Lecture Notes: 100% Down Conventional Loan

Introduction

• Speaker: Shah Hill
• Topic: Mortgage program - 100% down conventional loan
• Audience: Potential first-time home buyers

Overview of 100% Down Conventional Loan

• Offered by many credit unions and smaller regional banks
• Allows for home purchase with no down payment
• No mortgage insurance required

Popularity and Availability

• Well-known at institutions like Navy Federal
• Local credit unions are likely to offer this program
• Banks may vary, but it's worth inquiring locally

Key Features

• 100% Financing: No need for a cash down payment
• No PMI (Private Mortgage Insurance)
• Interest Rates: Potentially higher than traditional conventional loans

Considerations

• Higher Closing Costs: Could incur more initial fees
• Suitability for Resales vs. New Constructions
  • Better with resale homes due to builder lender preferences in new constructions
• Seller's Market Influence: Sellers with significant equity might cover closing costs

Client Case Study

• Client secured a $400,000 home
• Seller covered closing costs after negotiation
• Even offered below list price in some cases
• Home had desirable features: backyard, two-car garage, five bedrooms, loft

Process Insights

• Start with a clear strategy and open communication with an agent
• Use seller’s equity potential to negotiate closing costs
• Length of Process: May take several months to find the right deal

Financial Requirements

• Savings Requirements: 3 months of mortgage payments in reserve
• Reserves can include a 401k or retirement account
• Example: $6,000 in reserves for a $2,000 monthly mortgage

Additional Benefits

• Potential refund of inspection fees (e.g., Navy Federal)
• Leftover funds can be used for home warranty or rate buy-down

Strategy for Success

• Engage in discussions upfront with real estate agents
• Be persistent and patient in negotiations
• Not all sellers will agree, but persistence can yield results

Conclusion

• Action Items: Research local credit unions and banks
• Next Steps: Engage with a real estate agent to explore opportunities
• Further Resources: First-time home buyer master class

Call to Action

• Comments and Engagement: Seek answers to questions and engage with the community
• Resources: Check video description for more educational content
• Community: Like and subscribe for updates on financial opportunities