How to get Financing for Buying a Home

Video Transcript

"Okay so we've covered the four main areas of evaluation. Which are the income, the credit, the property and the cash, or your reserves. Where do I go to get all these done? Okay that's a great question. The next thing we're going to talk about are the three main areas that you can get your money for your home financing, or the three main places. The first place we're going to talk about is hard money. Okay? Now, hard money is typically a private investor or a private group that invests into situations based on the criteria we set forth before. Most of the time when people go to hard money they're going there because they don't like dealing with institutions or because they can't qualify for the normal institution standards. Hard money typically has higher interest rates and has upfront costs when you're getting the financing. Now higher interests rates there are limits set in each state, so it depends what state you're set in which determines how high they can charge for their interest rate. The upfront costs or fees they're going to charge upfront and sometimes they'll talk tack those into the loan or sometimes they'll charge you directly to get that loan done with them. Okay? So that is hard money. Okay so after we've looked at hard money, the other two main areas we're going to look at as far as places you can go to get this done, are direct lenders and mortgage brokers. Now, I'm sure you've heard of both, but direct lenders are going to be like you're going straight to Wells Fargo, your local banks, your credit unions and things like that. They do offer some great things but they are limited because they can only provide you what they have with their own bank. And then when you go to a mortgage broker, mortgage brokers have networks of banks they work out, that's why they're called a broker. They don't deal usually with one specific bank but they deal with a whole plethora of banks that offer different programs and options so they can match up what your scenario is to what bank best suits that. To give you the best interest rates and to give you the best program options and things like that for your scenario, okay? So, brokers have more banks. And generally more options. Okay? So you have your hard money, which generally are higher interest rates and upfront costs, then you have your direct lenders which traditionally are your federal credit unions, things of that nature, local banks. But they have program restrictions. They're restricted to only what they carry and offer. And then you have your mortgage brokers, who are available to go to all the different sources and can offer you generally the most programs, okay? And the most options. "