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BAD CREDIT MORTGAGE LOANS | Bad Credit | VA/FHA/CONVENTIONAL LOAN - YouTube
Channel: Life With Jazzy Mac
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in today's video we're going to talk
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about how to get approved for a home
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mortgage even if you have bad credit or
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no money for a down payment and we'll
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also get into how i closed on my home in
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just
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two weeks
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and as a special bonus we'll talk a
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little bit about the most common types
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of loans
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how to calculate your home buying costs
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and how to clean up your credit if you
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need a little bit of help there so let's
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get started
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[Music]
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hi everyone welcome back to my channel
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it's me jazzymac thank you to everyone
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that has liked shared and subscribed to
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my content and if you're new to my
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channel go ahead and hit the subscribe
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button and turn on those notifications
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like now
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i talk about everything from faith
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family and finances and lately we've
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been on a credit like role
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so many people have been grabbing my
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templates and cleaning up their credit
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and i'm so proud of all of you that have
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been putting in the work don't worry
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about trying to just write everything
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down that i'm going to say today it's a
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lot of information but i put together a
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home buyers kit
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so that those of you that are more
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visual those of you that like to have
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things at your fingertips you can have
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access to everything that i'm saying and
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so you can just listen to this video and
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take it all in so
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let's get started i'm going to just grab
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my notes the first thing that you're
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going to need to do is understand what
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the home buying process entails and i
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just made like a short little checklist
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um there are six steps to home buying
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the first step is the pre-approval
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process
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this is where you're going to just talk
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to someone over the phone you're going
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to like briefly talk about your credit
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your income
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um and like what your
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budget's going to be and that's going to
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determine what type of loan pathway
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they're going to send you down and we'll
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talk about those three different types
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of loans step two is going to be home
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shopping where you're actually
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purchasing um looking for the house that
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you want to purchase you're shopping for
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the house
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and once you find the house
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step three is going to be the offer and
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negotiation stage where you place an
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actual bid through your realtor and you
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wait to see if the sellers are going to
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accept that particular bid
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if they do accept your bid then you're
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going to go into step four which is
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going to be the due diligence process
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where depending on the type of loan that
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you have or that you're applying for um
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it could be anywhere between 5 and 15
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days
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that you're given to either back out of
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the deal without losing your earnest
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money so usually it's a minimum of five
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up to 15 sometimes it can be a little
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bit longer depending on the terms of
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your
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real estate seller and buyer agreement
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step five
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um is going to be the pre-closing and um
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title phase and that basically is going
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to be the phase where you confirm if the
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repairs are going to be taken care of by
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the sellers sometimes they take care of
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it some don't
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um you'll do your pre-closing
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walk-through like a final walk through
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of the house
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and you'll send your funds to the title
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company um you know and that's kind of
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like you know like the icing on the cake
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and so step six is gonna obviously be
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the closing where you'll sit down with
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an attorney
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um the sellers are sometimes present
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sometimes they're not but you'll sit
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down with an attorney to sign a whole
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bunch of paperwork and that's where
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you'll actually get the keys um and most
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people depending on the type of loan
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they might get a check back at closing
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um
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where you know you as the buyer will
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receive a check at closing and so those
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are just the general home buying steps
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and so
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now what i want us
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to get into are the types of loans there
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are three very common types of loans um
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fha loan
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va loan and conventional loan and i'll
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talk about um you know the pros of all
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three of those
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starting with
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the fha loan and i'm just going to grab
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my nukes
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so
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with an fha loan um
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that stands for federal housing
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association
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and it's for first time home buyers
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and it's generally used for people that
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may not have a very high credit score um
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or maybe on the low to moderate income
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scale
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with an fha loan what's good about it is
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you can apply with really bad credit you
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know credit score in the 500s um usually
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a 580 is sometimes the lowest that um
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your lender will accept for an fha loan
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but it can go lower um the only caveat
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is if you have less than 580 um you'll
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have to pay like 10
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of
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the
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you have to pay 10 of the price of the
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home as your down payment um if you have
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580 and above you only have to pay three
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and a half percent
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um or a down payment and because it's a
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federal backed loan you would still
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qualify for um down payment assistance
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programs there are some programs that um
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a you
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will that will give you you know up to
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ten thousand dollars in down payment
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assistance i know georgia dream
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um home buyers program has something
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similar that gives you a very
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significant amount of money so
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it varies by state but down payment
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assistance and fha loans kind of go hand
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in hand another good thing is
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the fha loans
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they
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provide assistance for you to avoid
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foreclosure most loans don't do that but
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for fha there's you know they want to
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keep you in the house and keep you from
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losing the house
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um and so that's some of the pros for
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fha loans
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um
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so like i said if you have a low credit
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score you don't quite have a lot of
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money to put down fha loan is probably
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going to be the best path for you now if
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you have zero money to put down
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and you are a service member then the va
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loan is going to be perfect for you
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um
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with the va loan i come from a military
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family so many people in my family
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have used a va loan and
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you know it's got some good things to it
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the va loan doesn't have a prep
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prepayment penalty like some loans do
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um there are no borrow limits so there's
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no cap on how much money you can borrow
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of course i still want to be contingent
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on your income but just initially there
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is not a cap for what you can borrow
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um there's also no mortgage insurance
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that you have to pay so your
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monthly
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mortgage insurance your monthly mortgage
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payments will not include insurance
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which means your payments are going to
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be lower each month
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um and of course you don't have to have
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a down payment the va is very clear that
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for active or
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veteran service members
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no down payment is required for them to
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issue you a loan also no minimum credit
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score is what the va also offers so even
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if you had like a 550 i've seen people
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with a 540 get approved for
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no money down for the va loan of course
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they had the 540 credit score but they
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were able to close on the deal because
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the va does not have a minimum credit
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score requirement that is going to be
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the biggest benefit
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so if you're using a va loan if you are
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a service member about joining the
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service that's a huge benefit that you
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want to make sure that you are
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capitalizing on
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um
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the third type of loan is going to be
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the type of loan that i use when i
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purchase my home just a couple of months
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ago it's a conventional loan
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and a conventional loan is generally
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um
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it's a much faster closing process and
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so
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the fha and the va loans are going to
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probably take you minimum 30 to 60 days
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to close you know from the time that the
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seller accepts your offer
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um it's gonna be 30 to 60 days before
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you get the keys in your hand
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or a conventional loan i closed in 10
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days
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it was very fast processed
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conventional loans generally have lower
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interest rates
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reduced mortgage insurance costs
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and multi-tier down payment options and
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so
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you can put down as little as three
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percent on a conventional loan but you
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do have to have a much higher credit
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score i think a minimum of maybe a 620
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um some lenders will probably want you
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to have higher than that i entered into
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my mortgage with i think a 820 credit
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score or something like that
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but mind you
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when it comes to mortgages
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lenders are going to use an older credit
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scoring model so if you go to credit
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karma a credit sesame and it says you
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have a 700 chances are what the lender
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sees and the credit scoring model that
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they use you're going to have something
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lower than that and so that's when
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the whole cleaning up your credit thing
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comes into play if you have
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collections
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if you have any type of late payments
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um those are things that you're going to
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want to get rectified and especially
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collections um my lender made it clear
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even before we talked about the
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pre-approval process they do not deal
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with collections if they see that you
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had a collection even if it's paid off
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the fact that it's on your credit shows
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irresponsibility and so many of you have
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used my credit templates and you've
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started to clean up your credit you
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started to boost those credit scores
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i've also put that down below for those
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of you that haven't been exposed to that
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yet um and it's also included for free
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in my home buyers kit if you were to get
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the home buyers get i threw in the
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credit
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boosting kit that includes the dispute
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templates and
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the goodwill letters for late payment
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removals um of course you have to do the
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work i can't guarantee what your credit
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is going to look like but if you do the
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work like many other people have then
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this is going to make your home buying
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process so much smoother when you have a
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clean bill of credit
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it makes it go so much smoother
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um
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the other thing that you want to
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consider
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are your home buying costs
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um
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and so
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when it comes to getting approved let me
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just back up when it comes to approval
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it's going to be based on credit and
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income mostly amongst
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smaller things but credit and income are
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going to be the two bigger things
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want to have your credit just a decent
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credit score depending on your loan type
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no late
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payments no collections no
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judgments or repossessions
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um and then when it comes to income you
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want to make sure that you have two
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years worth of income you don't have to
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spend two years consecutively on one job
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if you had two jobs within two years you
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just want to show that you had
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consistent income
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on the other thing that you'll be
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required to submit
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um at some point in the pre-approval
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process is going to be your tax returns
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um and or your pay stubs if you don't
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have your tax returns you can get away
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with the pay stubs but you will need
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that
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the tax returns for underwriting
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um and they will also ask you for your
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bank statement so make sure your bank
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statements don't show like these large
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deposits for ten thousand dollars that
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you can't reasonably trace back to a
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source
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um you want to really kind of avoid a
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lot of cash deposits anything over a
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thousand dollars you want to avoid that
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because that could raise a red flag with
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your lender
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um so make sure that you can explain
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where all of your money is coming from
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because that is going to be a very big
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part of getting you approved
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um again when it comes to home buying
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costs
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i did create a calculator for you to
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calculate
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the closing costs
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um
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which is going to be
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a
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grouping of piti
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which is principal interest title and
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insurance those are the four costs that
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make up
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the bottom line amount that you'll pay
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for your home so i do have a calculator
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in the home buyers
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it um and then there's also a debt
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payoff calculator that i created if
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you're trying to pay off any debt before
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you purchase your home um but the most
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important thing
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when it comes to
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applying for a home is you don't want to
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wait until you're ready to buy
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to go through the pre-approval process
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if i wanted to buy a house in june and i
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wanted my move-in date to be like august
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i would probably go through the approval
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process in january because i want to
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give myself a good six months to number
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one get my credit straight and then
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number two get whatever savings is
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necessary well before it's time for me
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to purchase a home
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that makes your home buying process so
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much smoother when you go and do the
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pre-approval process six months early
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and again
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um depending on your lender your
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closing
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um time frame
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um and you're under contract time frame
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that can vary so you don't want to say
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well i want to move into a house in june
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and then you'll apply for it in may but
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you got to wait 60 days to get the keys
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like
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do it early that's all i'm saying
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so i hope this video was helpful if
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anyone has questions about the home
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buying process you know going under
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contract how to submit your bids how to
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negotiate i'm so happy to provide that
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information i personally
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was very blessed to have negotiated a
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deal where the sellers paid
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the closing costs
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um they actually paid around i think
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maybe seven thousand which saved me
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seven thousand dollars out of pocket
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that i would have potentially had to pay
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at closing
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a lot of people when they negotiate
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things like that they actually get a
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check at closing like the buyer like for
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me
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um if i was the buyer in one of these
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cases there would be a
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you know i'd meet with the attorney to
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fill out all the closing paperwork and
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then he would cut me a check at the end
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of it
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um for any like extra money that was
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left over a lot of people take that
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money and just remodel their house with
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it or they just
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make their first mortgage payment with
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it um but i'm happy to answer any
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questions that you all may have
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um happy house hunting happy credit
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building i'm totally here for that um
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for any questions that you guys may have
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on either of those processes
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um this is my first video since having
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my baby two weeks ago so i'm so happy to
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be talking to you all again
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and until the next time stay safe stay
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healthy
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and i will see you later
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bye
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