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First time buyers, start here!

  • How much do you need for a down payment?
    Hello hello! Josh Thomas mortgage broker here in Utah. How are you today? Hey, I wanted to go ahead and talk to you about down payments today when you're purchasing a home. There are a lot of misconceptions out there. In fact, 87% of those that don't own a home have the wrong idea, grossly wrong idea, about how much down payment is required!!! According to the National Association of Realtors, a study they did in 2017, 87% of those polled (those that don't own a home) thought that they had to have at least a 10% down payment and 40% of them thought that they had to have 20%+ down!! That is just wrong! It's just not true! That same year, according to Freddie Mac, the average down payment across the board was only 6% (of the purchase price). What's more is according to Freddie Mac and Fannie Mae who are two large agencies that purchased loans from all the banks and credit unions out there including from me, Fannie Mae and Freddie Mac have on their websites affordable housing loans called Home Ready and Home Possible as well as some first-time home buyer loans that only require 3% down for those eligible! FHA as listed on, and they’re another large agency buying loans from banks and credit unions and brokers like me, FHA actually offers as little as 3.5% down. And for those eligible for USDA loans and VA loans (two more agencies that buy loans from the banks and credit unions) those two agencies offer to financing equal to the full amount of the purchase price, assuming the appraisal supports that purchase price, so they both offer 100% financing and so again just go to or All of those agencies are offering less than the 6% average down payment and certainly less than what 87% of non-homeowners expected to put for a down payment! If you have more questions about that, please grab the little chat button now on the bottom right and shoot us a message and let us know what your questions are or if you're ready to go ahead and find out for yourself what you qualify for. Don't hesitate to look around the website and grab all the other videos and look through as many of them as you want. Use them to help you put your ducks in a row. But feel free to reach out to us and use us as a resource as well!! Josh Thomas in Utah, a mortgage broker. Thank you for your attention. We'll talk to you another time!
  • What Credit Score Do I Need To Buy A House?
    Hello, Josh Thomas mortgage broker in Utah. I just wanted to try to answer the question what does my credit score need to be? Of course this question depends on if I'm refinancing, if I'm buying, or rental properties or whatever it is I'm doing. Let's make the assumption that you're just asking about purchasing a property. Let me go ahead and just begin to explain what credit scores look like. First off let's take the 30,000 foot view and before I even get into the mortgage credit scores let's identify the fact that a mortgage credit score is different, It used to be, you know 20 years ago at the beginning of my career it used to be that the mortgage score was pretty much the only score anybody ever talked about. But then credit cards started offering access to your credit score and the credit bureaus started offering that access and then credit karma and other companies like it. Nowadays everybody's an expert on credit but none of those credit scores happen to be the same scores that we pull in the mortgage industry. The only way you can get access to a mortgage credit score is by applying for a mortgage and having a bank or credit union give it to you. It's always a try merge with three scores that are pulled from Equifax Experian and Trans Union. And we just take the middle of the three scores. If you have one score that's a 750, another score at 740 and another score that's 500, we're going to go with the 740. If you have one score that's 750 another score is 500 and another score that's 490 we're going to go to 500. So that's the way the banks and agencies work. So whatever that middle score is it's probably different than whatever you think your credit score is. In the mortgage industry 850 tends to be the highest. I don't think I've ever seen that score, but I've seen literally thousands of credit reports. I've seen many scores over 800 but to be clear anything over 780 is as good as it needs to be. Nothing better than that matters and to be honest in most situations anything over 740 is the same and so whether it's 800, 780, 820, or 740 it doesn't matter. It's all the same in most settings. Jumbo loans and a few niche loans care a little bit. Now let's move on. If you're at 740 or above you're basically an A. You know, if we're going to use the alphabet system from schools. If you're like a 720 that might be like an A-. 700 and every 20 points down you basically get further and further away from the best options. Now how low can we go? Well it depends on what you're trying to accomplish! That's a really important thing to recognize. Again if we're going into the purchase market and we're trying to buy a house, remember we have five different main agencies. We've got Fannie Mae Freddie Mac FHA VA and USDA. And all five of them look at credit differently. FHA is probably the lowest. They'll probably go the lowest. We have manual underwrites with down payment assistance down to a 580 credit score for 100% financing. Or at least that's the the package, "100% financing" doesn't always mean that you won't bring any money to closing it just means that 100% of that purchase price is being financed. So if there's closing costs or things like that you'll bring money to closing. We can get you specific scenario quotes if you'd like to look at those but basically 580 is the lowest level for that scenario. Now under 580, FHA continues to offer financing all the way down to 500 if you can put 10% down. Normal FHA is a 3.5% down payment. Like I said we actually even have down payment assistance to pay that 3.5% for you. But under that 580 you're going to need to come up with right around 10% down. That's not 100% of the cases. FHA does have some parameters for different scenarios down to about 550 but basically 580 to 500 is kind of the the end of of available financing. Conventional options, depending on the year and the time sometimes will come all the way down to 600. VA typically will go down to 600 sometimes can go lower. USDA will go pretty low but getting an approval with USDA with a low credit score is often times not a reality. So in a nutshell, what credit score do I need? It depends on what you're trying to do. So we need to start with figuring that out. But basically if you've got a 580 or higher there are options, especially if you're refinancing, especially if you have good equity. If you have a 501 credit score and you're just trying to refinance a house maybe you consolidate or something like that and if you have a bunch of home equity you could probably get away with doing that. So it just kind of varies. Also remember the five agencies, Fannie Mae, Freddie Mac, FHA, VA, and USDA are not the only loans that exist. There's a sixth pocket of loans if you will and this is where all the niches are, all portfolios, all the different banks and credit unions across the country. Sometimes they'll offer just one off products that only they offer you know and sometimes we can broker those sometimes we can't but there are literally thousands of banks and credit unions and so who knows what other different options are out there. I say never say never. But always start with us. Give us a call. We can tell you where things are at. Generally speaking as a broker in the state of Utah we're going to be able to offer more options than most lenders because we have access to so many different lenders. And interest rates of course are going to be very very competitive even on those lower credit score options. If you have any further questions please let us know. Josh Thomas 801.916.7716 Mortgage Loan Originator NMLS#314438
  • The Truths Young Homebuyers Need To Hear
    Josh Thomas reviews this article in this video. Josh has been helping first time home buyers get financing since 2003. He recommends sharing this video (and webpage) with anyone you know in Utah that doesn’t own a home. If you already own one, then buy another one. Owning a home is a vital part of a solid financial plan. In the article, it states that among people age 25-40 years old (Millennials), 25% underestimated their buying power by $150k+ 25% underestimated house prices by at least $100k And almost half didn’t know what a good interest rate is All of the above info we cover with every single client we meet with during the preapproval. Getting Preapproved isn’t the last step but the first step each would be buyer should take. We only need about an hour to completely preapprove someone. But because we try to be so thorough during the meeting, preventing you from needing to come back and forth several times over several weeks, we recommend some preparation ahead of time. And we have great availability to preapprove someone that is in a hurry possibly even same day. There are three myths cited in the article. 20% down is a myth. We have many programs requiring much less down, even to requiring $0, 0% down payment. Look into this deeply. Debunk the myths in your mind and get the facts. I have to list this disclaimer since I mention 0% down: Listing a Down Payment % requires by law to disclose other terms. The above down payments align with the following scenarios. All loans are 30 year fixed assuming a $400k price. USDA 0% down would have a 2.25% note rate, $1997/mo PITIMI, with no points or lender fees, 2.656% APR, $404,160 loan amount, $4995 closing costs. The VA loan would have 2.25% note rate, no points or lender fees, PITIMI of $1901/mo, 2.349% APR, and $5034 closing costs for a $409,600 loan amount. The FHA loan would have a 2.25% note rate, no lender fees or points, $2107/mo PITIMI, 3.165% APR, $4913 closing costs, $392,755 loan amount. The conventional 3% down would have 2.875% note rate, $388,000 loan amount, $2131/mo PITIMI, 3.094% APR, $4980 closing costs. The 5% down Conventional would have 3% note rate, $380k loan amount, no lender points or fees, $2083/mo PITIMI, 3.182% APR, and $4941 closing costs. Another myth isn’t as much a myth as a misunderstanding. People usually qualify for more than they expected, but we also maintain that many end up paying more than they initially planned or hoped for. Housing is usually more expensive than they think. But once they get the facts, they’re usually able to figure things out. We have seen very very few of our clients call us up later and tell us they hated it and need to bail. Almost everyone figures it out and only wish they bought sooner. Myth number three, homeownership will become less affordable the longer you wait. This is a dumb myth to list in the article. Most people’s incomes rise as they age. So you’ll likely be able to manage payments in the future better than today. BUT homes have increased in price historically almost every year for the last 80 years. And rates rising or falling impact affordability as well. If you CAN buy, you SHOULD buy now is our stance generally. Josh relates his own story. Buying in 2004, a house in South Jordan Utah cost $170,000 and was above their initial price range. He freaked out but his wife won the debate and not only did it work out, it worked out very very favorably. The same home at the time of this video is about $500,000. That definitely will cost more monthly than originally regardless of rates. Please share this with anyone you know that doesn’t own a home. 25% chance they don’t know these things. :) And contact us. We’re here to help YOU!
  • Josh Counsels Parents Of Adult Children To Prepare Them To Buy
    Hello hello! Josh Thomas, mortgage broker! I wanted to share something with you. This is an old man reminiscing. I'm 44. I've got a 24-year-old son and 18-year-old daughter and I've been doing loans for 17 years. In that length of time I have learned a lot of things that I think are worth sharing with people. Anybody that's worked with me for any length of time has heard a lot of that perspective as I've always wanted to help my clients best I could. Let's talk about helping our kids. Any of those who are I would say late teens to early 20s this is probably good video for you. Except you're going to have to be attentive to an old guy that talks slow and probably way too much and doesn't have enough flashing lights and stuff on on this video haha. But for all those my age or older if you have kids and grandkids that you would like the very best for, I'm going to do my best to share with you really quick a couple things to that should help. 1. Go find a video that I made a few years ago called good better best It's probably five six years old, but it's still true! Everything in there is still accurate. Anybody who has no credit or not as good of credit, follow the steps in there to get good credit. So number one if you're 16 years old, it's time go ahead and start. If you have a 16 year old, go ahead and help them start getting credit. Good credit is the the number one requirement to enter the game. Once you have credit established, pay attention to that video. Think of all the stuff that I share in that video as a recipe. Don't go get a credit card and then borrow a whole bunch of money thinking that gives you more credit. It doesn't work that way. A $20 balance on a credit card is plenty! Then you need to be a grown up now. If you've got a credit card you need to be a grown up and recognize that you need to have a pattern in place to be able to always know if you have a bill due and to pay it on time. And also you need that pattern to never ever let somebody steal that credit card without you knowing about it. So kids listening to this, once you have an account open you need to know that there are people that will try to steal your money. You have to look at your checking accounts your savings accounts your online savings your credit cards, just everything you have, to look at at least every couple weeks at a minimum I would say once a month and you have to know what those charges are. You have to make sure that somebody didn't swipe your card and send a bunch of charges through. In my lifetime, and I'm 44, I've probably had three instances that I'm aware of personally and dozens for clients where somebody stole their identity or was swiping money or whatever and nobody even knew it for a time. So pay attention once you get the credit cards. Make sure you're a grown up and have some kind of organization in place to protect you. Parents help your kids set up that organization. I get paid every two weeks so I sit down every two weeks and I just run through all my finances every time. That's my style. I don't know how everybody else wants to do it. So that's part one. Get the credit. Get it going. Make sure you're responsible and babysit that. Never ever let it go late. You never need to borrow more than $20 to establish credit. 2. Down Payment. Getting the house. Actually pulling that trigger. I'm going to walk through my own family scenario to kind of give you some real life stuff that you can kind of chew on. So my oldest daughter is 18 and she is planning on serving a mission and young women can't go until they're 19. She has debated on when to go and made her own decisions as to the timing of that but she also is planning on taking me up on helping her buy a house. Clearly she's not going to be able to afford a house when she's 18 years old. Nor is she going to be able to qualify at 18 years old. However I can help with both of those two things. Right now I am also a landlord. I've got five rental properties. I've got some experiences managing a property and I would love to help her have that experience. And so for her personally she said "well I'm going to college and going on a mission" so she's worked out the timing because when you buy a house to live in it you need to live in it for a year in order for it to be owner occupied (best financing options) and so looking at the timing of that she's decided to wait till she returns from her mission. I would love for her to buy a house when she's 18 ASAP in order to be able to gain the appreciation and home equity. But sometimes you can't bite off too much. So her intent is to buy one when she returns, that doesn't matter to you, but I'm sharing this with you transparently so you can kind of map some of your own plans. So she'll buy when she returns. I'm going to help her qualify by cosigning. And then I'm going to help her manage it by simply being almost a silent partner if you will, where she and I will consult regularly and I'll kind of almost force the schedule and how to manage that and pay attention to that. And we've also opened up a credit card for her and help her kind of manage that as well as it's married to our checking account. So that way I can monitor it while I'm in my account, especially important when she's on her mission making sure no one's stealing any of her money. Anyway so I share all that with you and I'll give you one more story to close with as you kind of chew on stuff. We have to play the money game right? We have to pay our bills. We have to earn stuff. When we're young kids it's really really hard sometimes to kind of see that. I have some clients and friends who have shown the whole world a great example. I just started an application for another one of his kids the other day. YOUNG man, I mean just about to graduate from a university and he's got $70,000 in savings! That's abnormal. Super abnormal. But awesome right? Again, that's not the norm. Most of us aren't quite there, but get there! Right? Push a little bit harder. Try to look ahead. Try to put some money into savings and prepare for that day. But buying a house can be part of the game plan of gaining that money right? Another example. Some clients of mine that are becoming friends who are younger millennials just bought their first house last June. Their purchase price was $345,000 and we are refinancing it now because rates are down a little bit AND they bought with 100% financing. They used some of the 100% financing stuff which I have explained in another video, just look through my videos and you'll see more about down payment assistance and different things like that. Anyway they got into the house for just a couple thousand bucks out of pocket and that was it and it was more than 100% financing. They actually borrowed a little bit more than it was worth. Fast forward a few months later into February and at that time we get an appraisal and that appraisal came in at $395,000 now that's what this crazy market and appreciation is doing to our house prices right now. So $345k to $395k! Terrible if you're not a buyer yet and you're going to go buy that $395,000 house. But awesome if you're the one that bought right?! $50,000 of equity already. That's why buying a house sooner than later makes sense right now! Plus talk about growing yourself up right? It forces you into maturity. My daughter is going to become a landlord barely even knowing what it means to own a home! A little bit longer of a video for you. I hope I didn't go too long for you but at the same time I hope that I went quick enough with you and you could kind of see some of the value to these different points that I'm making. But I would encourage all kids to prepare to buy a house as early as they possibly can. Parents I would prepare to help your kids buy those houses as early as you can. Yes, you're going to need some low debt to income ratios because you're going to essentially qualify for two mortgages but take the effort and the time to put things together so that you can actually help your kids do that and go ahead and co-buy with them so that they can go ahead and start harnessing some of that home equity and you know kind of start lining things up. And my daughter she's going to be coming home from her mission, buying a house, she's still single, she'll start dating and who knows how long that'll take to finally establish herself a family and all that. Maybe when they get married they're not going to like the house that she has and they'll want to sell and maybe with any luck she'll have $50,000 or more of equity like my client did and now they've got a down payment for their real house right? They're still a young couple. They're still barely married, but already they'll have some options. So look forward to the big picture. Put some things in place early. Call me if you want to strategize about that. I would love to help you guys. I hope you have a great day and hopefully this information was helpful for you.
  • Are You A Bullet Proof Buyer?
    Let's help you make sure that you're a bulletproof buyer! What do I mean by bulletproof buyers? In the mortgage world, there are a lot of different mortgage companies, and different companies will do things in different ways. Two words that are thrown around a lot are pre-qualification and pre-approval. They sound similar, but these two words can mean something completely different to a lot of different lenders out there. To me, pre-qualification simply means a brief phone call where you tell me how much you're making, what you think your credit score is, maybe a summary of your debts, and I translate that into an idea of what your ideal purchase price is. The main purpose of a pre-qualification is to spitball ideas when people are trying to get their minds wrapped around what they are doing. A pre-approval is far more valuable, so what is a pre-approval? To start the pre-approval we create an actual application and pull your credit. A lot of lenders do that. For us, a pre-approval goes several steps beyond that. Step 1 - Gathering documents. We gather all your income documents including bank statements, tax returns, pay stubs, W2’s. Anything that a bank is ever going to ask you for. We are going to get that all upfront in a pre-approval. Essentially we are scrubbing through those documents looking for any drama that will come up. Once we have done that then we take your file and run it through an automated underwriting system and if there is anything else dramatic within your file, we are going to sit down with human underwriters (the people that audit the computer underwriting) and we will go through and hash those out. This does take up more time, that is why a lot of lenders don’t do it but it’s something we have always wanted to do and it has been well over a decade now. Anybody that is pre-approved with me can close on their home. That's what pre-approval means to us! It's step one to being a bulletproof buyer. When you present your case to a seller to try to buy their house you are ironclad there's no chance you are not getting financing at that point! When you are completely pre-approved, we can close very quickly! Our average close time is three weeks, but we can close in two weeks easily if someone is fully pre-approved. (Provided they’re not using some funky program that has automatic delays built into it like down payment assistance or USDA financing if their underwriting is backed up.) Step 2 - Quick close. This is very important to a lot of sellers. When you can close in two weeks it makes you very competitive with cash offers out there. Step 3 - Sticker shock. Sometimes people go out there, write an offer, get the seller to agree and then they see their future monthly payment and down payment and they back out. We don’t want that to be you! We want to make sure that you know everything before you go into it. One of the things we do with our clients, we show them the different loan options. We will go through and help them see all their different options. We provide them with a payment calculator to have a very good estimate of what they are looking to bring to closing and what their monthly payment will look like, regardless of the price! Every couple of weeks after the pre-approval we are reaching out and making sure we update things if rates have changed much. There are a few other things, such as contingencies when you write a contract - who is in your corner? What agent are you using to help you? That is a very important part. You may very well fail in getting a seller to accept your offer simply because of your agent, or you may succeed. Make sure you have a great agent in your corner. Other things include the bidding process, when you write that contract there will be your due diligence contingencies, your financing and appraisal contingencies (our clients never need the financing contingencies). Should they waive or shorten the deadline for their appraisal or should they even amend all that and add an appraisal gap contingency. All these things will be very important! This is where your agent becomes critical. To keep this short for now, you will need to have good contingencies that are favorable to the seller. That is potentially even releasing your earnest money very quickly. Some sellers will only take it if you immediately release it. I have seen some very successful buyers where they release maybe $1000 of their earnest money within three days, and another $1000 a week later, and so on. All while they are doing their diligence, checking their financing, and getting that appraisal back while trying to race the clock so that they are not losing any money. Those are all parts of becoming a bulletproof buyer. I’m trying to keep it short. But if you have any questions or comments, please reach out to us. We will be happy to answer any further questions that you may have. If you haven’t been pre-approved yet or know someone who is wanting to shop, get pre-approved! Let’s make sure that process is fully up to speed, otherwise, you may be wasting your time if you aren’t a bulletproof buyer. I hope you have a great experience and let us help you do that! Share this with anyone else who wants to be a homeowner sometime soon!
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