Financing Nomad 101

We have two separate recordings of the Financing Nomad 101 class.

The following is a video recording of the webinar I presented to Nomads on January 17, 2017 with special guest Jassen Bowman.


And, the following is a video of the live Power Point presentation I gave to Nomads in Fort Collins on June 23, 2016 on Financing Nomad 101.

I also created some new tools for analyzing financing options. Those are shown below.

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Read the "What is Nomad?" blog post on

https://LearnToBeRich.com/what-is-nomad/

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Nomad BasicsUltimate Nomad ChecklistWeek 1

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Read "Nomad on $10 Per Hour" blog post:

https://LearnToBeRich.com/nomad-on-10-per-hour/

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Nomad BasicsOptional

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Watch the recording of the live presentation of "Get Your First Deal Done" available on:

https://LearnToBeRich.com/get-your-first-deal-done/

Mark this task as complete once you've watched it.

ASAPBuying Process OverviewClassesGet Your First Deal DoneNomad BasicsUltimate Nomad ChecklistWeek 1

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Watch the recording of the live presentation of "Buying Process Overview for Nomads" available on:

https://LearnToBeRich.com/buying-process-overview/

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ASAPBuying Process OverviewClassesGet Your First Deal DoneNomad BasicsOptionalUltimate Nomad ChecklistWeek 1

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Complete the "First Meeting: Financing" checklist:

https://LearnToBeRich.com/financing/

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ASAPFinancingFirst MeetingFirst Meeting FinancingUltimate Nomad ChecklistWeek 1

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Watch the recording of the live presentation of "Financing Nomad 101" available on:

https://LearnToBeRich.com/financing-nomad-101/

This class covers the different types of financing available and which ones we consider for Nomad. It goes into detail on Down Payments and much more.

Mark this task as complete once you've watched it.

ASAPClassesFinancingFirst Meeting: FinancingGet Your First Deal DoneNomad BasicsUltimate Nomad ChecklistWeek 1

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As a pre-curser to discussing the specific loan programs with your Lender, you may want to get a feel for some of the big picture loan types we use. Discuss these with your Real Estate Broker.

  • Nothing down loans like USDA and VA. VA loans require VA benefits but can also be used to purchase single family homes, duplexes, triplexes and fourplexes if you owner occupy at least one of the units.
  • Conventional financing like 1% down payment for your first owner occupant purchase, 3% down payment for purchases #2 and #3, then 5% down payment for purchases through #10
  • FHA 3.5% down payment programs which can be used to purchase single family homes, duplexes, triplexes or fourplexes if you owner occupy at least one of the units. FHA is also one of the easiest loans to qualify for should you have some credit challenges.
  • Non-owner-occupant loans with as little as 15% down payment with Private Mortgage Insurance (PMI) or 20% down payment without PMI.

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FinancingFirst Meeting: FinancingUltimate Nomad ChecklistWeek 1

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When you write an offer you'll need to come up with Earnest Money when you write the offer. It is typically applied as part of your Down Payment so it is NOT in addition to a Down Payment. It is typically about 1% of the purchase price but it is negotiated between Buyer and Seller.

Offering less Earnest Money than the Seller is asking for will typically weaken your offer.

That means for the following home prices, Earnest Money will typically be approximately:

  • $100,000 home - $1,000 Earnest Money
  • $200,000 home - $2,000 Earnest Money
  • $300,000 home - $3,000 Earnest Money
  • $400,000 home - $4,000 Earnest Money
  • $500,000 home - $5,000 Earnest Money

If you're trying to buy a home with little or nothing down, it would help if you had Earnest Money to put up with your offer and if you did not use it at closing for Closing Costs, you could get a refund of your Earnest Money at Closing.

If you don't have Earnest Money, it will be harder to negotiate getting a Seller to accept your offer so we might need to be much more flexible in house selection to find a Seller willing to accept an offer with little or no Earnest Money.

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Earnest MoneyFinancingFirst Meeting: FinancingUltimate Nomad ChecklistWeek 1

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You'll typically need your Down Payment at the time of Closing, but the Lender will likely need to know the source of your Down Payment.

Your Earnest Money will apply toward your Down Payment (plus any closing costs you might have for your loan). For example, if you needed $15,000 for Down Payment and you put up $3,000 for Earnest Money, the $3,000 would apply toward the $15,000 so you would need $12,000 more for Closing plus any additional closings costs.

This is the time to start thinking about where you might get your Down Payment from and how much you have to work with.

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Down PaymentFinancingFirst Meeting: FinancingUltimate Nomad ChecklistWeek 1

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Once you have your contract accepted there are some common expenses you might need to pay while you're under contract and at Closing to buy the property.

Here are some examples and some really rough estimates of what they might cost:

  • Home inspection (paid to Home Inspector you hire if you decide to hire one) - about $250 for interior only condo to $375-$500 for single family home, more for multi-family properties
  • Radon test (paid to the person who does your radon test which may be your Home Inspector) - $100 to $200
  • Sewer scope (paid to the Sewer Scope company) - $200 if there is a sewer cleanout or more if they need to go in through a toilet
  • Meth test (paid to Industrial Hygienist) - $1,000 and up if you decide you want to test for meth.
  • Mold test (paid to Industrial Hygienist) - $300 and up if you decide you want to test for mold.
  • Appraisal (paid to the appraiser usually via your Lender) - usually about $500 to $800, can be much more if there is a rush fee, multiple trips or multi-family property
  • Closing Services Fee (paid to Title Insurance Company for preparing and presenting all the paperwork for Closing) - usually about $300 and is negotiated in the contract as to who pays (Buyer or Seller or split 50/50)
  • Loan Closing Fee (paid to Title Insurance Company for presenting your specific loan paperwork to you at Closing to get the loan) - typically about $350 (and not negotiated in Contract; it is a Buyer cost if they're getting a loan)
  • Owner's Title Policy (paid to Title Insurance Company and typically required by lender to get the loan) - varies based on purchase price and time since last refinance but you can estimate about $1,200 for $300K property without a new loan in past 5 years. It is negotiated in Contract but it is common to negotiate to get the Seller to pay for this.
  • Lender's Title Policy (paid to Title Insurance Company to insure the Lender for your loan) - typically about $400 to $500 depending on purchase price and this one is not negotiated in Contract and is always a Buyer expense.
  • HOA Transfer Fee (paid to the HOA) - Who pays it is negotiated in the Contract. It ranges from $0 to $500 or more depending on the HOA. It is common to see about $250ish.
  • HOA Status Letter Fee (paid to the HOA) - Who pays it is negotiated in the Contract. It ranges from $0 to $250 or more. It is common to see it about $150ish.
  • HOA Capital (paid to the HOA) - The amount varies depending on the HOA, but it is a Buyer expense all the time. Buyer may get it back when they sell. It is common that it can be about one or two months of HOA dues but can vary widely from that.
  • Condo Questionnaire (paid to HOA) - Usually if you're buying a condo and the lender requires it for the loan. It can vary a lot, so we'd need to call the HOA to find out the amount.

Some of these expenses are optional but strongly recommended like Inspection. Some of these expenses are optional and rarely done like meth tests. Some are negotiated in the Contract between Buyer and Seller like who pays the $300 or so Closing Services Fee or Owner's Title Policy. Some are required if you're getting a loan. Some you can ask the Lender to increase your interest rate (which will raise your monthly payment slightly) but give you a credit you can use to pay some of these up-front expenses; this allows you finance some of them over time. Sometimes, you can negotiate to get the Seller to pay some of them as Seller Concessions when you submit your offer.

Discuss these with James to talk about it especially before writing your offer if you're trying to minimize your out of pocket and buy a home with little or nothing down.

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Down PaymentFinancingFirst Meeting: FinancingUltimate Nomad ChecklistWeek 1

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Once you have your contract accepted you'll typically authorize your Lender to order the appraisal and pay for it.

Appraisals can run about $500 to $800.

Much more if there is a rush fee, multiple trips or multi-family property.

It is extremely rare (like I've never seen a Seller agree to it), but you can try to get Seller to pay for the appraisal when submitting your Contract. It is highly unlikely.

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FinancingFirst Meeting: FinancingUltimate Nomad ChecklistWeek 1

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If you've opted to freeze your credit to prevent identity theft, you'll need to unfreeze your credit to apply for your loan.

In some cases, I am hearing it is taking mailing in a copy of your request and a photo ID to unfreeze your credit, so you may want to get a jump start on this process before you formally apply.

Ask your lender which credit bureaus they pull credit from so you know which to unfreeze.

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FinancingFirst Meeting: FinancingUltimate Nomad ChecklistWeek 1

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Watch the recording of the live presentation of "Analyzing a Deal with Brian's Spreadsheet" available on:

https://LearnToBeRich.com/how-to-analyze-a-deal-with-brians-spreadsheet/

Mark this task as complete once you've watched it.

Analyzing DealsASAPCash FlowClassesFirst Meeting: Analyze DealsGet Your First Deal DoneNomad BasicsUltimate Nomad ChecklistWeek 4Week 56

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Watch the recording of the live presentation of "Looking at Houses" available on:

https://LearnToBeRich.com/looking-at-nomad-houses/

Mark this task as complete once you've watched it.

ClassesGet Your First Deal DoneNomad BasicsPre-ShowingsUltimate Nomad ChecklistWeek 3

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Complete the "Pre-Showings: Qualify with Lender" checklist:

https://LearnToBeRich.com/qualify-with-lender/

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ASAPFinancingPre-ShowingsPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2

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Ask your Real Estate Broker to suggest 3 possible Lenders to contact for financing your home purchase based on the types of loans you're considering.

You're welcome to use whichever Lender you choose (from the Real Estate Broker's recommendations or your own), however... you should realize that making sure your Lender performs if your responsibility.

In other words, if your Lender does not show up on the day of closing with the money for whatever reason, you are still in default on the "Contract to Buy and Sell Real Estate" (not your Lender) and you are at risk of losing your Earnest Money (and specific performance in the unlikely event that box is checked on the "Contract to Buy and Sell Real Estate"). Another way of saying this is: your Lender is not a party to the "Contract to Buy and Sell Real Estate" and so they have no consequences in the "Contract to Buy and Sell Real Estate" if they don't perform.

So, consider "testing" a new Lender carefully.

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ASAPDream TeamDream Team - Pre-ClosingFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2

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Talk to 3 Lenders to determine which one you'd like to use.

Ask your Real Estate Broker for recommendations.

You may want to consider at least reading through the Mortgage Broker Interview Questions for some ideas of what you might want to ask:

http://JamesOrr.com/mortgage-broker-interview-questions/

Mark complete once you've talked to 3 Lenders of if you've already decided which Lender you plan to use.

ASAPDream TeamDream Team - Pre-ClosingFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2

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Decide which Lender you will use to finance your purchase.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on a Lender to use.

Analyzing DealsASAPDream TeamDream Team - Pre-ClosingFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2

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Make an application to get qualified for a loan with the Lender you've decided you're going to use.

Some people will opt to get quotes from multiple lenders. If you're going to do this, compare everyone on the same day so the rate is the same.

Also, have the Lender you think is most likely to be the one you'll go with pull your credit and then tell the other Lenders you're comparing what your credit score is. If you decide to go with them, you'll let them pull your credit then.

Your ultimate goal at this point is to get a pre-approval letter for the max amount you qualify for.

If you need a recommendation for a Lender ask your Real Estate Broker.

Mark this task complete once you've applied for a loan and been approved with the Lender you plan to use.

ASAPFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2Week 54

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Understand what documents your lender will ultimately need to do your loan and start gathering and preparing those documents.

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ASAPFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2Week 54

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Find out what interest rate and what down payment amount you'll likely get when you get your loan.

You'll want to use this when you start to analyze properties using Brian's Spreadsheet.

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ASAPFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2Week 54

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If you're going to owner occupy the property especially, find what your estimated monthly payment will be for both your max loan that you can qualify for and the price you're comfortable with that you'll likely be buying at.

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ASAPFinancingPre-Showings: Qualify with LenderUltimate Nomad ChecklistWeek 2Week 54

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As soon as your "Contract to Buy and Sell Real Estate" is accepted, make sure your Lender has a copy so they can complete your application and start working on getting your financing approved and through under-writing.

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ASAPFinancingUltimate Nomad ChecklistWeek 2Week 54

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Complete the "Pre-Showings: Pre-approval Letter" checklist:

https://LearnToBeRich.com/pre-approval-letter/

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ASAPFinancingPre-ShowingsPre-Showings: Pre-approval LetterUltimate Nomad ChecklistWeek 2

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Get Pre-Approval letter from Lender for the max you can afford. We will only use this if you're unable to reach your Lender and you want to submit an offer right away. Otherwise, we will ask your Lender for an updated "Lender Letter" for the exact Purchase Price.

Having a "Lender Letter" helps you get your offer accepted.

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ASAPFinancingPre-Showings: Pre-approval LetterUltimate Nomad ChecklistWeek 2Week 54

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Save a copy of your max "Lender Letter" to your Dropbox using the file format:

"YYYY-MM-DD - FULL NAME - Max Lender Pre-Approval Letter.pdf"

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ASAPFinancingPre-Showings: Pre-approval LetterUltimate Nomad ChecklistWeek 2Week 54

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Send a copy of your max "Lender Letter" to your Real Estate Broker.

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ASAPFinancingPre-Showings: Pre-approval LetterUltimate Nomad ChecklistWeek 2Week 54

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Complete the "Pre-Showings: Earnest Money" checklist:

https://LearnToBeRich.com/earnest-money/

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ASAPEarnest MoneyFinancingPre-ShowingsPre-Showings: Earnest MoneyUltimate Nomad ChecklistWeek 2

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Discuss the typical amount of Earnest Money with your Real Estate Broker.

In Northern Colorado, Earnest Money is typically about 1% of the purchase price of the property but is negotiated between Buyer and Seller.

However, offering less Earnest Money than the Seller is requesting on the MLS listing is typically considered a weaker offer.

If you're buying a property with little or no money down (especially less than what Earnest Money would be), discuss with your Real Estate Broker some possible strategies for trying to get an offer accepted in this situations. It may be harder to get your offer accepted in these situations so you may need to be more flexible in the homes you're looking at until we find a more flexible Seller.

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ASAPEarnest MoneyFinancingMaking OffersPre-Showings: Earnest MoneyUltimate Nomad ChecklistWeek 2

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You will need Earnest Money at the time you make your offer. It can vary and is negotiated but it is typically about 1% of the purchase price of the property you're going to buy. Earnest Money typically does count towards your Down Payment.

For a $300,000 property, that means you'll likely need about $3,000 for Earnest Money at the time you make your offer. Do you know where those funds are and are they readily accessible?

Discuss this with your Real Estate Broker if you have additional questions or concerns.

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ASAPEarnest MoneyFinancingMaking OffersPre-Showings: Earnest MoneyUltimate Nomad ChecklistWeek 2

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Watch the recording of the live presentation of "How to Get Down Payment for Nomad" available on:

https://LearnToBeRich.com/how-to-get-down-payment-for-nomad/

Mark this task as complete once you've watched it.

ASAPClassesDown PaymentFinancingNomad BasicsPre-Showings: Down PaymentUltimate Nomad ChecklistWeek 2

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Ask your Lender to give you estimates on how much your Down Payment and Closing Costs will be with the loan you plan to use and the home price you're likely to look for. Make adjustments if needed to your plan.

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Down PaymentFinancingPre-Showings: Down PaymentUltimate Nomad ChecklistWeek 2

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Make sure that you know the source of your Down Payment and Closing Costs.

You will need at least the Earnest Money when you make your offer. You will need the Down Payment and Closing Costs for closing.

Discuss the timing with your Real Estate Broker and/or Lender if you have any concerns.

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ASAPDown PaymentFinancingPre-Showings: Down PaymentUltimate Nomad ChecklistWeek 2

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Review the recording of the live presentation of "Looking at Houses" available on:

https://LearnToBeRich.com/looking-at-nomad-houses/

Mark this task as complete once you've watched it.

Get Your First Deal DoneNomad BasicsPre-ShowingsShowings: Looking at HousesUltimate Nomad ChecklistWeek 3

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Discuss the following tips for when you go on Showings with your Real Estate Broker:

  • Wear easy to remove shoes
  • WARNING: Sellers can easily record audio (and video) of you while inside their home... don't say anything inside the home that you wouldn't say right in front of the Seller. This is especially true of offer price and strategy.
  • Arrive 5 minutes early. Some Showing windows are very strict time ranges.
  • There may be others present at the Showing.
  • If Tenants are present, we typically will ask them questions about the property.
  • Drive/walk around the neighborhood especially if you're interested in the property.
  • Consider using the +/- system to make property notes.

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Get Your First Deal DoneNomad BasicsPre-ShowingsShowings: Looking at HousesUltimate Nomad ChecklistWeek 3

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Discuss the following with your Real Estate Broker when you you're out on a Showing and considering making an offer:

  • Meet the neighbors... tell them you're considering making an offer on the property and ask them how they like the neighborhood.
  • What appliances are included? Which are excluded?
  • What school district is this in?
  • Is the AC included? What type of heat is used in the property?
  • Where is the water disconnect located?
  • What is the age and likely need to replace or update the major, expensive items like:
    furnance, AC, roof, carpet, paint, hot water heater. You'll also check these during inspection.
  • Where are the property lines?
  • Is there adequate parking? Is it owned? Is there adequate garage spaces? Is it owned?
  • What does the HOA cost? What is included?
  • Is there anything from the current "Seller's Property Disclosure"?
  • Is there anything from previous "Seller's Property Disclosure" from past sales?
  • Where is the sewer cleanout?
  • Are there smoke/CO detectors within 15 feet of each bedroom doorway?
  • Does the house already have a radon mitigation system? Is it passive or active?
  • Will you be having a property inspection (it is recommended)? Will you be testing for radon? Mold? Meth? Termiates? Sewer scope?
  • If this is a condo, is it a warrantable or non-warrantable condo?
  • What are the secret broker comments on the "MLS Sheet"?
  • What due diligence documents are you going to want to see?
  • Are there any additional documents provided by the Seller's agent in the MLS?

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Get Your First Deal DoneNomad BasicsPre-ShowingsShowings: Looking at HousesUltimate Nomad ChecklistWeek 3

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Watch the recording of the live presentation of "Nomad 101" available on:

https://LearnToBeRich.com/nomad-101/

Mark this task as complete once you've watched it.

ASAPClassesNomad BasicsOptionalUltimate Nomad ChecklistWeek 5Week 57

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Get a Pre-Approval Letter from your Lender for the exact amount of the offer you're about to write.

Having a Lender Letter helps you get your offer accepted.

Mark complete when done.

FinancingUltimate Nomad ChecklistWeek 2Week 3Week 4Week 5Week 6Week 7Week 8Writing Offer: Info Required

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Complete the "Contract To Close: Loan and Credit" checklist:

https://LearnToBeRich.com/loan-and-credit/

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Contract To CloseContract To Close: Loan and CreditFinancingUltimate Nomad ChecklistWeek 13

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Complete the "Loan Application Deadline" checklist:

https://LearnToBeRich.com/loan-application-deadline/

You'll usually apply for the loan prior to going out and looking at homes with your Real Estate Broker. However, your Lender will require an address to have a completed loan application. For the "Contract to Buy and Sell Real Estate" we typically use "MEC + 2 Business Days" to get your Lender a full, complete with address of the property, application.

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Contract Deadline: Loan Application DeadlineContract To Close: Loan and CreditFinancingUltimate Nomad ChecklistWeek 13

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If you haven't already selected a Lender (which in most cases you will have at this point), then ask your Real Estate Broker to suggest 3 possible Lenders to contact for financing your home purchase based on the types of loans you're considering.

You're welcome to use whichever Lender you choose (from the Real Estate Broker's recommendations or your own), however... you should realize that making sure your Lender performs if your responsibility.

In other words, if your Lender does not show up on the day of closing with the money for whatever reason, you are still in default on the "Contract to Buy and Sell Real Estate" (not your Lender) and you are at risk of losing your Earnest Money (and specific performance in the unlikely event that box is checked on the "Contract to Buy and Sell Real Estate"). Another way of saying this is: your Lender is not a party to the "Contract to Buy and Sell Real Estate" and so they have no consequences in the "Contract to Buy and Sell Real Estate" if they don't perform.

So, consider "testing" a new Lender carefully.

Mark this task as complete when done.

ASAPContract Deadline: Loan Application DeadlineDream TeamDream Team - Pre-ClosingFinancingUltimate Nomad ChecklistWeek 2

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If you have not already done so, talk to 3 Lenders to determine which one you'd like to use.

Ask your Real Estate Broker for recommendations.

You may want to consider at least reading through the Mortgage Broker Interview Questions for some ideas of what you might want to ask:

http://JamesOrr.com/mortgage-broker-interview-questions/

Mark complete once you've talked to 3 Lenders of if you've already decided which Lender you plan to use.

ASAPContract Deadline: Loan Application DeadlineDream TeamDream Team - Pre-ClosingFinancingUltimate Nomad ChecklistWeek 2

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Decide which Lender you will use to finance your purchase.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on a Lender to use.

Analyzing DealsASAPContract Deadline: Loan Application DeadlineDream TeamDream Team - Pre-ClosingFinancingUltimate Nomad ChecklistWeek 2

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Make an application to get qualified for a loan with the Lender you've decided you're going to use.

Some people will opt to get quotes from multiple lenders. If you're going to do this, compare everyone on the same day so the rate is the same.

Also, have the Lender you think is most likely to be the one you'll go with pull your credit and then tell the other Lenders you're comparing what your credit score is. If you decide to go with them, you'll let them pull your credit then.

If you need a recommendation for a Lender ask your Real Estate Broker.

Mark this task complete once you've applied for a loan and been approved with the Lender you plan to use.

ASAPContract Deadline: Loan Application DeadlineFinancingUltimate Nomad ChecklistWeek 2Week 54

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As soon as your "Contract to Buy and Sell Real Estate" is accepted, make sure your Lender has a copy so they can complete your application and start working on getting your financing approved and through under-writing.

Mark this task complete when done.

ASAPContract Deadline: Loan Application DeadlineFinancingUltimate Nomad ChecklistWeek 2Week 54

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Once you have an accepted offer, you'll need to complete the loan application with your Lender.

Mark this task complete when done.

Contract Deadline: Loan Application DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Pay your Lender for Appraisal so they can order it.

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Contract Deadline: Loan Application DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Your Lender will undoubtedly want a plethora of financial documents.

Mark this task complete once you've provided them all to your Lender.

Contract Deadline: Loan Objection DeadlineFinancingUltimate Nomad ChecklistWeek 9

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In all but a small number of cases, we recommend fixed-rate 30 year mortgages for Nomads.

However, there are two situations we'd consider ARMs.

First, if you're buying the property and are 100% positive you're going to be putting a Tenant-Buyer in the property and you will be out of the property before the mortgage will adjust, then you can consider using an ARM.

Second, if you're buying the property with partners and the only loan you can get with the partnership is an ARM then you can also consider an ARM. However, in this case you probably should be putting a Tenant-Buyer in the property so it probably still falls under the first reason above.

Interest rates for ARMs (Adjustable Rate Mortgages) tend to be a little lower than the interest rates on fixed-rate 30 year mortgages. But the ARM interest rates can adjust over time causing much higher monthly payments and significant negative cash flow after the interest rate adjusts. This adds additional risk that you could have opted not to take on.

Mark this task as complete if you have decided to get fixed-rate mortgage or an ARM.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineFinancingNet Operating IncomeOptionalTenant BuyersUltimate Nomad ChecklistWeek 10

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Often for Nomads it is better to pay a one-time up front PMI (Private Mortgage Insurance) payment instead of monthly PMI on their loans.

This may mean coming to Closing with a little more cash.

Sometimes it means voluntarily raising your interest rate with your Lender to get a credit to pay for some or all of the up-front PMI.

Discuss these two scenarios with your Lender to see which one makes more sense to you.

Mark this task complete once you've discussed this with your Lender and decided which you'll pick.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineFinancingInterest RateNet Operating IncomeOptionalPrivate Mortgage InsuranceUltimate Nomad ChecklistWeek 10

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Talk to your Lender to see if buying down your interest rate makes sense in your specific situation.

Sometimes, especially if you have extra cash and you plan to hold the property for a long time, it makes sense to pay additional points to get a lower interest rate.

Mark this task complete once you've talked to your Lender about these options, analyzed them yourself and decided to buy down your interest rate or not.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineFinancingInterest RateNet Operating IncomeOptionalUltimate Nomad ChecklistWeek 10

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Sometimes if you have extra cash for down payment it might make sense to increase down payment.

We often consider this as an alternative to to paying up-front PMI or buying down the interest rate. If we're putting less than 20% down, one way to lower our monthly payment is to put more down to get rid of PMI instead of paying the PMI up-front.

Mark this task as complete when you've talked to your Lender about using a larger down payment and decided whether you will or not.

Analyzing DealsCash FlowContract Deadline: Loan Objection DeadlineDown PaymentFinancingInterest RateNet Operating IncomeOptionalUltimate Nomad ChecklistWeek 10

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If you're getting Owner Financing (also known as Seller Financing) please hire an Attorney to get help. Your Real Estate Broker is not qualified, trained or allowed to assist with Owner Financing.

Mark this task as complete when done.

Contract Deadline: Buyer's Credit Information DeadlineContract To Close: Loan and CreditFinancingOwner FinancingUltimate Nomad ChecklistWeek 10Week 11Week 12Week 13

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If you're getting Owner Financing (also known as Seller Financing) please hire an Attorney to get help. Your Real Estate Broker is not qualified, trained or allowed to assist with Owner Financing.

Mark this task as complete when done.

Contract Deadline: Disapproval of Buyer's Credit Information DeadlineContract To Close: Loan and CreditFinancingOwner FinancingUltimate Nomad ChecklistWeek 10Week 11Week 12Week 13

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If you're buying a property and the Seller's loan is remaining in place after the sale (also known as buying a property Subject To the existing financing) please hire an Attorney to get help. Your Real Estate Broker is not qualified, trained or allowed to assist with these types of transactions.

Mark this task as complete when done.

Contract Deadline: Existing Loan Documents DeadlineContract To Close: Loan and CreditFinancingOwner FinancingUltimate Nomad ChecklistWeek 10Week 11Week 12Week 13

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If you're buying a property and the Seller's loan is remaining in place after the sale (also known as buying a property Subject To the existing financing or assuming the loan) please hire an Attorney to get help. Your Real Estate Broker is not qualified, trained or allowed to assist with these types of transactions.

Mark this task as complete when done.

Contract Deadline: Existing Loan Documents Objection DeadlineContract To Close: Loan and CreditFinancingOwner FinancingUltimate Nomad ChecklistWeek 10Week 11Week 12Week 13

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If you're buying a property and the Seller's loan is remaining in place after the sale (also known as buying a property Subject To the existing financing or assuming the loan) please hire an Attorney to get help. Your Real Estate Broker is not qualified, trained or allowed to assist with these types of transactions.

Mark this task as complete when done.

Contract Deadline: Loan Transfer Approval DeadlineContract To Close: Loan and CreditFinancingOwner FinancingUltimate Nomad ChecklistWeek 10Week 11Week 12Week 13

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If you're buying a property and you are getting Owner Financing or Private Financing please hire an Attorney to get help. Your Real Estate Broker is not qualified, trained or allowed to assist with these types of transactions.

Mark this task as complete when done.

Contract Deadline: Seller or Private Financing DeadlineContract To Close: Loan and CreditFinancingOwner FinancingUltimate Nomad ChecklistWeek 10Week 11Week 12Week 13

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If you have not already done so, pay your Lender for Appraisal so they can order it.

Mark complete when done.

Contract Deadline: Appraisal DeadlineContract Deadline: Loan Application DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Since you're almost always paying for the Appraisal you will need to authorize your Lender to order the Appraisal.

IMPORTANT NOTE: If you're concerned about what you might find at the inspection and may be terminating your contract on inspection, you should discuss with your Lender and Real Estate Broker delaying your Appraisal so you do not have to pay for an Appraisal on a property you are not going to buy.

Mark this task complete once you've authorized your Lender to order the appraisal and provided them all the forms and payment information they need to do so.

Contract Deadline: Appraisal DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Your Real Estate Broker should be checking in with the Lender to make sure your Lender has ordered the Appraisal.

Mark this task complete when done.

Contract Deadline: Appraisal DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Your Real Estate Broker should check with the Lender and/or the Seller's Real Estate Broker to make sure the Appraisal has visited the property to complete their Appraisal.

This is a proactive step in case it looks like you might not make the Appraisal Deadline and we'd need to negotiate with the Seller to see if we can extend that deadline.

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Contract Deadline: Appraisal DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Once the Appraisal is complete and has gone through your Lender's underwriting review, they should give you a copy and let you know if the property has appraised for Purchase Price or not.

Mark this task complete when done.

Contract Deadline: Appraisal DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Once the Appraisal is complete and has gone through your Lender's underwriting review, your Lender should communicate with your Real Estate Broker to let us know if the property appraised or not.

While some Buyers send us copies of the Appraisal, Lender typically do not automatically send a copy of your Appraisal to your Real Estate Broker.

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Contract Deadline: Appraisal DeadlineFinancingUltimate Nomad ChecklistWeek 9

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Call your Lender and get an Interest Rate quote estimate to use when analyzing properties using Brian's Deal Analysis Spreadsheet.

You'll modify this as interest rates change or as your loan program changes for the property you're analyzing.

Mark this task complete when you have an interest rate estimate to use when analyzing deals using Brian's Spreadsheet.

Analyzing DealsASAPCash FlowFinancingNet Operating IncomeUltimate Nomad ChecklistWeek 2

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Watch the recording of the live presentation of "Closing Real Estate Deals" available on:

https://LearnToBeRich.com/closing-real-estate-deals/

Mark this task as complete once you've watched it.

ClassesClosingGet Your First Deal DoneNomad BasicsUltimate Nomad ChecklistWeek 61Week 9

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Read the "Catch Up For Retirement Nomad Overview" blog post on

https://LearnToBeRich.com/catch-up-for-retirement-nomad-overview/

Mark this task as complete when you're done.

Catch Up NomadNomad BasicsUltimate Nomad ChecklistWeek 14

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Read the "Nomad with Lease Option Exit Book" for your city:

https://LearnToBeRich.com/book/

Mark this task complete when done.

ASAPLease OptionNomad BasicsTenant BuyersUltimate Nomad ChecklistWeek 17

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Read the "Legacy Nomad Overview" blog post on

https://LearnToBeRich.com/legacy-nomad-overview-2/

Mark this task as complete when you're done.

Legacy NomadNomad BasicsUltimate Nomad ChecklistWeek 24

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Read the "Young Nomad Overview" blog post on

https://LearnToBeRich.com/nomad-overview-for-young-professionals/

Mark this task as complete when you're done.

Nomad BasicsUltimate Nomad ChecklistWeek 24Young Nomad

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Watch the recording of the live presentation of "How to Acquire a Multi-Million Dollar Real Estate Portfolio with just $3,000" available on:

https://LearnToBeRich.com/nomad-just-3000/

Mark this task as complete once you've watched it.

ClassesGet Your First Deal DoneLease OptionNomad BasicsTenant BuyersUltimate Nomad ChecklistWeek 15

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Watch the recording of the live presentation of "Interest Rate Scenarios for Nomads" available on:

https://LearnToBeRich.com/interest-rate-scenarios/

Mark this task as complete once you've watched it.

ClassesFinancingInterest RateUltimate Nomad ChecklistWeek 18

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Watch the recording of the live presentation of "Little Down Nomad Overview" available on:

https://LearnToBeRich.com/little-down-nomad-overview/

Mark this task as complete once you've watched it.

ClassesLittle Down NomadNomad BasicsUltimate Nomad ChecklistWeek 27

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Read the "Save For College Nomad Overview" blog post on

https://LearnToBeRich.com/save-for-college-nomad/

Mark this task as complete when you're done.

ASAPCollege NomadNomad BasicsUltimate Nomad ChecklistWeek 29

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Check to see if we have local Nomad Investor Club meetups near you to connect with other local Nomads, real estate agents, lenders and other dream team members:

https://LearnToBeRich.com/meetup/

Mark this task as complete once you've watched it.

ASAPNomad BasicsUltimate Nomad ChecklistWeek 1

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Take a moment to look at the Nomad Class Schedule to see the live classes we have coming up near you.

https://LearnToBeRich.com/schedule/

You can also get links to previously recorded classes.

Nomad BasicsUltimate Nomad Checklist

Improvements

The following are improvements I plan to make to this page based on some of my Standard Process Improvement Questions.

  • Add chart and spreadsheet.

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