Kenneth Baylock
Illinois Worth Clark Realty 700 Commerce Dr suite 500 Oak Brook, IL 60523 773-808-4321

First Time Home Buyer Blog


The Best Mortgage to Buy a House - Chicago and Surrounding Suburbs

Hey everyone, I am K.B. The broker. I'm here with Glen Marino today from Centennial Mortgage. Go ahead Glen, tell them a little bit about yourself. How long have you been in the business and what is it you do?


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Well, it's great to be here today. I'm Glen Marino, branch manager for centennial in Naperville, Illinois. I've been in the business for about 24 years now. I'm a CPA by background. Therefore I'm able to look at both those people that have basic needs for housing financing as well as more complicated self employed individuals. So it's kind of been my pleasure over the past 24 years to show people how they can get into housing and, be a part of the American dream.


Absolutely. This is the guy that I've been telling you guys about. He probably doesn't know about. I've been telling all of my viewers about this mortgage program that he offers. He basically offers a program where you only have to come up with one percent down. So if you were a first time home buyer or if you're just a home buyer, this is the guy that you need to go through. This is the guy that can get you preapproved for that long. I'm going to let him explain to you guys a little bit more about how that long works and what, what do you, what do you need, what your credit score needs to be, how much money you need to go. I didn't need that. You need to have to put down and he's going to go into that right now.


Well, it's quite an exciting program. Um, the, the new parameters requirements came out in February of 2018. So this is relatively new for people. But what makes it so exciting is the fact that if you look at somebody who might be in a rental situation, they get it. They understand the landlord wants me to put down the first month's rent and a security deposit. So over here we have an example of somebody giving $1,500 for a first month's rent, $1,500 security deposit, or say $3,000. They're prepared to, if the landlord were the currently rent, says, I'm no longer going to rent to you again. I'm going to have you move on. They go, great. I've got two, $3,000. I can move on to another rental unit. However, what they don't know and what they need to know is that if they were to look in this example, say a $200,000 home to purchase, the minimum down payment is three and a half percent, three and a half percent of $200,000, $7,000.


So initially I go, I can't buy. I've got $3,000, I don't know, 7,000. But what's great about the, what's called the IDA program, the Illinois Housing Development Authority program, is that they only have to come up with one percent of their own funds and the rest of it can come from what's called down payment assistance up to $10,000. So somebody had to come up with $7,000 in down payment. They only need to come up with one percent of 200,000 or $2,000 in the other $5,000 that they would need for down payment would come from say that $10,000 down payment assistance from Ida, so two and five to seven, they have got all the money for down payment. What's also great about it is the second bucket of cash that they need is good. It's called closing costs and that's about $5,000. They're still as $5,000 remaining in their IDA program, in their down payment assistance and that can all be used for the down payment. So in essence they're coming up with down payment of 2000. They're coming up with nothing for closing costs and they're able to buy a $200,000 home for as little as $2,000 or they can stay renters and pay $3,000, which would they prefer? I think they prefer home ownership and to spend a thousand dollars less and again be a part of the American dream.


The reason why I wanted to basically interview Glenn today is because a lot of people that would rather much rent them basically purchasing the home and the whole purpose of this video today is showing you guys how easy it is for you to get into a home. So I'm a, I'm a home buyer and I'm a little bit nervous about getting into a home. What is, what is my credit score needs to be Glen for me to for me to get this program.


Great question. Most renters, most landlords are going to require at least a 6:40 credit score. Will this program requires a six slash 40 or better credit score and it requires their income, their household income to be under 101,005 slash 20. So I mean that's a big number and I would say most renters that you and I come across as kind, they they're under 101,000 5:20. So the they need to be aware of the fact that home ownership got easier. Homeownership is there, it's in all counties. You can be a first time home buyer. You can be an existing homeowner and you're trying to now upgrade because you got married, you got children. It's too small. Where this program is also designed for them also,


so I'm a person that's looking to go into a home and are you saying that I that I can only make up to $100,000? Is that what you're saying? So if I make over $100,000, I don't qualify for this program.


Correct. If you make over 101,000 5:20, you would not qualify for this program. But again, I'd say a majority of the people that you and I meet with and talk to their making under $100, 1005 20 as a household and then this program would come into play in, could be very helpful to them.


Okay. Now here's another scenario. I just had a foreclosure maybe maybe about five years ago or I just got a bankruptcy maybe two or three years ago. How would that work for me? Am I going to still be able to qualify for this program blend?


You wouldn't be. You still wouldn't have to comply with whether it's an Fha loan, a conventional loan with the bankruptcy and the foreclosure rules, and those are, if you had a bankruptcy, a, you're going to have to wait two years to come back into what's called the Fha market. If you're going to have you had a bankruptcy, a, it's going to take you longer if you go convention, so logistic Fha, two years. If you've had a short sale, if you've had a foreclosure, the waiting period is three years, so that's what I'm gonna call the prime market. Then there's what's called alternative a market. The market. The market will allow people who have had a bankruptcy, a foreclosure or short sale to actually come back in and become home borrowers within one day after the bankruptcy, but just as the just said by the word all day, you're not going to get the best rate and you're going to have to put at least 10 to 20 percent down.


So if someone is going through the bankruptcy and they have been able to hang onto some of the cash and they can put money down, we can do them one day after the BK, one day after the foreclosure, but be prepared typically to put 20 percent down and hold onto a higher interest rate. Then after you wait the two year or three year waiting period, come back into the prime market refinance, get rid of that high interest rate and come back in and get a much lower interest rate. So you're basically saying that if, uh, if I have had a foreclosure or bankruptcy, I need to wait about a year or two before I can get along. I'd say wait two to three years, two years for the, for the bankruptcy, three years for the foreclosure, and then you're going to be back in the prime market.


Being able to, to purchase his if you never had the bankruptcy or foreclosure. Okay. So I need, I need the 6:40 credit score to qualify for this and all, uh, for the, for the idle owned 6:40. But let's say you didn't need down payment assistance, you could go as low as five 85 80 on a on a regular standard Fha loan, there'll be no idea down payment assistance, but you can get a good fha loan at five 80 or as low as five slash 80. You can also get a conventional loan as low as 620 on the credit score. It only reaches up to the six slash 40 level once you have to. You're in need of a down payment. Assistance of say $10,000 from the state of Illinois. Okay, so say for instance, my credit score is a five 85 90. I really don't either down the dental assistant program, I have a few dollars saved up.


About how much money would it take for me to bring to the closing table for me to get into my home? Two hundred thousand dollar house. That same $200,000 house we were talking about on the board about this. Just a roundabout figure. Well, let's break it down. Every real estate transaction is three buckets of cash in. The first bucket is down payment, so let's use three and a half percent times 200,000. That's $70,000, so you don't need down payment assistance. You need to come up with $7,000, either your own money or a gift from a blood relative mom, dad, brother, sister, grandma, grandpa. You know someone that a blood relative to you. The second bucket is called closing costs and that's going to be about $4,500. Now that typically the realtor can negotiate such that the seller pays that, which then that would not impose on our buyer to come up with another $4,500.


The lender can pay that in the sense that they would raise up the interest rate, give them a premium interest rate, and then give them a credit for their closing costs. So I see too, when they go standard Fha, no down payment assistance, the closing cost bucket of say 4,500 to $5,000. That can be paid by the realtor doing a great job of negotiating with the seller, pay it, or have the lender pay it with a higher interest rate. And so to answer your question, I see more people that say under $200,000 home they're coming up with seven grand of their own money and gifts and then the rest of it, there are some other entity, lender seller's paying, closing costs and other costs. So then to come up with about $7,000 on a typical $200,000 purchase, no down payment assistance.


Okay. About how long do I need to be on my job to qualify for some for this kind of program. The other program with the, with the bumper sit down, basically me putting down $2,000. How long do I need to be on my job or something like that.


You need to be need to be employed. You know, you might be on a job for less. I'm going to say you need to be employed for. You have a two year employment history, but you don't have to be on this particular job. You know, if you just got a job last month for 30 days, that's fine as long as it's in the same line of work or profession, as long as you've been employed for two years, we don't want to see gaps with more than six months in that two year history and if you're, say a new graduate and that's fine. You don't need to have a to your, your, your to your employment history includes school. So you could have been a graduate that just got an employment letter, get their first paycheck and you can actually be buying a house 30 days after you graduate because you got an employment letter, you got a job, you've got to, you got your, you got your first paycheck, pay stub from your employer. That's evidence that you showed up for work and you can be buying a house within 30 days after graduation.


Okay? A lot of times I'll see people want to get loans, they have to have a certain amount of money in the bank. Does this, is this the same way?


Um, if you need money in the bank, when you start to get into what I call investment properties, and there's, there's primary residences there, second homes, and there's investment property for a primary residence going, fha going back to our example as low as five 80, only three and a half percent down. They don't really have to come up with any cash reserves. Um, they could literally spend their last penny that's in the bank getting into the home and they will be fine as they move over from a primary residency to an investment property, that rental property, that's when all of a sudden you're going to see that they might have to have to four months worth of cash reserves in order to get their loan approved.


And that's very good because of how to deal a little while ago and someone that they needed like maybe five or $6,000 just to show in the bank account. So what, you not having to have any money in the account, that's a really, really good thing. The next question that I have for you, Glen, is, um, what kind of paperwork am I going to need you so safe and I'll give you guys a call and I say, Hey, I'm ready to get preapproved. I'm ready to just go ahead and try to get along. What kind of paperwork then on an sme to submit? What do they want? How can I submit it? You know, how can you guys get the paperwork for me? What am I going to need?


Well, what's great about technology, Kenton said, we've made the much easier, much faster. Many of our realtors, including yourself, have what's called the fcm express app. It's an APP on the phone and we ended up, we, you and I share it with clients. So if a client said, hey, I want to get preapproved, I would share the APP with them on their phone. They can open it up, they can do the application literally on their phone. Then with the dues, there's a scan button. It opens up the camera on their phone and all I need for paperwork to get them preapproved is I need them to shoot a picture of their w two, I need them to. You shoot a picture of their pay stubs and ended up picture of their tax returns. So literally right from their phone. They're doing that and yet uploads with their application.


It comes to us and we get them preapproved them within 24 hours. So you need my check stubs. You need W2's tax returns. Is it anything else that don't live out now? You got that. You've got the complete picture right there for preapproval. We don't want the rest of the documentation that, you know, Bank bank statements and drivers licenses and all that stuff. They can come after they've gone out shopping with you and found their dream home. But to get preapproved, do the mobile app, do the online app, then shoot pictures of of your income documents. Send them in. We'll get you preapproved within 24 hours. Okay. Now with the va loans, well if it's a senior or somebody like that, just a little bit older, is it anything different from from those individuals or is it still the same way? Well, what's great about the va loans is that it's a zero percent down program.


So go going back to our example of that $200,000 home. Well three and a half percent is inapplicable. There is no three and a half percent down payment. That first bucket of cash, it's zero percent down, so they literally have to come up with zero down. So if you have via you can get along for zero down. And then the second bucket is closing costs and if the realtor negotiates that the seller pays the closing costs or the lender pays the closing costs because we raised up the interest rate, I'm their second bucket of cash at zero. So there's. There's some veterans out there that are bought homes with no money. That's really, that's really exciting for them and there's also less closing costs on va loans by about a thousand dollars a month, a thousand dollars at the closing because certain closing costs cannot be put on to the veteran.


The seller has to pick up those costs. Is that just for veterans? Also senior citizens also. It's. It's strictly for the veterans, strictly for the veterans. Again, there's no special programs really out there for the seniors other than what we call reverse mortgages, so if somebody is 62 or older, they can, if they have equity in their home, come to us and we can annuitize that equity and help pay them a monthly amount just like the receiving social security of let's say a thousand dollars a month in social security and they can get a monthly check deposited into their bank account through a reverse mortgage. So that's. That's kind of the specialty program that will be out there for the seniors, so that sounds really good.


The last time I was with Glen, we was talking about basically if you're already in your home and you'd have a really, really high interest rate

or high or have more because you want to get that mortgage down a little bit, get that interest rate down a little bit. He was telling me about a little bit about that. I want him to talk about that right now. I'm talking about about. So say things. I'm in a home. Um, I've had my mortgage for maybe 15 years. I have a really, really high interest rate and the interest rate is like maybe 12 percent. I'm paying them. I have a $200,000 mortgage and my mortgage is, you know, astronomical was maybe 14 or 1500 is anything that you could do to help me with that?


Well, with those people we try to find out there's, there's. Why haven't they refinanced? I mean obviously rates were down in the, in the high threes at one point in time. Now they're there in the fives, low fives. So interest rates have gone up. Um, and yet we still see you see people that have higher interest rates and so we really have to ask them, why are you holding onto this higher interest rate? A IC three factors that could be one, they don't have good credit at this point in time, so they can't refinance. Secondly, they don't want to refinance because they need to really talk to you because they're candidates for. They're saying, I'm selling, I'm getting out of Illinois. Um, I've had this house for 15 years. I'm ready to go to warmer climates or wherever they want to go, or just downsize, stay in Illinois, just downsides.


So they go, I don't want to incur the $2,000 a year, it's going to cost to refinance. And the third one is, you know, they're just creatures of habit, you know, they've got an auto pay, they don't want to go through the paperwork. But just like I said, it's become so much easier with today's technology, with applications on their, on their phones, and was, you know, being able to scan and send documents to us with their camera in their phone that we encourage people with high interest rates, get onto the high interest rates. If you're above, say six percent today, it's worth a phone call to us to find out, you know, what, how much of a reduction can I have in my monthly payment in order to save monthly cash flow?


Absolutely. That's basically a question that I wanted to ask for you guys that already have homes and you know, you're paying this high interest rate and you're thinking about maybe refinancing. This is the guy that you definitely need to talk to. One more question before we wrap up Glen. So we're in Chicago. I'm in Chicago. He's a Naperville amount of Naperville right now. His office, if we started on the deal today, if we started, let's just say for instance, today is October the first and we saw it on the deal today. How long do you think it would take me to close and get the keys to my home and move in if I gave you all the paperwork that you needed, you know, how long does this process work? How long does it take? Does it take them in?


It's a great question and I think you said it best. If I'm motivated, I want to become a homeowner. I'm excited about that whole process. Um, it typically will take 30 days for us to go from the time that you signed the application, sending your documentation because there's going to be an appraisal. There's going to be, the seller is going to be ordering title. There's, there's a few steps in the manufacturing process to get you to the closing, but it's typically 30 days. Um, have we done it in less 30 days? Yes. If somebody says, Glenn, I found the dream house, you know, that I've been looking for, but the sellers are insisting it's October first. We got to get in there by October 21st. Can you get this done? In three weeks we'll, we'll move heaven and earth that we have to in order to get you in there by the 21st, but typically if we've got a very cooperative borrower, buyer on her hands were done in 30 days and you know, we're, we're sending them to the closing and everybody's celebrating with when's the next barbecue.


Absolutely. That's one of the questions I want the x because me being a realtor, I've seen deals where they've taken 45 days to months, sometimes three months in some cases sometimes they'll be able to fall apart. And the thing about Glenn as he's getting deals done really, really quickly and you know, his office, they call me at least twice a week and they're very, very good on the phone. They answer the phone. A lot of these guys, they don't even ask on the phone. They don't, they're, they're in the office like maybe two days, three days a week and you can't even get them on the phone. And I'm one of those people. If I'm doing something like buying a home, which is a really, really big deal, which is the really, really big purchase and if I have a question and I want to ask a question, if I want to get a real person on the phone, not a voice message, not a prompt, I basically want to talk to somebody to ask the person, hey, well what's going on with my deal where we add one, what will be going to the closing table?


I just want to be able to get somebody on the phone and I think that first centennial is a really, really good company to go with. Um, before we wrap up, Glenn, is there anything else extra that you want to add? Just anything about the business. I don't know, maybe it was some things that I didn't go over. Is there anything else that you would like to add?


No, but I like to add to what you just said because I thought there was very important comment that you made. Um, when someone's buying a home, I mean it is the biggest asset that will probably have in their lifetime buying a home and there's a lot of anxiety. There's a lot of, you know, I don't want to make a mistake, I don't want to look foolish. I don't want to look stupid. So one of the things that we do here is as they're long, you know, they're going to sign a loan application. It comes into us, they will get video updates and the loan officer here, my team, you know, they get assigned to two people, me and one of my team members. So they have more than one person to talk to Tim and we send out what's called video updates. We're automated their, when their loan application goes from the loan officer's desk to processing, they're going to get a video up. You're, you, you're going to see your files moving. When it goes from processing to the underwriting department, they're going to get a video update. When it comes out of underwriting with conditions, you're going to say your loan has been approved with conditions. When you get clear to close, they're gonna get another, so they're going to get video updates and phone calls once a week on status. That's gonna. Make them feel a little more comfortable, a little less anxious. And I think the communication is extremely important whenever somebody buying a home.


Absolutely. Absolutely. How can people get in contact with you, Glenn?


they can contact with me here at first. Antonio at six. Three. Oh, nine, eight, three, three, six, zero, zero m. my private line is six. Three. Oh, nine, eight, three, three, six, zero four. And my email is m, g dot Marino at go f, c


Absolutely. And my information is if you want to go visit out website and a few homes for sale in Chicago with surrounding suburbs. Again, our website is www dot. That's a should be a My cell number is seven, seven three eight, zero eight four, three, two, one. We also have a facebook group for first time home buyers. I'm going to put that in the description below. Um, I want you to like this video. I want you to share this video because we're trying to go viral and I want you to subscribe to our page and that's basically gonna be our video for today. This is Glenn Marina for first attending a mortgage broker. I'm going to be able to say, broker, I'm looking forward to working with you, looking forward to showing you your homes and moving you into your dream homes. And, um, give me a call. I'm ready to work and he's ready to get you preapproved. All right. Um, that's pretty much it. That's our video for day and I will see you on the next video.

Bye. Bye.


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