Jim Ross

Jim Rossiter has been working with the speaker's dad for 15 years. He got into the lending business after his friends recommended it as a lucrative opportunity. Jim explains that when someone wants to buy a house, they need to consider their credit, income, and debt-to-income ratio. He mentions that credit score affects bargaining power and interest rates, but there are loan programs available for lower credit scores. Jim also explains that student loans can affect a person's income and that FHA allows a higher debt-to-income ratio than conventional loans. He highlights the benefits of working with a local lender who provides better customer service and is more invested in the outcome. Jim also mentions a grant called PHFA K-FIT, which provides 5% of the sales price towards closing costs for buyers with a credit score of at least 660. The grant has improved turnaround times and is a good option for reducing closing costs. Jim Rossiter of, what's going on man, how are you? Doing good, how about yourself? Thanks for having me today. Very good, yeah, I appreciate it. So coming on, so Jimmy's been a huge friend of our family. He's been working with my dad. How long have you been working with my dad for? 15 years probably. I know, so it's so long. I was asking him when we meet, I had to like jog their memory in there in the other room before we got over here. Yeah, we actually, first time we met was, it was a deal that came over from somebody else and he was on the other side of it and it was one of the tough ones and it got through. We've had a fair bit of this in our day. Yeah, yeah, yeah. But he was more or less, I swear to God, like 15, he was like, if you get this done, you know, your dad is, if you get this done, I swear to God, you know, I'll take care of you. Well it worked out, shit. Yeah, definitely. But alright, so going forward, like how did you kind of get into the lending business? A couple buddies of mine were doing it a while ago, like 20 years ago, and they were just like, hey man, we're making, you know, it's a great business, we're making a lot of money, you know, this is what we do. And I was working like a mortgage foreclosure law firm and I was kind of, it got stale, you know what I mean, like you were making what you were making every week and it was nothing, you know, nothing above that and it was like, you know, I'd like to work somewhere where if I do more work, I can get paid more money and get a hustle a little more. So I got in and then I loved it and then a lot of my friends fell out of it once the crash happened, you know what I mean, I stuck it out and then, you know, here I am 20 plus years later. Yeah, and I should have asked you earlier, but where, so Paris, high school, where'd you grow up, those sort of things? I grew up in Longcrest, I went to St. Williams, then I went to Dougherty for high school. Nice, nice. All right, so as far as like a lender, like basically our jobs kind of go together. Like I think some people, if you don't have any idea, you don't know the difference, but basically the lender is giving money and we're using that to help buy a house, right? Correct. So as a lender, like what would be the things you think you need? Like, so if I'm coming, mine's name's Matt, I never bought a house before, right? I come to you guys and I go, hey, like what do I need to do, right? Well, that's, we've got to come up with a game plan, right? Right. And that's all part of it. So what I, you know, what you do is basically you got to get your credit, your income, deduct the income ratio, try to get the whole picture of what you have in the bank and everything. And then once I get all that stuff from the credit and everything shapes up, I just come up with a game plan. Sorry, listen, this is what you qualify for, this is where you'll be monthly. So I'll ask, like if basically if you didn't have, hold on, let's restart. So I'm Matt, I'm coming to you guys, I'm like, hey, I want to buy my first house, like what exactly do we need? Like I know some people are saying obviously you need credit, income, and that stuff, so I guess we'll start with credit. Like what would be the basis for credit? Like is there a lower or does it depend on like the programs? I mean, obviously the higher the credit score, the better. You know what I mean? Right. Because you're going to get more bargaining power, buying power, of course your rate's going to be lower. But I mean, you can go all the way down, there's loan programs out there, 580, you know what I mean? Don't get me wrong, they're tough to get through, you need a lot of compensating factors. We'd put some through, no doubt. Yeah, definitely. You know what I mean? Sometimes it works out where somebody's buying a house that they just sold and they have 100 grand to put down, but their credit's really shot. Some people go through divorce, stuff happens, you know, but you can go as far down as 580. Sweet. Yeah, one good thing too that I've had in the past, like I've had people that were on that cost point, they weren't quite there credit-wise, or maybe one person was and the other spouse wasn't. One thing that you guys do, I know, is you can kind of put people on track. Like, hey, if you could pay this, this, this, buy then, then, then, or put kind of a game plan together as this is what you got to do to fix your credit. So that's always one great thing that you've done for our clients in the past. But as far as income, is there like an income, like I know, at least for people my age, like a lot of people, and I was in the first perspective when I first joined the business, like if you have student loans, you're going to be like kind of screwed. So as far as student loans, like how do those affect your income? Student loans, you can use, if they're deferred, you can use half of what the balance is for FHA and for Freddie Mac. Freddie Mac uses 1%. It's harder and harder. With the rates going up, how they are right now, it's been a little bit of a struggle the past year with people just getting out of college. Because people just getting out of college, they have student loans, they buy their first car, not a lot of money left over to get a home. So, I mean, we're doing a lot of first-time homebuyers that have co-signers, mom and dad help out. Yeah, it's definitely a common thing. We do that, too, a bunch with our clients. So that's going to be pretty much a debt, right? So as far as I know, you have income, you have debt, and you're taking that, like is there a percentage, is there a certain threshold? So FHA, you can actually go up to 57% debt-to-income ratio. So basically, you're debt over your income? Correct. Okay, perfect. So that's kind of going off of that. And then I know with FHA and certain programs, is there any difference? If you're just explaining it bluntly, someone doesn't know, why would you do FHA or conventional? Is there a preference or anything? Does that matter? Yeah, so FHA, you can go up to 57, where conventional, you can only go up to 50. So if you have somebody with a higher debt-to-income ratio, you're going to want to take them FHA to make it work for them. Okay. If they fit between the 50 and 57. Now also, credit score, that's what we talked about before that comes into play. So somebody that has a 640 credit score, you're going to want to go FHA because the mortgage insurance is going to be cheaper if you're not putting down 20%, and the rate's probably going to be cheaper. Yeah. Conventional, I mean, the pros of that are you can get the mortgage insurance knocked off at a certain amount of time once you hit the 80% threshold, and they're usually stronger rates. All right, cool. And then one other thing, I guess, I have people tell me this all the time, like, hey, I have a client, they show up to me, and they're like, oh, obviously, I'm always asking people if they're pre-approved. But someone comes up to me, and they're like, yeah, I just got pre-approved by Rocket Mortgage, or one of these big companies, you know what I mean? And that's one thing I always laugh at in business, but to be honest, if you're just somebody who has no idea about anything, like, why would you want to go to a local lender as opposed to one of these bigger banks? I just had a big smile on my face. Yeah, that's how, for the record, everybody in real estate acts. Like, if I came to an offer with one of these big banks and one of those pre-approvals, like, that's how the listening agent will look, too. Yeah, I mean, what I've found, like, again, I'm not baiting out anybody, but it just seems like when you deal with a local lender or somebody that really cares, I mean, we care, it's our reputation on the line, right? Right. And, you know, if you're dealing with a bigger company, you're dealing with Joe from Idaho that's doing your loan, I mean, if he doesn't get your loan done or something happens, wait a second, I mean, do you really think he's losing sleep over it? You know what I mean? No. And there's plenty of me around. We care a number, basically. Exactly. So, I mean, that's really the main difference is you're getting a little more customer service. And, like, anything, any other business, I mean, we wouldn't have a job if there wasn't obstacles. Like, stuff happens where you don't know. We're dealing with multiple third parties. There's third, fourth, fifth parties in this. I'm sure on the lending side, you're dealing with, like, betting and all that stuff. Yeah. I'm sure there's a ton of stuff. And, kind of, to go into that, like, we deal with sometimes, like, what are the certain grants that you guys would do these days? So, right now, we have the PHFA K-FIT grant, all right? So, that's 5% of what the sales price is. Yeah. You have to have at least a 660 credit score. That's the most popular one. It's the easiest one to get. Yeah. We've done a good bunch of them. We've probably done, like, at least 20, 25 of them. A lot of them, yeah. They're awesome because that money you're putting down, that 5%, I mean, that's going to almost cut your closing costs, like, in a half, a third, at least. Like, we've had people where it's not too big of a hassle on the sales side. Like, it's not like they're taking on that much more risk. So, they're pretty good deals. So, actually, the turn times were going to be a little bit of a... Yeah. That was... Especially last year when things were a lot more popular. Yeah. And over, like, the holidays and everything. But, now, they just cut it down to, like, three business days now. So, they promised us over the holidays they were getting it right. Right. I guess they either hired... The good thing, too, is if you're a home buyer, let us deal with that. We're kind of dealing with that behind the scenes. It might... Hey, we might want to settle on a Monday. It might settle on a Friday. But you're getting 10, 15 grand. Yeah. So, you're being compensated pretty fairly for that money. Yep. Yep. You know what I mean? So, that's one great one. The other one I want to ask you about was, like, Philly Front Door and the first Philly grant, right? Am I saying those right? No. Yeah. Yeah. So, the first Front Door grant, that comes out April 16th. So, that's going to be $15,000. That's sweet. And then you just have to have, like, a $1,500 minimum. And from what I understand, too, like, they're... It's a certain amount of money. It's, like, premeditated. So, the sooner you do it, the better, right? It's not like it's just, like, thrown out. There's an open invite for whoever. So, how it works is, basically, you put the application in, get approved, and then you have three to six months to go find a house. So, what I've been telling people is, hey, listen, like, end of March, beginning of April, get me all your stuff. Let me get you in the door. If your credit looks good, everything else kind of works out, then I'll submit it and get the approval for you. Yeah. I think that's going to be a great time to buy, too. I think you're going to have... It's going to be bittersweet. There's going to be more inventory, but I'm sure there'll be more competition, too. But the other one I wanted to talk about, too, is the Philly grant, right? That's the $10,000 one. Yeah. It's a different one, right? So, that one's different than, obviously, the other one. Correct. So, it's more money. That one requires a little more of, like, counseling. Yes, exactly. You have to go to them prior to finding a house. They have to approve you on everything prior to you finding a house. It's funny, too. Like, so many people will be like, oh, I have to do this class. Like, imagine if it was like, hey, we're going to give you $10,000. Like, there would be a line, like, all the way wrapped around it. It's a whole entire block. Yeah. I'm at the point now. I've been doing it for a long time. Like, do you want it or not? Yeah, right. Like, I know you have to go listen to my talk for a couple of hours, and that's not where you want to be. I know. It definitely sucks, but it's worth it. You're literally getting compensated. Exactly. That one's cool. And the last one I wanted to kind of talk about, too, is that you guys have one in-house at your company. That's a CRA. So could you kind of explain, like, what that one is? Yeah, so that program's a conventional program, 3% down with no mortgage insurance. So it gives you a, you can kind of stack that with the first front door, and then there's no MMI on a loan. Yeah, that would be sweet. Like, in theory, like, I was thinking about this when you first came out with the programs, right? So you could stack that with the first front door, right? And you can't with case it. No, that's a dumb stuffer. From what I understand, right? So the one caveat to the CRA is it has to be under 300, right? Correct. The purchase price. Yeah. So it's in Philly or outside of Philly, too? It's in the footprint. So it's Philly, though, or it won't go in the box. Yeah, so that would be cool. So in theory, if you could find something 300 or under, you could put the grant on it, so that's 10K off, and then you could do that CRA, and that's going to get rid of your PMI. So not only is your down payment going, or sorry, your cash to close is going down, but also your monthly payment by a fair bit. And then, if your realtor is really good, not to make any promises, but you could negotiate some assist in theory, you could be coming out of pocket basically with nothing, and also lowering your PMI like you put 20% down. So, I mean, that's just a killer program. Like, that's really one I'm going to be pushing hard to my clients, just because, I mean, you really can't beat that. Especially in a Philly area, there's a fair bit of houses that could use a little bit of work. Like, if you need something that's 285, that has good bones, but needs a little bit of work, well, now instead of using that 25 grand to close, you could roll that into the house. And a lot of people I know, like a lot of my boys, they can either do it themselves, or they have an uncle or a brother that can do the work. Like, for 25 grand, you could stretch a lot of money out of that. Like, you could almost turn it into a brand new house. So, I think that one's really cool. And then, outside of that, going forward, the one other thing I just wanted to mention, like, so we use Jim a lot, obviously, and one other cool thing, like going off the local numbers, big company, but one thing that's been, like, really beneficial to me is, like, you have a relationship with a lot of other realtors, right? So, he's obviously working not just with us, with a bunch of different realtors, but when we go to buy, like, if I go with one of my clients and they want to put an offer in, and they see that, hey, Jim's the one that's lending, and either, there's one of two options, either they use him already, so they already have that relationship, so God forbid something happens, they could give him a call. If they don't know him, I obviously am including you in all that, so you're going to be able to do that anyway. But, it's really nice just knowing, hey, this is somebody I know, you know what I mean? Right. Like, it's really beneficial when, I've had to deal with myself, like, what was the one, we'd won a couple months ago, that was in Fox Geese. Good one, yeah. Yeah, that was literally somebody that, the other agent you knew, right? Right, right. Yeah, that was awesome, so, it's cool, you know what I mean, sometimes it can work out having, you definitely want to work with someone, a local lender, and it should be good to go. Outside of that, you got any other kind of questions for me, or anything like that? Not really, I guess, did I cut that off? Yeah, we can stop again. I kept going. The last thing here, I wanted to go over something, you're getting the early scoop on this, but March 23rd, me and Jim, a bunch of our other friends are going to have an inspector, an appraiser, title, homeowners insurance, all these people, we're going to have a big buyer seminar, it's going to be March 23rd, at Paddy Wax, in the far northeast here, off Welsh, so, it's going to be right near March Mayonnaise, too, so, I'm thinking about putting some type of ad out there, like, Market Mayonnaise, something to do with that, like a tie-in with basketball, and me and my dad have an ad that we're going to be making, that should be pretty funny, too, so, should be good to go. If you know anybody that's looking to buy a house soon, like, either in the next couple months, or even if you're going to be looking to buy next year, we're going to have a ton of information there, feel free to come, it's going to be food, drinks, everything, it's completely free, so, just feel free to reach out to me, and hope everybody has a good day. Okay, good to go, all right, I think we're good.