FHA and Home Mortgage Loans
Raoul: Everyone, this is Raoul Amescua with The Hanover Group at Keller Williams Realty here in Rancho Cucamonga, California. And today, we have the fortunate opportunity to interview Seth Anapolsky from Full Circle Home Loans. Seth, why don’t you take a moment and introduce yourself.
Seth: Thank you very much Raoul. I’m very excited to be here. Again, my name is Seth Anapolsky. I’m the owner of Full Circle Home Loans. We’re a mortgage brokerage, and I’m excited to answer some questions today.
Raoul: Seth, let’s ask one of those biggest questions that’s out there the public is always asking. What’s the advantage of working with the broker like yourself as opposed with that large institutional or direct lender?
Seth: That’s a great question and I think that they all have their advantages. Big institutions, direct lenders claim they can do a lot of things than brokerage company. In reality, they’re very much the same and the biggest component is brokers have the most flexibility with their clients. And what that means is if you have a client that has a particular scenario and only one option is available for one institution where broker has hundreds of institutions to choose from and that’s the huge advantage. It’s giving the flexibility to the client for multiple loan programs. In addition to that, interest rates are better at various banks, and we have the option as brokers to shop that around and pick the best institution or lender for you, the client; so that’s why I like the broker model, and I think it’s better.
Raoul: So, what you’re saying is like a lot of times if you’re an institutional lender like a bank or a big lending organization, it’s kind of like they want to try to stuff everybody in the one size fits all; where you’re more of a custom tailor kind of figuring out the best programs, best rates for the client.
Seth: I really like how you said that and I think that in my opinion, that is true; but, there are some great direct lenders that I’ve also aside from colleagues at work that are awesome and they have a little bit more flexibility; but, I don’t think anything compares to the broker model and I think that that’s true. We don’t treat clients as just a number fitting in a box; we treat them as the personality and what they want specific for their needs. I think that’s the key.
Raoul: That’s great. Thank you. Seth, the next big question that we face as professionals, us in the real estate side, you as in the mortgage side…
Raoul: People start looking for homes, when they’ve made that mental decision…
Raoul: Whether they’re an individual or a family or a couple, they get very fired up, they get very excited, right?
Seth: Oh, yeah.
Raoul: So, in your professional opinion, when someone has made that decision and start home shopping, what are the first things they should do?
Seth: Yeah, I mean, buying a home is probably one of the most exciting events in anyone’s lives and it’s an awesome experience in where, us, brokers as realtors, we’re very excited to be a part of that transaction. They key, number one, no matter what, is getting approved. Even if you decided to go with the direct lender or institutional lender as opposed to a broker, you need to get approved for various reasons. But most importantly, you need to make sure you can qualify for the home you want, and you need to know what is the actual monthly payment for the homes you are looking at before just looking at a home and fallen in love with it, and then realizing, “Oh, wow, that’s a really high tax rate. That’s a much higher payment that I would prefer.” You need to know that beforehand, before you get in the car and really start getting super emotionally attached to those properties. That’s what I highly recommend, and a lot of high caliber realtors will not show you properties until you are approved anyways. So I recommend getting approved from any reputable lenders.
Raoul: Seth, another question that constantly comes up being in real estate especially when in the business of selling homes, people often have this misconception or disbelief that they have to put 20% down. Can you tell everybody in the audience is that true or not true?
Seth: Yeah, I’m shocked how many times I hear from prospective clients, “Oh, I want to buy a home but I don’t have 20% down.” And that’s just not the case. It’s great if you have 20% down but with prices increasing, that’s very difficult. So, you can go as little as zero percent down if you’re better in VA loans at zero percent down. There’s USDA loans that if they’re in the right designated mapping areas, those are zero percent down as well; FHAs, 3.5% down. There’s conventional loan programs with 3% down, 5% down. There’s even down payment assistance if you quality if you meet that criteria. So, there’s tons of programs. You do not have to go 20% down. If you go less than 20% down, typically there’s PMI mortgage insurance; but, it’s actually not that bad and if you have a professional explain to you the differences, you can potentially buy it out as well as an option.
Raoul: Seth, obviously, we know home prices have been rising quite a bit since the 2010, 11 and 12 era, and right now, I’ve been talking to a lot especially younger people that are shortly at a college or graduate school and some of them are being pretty savvy moving away from single family homes and looking in actually buying a tri-flex or a four-flex and using FHA. Now, can you share that with us, a little bit insight on how someone can do that?
Seth: Yeah. FHA is fantastic loan. I actually have, one of my properties is an FHA loan. I highly recommend it. Amazing interest rates and the flexibility is just unmatched in my opinion and you can buy a one-unit single family residence, condo to even a four-unit property with FHA, which is pretty amazing, which is as little as 3.5% down. So, I would highly recommend it if you can qualify to export that idea.
Raoul: So, in LA, North County, I believe the FHA loan, the one we’re talking about earlier is like 1.25 million on the four-unit in that counting. So that means with approximately $40,000 down, somebody could buy an income-producing property and have probably at a minimum mortgage payment at the end of the month, right?
Seth: I think that’s very possible. You want to sit down with your professional to go through the math and make sure a pencil is out if he wants to be more of an investment but the intense of FHA is minimum down to help to occupy the property, but also you can get a great investment at the same time with minimum down.
Raoul: Awesome, and Seth, let’s talk about the other rule: a big part of mortgage lending is having the right credit scores, having a good credit history. And, a lot of times, it’s not uncommon and people shouldn’t be ashamed that their credit just doesn’t meet the minimum criteria to get an FHA loan or conventional one, whatever they’re pursuing. What can you talk about how people can, how important it is people to meet with you, sit down with you, so you can review their credit and then, give them the proper instruction on how to get their credit better?
Seth: It’s great question because credit is one of the three major components of buying a home. Down payment is the other one, and debt check is the third one. But credit is probably the most common one and everyone pre-credit report or whatever credit card people are using. I think their score is one thing but the reality when we do a mortgage tri-merge, FICO report which is the most detailed report and a lot of the times it’s lower. And, unfortunately, a lot of clients and customers are very disappointed to learn that their score was a lot lower and that can effect what kind of loan programs. So, what we do in our company and a lot of the professionals out there that understand credit due is they’ll just analyze the whole credit report. Now, we’re not a credit report company but I understand it very well. I’ve taken credit report courses and some of the things you can do is a simple collection you may have had when you’re in college, maybe it was a medical bill that you overlooked and moved away and you didn’t even know you had it, it’s $50 subsided all the time and you can usually call and negotiate that to be completely deleted and that could raise the score substantially. The other thing you could do is you want to keep your credit card balances ideally 25% or less than the high limit. So for example, if you have a $1,000 limit, you want to keep that to $250 or less and you want to be actively using the card. That’s how you build the credit. So, these little tricks I got, they’re not even difficult, we personally look at every client’s folder or their portfolio of credit and we try to do what we can to improve it to give them more options.
Raoul: So, it sounds like what you’re saying, Seth, is that people no matter what, if they’re thinking about buying a home whether they want to buy it today, or they want to buy six months from now, or 12 months from now, it’s better to have them sit down with professional like yourself, run their credit, so you can analyze it and tell them, yes, you will be ready to buy it now on a 6 to 12 months or no, you’re actually not ready to buy, these are the things that you need to do to get prepared to buy.
Seth: That cannot stress that point any more than how you just said it. That’s amazing, very well-said and that’s exactly what I recommend to every client, and that is no matter when your timeline of buying a home is, it could be tomorrow, it could be year, you need to obviously, if it’s more, to get it approved, but if it’s a year from now and you wanted to get started because there could be things preventing you, and when that year passes, you have no idea that you have this credit issue and you didn’t know that you shouldn’t charge up a new TV or something right before you’re going to buy a home. It’s very important to get a full review of your entire file, from your income, to your assets, to your down payment, co-signers possibly, credit review, everything possible before you even get in the car to look at a home. And no matter your timeline, I’d recommend you to do that and get started.
Raoul: Yeah. It surprises me so much how many people don’t heed that advice. They don’t get in front of the mortgage lender and review their credit report to see what their abilities are or aren’t right away. And it costs them nothing.
Seth: Yeah, exactly, most brokerages are free of charge to do an initial analysis, and as my company is, we do not charge for any type of review and you got a free copy of your credit report and I wish you can review that and hopefully it’s where you wanted to be.
Raoul: Seth, I want to share this point with the audience, actually, you’re in a unique situation because you are the broker and the owner of Full Circle Home Loans, and I know when I’ve interacted with your clients, they all really feel that they had like a special connection to the whole process and to you as well.
Seth: Thank you.
Raoul: And I really want you to talk about the advantages of working with a broker-owner as opposed to maybe working with a loan officer, not to say there’s anything wrong with that, but working with a loan officer maybe at a bigger institution or smaller institution versus owner that’s the actual stakeholder in the company.
Seth: Yeah, it’s a great question, and I’ve worked with and interacted with and have colleagues that are loan officers that are fantastic, highly ethical, great individual, super knowledgeable professionals, so there’s nothing wrong with working with a loan officer; but, I do think there’s an advantage to work with an owner and broker for couple reasons: number one, we care about our clients being super happy and satisfied. As a loan officer, if you just work for a company, it may just be a passing point for you, it may not be something that you really passionately care about, but as an owner, this is what I care about. This is what most owners, they want the client to be nothing but happy. So, I do everything I can in my power to make sure the client is completely happy, satisfied, and is going to recommend to their friends and family. The other thing that is really cool is as the owner, I don’t need to ask my manager if I can beat this interest rate or anything such as that that I can really show a benefit to the client. So, when it’s presented to me that there’s a quote, I beat it, and that’s what I do very well; and I think as an owner, it’s a really huge opportunity for me, and that could be an advantage.
Raoul: So, what really sounds like is the advantage with working with clients working with you is that: one, they get great service because your business is built on that or else, you won’t be in business, right?
Seth: I hope so.
Raoul: Alright, and then the other thing, it seems like you’re very nimble, meaning that you can get to a quick response without delays red tape and saying, “You know what guys, after further review and analysis to be competitive, this is the best I can do and that’s right there in black and white for the client.”
Seth: Yes, as a broker, we don’t fully, we cannot definitely say we’re going to lend you the money because that’s what brokers do not do. Brokers approve the package and then have to submit and an underwriter would be the final decision-maker. But at the end of the day, a typical loan officer may not have the experience or the knowledge to know if that’s a file that’s going to need an exception or not; and as the owner, I don’t ask anyone but the underwriter, so I think that’s a huge advantage.
Raoul: Got you. So, it’s really cutting a lot of people out of the process. It’s really the client, you, the lender’s underwriter, and together you create that synergy to get them the result in you.
Raoul: For the client. That’s perfect. Well, Seth, why won’t you tell the audience out here, how they can get in touch with you if they want to buy a home or refinance a home and then look at buying some investment property.
Seth: Yeah. I’m available 24/7, you can call me, you can text me at 951-538-6093. You can email me at email@example.com and my website is www.fchomeloans.com. We’re on Yelp. We’re on Facebook. Check out our reviews. I’d be more than happy to help you in the future.
Raoul: And you do loans all up and down the state of California. Is that correct?
Seth: Yes, that’s a licensed mortgage originator. We’re licensed in the state of California. So I’ve done transactions in the Bay area and I’ve done them all over Southern California and Central California, wherever you need assistance, I can be available to you.
Raoul: That sounds great. So, thank you so much for joining us today, and I know our audience is going to really get a lot out after hearing this Q&A that we had today.
Seth: Thank you very much. I really appreciate the opportunity to speak to you all.
Full Circle Home Loans
99 C St, Upland, CA 91786
Full Circle Home Loans is setting a new standard of quality in the mortgage industry. Whether you are looking to purchase a home or refinance the home you already own, our goal is to provide you with valuable information and sound advice. We believe that education is the key element in choosing the right mortgage. Inside our website you will learn more about our process and find answers to the most common questions surrounding real estate finance.
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