the home buying process and home ownership experience.
Kevin Krall: You're listening to
special programming brought to
you by Regatta. kumin. Henry of
Coldwell Banker Premier Realty,
the content of this program does
not reflect the views or
opinions of 91.5 Jazz and more,
the University of Nevada, Las
Vegas, or the Board of Regents
of the Nevada System of Higher
Regana Kooman Henry: Good
morning, everyone. Welcome to
Education.
the Southern Nevada real estate
Show. I'm your host, Regana and
we have a very special guests
Keirsey Maki, a loan officer
with the loan depot mortgage
company. Welcome Keirsey.
Kiersy: Thank you. We're gonna I
am so excited to be here with
you today. And I appreciate the
opportunity to have me here.
Unknown: Yes. And Keirsey. Today
is going to talk about loan
programs and what's right for
specific individuals. And I know
there's people out there, maybe
they have never purchased a home
before maybe they have. And some
people are very confused with
the different loan options there
are so Kiersey when people are
wondering out there, you know,
like what type of mortgage loan
is right for them? What do you
say?
Great question regardless. So
while there's lots of different
types of mortgage loan products,
you know, the main ones that
you're going to hear about are
your FHA, your conventional and
your VA loans. And, you know,
most of us weren't taught in
schools or by our parents what
the different options are for
us, for homeownership financing.
So we learned from talking to
family or talking to our friends
or, you know, maybe our
neighbors on what their
experience was show. And the
problem is, is it's just that
it's their experience.
Yes. And so the for the people
listening out there QRC, they're
probably wondering, especially
if they've never done this
before. And you know, since
things maybe have changed over
the years, how does one know,
which is the best mortgage
option program for them,
it's just going to really depend
on your specific situation. So
each program has its advantages,
or you know, but it's all it's
always going to be specific for
you and your specific situation.
There's different qualification
requirements for FHA, for
conventional for VA, but if you
have a really good loan officer,
they're going to go over all of
your situation, and what's going
to be the less the best loan for
you.
Yes. And so, you know, many
people think that FHA loans are
like, for first time homebuyers,
is that necessarily true?
Hey, that's a great question.
We're gonna so you know, you
will hear that a lot. You know,
people call me up, hey, I have
never bought a home before. Can
I get that that first time
homebuyer FHA program? Well, FHA
isn't necessarily a first time
homebuyer program. You know, you
can buy your first home with it,
you could buy your fifth home
with it. You know, there's
there's stipulations. Of course,
for example, you can't have two
FHA loans at the same time
within 100 mile radius. So let's
say you bought a home here in
Las Vegas a few years ago, now
you've had a couple of children,
you need another bedroom, your
mother's coming to live with,
you know, whatever the situation
is, you can't purchase with
another FHA loan if you
currently have one. So you would
either have to sell the home,
refinance it into a conventional
loan, or just do the new home as
a conventional. But FHA is a
great product, you can only use
it for owner occupied, okay, you
can't do it to purchase a second
home or an investment property.
Okay. And how do people know how
much do they need for a down
payment on an FHA loan? And like
what kind of credit score would
they need to do an FHA loan,
so FHA only requires you to put
down three and a half percent of
the purchase price or the
appraised value, whichever is
less. As far as credit scores
go? We can go down to a 580 with
that three and a half percent
down, okay. Now, you can go down
to a 500. But you're going to
need, you know, as much as 10%
down to be able to go that low
on the credit scores, and FHA
loans, they are insured by the
Federal Housing Administration,
which allows for easier
qualifications for borrowers
that may not be able to purchase
with a regular conventional loan
and they also allow for higher
DTI.
Okay, and for the consumers out
there. Are that don't know what
a DTI is? Because that's like an
abbreviation lingo for the
people in the mortgage business.
What is DTI?
That's a great question. I think
a lot of us use terminology in
our day to day business lives
that not everybody might
understand. So, DTI stands for
debt to income ratio. And that
is the percentage of your
monthly pre taxed income, you
know, what you spend on your
dad's your mortgages, student
loans, car loans, credit cards,
versus whatever your income is,
that's how we calculate a debt
to income.
I see. And can they consider the
lenders consider things like
cell phone bills paid on time,
gas utilities, food, car
insurance included in these type
of ratios?
That's a good question are gonna
so you know, some people like to
do their own research ahead of
time. And they may say, with all
of my expenses, you know, I
don't call my debt to income is
going to be way too high? Well,
we don't include things like
your cell phone, your your gas
for your car, your utilities,
your food, those things aren't
included in your in your debt to
income ratio.
I see. And, but Keirsey some
people may say that, you know,
for example, they may manage
their money well, and they know
they can afford to pay higher
than what they qualifying for
through the mortgage. And if
they know that they can manage
their money. Well, they might
think like, why won't they the
mortgage companies lend them a
higher amount?
So that's a great question. And
especially here in Las Vegas,
where you have industries where
you get a lot of tips, a lot of
commission, a lot of self
employment. So there's specific
ways that we have to calculate
the income per the FHA
guidelines. So you may make on
paper a little bit more money
than I can use to qualify you.
FHA does allow you to go up to
50% of your income for your
housing and your other
obligations. Sure. So after
that, they kind of deem it as a
risk for you, as the buyer, and
a risk for them as the lender.
And we've seen this really well,
in the last couple of years,
where we had a pandemic, I mean,
nobody, nobody could have
predicted a pandemic, right like
that. And there was a lot of
people that were out of out of
work for a month, two months a
year. So, you know, they want to
you to be able to save money and
have that money in case of
emergencies, like the pandemic,
for example.
I see. And Keirsey there's
people out there wondering,
okay, with an FHA loan, what is
the maximum purchase price they
can do for FHA loans?
That's a great question as well,
we're gonna so FHA, they do
their loan limits, and it's
determined by what county that
you are purchasing it. So in
Clark County here, where we're
at most of the counties in the
United States, that limit is
$420,860. Now, if you were
purchasing, let's say, in LA, or
Hawaii, or some of those other
high cost areas, it's going to
be a little bit more, but for
the most part, you're going to
be limited to that for 2860.
I see. And so for example, I
know there's some people out
there listening, they're gonna
say, Well, what if they found a
home that they absolutely love,
and it fits their family's needs
do to, you know, bedroom size,
yard size, but, for example,
that puts them over the county
loan met limit that you're
talking about? Does that mean
that they can't purchase that
home on an FHA loan Keirsey,
it does not necessarily mean
that you cannot, you would just
have to put a little bit more
money down so that your loan
amount doesn't go over that
county loan limit?
I see. Well, Keirsey, I'm sure
there's some customers that may
be working with a real estate
agent right now. And they're
saying, for example, the agent
is telling them, well, you know,
you qualify for the loan, but
for example, the house will not
qualify using FHA financing, so
they have to find another home
to purchase. Why would that be
that the real estate agent for
the buyer, say that the house
doesn't qualify for FHA
financing? Keirsey?
So this is a great question too,
because I have, you know, I have
a lot of people that are looking
like on Zillow, or on the
Internet somewhere for homes,
and when I go and look it up for
them so that I can see
approximately what their
payments going to be. You know,
I'll see that it doesn't qualify
for FHA financing. So I tried to
explain that to borrowers and
they're just not really, you
know, they don't really quite
understand. So I'm glad you
asked that question. So FHA,
they do read require an
appraisal from an FHA certified
appraiser. And they are
restricted to HUD guidelines,
they have to have specific
things in the home, that might
be a little bit more stringent
than, say, a conventional
appraisal. You know, you can't
have any self health and safety
issues, the soundness of the
construction is going to be
noted, it's got to adhere to
local codes, like no wires
poking out anywhere. No chipped
or peeling paint, you've got to
have outlet covers, things like
that.
I see. Now, here's the How are
the interest rates, let's say
for example, how the interest
rates compare from let's say, an
FHA loan to a conventional loan.
So for FHA rates are typically a
little bit lower than
conventional. And this is
because they are insured by FHA.
So FHA insures them with their
own particular mortgage
insurance,
and you keep mentioning about
the loan is insured by FHA. So
for people out there that never
purchased a home or are not
familiar with mortgage
insurance, can you expand on
what mortgage insurance is?
You bet. So there's a couple
different types of insurance
that you're going to have on
your home, you're going to have
your homeowners insurance, which
insures the property in case of
any any damage, like if there
was a fire, you know, things
like that. And then you're going
to have what's called mortgage
insurance, and mortgage
insurance is that it protects
the lender in case you default.
So on an FHA loan, they require
mortgage insurance on 99.9% of
their loans, regardless of how
much money you put down,
regardless of your credit score,
you know, all those different
types of things that go into
mortgage insurance, they require
it on on all FHA loans, and that
mortgage insurance is going to
stay on your loan for the life
of the loan. So that's a little
bit different than conventional
because on conventional, you're
not necessarily required to have
it and it can drop off. So FHA,
regardless of your credit score,
all those things, it's going to
be the same rate for everybody.
So if you have a 620 credit
score, and I have an 820 credit
score, our mortgage insurance
amount percentage is going to be
the same. And that's just how
FHA does that. And that's why
it's a little bit easier to
qualify sometimes for an FHA
loan. So they also have two
types, they have what's called
an upfront premium, that upfront
premium, you can pay for it out
of pocket if you want, most
people opt to roll that into the
loan, which you can do. And then
they have a monthly amount, a
monthly percentage that's going
to be included in your monthly
mortgage payment. And there is
also one more added benefit that
I would like to address with
FHA, they offer what's called a
streamline refinance. So
especially in the climate right
now, where rates are going up,
you know, they're past six, and
just a couple months ago, they
were in the twos and threes. So
if you're purchasing now and you
have an FHA loan, and maybe like
a year down the road rates drop
down to where it would drop your
payments significantly. You can
do the streamline refinance,
they don't do a credit check.
They don't do income
verification. In most cases,
there's no appraisal, it's just
strictly a refinance, to drop
your rate and drop your payment.
Now you are still going to have
mortgage insurance. And there
are a few other requirements for
this. But I mean, it's a great
option when it's time to
refinance for FHA.
Sure, and Keirsey, can you tell
us a little bit more about
conventional loans, and what
they need for like credit scores
and down payments and all those
things that because some people
have, again, never purchased a
home. So this will give them
weighing difference between the
FHA and versus the conventional,
right. So on conventional loans,
they require a credit score of
620 or higher. And there's a few
exceptions to this, but it's
really highly unlikely that
you're gonna get an approval on
a conventional loan, with less
than a 620 credit score, you can
purchase a primary residence,
you can purchase a second home,
you can purchase an investment
property with a conventional
loan, versus the FHA where you
can only purchase a primary
residence. And then another
difference for the conventional
loan is if you put 20% or more
down, then you're not required
to have mortgage insurance. So
you know, again, this is a
little bit different than FHA
that no matter how How much you
put down, you're gonna have
mortgage insurance, okay, the
mortgage insurance on a
conventional loan, it will
automatically drop off when you
reach 79% of your original loan
your principal balance to the
original purchase price. So in
markets that we're in right now,
where homes are appreciating, so
rapidly, you know, there's a lot
of people that say, Hey, you
know, I bought my house six
months ago, or my mortgage
insurance should be dropping
off. Well, that's not really how
they calculate it. And if you
want to remove it before it
reaches that point from the
original, you can do that. But
you have to make two years of
payments, you know, and then
they have like, what's called
like a desk review appraisal,
and stuff like that. But it is
possible to get that removed or
say you went in and did a bunch
of upgrades, that would increase
the value of your home,
sometimes they'll allow you to
drop the mortgage insurance that
way. So it's really just going
to be dependent on your, your
specific situation, conventional
loans, they also typically
require 5% down versus the FHA,
which is the three and a half.
Now, there's a few options for
conventional to put 3% down, but
it's only on owner occupied
properties. And they generally
have a few more restrictions.
first time homebuyer income
limits, things like that. So
it's a little bit harder to get
qualified for that 3% down
conventional that it would be
for say, like an FHA loan. Also
on a conventional loan, your
appraisal process is going to be
a little less stringent. So you
can have, you can close with
bare floors, which FHA you can't
close with bare floors, other
repairs that might be required
on FHA aren't going to be
required on a conventional loan.
Okay, now, we've talked about
FHA, we've talked about
conventional. Now, how about VA
loans? Keirsey? I bet there's
some veterans out there are
people that's active duty, and
they have possibly no idea or no
clue if they qualify for a VA
loan, which, by the way, has
some very good benefits to them.
So Keirsey, can you give us some
vital information about VA
loans?
Yes, thank you, we're gonna so
first of all, we want to say
thank you to all our veterans
out there and all our active
duty for everything that they do
for us and the sacrifices they
make. And VA is actually my
favorite type of loan to do.
First of all, the borrowers. I
mean, I hear so many great
stories about about veterans and
getting in homes and never have
been able to qualify before. But
so VA loan, how do you know if
you qualify for that. So if you
are on active duty regular
military, and you have 90 plus
days of continuous service, then
you qualify for a VA loan. If
you're in the National Guard, if
you're in the reserves in in
those other disciplines of the
military, then you need 90 non
training, active duty. So not
your training military, but like
if you've been activated, or
here in the States or abroad, 90
plus days of that, or six years
of creditable service. So you
get points for doing things in
the National Guard and Reserves.
So you need six years and a
certain number of points to do
that.
I see. And how do let's say VA
interest rates compared to
conventional interest rates
Keirsey.
Well, VA is very competitive,
and usually their rates are a
little bit lower than
conventional, especially because
you can finance a little bit
more on a VA loan.
I see. And like for example,
does VA require a down payment
like FHA or conventional and if
so, how much is the downpayment?
Great question. So VA does not
require a down payment. You can
put a down payment if you want
but they you can finance 100% of
your purchase price on a VA
loan.
Okay, VA appraisals versus let's
say a conventional appraisal,
how does that compare with the
appraisals situation?
So a VA appraisal is going to be
more like an FHA appraisal. The
appraiser has to be Vi certified
before they can do the appraisal
for them. You're gonna have your
health and safety issues that
they look at, you know, they
just really want to protect the
the buyer, that when they're
getting into this home that it's
going to be a place you can Go
in live and be comfortable
without having to worry about
doing a bunch of repairs and
stuff like that. So there is one
really great thing about VA
appraisals that I'd like to
mention is that let's say the
appraiser picked up the
assignment, they have looked at
the house, they've looked at
whatever comps they're going to
use, and they don't think that
the value is going to come in at
what your purchase price is. So
the VA is required to send out
notification to the lender. And
as the lender, we, we notify the
listing agent and the buyer's
agent, that you know, you've got
48 hours, please provide me with
anything that you are aware of
that the appraiser might not be
as to why you feel the value is
is what the purchase price is.
So we provide that back to the
appraiser. And they definitely
take that into account. And
you're not going to find that on
any other appraisal. So it's a
great thing about VA sounds
like it. And for example
Keirsey. What if a borrower
let's say for example, they're a
VA borrower, and they're being
transferred, let's say to Nellis
Air Force Base per orders, can
they actually purchase the home
before they physically get
transferred here in Nevada?
Oh, absolutely. So if you've got
orders, you know, I can't
imagine picking out my whole
family and moving every couple
of years to a new city a strange
place. And you know, especially
if you've got a family, you want
to be able to come here, you
don't want to have short term
housing trying to buy especially
in this market where you know,
there's no rentals and short
term rentals are crazy. So if
you have the orders, you can
come here, you can look for a
house, we can get you approved,
we can get the loan closed, as
long as you're going to move
into that property within a
reasonable amount of time. And
VA determines a reasonable
amount of time is roughly 60
days. Now that's going to be
specific to every situation, if
you have a situation that's
going to take you over that 60
days, that doesn't automatically
disqualify you for that. So we
just look at that on a on a case
by case basis. So it's great for
them to be able to come here and
just move straight into the home
that they're going to live in.
Sure. That sounds like a lot of
good information for vets,
veterans, for sure. And QC. What
if a veteran previously had a VA
loan, that let's say a while
back, maybe when we had our
market crash, and went into like
a short sale, or a foreclosure?
Is that veteran still eligible
to purchase? Again, using a VA
loan? Again?
That's a good question. I get
this a lot. And I think that not
many people are aware that just
because you had a short sale or
a foreclosure on a VA loan, that
doesn't automatically disqualify
you from getting another VA
loan. I've done plenty of homes
where they had a foreclosure,
they still had entitlement left
and entitlement is vas, mortgage
insurance, let's say. So if you
have entitlement left, then you
could still purchase a home with
a VA loan. And we just do like a
little simple calculation to
figure that out. And, you know,
it's going to be case by case
basis. So come in and talk to me
and I, I'd love to walk you
through that.
Okay, so that's a lot of great
information for the audience.
And, you know, today, my special
guests, Keirsey M Bucky, she's
gone over FHA, conventional, and
VA financing touched on all
three. And hopefully that gives
some of you people that's
listening right now, some really
great vital information so you
can put your best foot forward
and if you've been contemplating
buying or selling to go ahead
and contact Keirsey and get the
ball rolling with the mortgage
Keirsey I'd like you to give
your name full name and your
company name and your phone
number tries so that they know
how to reach you.
Great. So my name is Keirsey
Maki, and I am with the loan
depot. We have a couple
different offices. We've got one
at Town Square, we've got one at
Flamingo and the 215. My phone
number that you can reach me at
is 702-322-0421. Again, Keirsey
Bucky 702-322-0421 And my NMLS
number is 1398336
Wonderful Keirsey I really
appreciate you coming on my
show. So today and giving the
audience such great information
that they may not have had
before even if someone was a
purchaser of a home in the past,
it's good information to refresh
their memory of what it's like
between the different loan
products and the standard
qualifications for those
programs, and I am regatta kumin
Anri and I'm with Coldwell
Banker Premier Realty. And I
really, really appreciate all of
you that's been listening today.
And I will be here every fourth
Sunday of the month between 730
and eight o'clock with vital
information for everything
that's real estate here for
Southern Nevada. And my name
again, it's regatta and my
telephone number is 702-596-1267
I'll repeat it one more time.
702-596-1267 Thank you so much
for listening to the show. My
license number is BS 27880