Adam Tabaka (00:00):

We’re here today with my loan partner with New American Funding, Dalton – Dalton, tell us real quickly before we jump into a couple questions, give us a little bit of your background in the industry.

Dalton Haueisen (00:13):

I got into the industry actually at the end of 2017, and I started out as actually a loan processor. So I got to learn all of the backends of pretty much every single type of deal and loan program that you can imagine. I learned how to do all of the clerical stuff before I learned how to become a loan officer and kind of sell these kinds of programs and everything. So I have a little bit on the background on the backside, and then I know a lot about the sales part as well. So did that for about two and a half years. And then I got my mortgage license in the end of roughly the end of 2019, beginning of 2020.

(01:01):

So I have about five years in the sales portion of things and throughout my career I’ve done over the past five years, I’ve probably done, heck, 230 loans deals throughout those five years, which is quite a bit for that short amount of time being in the business, but I have a really good team behind me. So I’m able to kind of do that, do the front end, and then I’m able to hand some of those backend responsibilities off to my team, which without them I wouldn’t be able to do half the stuff that I’m able to do and help out half the people that I’m able to help out. So no, I love it and it’s pretty much been my life ever since.

Adam Tabaka (01:46):

So you work with a lot of home buyers. What are a couple of the maybe more common questions that you hear from them?

Dalton Haueisen (01:54):

How much is required for down payment is one of my biggest questions that I get. Now this question, there’s a couple variables. If you’re a first time home buyer, then there’s two types of loans usually. So there’s a FHA loan and there’s a conventional. Now with conventional, your first time home buyer down payment requirement is 3%. And with FHA it is three and a half percent. Usually if you have a credit score below 700, you might want to lean towards an FHA loan because those interest rates are going to be better for that kind of credit score. Now, if you are above a 720 credit score, then you’re definitely want to go with a conventional loan. Now, the other question that I get for this is what are the differences in these loan programs? With an FHA loan, you have that extra half percent for down payment that you have to bring if you’re a first time home buyer.

(02:59):

And then also with FHA loans, you have what’s called an upfront mortgage insurance premium, which can differ between a thousand dollars to $1,500. And with FHA, you have what’s called mortgage insurance every month as well. You’re going to have that mortgage insurance monthly for the life of the loan. Now a conventional loan, once you pay, let’s say the house is worth a hundred thousand dollars and you get a loan for 90,000 for it, once you pay that loan down to $80,000, which is 80% of the value of the home, your mortgage insurance will automatically drop off. That’s really the main difference between FHA and conventional.

Adam Tabaka (03:46):

And really, it’s great that you’ve got experience in multiple capacities along the way in the loan process. Give us a brief sense of what’s going on both behind the scenes, both during the pre-approval process and from contract to close, because it’s kind of a black box if you don’t work right there in the trenches like that.

Dalton Haueisen (04:11):

Absolutely, absolutely. So for the pre-approval process, this is when you’re just starting to look for a home. I will send them my loan application for them to enter their information, which like employment, how much money they have in their bank to use for down payment, stuff like that. Social, your date of birth. So with the pre-approval process, we are usually asking for additional documents from the client, which are most likely going to be their last month of pay stubs from their job, their last two years of W-2s, and then the most recent bank statement from that client.

(04:58):

So we can get an idea of what they have for down payment and closing costs in their bank. And with the pay stubs, we can calculate their income, how much money they have coming in each month, and we calculate the ratio from what you have coming in and what you have going out. So with a FHA loan, ideally you would like that ratio to be sitting at 52% or lower for an FHA. And then for conventional, you’re going to want that percentage to be more around the 45% mark. We will send you a pre-approval letter because without a pre-approval letter, I mean, I don’t know any real estate agent that would take an offer on a home from a potential buyer seriously. You know what I mean?

Adam Tabaka (05:48):

Oh, I do know what you mean. No, I know, I do encounter the occasional buyer who’s like, I’ll just do that later. And yeah, it’s kind of one of those things too where not only do you not want to get under contract if you can’t afford it, I’m not a hundred percent sure that you want to work with an agent who’s willing to work with a buyer who’s not been pre-approved. What would you say is maybe one thing that you do on a regular basis in the day-to-day operations of your job that is definitely more difficult than people might think it is?

Dalton Haueisen (06:21):

Self-employed income. Because that income, we have to get your tax returns. And if you have multiple businesses or file separate business tax returns, we have to go through and calculate all of the stuff that you’ve written off all of the income that you’ve claimed for the last two years, which means that the income that you haven’t written off, and we have to calculate those up against each other. So those types of calculations and pre-approvals usually take a day or so longer than a traditional 9-5 W-2 worker who works full time.

(07:06):

And then also down payment assistance programs are usually a lot more difficult because they have guidelines that you have to meet – extra guidelines from separate government entities, and you also have to deal with their departments being the ones who do the loan underwriting and the loan approval type stuff.

(07:33):

So most of the time those government agencies do not work as quickly as my team does. And I’ll say, I don’t know many people that do work as quickly as my team does to get things done. So those are a couple of the harder things that people don’t understand. You can’t just say, oh, I want to do this down payment assistance program. Let’s do it. There’s about 10 or 12 extra guidelines and requirements that you have to meet before you can even put in an application to get that down payment assistance program.

Adam Tabaka (08:12):

So wrapping up here real quickly, just what would be your top piece of advice for a prospective buyer who’s maybe thinking about buying, they’re not in the hunt right now, but thinking 6 to 12 months out, what would you give them in terms of your best piece of advice?

Dalton Haueisen (08:29):

Yeah, so I would recommend if you’re going to be buying here in six to 12 months, the first thing I would make sure is in good standing is your credit score. Because if you have more than about four or five late payments on certain accounts, you most likely will have a very hard time getting qualified.

(08:53):

Keeping your credit card at or below 30% usage is one of the main things that will drive your credit up or down. A difference of 50 points in a credit score up or down could be a difference of a half, a percent to three quarters of a percent on your interest rate that you qualify for. And then also the next one is your down payment amount. You want to make sure that you have at least the minimum required down payment.

Adam Tabaka (09:25):

Excellent advice, all of it. Dalton, I really appreciate you jumping on today with me for a couple minutes. Guys, if you’re ready to kind of figure out what your purchasing power might be, go ahead. We’ve got our loan link down below – click on that. If you’d like to jump on a quick call with the two of us and kind of discuss your situation a little bit more before you do that, feel free to, there’s a link below for that as well. And looking forward to seeing you next time. Until then, take it easy.

Dalton Haueisen (09:54):

Thanks so much.