Josh Lewis Mortgage Market Update – September 15th, 2020

Josh Lewis Mortgage Market Update – September 15th, 2020

Broker | Owner | Mortgage Consultant
Josh Lewis
Published on September 17, 2020
Josh Lewis - Jeb Smith Mortgage and Real Estate QA

Josh Lewis Mortgage Market Update – September 15th, 2020

Are you in the process of buying a home or selling a home and have questions about the housing market?

Verify your mortgage eligibility (Aug 15th, 2022)

Maybe your considering refinancing or getting pre-approved and have mortgage-related questions?

In tonight’s live stream we are going to answer your questions about Real Estate, Mortgage, Interest Rates, Loan Programs (FHA, VA, Conventional) and help guide you in the right direction.

Verify your mortgage eligibility (Aug 15th, 2022)

– All right, guys. So I assume everybody is there. We are live. I’m back with an update on the real estate market on the mortgage market.

We’re back to answer your questions like we’ve done in the past. So as I’ve mentioned on several videos, I encourage you guys to leave questions, that’s the reason we’re here. We want to answer your questions, help address any concerns you have about the real estate market about housing, about interest rates, so on and so forth.

Or maybe you’re just somebody who starting the process of buying a home, selling a home, getting pre-approved or what have you.

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So it can really be anything with regards to mortgage and real estate. We’re happy to touch on it.

As I mentioned, I’m Jeb Smith, Josh Lewis of BuyWise Mortgage. And depending on where you are watching this, because this is being streamed on Facebook, as well as YouTube, reach out to us.

Let us know where you are watching from. Maybe leave a name there. It doesn’t give us, it just tells us how many people are watching. So unless you comment, we don’t know who is watching, and it’s always fun to have an idea of who out there is watching.

Verify your mortgage eligibility (Aug 15th, 2022)

And if you like the content as you’re going through it, give us a thumbs up. And if you want more stuff like this, you can subscribe, whether it’s on Facebook or YouTube and keep up to date.

So that’s a long-winded introduction, Josh, but I think tonight’s since we don’t have any questions yet, let’s start around the topic of interest rates, right?

Because that seems to be a hot button for a lot of people, whether they’re buying a house or potentially refinancing.

Verify your mortgage eligibility (Aug 15th, 2022)

And as we discussed a couple of weeks ago, with regards to Fannie Mae, there was this urgent alert that essentially rates, you could end up with a higher rate due to Fannie Mae and Freddie Mac charging this additional half-point hit to their fee.

And then they came back and retracted it a little bit and gave a window, a buffer if you will. But now we’re coming up to that, the end of that buffer, if you will. So, maybe jump into that.

– Yeah, absolutely. The biggest misunderstanding that everyone has, I would say maybe 30%, 40% of potential borrowers found out or heard about this saw it on the news.

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There’s a lot of headlines, a lot of uproar. So most everyone was aware that it was in place for a period of time. And then it’s a way, but the ones that are aware, are aware of the fact that it’s been delayed til December 1.

So what that does not mean is that any loan between now and December one is free of the charge. So what happens is the half point tax gets added to any loan delivered to Fannie and Freddie after December 1.

So remember I said, delivered to Fannie and Freddie, this doesn’t affect FHA loans, doesn’t affect VA loans, doesn’t affect any of the non-QM loans, jumbo loans, only loans delivered to Fannie and Freddie.

Verify your mortgage eligibility (Aug 15th, 2022)

– And it doesn’t affect purchases only refinances.

– Doesn’t affect purchases, only refinances. And there is an exception now for loans under $125,000. So if you’re in other parts of the country with small loans, we ended up with a handful of small loans here in Southern California.

Those are at least exempt from it. But the important thing to remember is, it’s delivered to Fannie and Freddie December 1. So for the closed loan to be delivered to Fannie Freddie by December 1, normally that’s at least a couple of weeks for that to happen for the lender to close the loan and then get it delivered.

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We’re not in a normal market, this is insanity. Last quarter, where there were more loans closed than any quarter previously in the history of the mortgage business. And they’re expecting more will be closed this quarter.

So what we have, is lenders have junior green, inexperienced people doing these jobs. And so they’re erring on the side of caution, saying basically no later than the first week of November, most of them November 2, November 1 is a weekend.

So November 2, anything that’s gonna close after that is gonna get hit with the half-point fee. And they’re just saying, we’re gonna err, on the side of caution. a close anything in November without that half-point fee in case anything gets delayed, We’re covered with that.

Verify your mortgage eligibility (Aug 15th, 2022)

So what does that mean if we’re looking at closings November 2nd now, right now, a 45-day lock as of the 15th pushes you right into the first week of November and loans are taking 45 days at almost every lender on the planet.

So any lender that has faster turn times likely has bad rates to begin with is why they’re not getting inundated. So the big message to everyone is you got a handful of days, maybe a week, depending on what lender you’re working with to get loans locked on a refinance and not pay that half point fee.

So it’s interesting, we’re going on like three to four months of a very narrow range of interest rates. Everyone always wants to ask, what’s the interest rate right now?

Verify your mortgage eligibility (Aug 15th, 2022)

Rates haven’t moved, but in a tiny little range for three to four months now. So we know for a fact we’re gonna be an eighth of a percent in interest higher, that’s what that half point equates to.

Most people don’t pay the half point or half percent of their loan amount out of pocket. $400,000 loan, that’s $2,000. No one wants to come up with an additional $2,000 or take another $2,000 out of their home.

So what they do is they just take an eighth of a percent higher interest rate. We do have a Fed meeting tomorrow. The Fed meeting started today, concludes tomorrow. They have a press conference and we’ll have an announcement.

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Inflation has looked to be heating up. Inflation is bad for interest rates. So technically we just fell below the 50 day moving average. And it tells us that the market’s a little bit worried that the Fed might say something crazy tomorrow and rates could get worse.

Now, what does that mean? Are they gonna jump a half percent worse? No. A quarter percent worse? No. But you could lose an eighth of a percent. And we know we’re losing an eighth of a percent to this add on refinances.

So if you’re in the market, which you and I talked before we got in here, a surprisingly large number of homeowners that could and should be benefiting from refinancing, have not. They’re saying 43% of homeowners that would benefit.

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43% of homeowners would benefit from a refinance and have not done it yet. So unfortunately there’s a lot of people that are gonna get hit by this half point fee, or they’re not gonna take advantage of the lower rates at all.

So that’s what we’re dealing with this week. It’s been super busy here every night til 9 or 10. Worked all weekend, just trying to get as many people locked without having to pay that fee as possible.

– Got it. So, I wanna come back to interest rates because I wanna talk about kind of there’s some things in the market that could affect rates, whether to push them lower and, or potentially higher.

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But there are a couple of questions here that have come up and I wanna get to those as well, because these people are watching and that’s the reason we’re here.

So, first off we got Eric Jones watching from YouTube. I don’t know what KWHB is. Maybe that’s… I have no idea.

– It’s a Keller Williams office, my friend.

Verify your mortgage eligibility (Aug 15th, 2022)

– Oh, it could be.

– I guarantee you it is. That’s the KW logo, right there.

– KWHB, it makes sense.

Verify your mortgage eligibility (Aug 15th, 2022)

– Might be KW Huntington beach, I would guess, right where we are.

– It very well could be. So, Kara is asking if she got preapproved for a $200,000 conventional loan, do you have to live in the property if she wants to make it an investment?

So, I guess it would depend on how you got it approved initially, if it was a primary residence, then you probably need to live in it for a year or so, but I’ll let you touch on that.

Verify your mortgage eligibility (Aug 15th, 2022)

– No, absolutely. You’re signing an occupancy affidavit. So first of all, you’re signing in the transaction and then again at the close of the transaction. So it is my intent to own or occupy this property.

It doesn’t mean I’m gonna own or occupy the property forever, but if you don’t at least move into the property or have a spectacular reason as to why you didn’t, the lender can call the loan due, it’s really their only recourse on it.

So it’s not like they’re gonna send you to jail for mortgage fraud, but they could call the loan due. Their reason for that is, you were approved for $200,000 conventional loan from what the question sounds like you were approved for a $200,000 owner-occupied loan, which has a lower down payment and a lower interest rate.

Verify your mortgage eligibility (Aug 15th, 2022)

If you don’t move into the property, it was clear you weren’t telling them the truth and they couldn’t accurately price the risk or make sure they get the down payment that’s required on a non-owner loan

– Got it. So I think that was a great explanation there. Daniel’s asking, he’s a cosigner for his brother’s loan. He doesn’t make any of the payments. He wants to essentially apply for a loan at some point in the future. How will that affect him? We’ve been through this scenario multiple times together.

– Well, the big thing is for the first 12 months, in the first 12 months you can’t show that the brother has, or whoever you co-signed for had a 12-month history of making the payments. After 12 months, you’re golden.

Verify your mortgage eligibility (Aug 15th, 2022)

You just get the 12 months canceled checks, 12 months of bank statements showing the auto payment comes out of an account solely owned by the co-borrower, where we get into trouble with this sometimes it’s paid out of an account that both borrowers are on.

That can be a problem for you. Or I had this one earlier this year, guy’s sister co-borrowed for him last year, we hit the 12 month period, at month 11 he was 30 days late on his mortgage. So if there’s a late on there, we are generally not allowed to exclude the payment.

It doesn’t mean it has to be held against you and you can’t buy. But it means we can’t exclude that co-borrowed loan like we otherwise can. So, make sure your brother makes the payments on time. Make sure he can document it.

Verify your mortgage eligibility (Aug 15th, 2022)

We don’t want him doing things like getting a money order that doesn’t have his name and can’t be traced to his account. So checks or wires or auto payments out of an account solely owned by the co-borrower, then you’re good.

– Awesome. Rob’s saying thanks for always putting out great content. So Rob’s actually a realtor in Greenville, North Carolina, where I went to school.

So what’s up Rob? Lucas. I like your video’s currently on a new build contract and when we finish end of December how far back can I lock my rate? And does it cost if I request a lock a few months back?

Verify your mortgage eligibility (Aug 15th, 2022)

– So, on new construction, they do offer extended locks. So if we’re at the end of December, unfortunately it probably means you’re gonna finish up sometime in March or April.

But, assuming that it actually does close at the end of December or within 120 days of that. What are we? Probably what, 105 days. So it’s an extended lock.

They do get expensive once you get longer than 45 days and definitely longer than 60 days. And the reason for that is the lender just has to hedge the rate for a longer period of time.

Verify your mortgage eligibility (Aug 15th, 2022)

So unless you really felt like rates were gonna spike between here and there, I would do my best to try and get within 60 days of closing before locking it.

– But to answer his question, it can be done. Just might cost you a little bit more to do it.

– Absolutely. All right, so Jo Jo is asking when the market goes down, can I buy in Delaware within four to five months as foreclosures will increase? Josh.

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– I wanna find out if I can pay for access to Jo Jo’s crystal ball. There’s two pieces there. When the market goes down, which eventually in time it will, whether it’s a year or five years from now within four to five months as foreclosure really just comes down to, are you qualified?

There’s no reason why you can’t buy if the market drops and you feel like it’s a good opportunity to enter in.

– Well, I have two things on this. I don’t know a lot of you know this, but, those who know me know this, from 2009, til 2012, I sold a lot of foreclosed properties, REOs, real estate owned property that was owned by Fannie Mae, Wells Fargo, Bank of America, all of those guys.

Verify your mortgage eligibility (Aug 15th, 2022)

These were properties that were foreclosed upon from the time it happened from ’07 to ’09, a lot of what people are expecting to happen again, which I don’t, but that’s a whole nother scenario.

And what people think when they think of foreclosure, they think they get an automatic deal.

And what I will tell you is that in experience, especially towards the end of that foreclosure era, most foreclosures sold at market value.

Verify your mortgage eligibility (Aug 15th, 2022)

These banks realized very quickly when selling property that they could do some basic TLC to these properties, carpet, paint appliances, a quick flip, if you will. And that was paid by the agents and reimbursed by Fannie Mae and whoever the REO company was at that time.

But the reality is even if there are foreclosures, which there will be some. I’m not expecting a huge wave, as I’ve mentioned in multiple videos, which I’m not gonna get into that tonight, but there will be some foreclosures as a result of what’s gonna happen.

The reality is there’s probably not gonna be nearly as many as most people think, or as a lot of people think. And even if there are, chances are you’re still paying market value for those properties.

Verify your mortgage eligibility (Aug 15th, 2022)

So, what I would tell you, just like I would tell any other buyer who is interested in potentially buying a foreclosed property.

It’s no different than buying a regular property. You need to go through the preapproval process. And if you think this is gonna happen four to five months from now, then I would tell you, 60 days out, 30 days out, get preapproved, talk to your lender, give them the documentation, be ready to go so that when that property does come on the market, you’re in a position to write an offer.

– And Jeb, it’s not a bad idea to do it now if you think that opportunity is coming, or even if you don’t think it’s opportunities specific that your plan or intent is to buy at some point, a lot of times I’ll get people that will call they’ll be introduced by a realtor.

Verify your mortgage eligibility (Aug 15th, 2022)

And they’ll say, “well, I’m not gonna buy for six months. I’m not gonna buy for two years. So should we even be having this conversation?” It’s never too early to have the conversation because it’s a different conversation. We’re not talking about absolutely what can you buy today.

We go through the general numbers and we say, what do you expect to happen in the next six months? in the next 24 months? In Jo Jo’s case, maybe it’s, I’ve got $40,000 to work with, right now.

And I think I’ll have 80,000 in 12 months. so we can look at all of the what-ifs there and sort of layout a course of action. So you have a plan so that when that opportunity arises, whether it’s six months or six years from now that you’re in a position to be able to do it.

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And one of the things that I like to point out I had a conversation from one of the YouTube viewers. I had a conversation with her two days ago, and we were talking about, is there going to be an opportunity here?

So you talked about, you had a Fannie Mae account and listed a lot of Fannie Mae properties. I flipped over 40 homes from 2008 to 2015.

As far as flippers go, that’s low scale, but it’s a number of them. We make, me personally, I make as much money in a bad market, flipping houses as we do doing loans. So to me, loans are not as fun as flipping houses. So I would love for there to be a big opportunity.

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We essentially had the perfect storm in 2008, 2009. We’re never gonna get an opportunity that good. That doesn’t mean we won’t get another opportunity. And for me, I sit here and I go, I could make a case for there being an increase in distressed properties and some opportunities there.

But for anyone interested in that, the best thing you can do is get prepared and be ready for when you do see it.

– No, I mean agreed. Again, I think we’re all naive to think that this isn’t gonna have some effect. I just think everybody keeps going back to 2008 and saying, this is the exact same market, and it’s not.

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It is completely different what’s happening now than what happened in 2008. So, and I’ve done a video on that, which you guys can check out if you’re interested in that.

So we have Phani, Phani asking the current interest rate. I mean, you can touch on that. I mean, obviously it’s specific to their situation, but maybe, you know, we’re great credit scores down payment, all that good stuff, what’s the low side?

– We’re clinging right to that 3% range, a perfectly well-qualified borrower might be just a hair under it. If you’re taking cash out or don’t have a perfect credit score, you’re gonna be a hair over it.

Verify your mortgage eligibility (Aug 15th, 2022)

The government loans are still good, about a half percent lower than that. And then the high balance confounds that.

So depending on where you are in the country for us in Southern California, a lot of the loans are high balance and the rates are not quite as attractive, high balance just means above the conforming loan limits for your area, which Fannie and Freddie is $510,000. FHA varies by County.

– All right, Eduardo is looking a lot like Lucas up here with regards to a new bill being finished in November, but I’m planning to back out of the offer and lose earnest money due to possible house price drop in 2021.

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Thoughts? Thoughts? What market are you in? I guess that’s probably a question to ask, again, it all comes down to whether you being comfortable with the market. I mean, that’s the reality I can’t sit here, and I won’t sit here and tell you to buy a property that you don’t feel comfortable buying.

I mean, that’s probably the number one thing that you should consider when making an offer is whether or not you want to move forward. And if you’re past that contingency period, then essentially you could lose your deposit.

Now if you haven’t released contingencies on that property, then there’s still an opportunity that maybe you can come back out and save that money.

Verify your mortgage eligibility (Aug 15th, 2022)

But I think a lot of people that are way smarter than I, that I read, think that housing supply, which is a big driver of what we’ve seen here with regards to real estate prices, along with interest rates, right?

So prices were already pretty stable coming into COVID. And then we had, COVID obviously being a big effect, but with that, we got lower rates, right? So which generated way high buyer demand, it allowed buyers to purchase more property.

And in theory, those two drove the market, right? And that’s why we’re seeing right now, we’re seeing huge buyer demand and it’s being driven by low supply and interest rates. A lot of people expect the housing supply to stay like this for some time.

Verify your mortgage eligibility (Aug 15th, 2022)

Now, whether that means a year, two years, three years, it’s hard to tell, but what I will say is it takes a long time to change a market like this, months, maybe a year or so, of a lot of property coming on the market and not as many people buying. So you would need a lot of supply coming to the market.

You would likely need a rise in interest rates, and you would need buyers to stop buying in order to have that perfect storm, if you will, in my opinion of a slowing market.

So, at some point, prices are gonna pull back. But at that point, we’ve talked about this, interest rates are likely a little bit higher. So maybe the price of that property is less, but it could cost you more to own that property or buy that property at that time.

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So, Josh, what are your thoughts on that?

– The first question you asked was the absolute most important. What market are you’re in? And that’s largely, it becomes a supply and demand issue. Like for us here, in Orange County, it’s pretty much a hundred percent built out.

You’ll get little infill developments and they’re building six little condo units up the street from me here. But other than infill stuff, you don’t get a lot of supply.

Verify your mortgage eligibility (Aug 15th, 2022)

So what happens though, in a hot market builders get more aggressive and they build a little further out and people would like to be whatever the city center is, where you are.

They wanna be close to jobs, entertainment, meals, all that fun stuff. As the market gets hot and prices go up, people will go further and further out. There’s more land and builders get aggressive building out there.

So if you’re a ways out getting a more affordable home and there’s lots of building by all means, it could be a reason to back out, but look at the supply and demand.

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In general, when we look at the entire market nationwide, the demographic trends with the millennials coming into prime buying age, we already have a problem with limited supply of homes.

I wish I had the number here in front of you it’s an astronomical number. I believe there’s 400,000 less homes on the market this time than there were 12 months ago. Don’t quote me exactly on that number, but it is an astronomical number.

So you say that, and then we have more millennials coming into prime buying age, and that’s the biggest generation we’ve had since baby boomers. All of those things tell us, I don’t think we’re going to get a big dip in prices, regardless of what happens with the distress properties.

Verify your mortgage eligibility (Aug 15th, 2022)

– Well, I’ll add to that two quick things here is that one, when you have already a low supply of housing, and then you have something in California called wildfires, which are burning houses, you get less of a supply of houses.

So you’ve got to factor all of this stuff in, it’s not black and white, there’s a gray area, but there’s a lot of factors that play into this thing. And then you’ve got not only the natural disaster part of taking homes and people having to re-buy or rebuild, or what have you.

You also have people now in a position where they can work from home. So they may not need to be near that city that you mentioned Josh or wanna be near town. Maybe they can move to those rural areas. And because now they know no longer have to travel.

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So, I mean, we’re seeing it in California, people that have wanted to get out of California forever, for whatever reasons, taxes, political reasons, what have you, are now moving out of State because they have the ability to work from home, which is taking part of the market here and moving it elsewhere.

But the reality is, it’s just changing a little bit. I mean, you’re giving other markets higher demand, that probably wouldn’t have seen it, which is gonna affect their supply as well So, I dunno, we could go on and on about that.

So I think Alex here, Alex has reached out to me before, but he is asking about selling a home. Is there a major difference between VA offer and other offers? So he’s in LA County, I know that. He actually sent me a picture of his house. So, he has a nice house.

Verify your mortgage eligibility (Aug 15th, 2022)

Alex is in the process of selling his property. And Josh, you wanna touch on that? I mean, I can touch on it from a realtor aspect, but I think you can probably touch on it as well, so.

– I absolutely do wanna jump on this one because Jeb, you see this like we do, we do a lot of business. I’m in a group called vetted VA. It’s a giant Facebook group for veterans asking for help with real estate and mortgages.

So we get a ton of people through that. And we hear all of the time veteran offers, VA loans being discriminated against because agents don’t understand them and or their clients are afraid of them. So it’s awesome, Alex, that you’re asking about this.

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So, what I always looked at as a seller, told you I flipped 40 houses, as a seller we want to look at two things, the strength of the offer and what I’m going to net. So the VA offer is gonna net you just as much as any other offer, not gonna cost you a dime more as a seller.

So then the question just comes down to, what offer is stronger? What I can say is VA loans are the most flexible underwriting of any type of loan. They can take the worst credit, the highest debt to income ratios.

They require a no down payment, super, incredibly flexible on source of funds for the closing costs. So there really is not a safer loan that you can get.

Verify your mortgage eligibility (Aug 15th, 2022)

I tell all of my agents if you get an offer in if you get five offers in and you want help analyzing the preapproval package, the DU findings, the automated underwriting findings. I’m happy to go through that.

And I would tell anyone to have their agent go through that, look at it. If you give me a veteran with a 700 credit score and a VA loan with zero down versus someone with a 640 credit score and a 20% down, I’ll take the veteran eight days a week, it’s an easier loan, it’s a better loan.

It’s more likely to get approved. And most importantly, those people have gone and fought for us. It’s pretty rare in the last 20 years, going back to 1990, 30 years, if you went in the armed forces you’ve been deployed, you’ve been overseas.

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Maybe you weren’t taking bullet fire, but you’ve been sacrificing for this country. There’s a reason why we give that benefit. And it blows my mind when we come back and have people go, “no, I don’t want a VA loan.

I think I want something that’s safer.” Because there’s nothing safer for a seller than a VA. Other than you get into a perfectly qualified conventional loan with a big down payment.

– Right, so with that said, so I think that was a great explanation. But coming from an agent who represented VA buyers, there are some fees that the VA buyer cannot pay, right? Do you wanna touch on that?

Verify your mortgage eligibility (Aug 15th, 2022)

– It doesn’t mean the seller has to pay him. I can’t tell you when the last time I did the VA loan where the seller paid anything that they didn’t pay on any other loan

– No, I got it, but let’s explain that because I think that’s important. Cause I think that’s the misconception with a lot of agents out there that don’t understand VA and they automatically think, okay, I got a VA offer, that means that they can’t pay certain fees when buying a house, that means my seller has to pay it.

And the reality is that it can actually come from the mortgage side. There’s a number of ways to do it. But do you wanna touch on that?

Verify your mortgage eligibility (Aug 15th, 2022)

– Why don’t we touch on so we don’t send up in the 30 minutes on that of the two areas that as a seller like Alex could end up in an issue. You have to have a termite clearance. So let’s say it’s an older home that has $10,000 for the termite work. The veteran cannot pay for that.

The veteran can pay for the report. They can’t pay for the clearance. So, whatever work needs to be done, whether it’s lender coughing up the credit, agents coughing it up, seller coughing it up.

Someone has to pay for that. That’s written into the VA guidelines that the VA feels strongly.

Verify your mortgage eligibility (Aug 15th, 2022)

The veteran needs to have a home free of termites, some parts of the country that’s not a big deal. Most of the Southern States where we have warmer weather and that stuff it is. The other thing is there’s a VA mandatory clause or VA escape clause.

That says the property doesn’t appraise. So you see this all the time agents are going back and saying, you have to guarantee that you’ll buy the home, whether it appraises or not, you’ll make up the difference.

Well, in a VA loan, there’s a document that says once they are delivered the appraisal, if it doesn’t come in, they cannot be compelled to complete the transaction. So those would be really the only two things that are big potential negatives.

Verify your mortgage eligibility (Aug 15th, 2022)

So if you felt like you had a bidding war and we have nine offers and there’s three conventional ones and a VA one, and you’re $50,000 over the most recent comp, that’s a reason to not take a VA loan. But other than that, the termite stuff isn’t that big of a deal for most well-maintained homes.

– No. Understood. So again, we could do a whole nother video on that, and maybe we’ll save some of that for next time where we can talk about it in more detail. So, we’ve got Digital Shibayama.

Are loans for FHA spot approval or loans in general, taking longer to get approved today? I’m in the middle of an escrow but was supposed to close 15 days ago. My agent says we’re waiting for spot approval.

Verify your mortgage eligibility (Aug 15th, 2022)

So for those of you who don’t know what spot approval, so when you get an FHA loan, the condo complex, where you’re buying, essentially has to be FHA approved. That’s one of the guidelines for FHA when buying a condo, the complex has to be FHA approved.

Well, if that complex is not FHA approved, there is something called a spot approval where you can essentially apply, the condo association can apply to HUD in order to be approved.

So that’s what a spot approval is, Josh, you wanna jump on that and talk about timeframes? Cause I know that can be a four to six week period in itself.

Verify your mortgage eligibility (Aug 15th, 2022)

– Yeah, absolutely. The timelines on everything mortgage-related are delayed. So imagine if in a normal timeline, there’s two spot approvals that go through a HUD home ownership center in a week, there might be 22 right now, for whatever reason spot approvals just weren’t done for a number of years.

And about two, three years back, lenders started being okay with it and pursuing it, but the only difference between the spot approval and the entire complex approval is that the next person that comes and buy doesn’t benefit from a spot approval, they would need to get their own spot approval.

It doesn’t really save any time you gather and provide all of the same documentation and lenders, there’s two types of complex approvals. I mean, generally when we’re talking about the spot approval, the lender themselves is making the decision.

Verify your mortgage eligibility (Aug 15th, 2022)

So an FHA direct endorsement lender is looking at everything that would normally go to HUD and saying, this meets HUD’s guidelines and we’re comfortable making the loan.

The difference is we’d normally send all that package into HUD and HUD would say, Hey, the entire complex is okay. So anyone getting a loan in there in the next two years is okay before that gets renewed.

So the timeline, yeah, I’m surprised that in a really hot market the seller was willing to say, “I’ll sell to you FHA and we’ll get a spot approval on this just because everything is taking longer.”

Verify your mortgage eligibility (Aug 15th, 2022)

– Yeah, so, your question is hard to answer because of that, but hopefully that that information helps you out there.

So we got one more here from Cathy asking if you want to refinance your mortgage on strictly land, if you only have 48K left to pay on your mortgage on a Double Wide, and it’s easier to get a loan on five deeds, is it easier to get a loan on five deeds that total… I don’t understand the question exactly, but.

– The biggest thing with a loan of $48,000, you have to save a spectacular amount of interest to make it worthwhile. I’m not saying it’s not possible.

Verify your mortgage eligibility (Aug 15th, 2022)

Our rule of thumb on when it makes sense to do a regular refinance is take $125,000 divided by your loan amount. So $125,000 loan needs to increase or decrease a full percent.

A $48,000 loan would need to be like two and a half percent before it was even worth pursuing. So land loans, loans on manufactured housing, Double Wides can be a much higher interest rate.

So if that opportunity did exist, I’m not saying it’s not worth it, it takes a big decrease in the interest rate before you would see it being worthwhile in terms of savings.

Verify your mortgage eligibility (Aug 15th, 2022)

– No. Awesome. We’ve got a couple of thank yous from different people here. So, thank you guys for watching, of course. Josh, do you want to get into the conventional NFHA thing? Do you want to save it? Cause that could take us out here a little bit.

– Yeah, we’re already 30 minutes in. Let’s just save it.

– All right guys, so any last questions here. We’ll push it 30 minutes maybe one more question, if anybody has it, but if you haven’t already, if you’re watching this give us a thumbs up again.

Verify your mortgage eligibility (Aug 15th, 2022)

And if you’re not watching us on a regular basis, you can subscribe through Facebook, through YouTube, wherever you are to Josh or I keep up to date on this content.

We’re here to help educate and guide you guys through this process. That’s the primary reason for us being here is, is to help. So, we’ll continue doing it as long as you guys are here.

It looks like we’re coming to the end here. Not a lot of questions. So you wanna throw your contact information up there, Josh, so that we’re all on this.

Verify your mortgage eligibility (Aug 15th, 2022)

As we’ve mentioned several times in the past, we both have connections throughout the US so I realize a lot of you guys are watching all over the US and so if you’re in a state and you don’t have a real estate professional, a mortgage professional, and you’re buying a home, selling a home, refinancing, getting preapproved, whatever it is, shoot us an email, shoot myself an email, shoot Josh an email.

I’ll also throw my contact information up here as well. And we’ll connect you with somebody who does business like us. Somebody that can help guide you through the process. Someone’s that’s gonna take good care of you and any final parting words there, Josh?

– No, I just always like to remind everyone that literally both real estate and mortgage have fairly low barriers to entry they’re higher than what they used to be. But you have a better chance than not of finding someone who doesn’t, whether it’s through just ignorance, incompetence or being a bad person, doesn’t have your best interests at heart.

Verify your mortgage eligibility (Aug 15th, 2022)

So if you don’t have someone that’s highly recommended, vetted that you can check on their background, reach out to us because there’s plenty of is a big country, lots of realtors, lots of mortgage originators, and lots of good ones, but they are definitely the minority.

– Yeah, same for real estate. So we won’t bore you any longer, but again, if you guys are watching this after the fact, and you have questions, put them below, we’ll use them for next month’s video and we’ll get back to, or next week rather, and get back to you as well. As always thanks for your time. Talk to you soon. Have a great day. Bye bye.

Show me today's rates (Aug 15th, 2022)
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