Home buying A to Z ( How to get a mortgage) How to get a Home Loan 1/4

Home buying A to Z ( How to get a mortgage) How to get a Home Loan 1/4

Hey there this is Chris Trapani The
Mortgage Pro you know I decided to do

something a little different
instead of bits and pieces of all little

different videos on all different
subjects I said

it might be a long video but let's make
a video that's going to cover the home

buying process from a to z
it's going to cover everything so let's

give this a shot
let's see what we can do I hope it's not

too long but you can always come back to it.
[Music]

okay we're gonna get started. Now as
always

if you enjoy this video hit the like
button and you can subscribe so you'll

get all my new stuff
and you'll learn how the process works

and any new changes that come around in
the industry

so let's start we're going to go with
step number one

step number one here's how it works,
people

it's a normal thing, hey i decided to buy
a house so they decide and they reach

out to
a realtor well it kind of

seems like it would make sense but the
first thing you really need to do

is secure your financing because guess
what the

first thing that the realtor does he
sends you to me

so he can't show you a house or
take you out or submit an offer or do

anything until he knows you're approved
because

way too often it's a waste of time for a
realtor so they make it a rule

that they do not show houses pretty much
until they know borrow has been

pre-approved so how do we go through the
pre-approval process

well what we need to do is we need to
verify

the most important things that are
important to any lender

on any loan program and we start with
this

number one your credit obviously we have
to run a credit report no

we cannot actually do a full
pre-approval

if you show us just like a copy or a
credit karma

or whatnot we actually have to run a
mortgage

credit report in your name in
our company's name in order to do that

now
what's important about credit well

there's a couple of things
foreclosure if you've had a foreclosure

in the last seven years on a
conventional loan

or three years on a fha loan
or two years on a va loan that would

preclude you from doing that so if you
do have a foreclosure a couple of years

ago
that just means maybe you can't get a

conventional loan but you could go
fha or if the case is a va

so that's not that big a problem on
a bankruptcy see this is a this is a

very common situation
is four years on a conventional loan

two years on an fha or va loan
so hey look bad things happen to good

people if that was part of your past
look just got to get past it it's

usually not too bad
so let's pretend you're past that and

you do not have a bankruptcy or
foreclosure or

you're past that time frame now what
scores

are acceptable well on an fha loan
or a va loan you can often sometimes get

an approval believe it or not with as
little as 500.

now on a va loan you're really not going
to get an approval with

zero down at a 500 score and
on an fha loan it would require a

10 down payment if your score is 579 or
below

now once you start hitting 580 on either
one of these type of programs

the approvals will become more and more
commonplace

at 580 and above fha we're looking at a
three and a half percent down payment

and on a va it's still zero and they've
earned that right

and that's wonderful now on a
conventional loan

we're looking at a minimum of a 620 fico
score

at 620 you can be approved for a
conventional loan

now very often one borrower
with a minimal down at 620 on a

conventional loan
won't get approved now if you have more

than one borrower
look it looks at it as we have two

people we can go to
if there's a problem here so we're

looking at it and you're more likely to
get

approved if you have a co-borrow with a
very low fico score

so now you know what you need to do with
a fico score

the next thing we need to do on a
pre-approval is obviously we have to

look at your income
what is your income how is your income

derived
how long have you been on the job you

don't have to be on a job
for a long period of time you could have

gotten a first paycheck yesterday
now on in most cases we need to see a

two-year work history it doesn't have to
be the same job

but a two-year work history we have to
prove that

whether it's fha or conventional
obviously you can't be

18 years old starting your first job
yesterday

it just doesn't work that way now there
are exceptions to the two-year rule

let me give you an example if you were
in school

and you got a degree maybe you became a
school teacher maybe you became

a radiologist in a hospital
or an ultrasound technician if you went

to school and we will need to see the
transcripts we will need to see

the time frame you went to school from
this time to this time

and that will be acceptable instead of
that two years

so i recently did a loan for a
registered nurse

she went to school for four years she
got her first pay stub

and we funded the loan why because we
used the four years as the history and

now her new income was 50 bucks an hour
she's doing fantastic

real proud of her she's in her own home
so we can use that

now how do you get paid do you get paid
salary well salary is easy if you get

paid five thousand dollars a month
for income we use five thousand dollars a month.

If you are paid
hourly what happens is we have to figure

out how many hours you work
as an example if you work 50 hours a

week
you're working 10 hours overtime plus

the 40 hours
first we start with the base pay which

is the 40 hours
and a simple way to figure that out is

we work on monthly incomes so if you're
making

twenty dollars an hour multiply whatever
that hourly rate is

by 173.333
that is 40 hours a week that's how much

you make
monthly so that's pretty simple now if

you work
less than 40 hours we're going to take

an average over two years
because sometimes people work part-time

jobs hey did you work 20 hours this week
22 the week before 30 the week before

next week you're working 13 when we when
we look at all these things we have to

average them out we also have to average
overtime

over a period of two years and if you
get

bonuses or commissions again over a
two-year

period see income works in reverse
we look backwards pretty much for most

in most cases
to see how long have you been making

this money now it's okay if you get a
raise

if you get a promotion we'll use that
higher income

but again we're going to use the
overtime or commission or bonuses

going backwards and we're going to
average it out if you are self-employed

this is going to be really super
important i don't care if you gross a

million dollars a year
that doesn't matter what matters is what

you pay
taxes on so if you gross a million

dollars and write off
999 000 you made a thousand dollars

you're not going to be able to
buy a pair of nikes never mind buy a

house so
it depends on what you pay taxes on

there are such things called
depreciation that your tax preparer

might use
we're going to add that on to your

income also sometimes people
use their home and a tax preparer will

write off some expenses in the use of
the home we get to add that back on

so let's say you grossed a hundred
thousand dollars but you had fifty

thousand dollars in expenses

we're going to take 2 years of 50,000 last year

and how much was it the year before oh 47,000

that's 97 000 we're going to average
that

over a period of 24 months and that's
the

allowable income that we use that works
for

fha va and conventional loans it works
the same exact way

so obviously now we've looked at the
income

we've looked at your credit we also have
to look at your down payment

Chris Trapani

As found on YouTube

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