You Can Buy A Home For Less Than A Rent Deposit. Realty Experts LLC

Hey, Rich Barnes here, owner broker of Realty Experts LLC, and today we have a special guest on our Zoom call. His name is Cole Heinrich, from CMG Financial, and he is by far the best loan officer this side of the Mississippi, but first I’ll introduce myself again. Rich Barnes, owner broker of Realty Experts in West Allis, and I’ve been selling real estate for about 20 years now. And Cole, maybe you can tell us a little bit about yourself.Yeah, so I’ve been in home loan lending for coming up on four years, was in banking prior to that. Love helping first-time home buyers, move-up buyers, doing tons of refinances of course right now. And then today, we’re gonna talk about how you can get into a house with super low costs to you, or even nothing, so I’m super excited to be here, thanks for having me Rich.We are totally happy to have you. Cole is here with us today. So Cole and I have done quite a few purchases in the past, and he has some very unique programs that are available where folks can purchase a home with very little money out of their own pockets. An example would be recently, you and I collaborated on a property with Anthony, and Anthony bought a home in Milwaukee with $100 out of his pocket. Can you tell us a little bit about that?Yeah, that was pretty cool, so it’s a program that not too many lenders know about. Because it was a HUD-owned property, we could use the FHA $100 down. He was super excited about that originally, he was pre-approved and they said, “you needed to do 10% down”. Of course that was a lot more than what he really wanted to. He wanted as little as possible, especially since he wanted to fix a couple things up after he moved in. And he gave us just raving reviews, was super happy, wants to refer us again. It was a huge success story, and he was really happy, so it was a lot of fun on that one.Yeah, he is very happy, and he bought a pretty nice house for the money that he had to pay out of his pocket, and he does have extra to fix it up, and he’s a real happy man. Absolutely.Another purchase that you and I did recently, we had a couple where I sold their home, and they were thinking of renting a property for a year because they wanted to sell their home, save their money and then invest it in another country, they had a project going on. So we got the home under contract, and a closing date, but they found that they couldn’t find a decent rental out there that would take a pet and that was livable. So they said, “well, maybe we should go find a home.” So I turned it over to Cole here, and I think we had about 20 days to find it, inspect it, get accepted offer, and get it closed. And Cole got the job done, could you tell us about that deal?Yeah, it was pretty fun. It was a pretty tough deal to get done. Luckily my company’s running on all cylinders, and we are able to assist with quicker closings. Because, like Rich was saying, is they literally sold their house, they had an accepted offer with the closing date and everything. And so, you’ve got this domino effect going on with everything, and so we needed to make sure that they had all their ducks in a row, and could close it, and so they were super great, they got me everything that I needed. And we closed it I think in 19 days, and everyone came out really happy, so it was great.And I think that’s one of the keys, is that the buyers have to co-operate with you and get you everything you need in a timely manner. So if sometimes that doesn’t happen and it delays things, because there’s more than one person has to touch this file, I think the number’s 10 .

Yeah, we got a lot of people in our back office helping me work on stuff, and I’m helping them, and you’d be shocked at how many people are touching your thing, and how many things actually need to get checked off the checklist in order to get your loan closed, so it’s a lot of things. It’s all good things, for the most part, to triple check everything. And, so, that’s great that we can work for a company that is able to explain things and get it done quickly, so it’s great.

That one did work out just fine, that was really appreciated to get that done, for sure. Okay, we also have VA and USDA loans, maybe you could expand a little bit on those two.

Yeah, absolutely, so VA loans, that’s Veterans Affairs. So if you’re current military or even in the reserves for a certain amount of time, and obviously if you’re a veteran, and typically you will qualify for the VA benefits, which include 0% down for buying a house. The great thing about it is of course at 0% down, and then also you won’t have to pay private mortgage insurance, so that’s really good on that too. So you save a lot of money, and it’s 0% down. We’ve seen even people get cash back, a little bit of cash back at those VA closings, with some closing costs credits negotiated.

Yeah, that’s a nice surprise for the buyers, isn’t it?

It is, it is, usually you don’t talk about getting cash back when you’re buying a house, but it’s pretty cool. And then, in terms of USDA, that has to be in a more rural area, it can’t really be near a city or a metropolitan area. But it never hurts to check it against the maps, and just see, and that program is also 0% down. We do a handful of those a month too, and those have been great, because, again, people are super thrilled to be able to preserve some of their funds for insuring house improvements in their nest egg, so it’s been good.

Well, as you and I both know, down payments don’t equal closing costs, and there are both of those fees involved. Maybe you could tell us about closing costs, and how we can handle that.

Yeah, absolutely. So, basically, you do typically have an appraisal to determine the property’s value. You’re also cushioning your escrow accounts a lot of the time, because most of the time you’re paying it to us monthly and then we’re paying it for you when it comes due. And usually it’s the same with the homeowners insurance, you pay the first year of that, and then you cushion that with three months as well, so there’s some other expenses that people don’t always consider when they’re buying a house. Of course, we always review that with people, and then sometimes even half the seller pay for those closing costs, so then again it’s just the down payment, if any, so that’s been great.

So depending on the program, you can get a 0 down payment, and also there are closing costs involved which are the appraisal and all these other things that go along. And we can usually get that from the sellers. So before the crash of ’08, you could get both down payment assistance, and you could get closing cost assistance, but they eliminated the down payment assistance. So we have closing cost assistance, which we can get from the sellers in most all cases, two, three, $4000. So literally you could come to the table with no money out of your pocket.

Right, it’s a great thing, people are super jazzed about it, of course, and we love doing it for ’em.

We’ve also done a few deals in the past where you have a very unique program specific to your company, CMG Financial. And you maybe you could tell us a little bit about your down payment assistance program.

Yeah, it’s a super cool program, it’s called HomeFundIt. And it works just like it sounds, like a GoFundMe. Basically it’s a way that you can actually crowdsource your down payment for your house. We worked it out with the mortgage-backed securities, Freddie Mac and Fannie Mae, and the Mortgage Bankers Association, to basically push that through. And how it works is they can just go right to your portal and drop the money in there, and you can have it as a private event, or you can use it as your wedding registry. Some people do that, instead of getting pots and pans and things, they can get money for their house, which a lot of people sometimes like better, wanna buy a house after you get married. And so it’s a super cool thing as long as it’s under $5000, anyone can contribute to it. And it’s super easy to use, and we even give ’em a little special grant that goes along with that 1% or 1500, which ever is less currently. So it’s a nice little perk on top of it as well.

That’s awesome, but, typically, when someone gives money to help you out with your down payment, it has to be a family member, mom, dad, sister, brother type thing, where this program allows anybody to contribute to your down payment, which you couldn’t do before.

That’s right. The down payment for your funds to close were verifying it from your bank account, it can’t come from cash. It’s very closely tracked, and if you do get a gift, it typically needs to come from immediate family. Where this program helps out with that is it alleviates the stress from it just coming from family. As long as it’s under $5000, literally your next door neighbor could contribute money to it, so it’s a super cool program, very easy to use, and we use it on a lot of our transactions, ’cause it’s such a easy, great program for people.

That’s a nice deal, so if you have any questions for Cole or myself, just click the Learn More button below, and you’ll hook up with us, and we’ll get in touch with you, or you can get in touch with us. Cole is a great loan officer, he does a great job, he gets the work done. When he says it’s a good deal, it’s a good deal, so we don’t have problems at the end. So do you have anything you’d like to add to close, Cole?

Basically, just there’s a lot of programs out there, and we offer some of those unique ones that we talked about, and so if you’re not sure if you’re ready to buy a house, and don’t stress about it too much, it’s always great to start wherever you’re at. And if it can’t be done today, it can always be done in the future, so we create a plan with people and get ’em going, so it’s a lot of fun.

Well, if you think you’re ready to buy a home, and you’re tired of renting, get in contact with us, and we’ll check it out, we’ll see if we can get you done. And of course interest rates don’t always stay the same, they’re probably gonna go up in the future, so this is a great time to buy. Historically, the interest rates are very, very low right now, I think we’re on 3.3, I’m not sure at this point ’cause they change daily, right?

Right, they change daily, but, overall, just historic lows like you said. Prices may be going up a little bit, but with great SoLo, there’s tons of market activity, and it’s always great to start building wealth with a house sooner than later.

Great, so get in touch with us if you have some questions, and we’ll be more than happy to get back with you, and answer those questions for ya. And, Cole, I appreciate you coming on today, and helping us out with this, and let’s see if we can find some folks who’d like to buy some homes.

Awesome, sounds like a plan, Rich, thanks for having me on, and we’ll talk soon.

Great, and you have a great day, we’ll talk to you soon.

You too, take care.

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