Season 1 – Episode 03 | March 13, 2020
Guest: Becky Bessinger, Mortgage Banker at Ameris Bank
Anna Olcese 00:01
Welcome to Let’s talk real estate. I’m your host, Anna Olcese, serial entrepreneur, passionate marketer and partner at segway Group at Keller Williams Realty Gainesville. On the podcast you will find valuable information about all things real estate, plus some fun stories told by a variety of guests. So if you like what you hear, then subscribe and invite any friends who you think may get some value from listening. VA, FHA and USDA Oh my throw in conventional PMI, frm frm and interest rates, and any potential homebuyer is bound to be overwhelmed. That’s why we’re here to break down the various types of loans and terms you need to know so that you’ll have less stress as you begin the initial lending process. Hi, Becky, Becky Bessinger is here. She’s a mortgage banker with a Maris bank. And Becky is one of the best lenders that we work with. We’ve had the pleasure of working with her on many transactions, as have my partners. And so I thought she would be a great person to really just give us a lowdown very basic information on the different types of loans and just guide us through, you know what we need to know before we start the home buying process.
Becky Bessinger 01:21
Hi, Anna, I’m happy to help. Yeah, we do offer a wide variety of loans. And I know it can be very, can be used to say the least. But to start with, we offer loans anywhere from a VA loan, which Anna was going over the different programs, which is for veterans, and that’s 100% financing, just designed for veterans and then we have an FHA loan, which is a loan that is backed by the federal government with a three and a half percent downpayment. We also have a USDA loan, which is 100% financing in certain designated areas.
Anna Olcese 01:54
When you say designated areas such as it sounds like farm land,
Becky Bessinger 01:58
it’s not necessarily farm it’s actually designed just for single family homes, it could be on a you know, a small lot versus some acreage. So it’s actually in in areas that are considered underserved. So we also have, there’s a site you can go to that’s put on by USDA, where you can go and put in an address to see if that property is eligible. And it’s typically in your outer line areas areas on the outside of big cities. So in our community, Gainesville would not be considered a USDA eligible area right. However, properties that are on the outskirts of town.
Anna Olcese 02:35
I know that in Newberry we get a lot of USDA and probably a lot your high springs
Becky Bessinger 02:40
Newberry alachua high springs and even even properties closer into town. Where Turkey Creek subdivision that’s the right there off up of 441.
Anna Olcese 02:49
Anna Olcese 02:50
So that’s well, that’s great to know, because a lot of people probably equate USDA with rural properties, which is not necessarily the case. Isn’t that correct? Good to know, good to know. Is there some sort of like who can qualify for that other than getting something
Becky Bessinger 03:05
so this program is income restricted, so it’s all depending on family size and it is total household income. So we have to consider everybody’s income within the house whether they’re on the loan or not. Okay, so just to give you an idea, it’s 84,000 some odd dollars for the Gainesville area for to two people even a single person and then you can start increasing that as you have more family size.
Anna Olcese 03:29
Okay. Okay. So this is great. This might be a good program for a first time buyer for
Becky Bessinger 03:33
it is it’s it’s actually geared for first time homebuyers. You do not have to be a first time homebuyer but we do utilize the program a lot for first time homebuyers.
Anna Olcese 03:43
Okay, great. Great. I know that a lot of first time homebuyers use the FHA, can you you mentioned it earlier, what? What does that mean? what’s what’s an FHA? Yeah, and
Becky Bessinger 03:53
the FHA loan is a loan that is actually designed for first time homebuyers. Again, you don’t have to be a first time homebuyer but it’s a three and a half percent downpayment. It does have what we call mortgage insurance. So there are some mortgage insurance premiums associated with it. But it’s an easy loan for people that are just maybe just getting into buying a home and maybe don’t have a whole lot of money saved for downpayment so that that’s a great program to use, and it’s not income restricted or area restricted.
Anna Olcese 04:25
Okay. That’s wonderful. That’s wonderful. I know that there’s some other requirements with FHA. Do people have to live in the home
Becky Bessinger 04:31
that they’re they do it’s for primary residence only and as with the USDA loan, that is a primary residence as well.
Anna Olcese 04:39
Okay. So investors, for example, can’t use it. Now
Becky Bessinger 04:42
investors can only do like conventional type loans. Okay, perfect.
Anna Olcese 04:46
And for FHA, are you able to use it on a condo or townhouse
Becky Bessinger 04:52
so there are some condos that are approved for FHA but most of the condos in our area are not approved FHA. so we would have to you know offer them another another type product for that but there are a few condos that are available for fha financing and then there’s also what we call attached units that are playing unit development properties that kind of act like condominiums are but are not so those properties that are attached can be used for fha financing
Anna Olcese 05:23
fantastic all right before we get into conventional loans which are probably the most popular ones and people know most about let’s touch on va just for like the last word of those three that people may not know about so tell me just a teeny bit about va
Becky Bessinger 05:40
so va is also for our primary residence for veterans so it’s all 100% financing for someone that is served and they have to have a certain time that they have served active duty or there’s a chart that we use to determine whether they’re eligible and so that is 100% financing it’s not income restricted or anything like that but it’s a great product the interest rates are you know very competitive with that product and there’s no mortgage insurance so it really is a good program for veterans
Anna Olcese 06:12
that’s great is there a cap on how much somebody can purchase like what the purchase price of the home is for veterans not
Becky Bessinger 06:20
i mean there is a cap but we do go off of our jumbo area limits and then we can actually do jumbo loans for veterans so we can you know do loans up in the six $700,000 range depending on the veterans eligibility and at that point if it’s it’s too high there there’s a formula that we use that they’ve may have to put a little bit of a downpayment
Anna Olcese 06:43
oh okay okay wonderful and jumbo we’re going to touch i’m going to go back to the jumbo loan because somebody’s going to hear that and maybe not know what that is i know i didn’t know what that was many years ago when i first knew that i needed one whenever i was a younger person but still it’s definitely a good thing to know but let let’s go now into conventional i know there there’s the conventional but then there’s so many different percentages that you can put down and when i got me right oh
Becky Bessinger 07:09
so conventional loans is anything under 484 350 loan amount and for a conventional loan we can do as little as 3% down for a first time homebuyer and then we do like you can do 5% down 10% down 15% down or 20% down and once you reach a 20% down payment on a conventional loan there’s no mortgage insurance so they kind of fact the mortgage insurance factors or premiums are lower as you put more down
Anna Olcese 07:40
okay so then what is it because this is always actually as a realtor i actually have that question sometimes it’s a question why people are getting certain types of loans why would someone get an fha which is three and a half percent down versus a 3% down conventional when you still would have to pay mortgage insurance on either one
Becky Bessinger 07:58
right so your fha loan is a little more lenient if you will on what we call debt to income ratios credit score’s things like that so it’s a little easier for someone that is you know stretching it a bit to get an fha loan versus a conventional loan so we would look at that customers you know overall credit income debts and we would determine which program would fit their needs better based on interest rate and monthly payment whether it would make more sense to go with conventional versus an fha loan
Anna Olcese 08:35
okay okay well that makes perfect sense and for conventional are there restrictions as to whether or not you’re using this as your primary home
Becky Bessinger 08:43
so we have conventional loans that you can do with a second home okay so we can do a 10% down second home for someone that would be purchasing it as their kind of vacation home or home away from home or a primary residence or then we can do an investor where someone is just purchasing a home as an investment property at that point they would put more money down we could do a 15% down on a investment home interest rates are a little bit higher on those sure
Anna Olcese 09:13
yeah absolutely and my understanding is the lower the less you’re putting down the higher the interest rate would probably be
Becky Bessinger 09:22
on investor loans
Anna Olcese 09:23
yeah okay that would be perfect but not on not on right
Becky Bessinger 09:29
or second home
Anna Olcese 09:30
okay that’s good to know about the investor loans because so many people particularly in our area are buying condos and homes for their kids to live in while they’re in school would that be a good solution for them it’s like absolutely perfect perfect fit wonderful all right so the jumbo the prices of homes and gains are actually rising significantly and so we’re seeing probably more jumbo loans just
Becky Bessinger 09:58
anything over borrowing over 484, 350 is considered a jumbo loan what happens when you get into jumbo loans downpayment requirements interest rates things like that are affected a little bit by by what you can do we do at a maris offer jumbo loans up to 95% depending on the size of the loan so you look at the size of the loan whether it be $1,000,000, $750,000 but anything over a million we have to determine what kind of downpayment is needed and that kind of thing it’s um they’re not as as easy as far as low down payments and interest rates are a little bit higher when you get into a jumbo product
Anna Olcese 10:45
okay there’s one loan that everybody not everybody but a lot of people here ask me about because we have a huge medical community and they’re called doctor loans and what is that
Becky Bessinger 10:57
yes and we actually have a doctor loan which we call our medical professional loan okay our medical professional loan not only has doctors on the program but we can also do pa is licensed nurse practitioners we can do chiropractors veterinarians so we’ve added a variety of medical professionals to our product and it’s up to 100% financing with no mortgage insurance
Anna Olcese 11:22
Becky Bessinger 11:23
that’s a great
Anna Olcese 11:24
great program definitely devin and the fact that it’s more than just doctors is fantastic because yeah and there are many people in the medical field around
Becky Bessinger 11:35
well then just starting out too so if you come out of your residency and you know you’re just starting out you don’t have a lot saved it works perfectly to be able to go in and do you know 100% a medical professional loan and we do look first for that doctor a medical professional that’s just starting out so if they’ve been on the job for more than 10 years you would not qualify for that program so there are some you know some guidelines that we look at when qualifying for a medical professional line
Anna Olcese 12:02
okay see i learned something new i did not know it was the 10 year limit so that’s something to keep in mind when i’m advising is the reason that this medical professional loan is is a good thing i guess for for the lender is because they have guaranteed income sure well
Becky Bessinger 12:20
and i think too is ameris bank would like to establish relationships with medical professionals so we do you know we do want them to do have a banking relationship with us
Anna Olcese 12:31
absolutely which is a great area of the bank alton and i’ll talk about that one on another day but i definitely take i use that i love it okay so one one other type and then and then you can tell me what other types of missing but but a renovation loan a lot of those
Becky Bessinger 12:46
are we have a couple of different products that we use for that fha has a 203 k loan where we can do anything up to like $35,000 for renovations so you can get a contract to purchase a home and say you want to do so a new kitchen or new bathroom or you know you just have some things you want to upgrade you can get a contractor to bid those repairs and we add it to the purchase price of the house and then we do three and a half percent off of that for your downpayment okay so it’s a way that people can you know maybe find a home that they really love but they still need to do some some work to it so we do those and then we also have a conventional product it’s a homestyle renovation loan that we basically do the same thing you know just to add whatever repairs need to be done or you know renovations whether it’s just cosmetic we can add those things in and be able to do maximum financing
Anna Olcese 13:44
that’s great because there are so many as we keep expanding our metro area west west west and sometimes north a lot of people who want to live closer to the university or the hospitals and whatnot may want to renovate the homes are a little bit older and all that and then this gives them the opportunity to do that so that’s that’s fantastic absolutely okay so this is am i missing any loan type okay wonderful
Becky Bessinger 14:13
we do have a mirror stream product that is 100% that is income cap so it’s a you know it’s one of these programs that we can do 100% if the person makes a minimum income or the low to moderate income for our area so that’s one of the products we have and then i know you mentioned pmi and hey rm
Anna Olcese 14:41
all the initial like letters abcd yeah i don’t know
Becky Bessinger 14:45
they have your pmi which is private mortgage insurance and private mortgage insurance does not help the consumer the customer the borrower it helps the lender in case the default so the adjust the a rm is an adjustable rate mortgage gauge, which is a loan that is not fixed for the life of the loan. So it basically can adjust from year to year, depending on what adjustable rate mortgage you you chose. So, the other thing is the frm, which is a fixed rate mortgage. Right? That’s typically what people people go with.
Anna Olcese 15:18
Right? Right. Especially because they’ve been lower lately. And and everybody’s a little bit concerned about them going up. And so far, we’re good. So, you know, everybody that I work with, as a buyer nowadays is very happy about that. And we’re people don’t remember the 9% from way back when. So yeah,
Becky Bessinger 15:38
well, Ameris Bank also offers a portfolio loan, and that’s just where maybe the loan doesn’t fit in the box for some of the other products that we have, that we’re able to kind of make a loan that will work for somebody on our portfolio.
Anna Olcese 15:53
Okay. All right. So what are some tips that you would give somebody who’s buying a house? They come to you? And they say, Okay, well, so I want to get a house. So
Becky Bessinger 16:04
what what do you do? What first thing is to get pre qualified to determine how much you can afford? Or maybe what you’ve budgeted for when that payment would be, so that we can kind of guide you and in what price range to look in for a home?
Anna Olcese 16:18
And then I guess maybe you’ve given the options of what types of loans at that point, and then,
Becky Bessinger 16:23
and then go over what type of loan product works best for you. So we can give you a pre qualification letter so that you can
Anna Olcese 16:28
start shopping for a home. Exactly. And then when you find it, when that said, You’re like, Becky, I found it that’s under contract, I’m ready to get ready to go. So what is the once upon a time, that was a really lengthy process, right when they revisited it. So what are we looking at in terms of days,
Becky Bessinger 16:47
we do 15 business day close, as long as everybody does what they’re supposed to, we close from start to finish and 21 days. Wow. So basically, to qualify for a loan and to do the loan process, we collect documentation to support income and asset so we need to know you know, that your income, what your income is monthly, and what your assets are. So we can verify funds for closing. So we will ask for, you know, bank statements, W2 sometimes tax returns, just depending on your situation. And then or just your homeowners insurance, we’ll get an appraisal on the property and go to closing.
Anna Olcese 17:26
That’s fantastic. That’s it’s it sounds easy. And it really is pretty easy. It’s just that everybody kind of you know, can get scared, you know about the process, because it seems pretty daunting. But when you have people really guiding you through the whole process. And I know you are very good about guiding people holding hands and answering a lot of questions. But as buyers, we and I put myself in because I’ve been a buyer. And we have to have our ducks in a row before we go speak with lenders so and make sure that we were prepared our end, so we can make the process as smooth as possible for everybody.
Becky Bessinger 18:04
So and that’s our goal, to make sure everything is smooth and stress free as possible.
Anna Olcese 18:09
Exactly. Yeah, same here. Well, well, Becky, you have been incredibly helpful, as you always are. So thank you for explaining everything. And and we can dig deep into any of these. If anybody ever wants to ask questions about it or about any of these. I’m, you know, we’re happy to either direct them to you or you can come back I would love to have you back and we can go further into all of these. So sounds great. Yeah, great. Well, you’re well, thank you. Thanks so much for listening today. If you like what you hear and want to learn more about real estate and hear the occasional funny story, then hit that subscribe button right now. And if you know of someone who’d benefit from listening, then tell them to subscribe to or else they may feel a little left out. For questions, topic suggestions or nice comments. Send an email to Anna at segwayre.com. We can also connect on Facebook at SegwayRE. Thanks for listening as we bring you a new way of doing real estate.