Recap of House Hacker Episode 001!
I decided to go back and touch base over episode 001 of my podcast, The House Hacker Podcast.
I’m doing this as a way to do two things! The first is to review and improve, and the 2nd is to bring some value in blog/writing format for those who love to read. I thought it would be beneficial in both ways for you who are reading and for future listeners.
So episode 001 was “Unbelievable Down Payment!” in which I broke down the programs and the down payments needed in order to purchase a home.
This was first of all inspired by a few families that told me they did not have 10% or 15% down payment. So I wanted to debunk this being a necessary amount of money minimum for the down payment. Of course, keep in mind that there are circumstances that can affect this.
FHA: this is a first time homebuyer program that has a minimum of 3.5% down payment. With this program you can purchase 1–4 units with that low down payment. It is a government program that obligates something called monthly mortgage insurance that is included in your monthly payment. Keep in mind you need to live in the property in order to qualify for this program. Also, all of this is subject to review of documentation and making sure you fall into the guidelines by the company you are working with.
Conventional: with this program you can come in with a down payment that ranges between 3% to 20% as a first time homebuyer. The main difference on this one is there is not monthly mortgage insurance which means you have a lower payment every month. This is geared towards buyers that have a high credit score and requires you to live in the property or one of the units. The way it works is the interest rate is driven by credit score, and in order to not have mortgage insurance the interest rate has to cover the mortgage insurance. This is the called Lender Paid MI option. There is also a investment option on the conventional side, which is 25% down payment. This allows you to not live in it and rent it out right away! This is also subject to review of documentation and making sure you fall into the guidelines by the company you are working with.
VA: is a Veteran program that was created and is only available to Veterans. This allows you to come in with 0% out of your pocket. This program is ran by the Veteran of Affairs and requires documentation to prove you are a Veteran. One of the key documents that you will hear about is the Certificate of Eligibility that dictates how much your “funding fee” is. This is the cost to do the loan by the company based on the Veteran of Affairs and your standing as a Veteran. The mortgage companies do not decide this. And again this is also subject to review of documentation and making sure you fall into the guidelines by the company you are working with.
Bonus! Down payment assistance is a big phrase being thrown around. This can potentially help with the down payment for FHA and Conventional options. There are guidelines that are put in place for low to moderate income households, so please ask your mortgage representative if you qualify for this!
That is all, this is what episode 001 of the House Hacker Podcast was about.
I believe it was covered well, good pace, and good information. One of the episodes I am super proud of!
Feel free to take a listen to it on iTunes Podcast, SoundCloud, Google Play, Spotify, and Stitcher! https://itsoscvr.com/househackerpodcast/