Loan Officer | NMLS 228246
Licensed in AZ, CA, CO, CT, FL, GA, IL, LA, NJ, OH, OK, PA, TX, & VA
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A STEP-BY-STEP PLAN TO BUY AN INVESTMENT PROPERTY THOUSANDS UNDER THE LISTING PRICE
WITH PROVEN STRATEGIES, PROVEN RESULTS, HERE'S WHAT MY CLIENTS SAY:
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Bill Rapp's handling of our loan (even though out of state) was unparalleled to any service I have been through prior, including 3 different real estate transactions and multiple refinances. Extremely quick close, with great options and flexibility for my families needs. All around A+
Chris & Beth Sheehan - San Jose, CA
Professionalism - Expert in Home Style Loan
Bill is an expert in the topic, his explanations and online material make a difference and he is always there from the beginning to the end. He is committed to make thing happen.
Felipe Caldern & Carolina Angel Gutierrez
I couldn't have been more pleased with Bill's level of service. He made what is typically a lengthy, arduous process far quicker and easier at every turn. I'm extremely comfortable recommending Bill to friends and family, and will definitely utilize his services again!
Jim Lipari - Austin, TX
Bill is an exceptional loan officer. He helped us to purchase our home with very personal and professional service. He helped us navigate the whole process from start to closing without any problems. We didn't think we're qualified to purchase a house, but Bill went above and beyond to find a way to help us achieve our goal. He always responded very quickly with our requests, he would come back with different options with comparison chart to clearly indicate how much we need for down payment, monthly payments, interest rates, closing costs etc.
We would highly recommend Bill to anyone in need of lending services. In fact, we have already recommended Bill to one of our friends on purchasing a house.
David Chan - Houston, TX
Knowledgeable, Honest, Trustworthy, and Reliable!
"I will definitely keep you in mind. If anyone I know needs financing, I will send them your way!"
Jon & Andrea Saleem, CRPC Financial Advisor - Houston, TX
Best Dam Mortgage Guy a man could know!
"Hands down the best loan e
xperience to date!"
Gabe & Chelsea Jackson - Pearland, TX
Knowledgeable and Responsive
Bill was a pleasure to work with and he made the loan process fairly easy. He answered all questions I had very quickly and was straight forward in doing it. I would recommend Bill to others.
Wes Brady - Richmond, TX
Very professional and always returned our calls!
Bill takes a lot of pride in his job and is very dependable. They were very patient and understanding. He went out of his way and explained all my questions and concerns. They were very professional and returned my phone calls and emails. He did a great job and I fully recommend him.
Therese, Malcom & Shirley Teixeira - Katy, TX
Great Job !
Bill helped us out from beginning to end of loan process. The loan closed in a timely manner as Bill worked hard with bank to get our to the final steps.
Kamal & Theresa Wilson - Hartford, CT
Avid Problem-Solver and Absolute Pleasure to Work With !
Bill Rapp worked very hard to ensure that we closed our loan and were able to move into our new home. He always had alternatives to any problems we encountered while closing. He worked with us from the beginning identifying solutions to any problems that we were having. He was an absolute pleasure to work with!
Nikita Rayani & Sanit Tejani - Houston, TX
Awesome to work with !
Being a first-time buyer I came in with lots of questions and concerns. Bill was always available for any questions I had and answered everything to my satisfaction. Bill made the loan process so painless that I could still concentrate on other things. We ended up closing early which made things even better. If you are in need of a lender and want someone who is very approachable and stays on top of your loan then Bill is your guy.
Cesar Raya - Richmond, TX
Loan Declined by my bank, and he saved the day!
Bill, did an amazing job helping me close on my house. He took the reigns and reassured me the best route to take to help close. He was accountable, thorough and trustworthy. I will continue to work with Network Funding, L.P. when it comes to home buying in the future because of the quality of service Bill gave.
Jacob Smith - Boerne, TX
Bill Rapp Will Definitely Make It Happen!
Bill is the most kind, patient and helpful person I have ever known. He answers his phone calls and emails promptly. You can ask him a million questions, and he will answer each and every one of them. Before I started working with Bill, I had been turned down for a home loan, because of some past credit issues I had, plus I was a single mother. However, once I started working with Bill, he was able to quickly get me a home loan, with a good interest rate. I would recommend that you call him, as he will help you.
Corinne Wilson - Roselle, NJ
Phenomenal, Hard Working and Never Quits!
Had a stupid foreclosure that could have been avoided if ex’s attny would have sent my buy out offer. So Bill was able to push this through with a 4 year foreclosure. He worked his butt off, was very diligent with his communication; and was very professional talking to me even when I was screaming and/or crying at him. Highly recommend this lender. He really go to the ends of the earth to help you!
Liz Keeter - Harlingen, TX
Exceptional customer service
Bill was superb! This was our second home buying experience, and after the process through our bank for the first home (IT WAS A TOTAL NIGHTMARE!) we were very hesitant about buying a second home. BUT Bill was there to make this home buying experience phenomenal! It was so easy! We will definitely be faithful customers.
Isha Lopez & Mauricio Garcia - Houston, TX
Service with a capitol S
Bill went above and beyond at every turn. He worked late on Saturday, he worked late all the time. We wanted to close ASAP and he really helped make it happen for us.
Jeff & Wendy Heger - Houston, TX
Best Buying Experience
I would would highly recommend going with Network Funding LP. As a first time home buyer I didn't know what to expect. Bill Rapp was very helpful in answering all my questions and guided me through all ghe steps. I couldn't have asked for a better buying experience!
Tabitha Turner - Humble, TX
Would recommend him and use him again!
Very involved and professional . Kept me informed and up to date on everything that was going on Went with me closing and was very helpful and knowledgeable.
Kathy Ward - Houston, TX
Well I meet bill back in December 2016 he got recommended by my real estate agent we had a house in sight and started the process to get approved but we fail due to my work history and credit bill told me not to give up and put me in contact with a credit repair company they help me bring my score up and bill walk me thru the process of getting a new line so this time around we got approved before looking for our house after we found it we still had a couple of hick up but with bills help on Sunday 6-18-17 to be exact Father's Day bill called me to give me the great news that we had got approved and the closing date was as scheduled bill was more than just a lender to my family he became a friend and I'm alway going to have him in mind for any other financial situation.
Alejandres Felimon - Richmond, TX
I really liked his attitude!
I wouldn't usually say this but the way he had handled my mortgage was really pleasant. I personally enjoyed the time spent with him while we discussed feasible rates. He's a great man with a great personality and he offered really low interests as well. Definitely recommend him to others.
Tom Troiano - Atlantic City, NJ
He's nothing short of a miracle!
I'm a self-employed businessman and had him figure out the mortgage of the house after 30% down payment. The interest rates I received were incredibly low given what I had thought of earlier. One other important thing to note was that I hadn't really taken any loans earlier, so I had no credit history. He helped me out with all that as well so I can't really call him anything else but a miracle.
Fran Suarez - Cleveland, OH
He's really helpful!
I made a bid to him and the very same day he gave me an offer which I couldn't resist. It was too intimidating with those incredibly low interest rates and all, thoroughly recommend him.
Kenny Mickle - Houston, TX
Bill was very expeditious and made it real easy going through the loan process. I felt he was on top of things.
I deal with investment properties and will more than likely call on him again.
Wayne King - Pensacola, FL
Bill was great!
Bill made us feel like a friend all the way thru the process. He was patient and explained everything he needed clearly. He was available ANYTIME we had questions or needed more information. Hopefully we won’t go thru this process again anytime soon, but if we do - we’d choose Bill! =)
Barbra & Nick Grimmer - Austin, TX
Great broker !
Bill was a great broker to work with. As first time home buyers we had many questions about the process, Bill took the time to help us even calling us back on weekends with answers.
I would not hesitate to recommend him to anyone looking for a broker to work with.
Murray & Lisa Turner - Pensacola, FL
Bank Statement Lending!
William Rapp of Network Funding, L. P. was very professional and I felt comfortable in dealing with him. I will definitely recommend him to family and friends.
Ian F - Missouri City, TX
Jumbo Mortgage Specialist
Getting a jumbo mortgage is easier than you might think. This guide will help you understand what a jumbo loan is and whether it’s right for your financial profile.
What Is a Jumbo Loan?
Another name for a jumbo mortgage is a non-conforming mortgage. This is a loan a lender makes you that doesn’t “conform” to the guidelines of Fannie Mae and Freddie Mac. Created by Congress in 1938 and 1970 respectively, Fannie Mae and Freddie Mac provide stability and affordability to the mortgage market by buying “conforming” mortgages from lenders, which gives lenders liquidity to make more mortgages.
Fannie Mae and Freddie Mac only buy mortgages meeting their guidelines for down payment, credit score, post-closing reserves, and loan amount.
In 2017, the conforming loan size limit for a one-unit home is $453,100 nationwide, but can go higher in certain high-priced markets. Here is a link to the current
Fannie Mae Mortgage limits:
Loans greater than these limits are usually called jumbo mortgages, but can also be called non-conforming mortgages.
Questions about jumbo loans?
Bill Rapp is a Jumbo Mortgage expert and can help answer any question you may have. 832-956-0901
When Should I Use a Jumbo Mortgage?
You’d use a jumbo mortgage when you’re seeking a loan amount that’s greater than the conforming loan limit in your area. In most of the country, that means you’ll use a jumbo mortgage if your loan amount is greater than $453,100.
In certain areas that are deemed high cost, the conforming loan limits go above $453,100, and you have to look up your area’s loan limits to know exactly.
Certain lenders will categorize anything above $417,000 as a jumbo, even if the loan is being made in a high-cost area where the conforming limit goes as high as $679,650.
But don’t assume this applies if you’re in an area where your conforming limit goes above $453,100. You must ask your specific lender what kind of loan you’ll be eligible for.
Is Qualifying for a Jumbo Mortgage Different?
Jumbo mortgages have the same overall qualifying methodology as a conforming loan. Lenders will look at credit score, down payment size, total monthly debt obligations relative to income (called your debt-to-income ratio), and money left over after closing.
Credit score requirements are about the same for conforming and jumbo: a credit score down to 680 generally gets you most available loan options, albeit with a higher rate than you’d get with a top-tier credit score of 760 or greater.
As for money left over after loan closing — often called reserves or post-closing liquidity — jumbo loans will be more stringent than conforming. Typically jumbo lenders want to see 12 months of reserves after the close, half liquid (in a checking or savings account), and half calculated from retirement assets. Conforming loan reserve requirements range from 0 to 12 months, depending on factors such as credit score, down payment, and DTI . Jumbo exceptions are available if your debt-to-income ratio is low and your down payment is high.
However, jumbo loan approvals have some flexibility that conforming loans don’t have:
* Higher debt-to-income ratio. For most conforming loans with 20 percent down or greater, lenders will usually require that your total monthly housing payment plus all other monthly bills doesn’t exceed 43 percent of your income. But there can be some flexibility on non-conforming loans. For example, if you documented substantial cash reserves left over after the loan closed, you might be able to get a jumbo loan with a debt-to-income ratio higher than 43 percent.
* Flexible income calculations. Jumbo income calculations can be more logical than conforming. For example, if you were in the same industry for 15 years and recently started your own business in that industry, a conforming loan would require you to show two years of filed self-employed tax returns. A jumbo loan might only require one year of filed returns if you could document that the business was stable or growing.
* Less than 20 percent down with no mortgage insurance. Down payments on jumbo loans can be as little as 10 percent for loan amounts of $1 million and sometimes higher, translating into a $1.1 million purchase price or higher. Unlike conforming loans, these low-down jumbo programs don’t always require mortgage insurance. The tradeoff for this flexibility is that most lenders will offer a rate that’s about .25 percent higher and require 30- to 36-percent debt-to-income ratios for these low-down jumbos.
* Piggy Back loans can be used to do a first and a second mortgage to allow for as little as 5% down when buying a home that traditionally will fall into the Jumbo category. Take for an example of a $750,000 sales price. With a $450,000 first, Less than 20 percent down with no mortgage insurance. Down payments on jumbo loans can be as little and $262,500 second mortgage you will only need 5% or $37,500 down.
Second liens of this size are a true specialty product. My best suggestion is to call Bill Rapp “The Mortgage Viking” at 832-956-0901.
How Do Jumbo Rates Compare to Conforming Rates?
Before the financial crisis of 2008, jumbo loans typically had rates at least .25 percent higher than conforming loans because jumbo lenders were perceived as taking more risk making loans that couldn’t be sold to government-backed Fannie Mae and Freddie Mac. This risk translated into higher consumer rates.
In the years following the financial crisis, federal regulations have impacted rate markets in such a way that has enabled banks to keep jumbo rates about the same as conforming rates.
This dynamic can change over time, so ask your lender to compare options for you, especially if you’re in a high-cost area where you might be eligible for a conforming loan above $453,100.
Jumbo loan, also known as a jumbo mortgage, is a form of home financing for whose amount exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). As a result, unlike conventional mortgages, it is not eligible to be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications.
Jumbo mortgages are gaining traction as the housing market continues to recover following the Great Recession.
How Big is a Jumbo Mortgage?
At what price does a mortgage exceed conventional/conforming and cross over into jumbo? It varies by state and even county. The FHFA sets the conforming loan limit size for different areas on an annual basis, though it changes infrequently. In fact, the 2017 maximum limit for one-unit properties of $453,100 (for most of the country) is the first across-the-board, baseline increase since 2018.
Currently, a mortgage in excess of $453,100 is considered a jumbo loan in the vast majority of the continental U.S. However, the conforming limit is higher in areas with steep home prices. In the highest of these “high-cost zones,” a jumbo is a loan above $679,650.
Here’s a look at how it breaks down. There are approximately 3,143 counties in the continental United States. Out of those, 2,916 have a loan limit of $453,100 in 2018. Only 108 counties have a loan limit of $679,650, including New York City, Los Angeles and San Francisco. The majority of high-cost areas are in California – which is no surprise, considering that the Golden State is home to some of the most expensive housing markets in the country.
Loan limits are often even higher outside of the continental U.S.. In fact, the limits in Hawaii’s five counties range between $679,650 and $1.019,475. (Hawaii, along with Alaska, Guam and the Virgin Islands, is allowed to have higher conforming limits.)
Qualifying for a Jumbo Mortgage
If you have your sights set on a home that costs close to half a million or more – and you don't have that much sitting in a bank account – you're probably going to require a jumbo mortgage. And if you’re trying to land one, you’ll face much more rigorous credit requirements than homeowners applying for a conventional loan. That’s because jumbo loans carry more credit risk for the lender, due to their lack of a Fannie Mae or Freddie Mac guarantee, as mentioned above. And, of course, because more money is involved.
As with mortgages in general, minimum requirements for a jumbo have gotten increasingly stringent since 2008. To get approved, you’ll need a good credit score – 680 and above —and a low debt-to-income (DTI) ratio – under 43%, at least, and preferably closer to 36%. Although they’re nonconforming mortgages, jumbos often still must fall within the guidelines of what the Consumer Financial Protection Bureau considers a “qualified mortgage,” a lending system with standardized terms and rules, such as the 43% DTI.
You’ll need to prove you have accessible cash on hand to cover your jumbo mortgage payments, which are likely to be very high if you opt for a standard 30-year fixed-rate mortgage. Specific income levels and reserves depend on the size of the overall loan, but all borrowers need pay stubs dating back 30 days and W2 tax forms stretching back two years. If you're self-employed, the income requirements are greater: two years of tax returns and at least 60 days of current bank statements. The borrower also needs to prove that he or she has the liquid assets to qualify and cash reserves equal to 6-12 months of the mortgage payments.
And all applicants have to show proper documentation on all other loans held and proof of ownership of non-liquid assets, like other real estate.
How much you can ultimately borrow depends, of course, on your assets, your credit score and the value of the property you're interested in buying.
Jumbo Loan Rates
On the bright side, while jumbo mortgages used to carry higher interest rates than conventional mortgages (because of the larger amount of money involved and because it can take longer to sell a higher-priced home if the lender must foreclose), that gap has been closing in recent years. Today, the average annual percentage rate (APR) for a jumbo mortgage is often par with conventional mortgages — and in some cases, actually lower. Otherwise, banks may charge from 0.25% to 1.5% more interest on a jumbo loan.
Even though the government-sponsored enterprises can't handle them, jumbo loans are often securitized by other financial institutions; since these securities carry more risk, they trade at a yield premium to conventional securitized mortgages. However, of late this spread has been reduced, with the interest rate of the loans themselves.
Down Payment on Jumbo Loans
On the even brighter side, down payment requirements have loosened over the same time period. In the past, jumbo mortgage lenders often required home buyers to put up 30% of the residence's purchase price (compared to 20% in conventional mortgages). Now, that figure has fallen as low as 10% to 15%. (Bear in mind, though, there can be various advantages to making a higher down payment – among them, to avoid the cost of private mortgage insurance.)
You could attribute all these low rates for interest and down payments to the fact that banks are generally very eager to find new customers for their jumbo loan packages. Jumbo mortgage borrowers are likely to be, or are on the road to becoming, the sort of high net worth individuals institutions love to sign up for long-term products. Such clients have an excellent credit history, plenty of assets and, often, the need for additional wealth management and investment services down the road. Plus, it's more practical for a bank to administer a single $2 million mortgage than 10 $200,000 mortgages.
Who Should Get a Jumbo Loan?
These mortgages are considered most appropriate for a segment of high-income earners who make between $250,000 and $500,000 a year. This segment is known as HENRY, an acronym for "high earners, not rich yet,"; it refers to people who generally make a lot of money but don't have millions in extra cash or other assets accumulated – yet.
While an individual in the HENRY segment may not have amassed the wealth to purchase an expensive new home with cash, such high-income individuals do usually have better credit scores and more extensively established credit histories than the average home buyer seeking a conventional mortgage loan for a lower amount.
Along with having more well-established credit, high-income earners also tend to have more solidly established retirement accounts. They have often been contributing to such investment accounts for a longer period of time than lower-income earners. They have usually contributed more funds to such accounts, so that the account balances represent substantial sums.
The Tax Implications of a Jumbo Loan
Just because you could qualify for one of these loans doesn't mean you should take it. You certainly shouldn't if you are counting on it furnishing you with a substantial tax break, for example.
You’re probably aware that you can deduct from your taxes the mortgage interest you paid for any given year. But you probably never had to worry about the cap the IRS places on this deduction. You can deduct the interest as long as the mortgage itself is $1 million or less. If your mortgage is larger, you don't get the full deduction. For example, if you took out a $2 million jumbo mortgage that accrues $60,000 in interest a year, you can only deduct $30,000 – the interest on the first million of your mortgage. So, you only get a tax break on half the mortgage interest, in effect.
And even though jumbos' interest rates are coming more into line with conventional mortgages', it still might behoove you to crunch numbers and compare terms, to see if taking out two smaller conforming loans, instead of one big jumbo, might prove better for your finances in the long haul.
Best Practices for Obtaining a Mortgage
For most people, buying a home is the single largest purchase they will ever make. There's a whole world of new terminology, policies, procedures, information and documentation to wade through and understand. Even if you are buying for the first time, it can be an intimidating process...
That's why it is crucial that you have an expert help you navigate the process and keep everything working and on track. You wouldn't even think about trying to represent yourself in court, why would you consider buying a house without an expert to help guide you?
The main question is what expert should you choose? Should you have a mortgage broker, a mega bank, or a mortgage banker help you?
It’s also important to note that you must have good communication with your broker or lender. This person will be a stakeholder in your financial future. You want a competitive rate on the loan, but don’t lose sight that this person can help navigate the loan process and side step the mortgage pitfalls along the way.
Also, should you have your own real estate agent to help navigate the process, or just work with the person who has the house listed?
First, let's talk about real estate agents. Some agents represent the seller in the transaction. They are called sellers agents and have a fiduciary responsibility to the seller. A fiduciary responsibility is just a fancy way of saying that a professional owes the beneficiary of the responsibility the highest and best care.
It doesn't mean that professionals can lie or be dishonest with other people, but it means they have to keep the beneficiary's interest first in their mind when they are working for that person.
So seller's agents have a fiduciary responsibility to the seller of the house.
Some agents are buyer’s agents, and they have a fiduciary duty to their buyer client.
And finally, there are agents that call themselves transaction brokers. They don't have a fiduciary responsibility to anyone in the transaction...they just want to get the house sold.
I know this can all be very confusing, so let's just cut to the chase...in my opinion you should always find a real estate agent who represents you. If you're a buyer, find a buyer's agent. A buyer's agent has a legal and ethical responsibility to look out for the buyer's best interest.
Mortgage Banker or a Bank?
Well, obviously as a mortgage banker I have a vested interest in the answer to this question. That said, I honestly believe a mortgage banker is a better choice...and I'll tell you why. First, as a broker I have access to far more lenders than your bank...who, generally speaking, will only lend money based on their in house lending programs.
That means I normally can get borrowers far better rates than their bank can offer. That's because I can generally place loans with traditional banks, through their “wholesale” mortgage department...but I can also place loans with companies that are strictly mortgage lenders.
Sometimes I can even arrange better rates at your bank. Not all the time, but it does happen occasionally. How is that possible?
Well, wholesale lenders, and wholesale divisions of retail lenders, know they are competing among professional brokers with countless other lenders.
Your bank, on the other hand, knows you are not likely to shop your business to 100 lenders. If you happen into your bank, chances are you aren't shopping at all. Or if you are, you'll make 2 or 3 phone calls.
The wholesale loan reps I talk to know I have access to countless lenders, so they are willing to be more aggressive in the rates they will give my clients.
I understand some borrowers have close relationships with their bank and want to keep all of their financial transactions with that particular bank. That made a lot of sense decades ago. Not so much sense today. You see, even if your bank originates your loan, there is a very good chance that they will sell it within a few months after closing. That's how the financial system is set up today.
So even if you think you are doing business with your bank, you'll end up doing business with a company that purchases loans from banks who originate them.
Wouldn't that be frustrating...agreeing to pay .5% more on your mortgage so you can stay with your bank, only to have your bank sell your mortgage to another company anyway?
For good or bad, your bank thinks of you as a profit center. I'm not referring to the local people in the branch, who you may have a very nice relationship with. I'm talking about the people who run the bank. It's their job to make as much money as possible, and they do that by taking advantage of the local branches relationship with you.
That's not bad, per say. But it does mean you shouldn't allow that relationship to alter your financial decisions that are in your best interest.
So in short, by all means check with your bank regarding rates and terms, but find a good mortgage banker to help you get quotes from other lenders as well. And always, always, go with the lender who offers the best terms for you!
Now should you bank or other loan professional tell you they can’t do you loan. Don’t be embarrassed. Chances are you are simply talking with the wrong person. It’s not what you know. In real estate, it’s who you know.
Click the link above or below to schedule a free no-obligation consultation with a mortgage expert who can get your deal closed on time with as little hassle as possible!
Click the contact me link to reach out and have a chat with the “Mortgage Viking” today 832-956-0901!