what's going on guys this is Chandler Smith and today I'm gonna help you to find the perfect home loans for you and your family and I know there are tons of options out there from FHA to VA to conventional to unconventional and the list goes on and on and the reality is the goal of the bank is to push you into a loan to where they can make the most money and so the goal of this video is to help you find the perfect loan without getting taken advantage of so with that being said let's jump into it alright now to get started my brother just got his offer accepted last month on his dream home and so right away he called me and said Chandler what do I need to do to find the right loan for us and what all is going to be involved how do I go through the process what am I looking for what loan is good what loan is bad and so he was consistently calling me with a bunch of questions that let's be honest even the bank that you're working with when getting your loan doesn't always help with all of these answers now the reason that my brother reached out to me is because I do this every single day as a matter of fact I owned over a hundred doors of rental real estate I've done dozens of loans research all of the different loan packages and rates and terms and everything under the Sun when it comes to getting loans and so my goal on this video is to give you everything that you need to make sure that you get the right loan for you and for your family all that I ask you to do is make sure you smash that like button and subscribe to the channel and I promise you this video is going to guarantee that you get into the right loan also once you watch this video and figure out what loan is perfect for you make sure to go check out this video because this video is going to show you everything you need to know to be able to get approved for a home loan and that's very important because if you find the right loan package but you can't get approved that's going to be a major bummer I'm going to explain all of the different loan options and what you need to do to be able to apply for each of them and then at the end of this video I'm going to show you how you negotiate terms rates and help you understand eggs actually what you need to look for so that you get a perfect loan and you don't end up getting taken advantage of now I'm guessing most people have heard of conventional and unconventional loans and I'm an explain both of those however there are three real options there's conventional there's unconventional and then there are subprime mortgages now I want to start with subprime mortgages because these are what you want to make sure that you avoid these were created to help people to get into a home when they were not in a financial state to be able to get into a home this is for people who have just gone through a divorce or have had major money issues and yet they're receiving help to purchase a home I don't know your situation if you're in a situation where you have a ton of cash and you still want to get a mortgage to keep that cash free maybe a subprime mortgage would be right for you however the reason I tell everyone to steer clear of these is they're gonna have terrible terms extremely high interest rates and they're a situation that I just don't even want to get involved in so I'm not going to talk about those because if you're having to get into those you're probably in a place where you shouldn't be purchasing a home so now let's focus in on conventional and unconventional now conventional loans are loans that you get through a bank and they are backed by the bank unconventional loans are backed by the government now what this gives the government the ability to do is to give more people loans that maybe can't afford them however if you know what you're doing using an unconventional loan can give you the ability to get an extremely low downpayment and take advantage of a couple other great options and so I'm not telling you not to go the unconventional route however I am telling you that overall the unconventional route does have more risk if you're not financially responsible so you want to make sure so you want to make sure what an unconventional loan entails so that you don't dig yourself into a hole that you can't get out of don't get discouraged just because you're going the unconventional loan route doesn't mean you're an idiot as a matter of fact that is the route I've pushed my brother to use because it gave him the ability to put a substantially lower down payment down so that he could keep his money liquid so that he could have money in the bank for his business and to make sure that he's got reserves if for some reason his business has struggles rather than locking more money up into the loan so there are lots of advantages to using unconventional and I'm going to talk about those as I go through all of the different unconventional loan options now the first one I want to start with is probably the most popular now I should probably check my stats on that but this one is used a ton especially by first-time homebuyers and that is an FHA loan now an FHA loan is awesome because it gives you the ability to go as low as three and a half percent down on a property as long as you were living in that property on top of that you can get a 30 year fixed alone and still have extremely competitive rates so you're in a situation where you could buy your dream home with only three and a half percent down you've got pretty low interest rates especially right now and it's a great set up for you now I know a lot of you are saying if it's such a great option what are the negatives you are pretty heavily leveraged so you're paying a ton in interest so if you look at big picture at the end of the day the less that you put down the more interest you're going to pay over however long your loan is now a lot of people would say all of that sucks you're paying more interest well it doesn't really suck because a lot of times you can get in a place where you don't need nearly as much money up front and it doesn't affect your monthly payment that drastically will you be paying an extra who knows how many thousands of dollars worth extra in interest yes but if you can get in a situation where you're keeping an extra 15 20 thousand dollars in the bank or heck even 40 or 50 thousand dollars in the bank and it's only going to increase your payment by a couple hundred dollars maybe it's worth it to be able to get into the home that fits your family if you know you can make those monthly payments the other downside to an FHA loan is what they call em IP so essentially it's insurance that you're paying to the every single month on top of your mortgage payments so when you're looking at your monthly payment you need to make sure that you know what the final numbers going to be with your mortgage which is your principal your interest and then adding in your MIP and with MIP it is a bummer because with other loans where you have PMI you get to a point where you no longer have to pay that insurance because you have so much down however with this you have to pay that MIP for the entirety of the loan now I know a lot of people are saying well Chandler isn't worth it to go the FHA route 100% if it works for you as long as you can make the monthly payments and you've been renting I think it's an awesome option as long as you don't overspend and put yourself in a situation where you can't afford that mortgage if you can't afford that mortgage you're now getting principal pay down every single month that's money that's getting locked away into that property that you can take out when you refinance or sell the property on top of that you're getting appreciation and remember appreciation is on the entirety of the building so if you bought a hundred thousand dollar building and you only put thirty five hundred dollars down in an FHA loan and you're making monthly payments remember that that one hundred thousand dollar property should be going up anywhere between three and five thousand dollars every single year so you've got principal pay down and a property that's going up in value and if you can make that monthly mortgage and it's not any more than what you would have been paying renting why not jump into it and usually in a scenario like this if you've been renting a nice place it's actually going to cost you less every single month and you're still going to get all of those advantages so an FHA loan is awesome now the next one is a VA loan and this is for people who have served in the military now that's not me so I don't usually talk about VA loans however they are probably the best loan package ever and here's why they give you the ability to literally put nothing down on your home so you need almost nothing as a downpayment now you'll still have fees to be able to do the loan except having nothing as a down payment can be a huge advantage if you're tight on money but you know you're gonna have money and be in a good situation it's also a great advantage if you're buying like a duplex or a four-plex and you want to live in a portion and rent out other portions so that with no money you can literally be making money and have a free place to live so I love VA loans on top of that they don't have any kind of mortgage insurance and so if you're gonna compare the out loan to any other loan I don't think it can be beat especially because I've seen those come in with extremely low interest rates so va loan definitely approved by Chandler another great option the next loan is a USDA or rhs loan now these are loans that I would tell you to stay away for therefore people out in rural areas however they've got a lot of caches to the loan now you can get into a house with almost nothing down however you are gonna have crazy mortgage insurance you're gonna have prepayment penalties so that if you ever want to refinance you've got to pay these penalties you've got all kinds of different junk that's involved with these loans and so the terms just kind of suck other than the fact that you don't require any money to get into them so if you're in a scenario again where it makes sense and you can make the mortgage and you understand all of the penalties and fees and everything else involved with these then maybe they'll work for you however it's something that I personally probably wouldn't mess around with now I'm sure there are other unconventional loans however those are the main ones that most people use and as you can see I think a lot of those loan options could be incredible for you you just want to make sure that you find the right one and later in this video I'm gonna show you how to decide if the rates and terms and everything else are a good fit for you so you don't get taken advantage of by the bank all right now we're gonna jump into conventional loans and remember conventional loans are backed by the bank and so they are purely a bank loan however within the conventional loan niche there are conforming loans and non conforming loans non-conforming loans are like jumbo loans they're on bigger purchase price items and they don't conform to the requirements made by Fannie Mae and Freddie Mac and so conforming loans are going to give you better interest rates and usually better terms and the option to put a lower down payment on and honestly most people don't even know the difference of these because anytime you're going in for a normal home that isn't like this mansion it's going to be a conforming loan which is going to give you awesome interest rates conventional loans are awesome and they give you the ability to go as low as only 5% down when purchasing a home that you're going to live in the only thing you need to keep in mind is you will have to pay private mortgage insurance or PMI which is what we talked about earlier the difference with private mortgage insurance compared to MIP like you had on an FHA loan is once you get to a certain point so once you've gotten 20% down in the home you no longer have to pay that mortgage insurance so at some point you won't have that bill anymore the other thing that's really cool about these loans is interest rates are extremely competitive so you should be able to get a very low interest rate now after this conventional loans just like any other loan get to a point where the rates and terms and everything else can be all kinds of crazy I mean you can change your down payment they can change the interest rates they can change whether it's fixed for five years or thirty years or five years and then it changes every year or five years and it changes every five years those are called armed loans and an armed loan is cool because it gives you a lower interest rate and a lot of times you can work a lower down and a lower interest rate however after five years then your interest rate can change and so if interest rates go way up you can get totally screwed on an arm loan now a lot of you are saying well Chandler is it ever a good option to use an arm loan yes it can be a great option if you're only planning on using that loan for five years and then refinancing or if you're very confident the interest rates aren't going to go up which I've never met anyone that is a hundred percent confident in that however if you know something that we don't know again it could be a great option for you I talk very negatively about these arm mortgages however I buy commercial property and that sometimes is the only and so I actually own property right now that is on an arm so it's not something to lose sleep over if that's the only option that works for you and you understand the risks alright so we've covered all of the loans but now we need to get into the nitty-gritty and that is the combination of all of these different options put together and how they affect your end result of what loan you have and what I mean by that is you've got interest rates that are gonna be different you've got down payment that's going to be different you've got the length of your term whether it's a 15 a 30 or a 50 year loan you've got fees on the up front you've got loans that can change rates as time goes on and what's interesting is every time you get something added that looks advantageous it's usually affecting one of these other things and so you need to know exactly what you want for a loan and figure out what you have to use for instance if you've got a lot of money to put as a down payment it will save you money to put more down however if putting more down puts you in a tricky situation it's not worth it if that leaves you cash poor and you still got a loan even if you've got lower interest rates who cares if you don't have any money in reserves and you end up getting screwed and so I'm going to show you how to analyze all of these different terms and everything else so that you can put yourself in a place where you know exactly the kind of loan and the terms that you need so that you're set up so the first thing you need to understand is if it provides you the best interest rate ever that doesn't always mean it's the right loan for you the same way if it provides the lowest down payment for you it's not the best loan because any time you're doing a lower down payment you're going to have a higher interest rate however anytime you do a bigger down payment you're gonna have a lower interest rate anytime you have a shorter term for instance if you go from a 30-year term down to a 15-year term your interest rate is going to go down and a lot of times even your fees will go down the same with one of these arm loans if you do an arm loan where your rate changes after five years you're going to be able to walk in a crazy low rate in comparison to a 30-year fixed however keep in mind after five years then that rate is going to increase as a matter of fact sometimes they'll put in the terms that regardless of where the prime interest rate is your interest rate has to go up and it cannot go down and so you've got to take that into consideration when you're looking at these loans because everything has an impact on other factors now before you ever lock in a loan these are the things you need to make sure that you get from your loan officer so you know exactly what you're signing up for first off you want to know what the interest rates are second off you want to know what your down payment is so how much down you need third you want to know what the terms are as far as how long the loan is whether it's five years fifteen years thirty years fifty years how long is your rate fixed and then what happens after it's no longer fixed is at the end of the term or is it an interest rate that can change then you want to know if you're going to have any kind of PMI or personal mortgage insurance whether that's MIP PMI whatever it is you want to see if there's any other monthly fee that you're going to get hit with as insurance on that loan you also want to make sure that there aren't any other crazy fees on your closing costs so pin down exactly what your closing costs are going to be on top of your down payment finally you want to make sure that there aren't any prepayment penalties and you understand what your freedoms will be when it comes to refinance and what you can do is when you're comparing loans you can get the details on all of these things so you can compare a 15-year to a 30-year you can compare one of the arm loans to a 30-year you can compare a lower down payment to a higher down payment and this is what your loan officer is getting paid to do so get all of them in front of you and figure out what's gonna work best for your family now here was my advice to my brother when he was deciding what to do I told him look are you planning and staying in the home for longer than five years if you are and you know you're gonna be staying in the home for a long period of time then you probably shouldn't do one of the armed loans so with the term you need to figure out what's going to be best for you depending on how long you're staying in the home now if you talk to a Dave Ramsey he's always going to say do the shortest term possible on a fixed-rate you people that are calling me out I really strongly disagree with this because I'm a big believer of keeping reserves I think you should always keep enough reserves to where if crap hit the fan you could pay your mortgage and all of your living expenses for at least six months so use this as a requirement to figure out which loan works best for you because you don't want to put a ton down to try and get ahead if you don't have reserves so make sure you're keeping a good amount of reserves and then just play around with it in my personal opinion the best loan is going to be a 30-year fixed loan the reason I love this is you can lock in a super low interest rate you can know that that term is fixed and you're in a situation where you know exactly what your payment is going to be every single month now if you have the money for a bigger down payment send it however my one argument would be if you've got a ton of money and you've got enough for 20% down on your home why not put a lower down payment on your home and then use that extra money you would have put in a down payment in an investment property and this is a little bit of a higher-level technique but just think about it this way if you're in a place where you're only paying three and a half percent interest and then PMI so essentially it looks like maybe a four or a four and a half percent interest rate that you're saving paying that interest rate by having that money in your home if you can make a ten percent interest rate somewhere else why not pull that money out and use it to make ten percent now you might be paying four or even five percent over here but you're making that five percent back to pay it off and you're making an additional five percent so you've got to sit back and look at your scenario the biggest piece of advice I can give you is I always believe it's better to own than to rent because you're going to get principal pay down you're going to get appreciation on that property and you're gonna have something that is yours something you can live in that you can raise your family and now I really hope this video is going to help you to find the perfect loan for you and your family if you enjoyed it please push the like button subscribe to the channel and again if you want to learn how to get approved for a home loan go down in the description and push the link on that video and it will help you learn everything that you need to know to make sure you not only get approved but then by using this video you pick the right loan so you can get into your perfect home now with all of that being said again push the like button subscribe to the channel and I'll look forward to seeing you in my future videos where my goal is to help you make smart financial decisions and build a huge passive income thanks so much guys have a great day [Music]