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CalHFA [Home Loans] FHA {CalHFA Loan} Zero Down Loan (No Down Payment) - YouTube
Channel: Fire Your Landlord
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Hey, This is Chris Trapani the Mortgage Pro.
You know, people ask me all the time, whether
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they are realtors or the consumer, they ask
me all about a CalHFA loan. Zero Down payment.
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Do those programs really work, do they exist?
Absolutely! And today I'm going to teach you
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about the Good, The Bad &the ugly.!
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Alright, a lot of people want to buy a house,
but they don't want to put a down payment
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or maybe they just don't have the down payment.
The CalHFA program is going to lend you, they're
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not giving you, they are lending you the money
for a down payment.
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Now as an example, on a $300,000 purchase
on an FHA loan you would need a $10,500 Down
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Payment. What happens is, we have a program
tied to CalHFA called my home. And My Home
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is actually going to give you a loan for $10,500
for the entire Down Payment. Fantastic right!
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Now that loan is called a silent second mortgage.
You do not make monthly payments on that mortgage
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at all. Eventually, you have to pay this money
back. There are three reasons that are triggering
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events that would require you to pay this
off. What are they? Number 1 - you Sell the
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home. Obviously, if you sell the home all
liens have to be paid off this is a lien on
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the house. Option number 2 is if you pay the
house off in 30 years or even if you pay it
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off early it does become due and payable at
that time. You'd have to pay it off or refinance
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or something to pay it off. Option number
3 - you Refinance hey a couple of years up
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the road you have some equity in the house
and you decide, hey I want to lower the rate
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or want to take some cash out or whatever
triggering event that requires you to do a
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refinance what happens is it will become due
and payable then. if you have enough equity
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you can just roll it into the payment.I'm
doing that for somebody right now. It's really
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simple. OK! So now we have closing costs.
Closing costs are required on all loans. People
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don't understand, but there are 25 to 30 people
that work on every single loan. We have escrow
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and we have title and we have processors and
we have underwriters and we have assistants
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and we have appraisers and ther are so many
people that get involved in every transaction.
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Well those people don't work for free just
like you or I don't so we have to come up
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with the fees. Now on you average loan you
are looking at on a $300,000 loan, you're
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probably looking at about $8,000 this loan
is more expensive as far as points because
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without charging points on this particular
loan there's no way the company would get
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paid and everybody would lose money nobody
would smile except of course you. Unfortunately,
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we can't do that. So we have a third mortgage.
It's called a Zip program. Now CalHFA offers
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a ZIP Program and what happens is they offer
a ZIP Plus 2 or a ZIP Plus 3 now a ZIP Plus
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2 gives you 2% which is enough to pay the
points on the loan but we still have the other
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$8,000 Zip Plus 3 would Offer the 2 Percent
for the points and 1% for the closing costs,
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but we're still short about $5,000 roughly
on a $300,000 purchase.
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Now, where is that money going to come from?
Well, that's always negotiable. Number 1 - You
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as the consumer maybe you have the money,
maybe you have it in a 401k, maybe Grandma
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can gift it to you, maybe your cousin Charlie
borrowed money 10 years ago from you and he's
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ready to pay you back or the Realtor that
we work with, maybe they can go back to the
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seller and ask the seller to pay $5,000 or
$8,000 in closing costs. This is very very
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common. Now it is more difficult in today's
market. Today's Real Estate Market is very
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aggressive. There's a lot of great things
happening but for every house in that $300,000
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market, there are probably going to be 5 to
10 offers, so all the sellers - they just
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want the most money just like if you were
selling your house. Sometimes they're willing
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to pay closing costs, sometimes they're saying
"Hey, I'm not paying closing costs I want
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to maximize what I get. It's all a negotiation.
It takes time and that's one of the reasons
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a super professional realtor who knows what
they're doing with great experience can help
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you buy that house. Now, we're talking ZERO
Money Down! You're talking about paying for
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an appraisal which sometimes if we have enough
closing costs money can even be reimbursed
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to you, but all of these things have to get
paid. That is a third mortgage the Zip Plus
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2 or ZIP Plus 3 - it is also a silent mortgage.
You don't make the payment until you sell
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the house, refinance the house or pay the
house off - the same as the silent second.
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So it's a great program for those people who
don't have any money! Now how do you qualify
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for the CalHFA program? Well, first of all,
you must have a 660 FICO score, it used to
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be 640, but recently CalHFA, that's a government
agency program, CalHFA basically raised it
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to 660 so if you don't have a 660 FICOscore,
hey you can reach out to us a lot of times
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there are things we can do there are tricks
to the trade, I've been doing this for 29
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years we know what to do to raise your score
and sometimes it takes a month and sometimes
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it takes 6 months it all depends on what's
there. So, don't let that get in the way.
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We'll work on it till we get you there! Also,
number 2 there is a maximum income to qualify
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for CalHFA. That in San Bernardino and Riverside
County is $138,700 a year. So if husband and
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wife are both on the loan well their income
cannot be above that amount. The third thing
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you need to do is you must take a first-time
homebuyer class. You must Number 1 - prove
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that you are a first-time homebuyer. And that
really means you haven't owned a home in the
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last 3 years. If you owned a home 10 years
ago, that's OK. You're still a first-time
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homebuyer if you haven't owned in the last
3 years. And you must take a class it's a
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very simple lass you can take it online but
you do learn some wonderful tools and wonderful
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things to get ahead.
So, let's recap a little bit. Number 1 - the
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great thing things - No Money Down - We can
also cover some of the closing costs - that's
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a great thing! That's the good - Now there's
the bad. The bad is the interest rate could
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be a little higher or will be a little higher
than a standard program. So if somebody says
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to me, "Hey Chris - I have the down payment,
or Grandma is going to gift it to me or I
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can take it out of the 401k, I encourage you
to do it that way - Why? 1 you're going to
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get a lower interest rate. 2 you're not borrowing
the money you're just paying it and it's done,
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3 the qualifications are different. As an
example - on a standard FHA loan for most
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people we can go up to a 57% debt ratio. That
means take the house payment add the card
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payment add the credit cards the monthly payments
- the minimums - I'm sure you pay extra, but
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we use the minimum payment which helps you
qualify, any student loans any installment
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debts, child support, alimony let's add them
all together on a standard FHA we have to
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make sure that's not over 57% to get the approval.
On a CalHFA loan, you are limited to a 45%
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debt ratio, so you have to be in a little
bit better financial shape because remember,
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you're putting no money down no skin in the
game. Now there's always people who reach
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out to me when I make these videos who say
"People shouldn't buy homes if they don't
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have 20% to put down" Well you know what,
that's nice for you, but it's not nice for
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the little guy who wants to buy a house. Let
me teach you a couple of things about buying
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a home, do you know if you have children,
the children of homeowners score higher in
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school in math and in English than children
of renters! I don't know why - this is done
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you can google this it's a study - it was
also proven that they are 50% more likely
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to graduate from High School and 130% more
likely to graduate from college!
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The reason we buy houses is not just financial,
but we want to give our kids every opportunity
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and every advantage! That's another reason
to buy a home. Look these programs are there
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for you! You can have $138,000 income which
is a lot of money and you can still buy a
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house with no money down. If you have the
money, I'm still going to recommend you put
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the down payment. Ok So my attitude is, you
have everything you need, as long as you have
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reasonable credit you have the income you
don't even have to have the down payment,
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what are you still renting for? Don't you
realize that rent goes up every year? But
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the house payment stays the same. And people
say but Chris, it's higher. Well yeah, sometimes
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it's higher initially. But let me ask you
a question, Are you going to get a raise next
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year? Maybe you're going to get a dollar an
hour raise, maybe your wife is going to get
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a dollar an hour raise - a year from now,
do you realize that a year from now you'll
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be making an extra $346 a month? So sometimes
we need to suck it up for a little bit of
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time. When I was a little kid, I remember
my Dad saying, $272 a month! How am I going
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to make these house payments? You know he
only made about $7,000 a year in 1969. But
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what happens is over time you get a little
raise you get a little raise you get a little
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raise I bet you if you stopped eating out,
look at your bank statement go through all
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the ATM charges for eating out eating at a
restaurant eating at McDonalds eating at Applebees,
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go through and say how many times did I go
to Starbucks, leave your ATM card at home,
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every time you walk into a store say do I
want my own house or do I want those shoes
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or do I want my own house or do I want that
book If you start to think like that you are
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going to become a homeowner together we can
do it we are going to Fire Your Landlord!
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go to www.FireYourLandlord.info click on the
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5 minutes and together we're going to Fire
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