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How COVID-19 Has Affected the Mortgage Market with Eddie Fooshang

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Resources

The Eddie Fooshang Team– Eddie Fooshang and his team of mortgage professionals are available to answer your questions about mortgage loans. 

Think and Grow Rich by Napoleon Hill — Eddie Fooshang recommends this life-changing book on cultivating a wealth mindset.

Key Takeaways 

1) The COVID-19 crisis is causing volatility in the mortgage industry. Many clients are coming in with misinformation about refinancing.

2) If you’ve been waiting to buy, now is the time to get pre-approved and to get your financing in order because there will be opportunities.

3) If you’re an entrepreneur considering a home purchase, speak with your CPA to create a smart strategy about how to file your taxes in a way that takes this goal into consideration. 

Show Notes

**Click the timestamp to jump directly to that point in the episode.

[2:30] – Learn more about The Eddie Fooshang Mortgage Team in Austin, Texas.

  • They’re helping as many people as they can become homeowners through residential loan products.
  • The foundation of Eddie’s business is education.

[4:30]  Do they do any home equity lines of credit or reverse mortgages?

  • They do not do reverse mortgages but they have partners that specialize in this service.
  • They do home equity loans but not home equity lines of credit.
  • They can do a cash out refinance.
  • Local credit unions often provide options for home equity lines of credit.

[7:37]  Do they focus on business owners or do they help anyone who needs a mortgage?

  • They help anyone who needs a mortgage.

[8:17]  What changes have happened in the mortgage industry in the last few weeks?

  • Things are volatile and changing by the moment.
  • Since there’s a high level of unemployment, people are unable to qualify for loans.
  • Lenders are preparing themselves for defaults on mortgages.
  • Lenders will be stricter with their guidelines. Lending is less aggressive.
  • Many people have recently applied to refinance their home loans with rate drops.
  • The mass refinance is actually raising rates to slow down demand.
  • If lenders don’t keep the home loan for an average of three years, they don’t make money.
  • This will generate a huge opportunity pool for those who are wanting to buy houses at the right time.
  • The seller’s market is going to die down in the next few months and shift to a buyer’s market.
  • You’ll start to see a lot of homes going on the market. For every buyer, there will be 3-4 homes for sale.
  • If you’ve been waiting to buy, now is the time to get pre-approved and to get your financing in order.

[16:31]  What advice would Eddie give to listeners who want to refinance?

  • Get an idea of what’s available right now in the market.
  • Get in touch with your lender and check in about whether the refinance makes sense.

[18:06]  What considerations or type of analysis does Eddie’s team make when helping someone with the refinance process?

  • They ask people what goals they have for the refinance.
  • Most people either want to access equity or they want to reduce the term. Sometimes they want to lower the interest rate.
  • The analysis depends on the goal.
  • If you plan to stay in the home for anything less than three years, it may not be a wise move.

[22:21]  If I’m interested in a refinance or a purchase, how do I expedite this process?

  • Eddie’s recommendation is to be as efficient as possible.
  • He has an application at application.teamfooshang.com that allows you to upload the necessary documents.
  • This system allows them to give you answers and pre-approvals very quickly.

[24:54]  Is there a lot of demand for new home purchases right now?

  • New home purchases won’t slow down in the Austin, Texas area.
  • Many people are coming to them asking to refinance but they have been misinformed about rates.

[26:20]  Is looking at the 10 Year treasury a good benchmark?

  • If you’re not sure if it’s a good time to refinance, go ahead and ask. Talk to a professional.
  • People are looking at the base rates for the lenders online and assume that they will be able to get those rates.

[28:45]  What does the home buying process look like for entrepreneurs? Are there different types of products that are best suited to them?

  • The home purchase process is the same whether you’re an entrepreneur, self-employed, or a regular W-2 employee.
  • The process usually takes 3-4 weeks to close from the executed date of the contract.
  • At the current moment, it may take an additional week.
  • There are different document requirements for different types of self-employed people.
  • You have to demonstrate two years of being self-employed to be eligible for a loan.

[33:18]  How can entrepreneurs prepare for the new home purchase?

  • Minimizing your tax exposure does not help you when you’re trying to buy a home.
  • Tell your CPA you intend to buy a home and they can advise you about how your taxes will need to be filed.
  • There’s also a non-traditional financing option called a bank statement program.
  • If for any reason the tax return was amended recently before a purchase, the underwriters of the lender will look at that as a red flag.

[36:32]  What does Eddie recommend on cash? How are they telling people to prepare if they want to buy in the next 6-12 months?

  • You’ll need a minimum of 3.5% down if you’re doing an FHA loan or 5% if you’re using a conventional loan.
  • If you’re trying to buy as an investment property, the minimum down payment is 15%. You will also need cash reserves.

[37:30]  If I own an investment property, does it have to be rented for a certain amount of time before I count that income? Can you cross-collateralize?

  • You can use 75% of the projected rental income that you’ll be receiving.
  • You can’t cross-collateralize. Every loan is individually determined for the property that is on the loan.

[39:10] – How does Eddie help clients with product selection?

  • Eddie never recommends an adjustable-rate mortgage.
  • A 30-year mortgage gives you some flexibility if you want to reduce the term later.

[42:37]  Has Eddie ever recommended that someone not purchase?

  • Yes. Just because you qualify for a purchase doesn’t mean it’s a good idea for you to purchase.
  • Many first time homeowners have no idea about the additional expenses of homeownership. This can cause payment shock.

[46:49]  What’s the best way to reach Eddie?

[47:43]  What does Eddie do to keep his edge?

  • Eddie is an avid reader. He also listens to podcasts. Listen or read to something constructive for at least thirty minutes every day.

[48:32]  Who has been the most impactful person in his life so far?

  • Tony Robbins.

[49:34]  What is one book or resource Eddie recommends?

[50:32]  What does Eddie do in his free time?

  • He loves to take walks and watch shows with his kids.

[51:18]  How does Eddie want to be remembered?

  • As someone who positively impacted at least one other person.

[51:54] – What’s one final tip Eddie would give listeners?

  • Count your blessings. It’s hard to be depressed when you’re grateful.

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