You Don’t Need Perfect Credit or 20% Down: Mortgage Approval Myths Busted

In Episode 3 of Coffee Break Real Estate, Danny Benjamin and Adam Youhanna break down the biggest myths that keep buyers stuck on the sidelines.

We cover:

• “I need a perfect credit score” and what the real minimums look like
• Credit Karma versus lender credit pulls and why FICO matters
• Simple ways to boost your score faster, including credit utilization
• “I need 20% down” and what down payment options actually look like
• PMI explained and how down payment changes the monthly payment
• Why waiting for rates to drop can cost you more through appreciation and competition
• Why talking to a lender usually will not destroy your credit
• When a second opinion can save a deal that another lender could not close

If you are thinking about buying, the goal is simple: stop guessing and get clarity. Reach out for our home buying game plan and we will help you build a strategy that fits your situation.

Subscribe, leave a review, and share this with a friend who thinks they cannot get approved.

Intro and outro music provided by Mahami Music ‪https://www.youtube.com/@mahamimusic

Connect with the hosts:

Danny Benjamin
@dsbexplores
www.YourAgentDanny.com

Adam Youhanna
@adamyouhanna
www.MortgageAdvisorAdam.com

Coffee Break Real Estate
Hosted by Danny Benjamin, real estate agent and expert, and Adam Youhanna, mortgage advisor

Focused on all things real estate.

Subscribe for weekly conversations on real world real estate.
Questions or topic requests welcome.

Transcript

Daniel Benjamin (00:10)
All right, welcome to Coffee Break Real Estate. We're on episode three. This is the show where we break down real estate deals, strategies and stories over coffee. I'm Danny Benjamin.

Adam Youhanna (00:20)
And I'm Adam Johanna. Danny, what are we drinking today?

Daniel Benjamin (00:23)
I've got the good old black coffee again, but got it in the Seattle Art Museum mug.

Adam Youhanna (00:29)
Nice, nice.

I got a mushroom coffee, Cup of brand. You ever heard of that? C-U-P-P-A. It's pretty good. I'm trying out, it's got different types of mushrooms, which helps with you, ⁓ you know, kind of help like brain clarity and help like your joints, inflammation and stuff like that with your gut. So it's pretty good. I got mine right here and my CMA mug that I got certified mortgage advisor.

Daniel Benjamin (00:35)
Never. What's mushroom coffee?

Adam Youhanna (00:53)
shot out more ⁓ MBS Highway and it's pretty good. Trying out different ones.

Daniel Benjamin (00:58)
Love

it. How's it taste?

Adam Youhanna (01:00)
You know what? They all taste pretty chalky, which is normal, but I throw a little bit of a creamer in there just to kind of not make the, you know, the

when I pour it in the scoop so it doesn't like kind of clumpy. So when it gets clumpy and you taste it, it's like ash. So put a little bit of creamer in there to help and love it. I feel good. I don't feel bloated. Nothing. So shameless plug right there.

Daniel Benjamin (01:11)
Okay.

Love it,

All right, I'm gonna have to try that out.

Adam Youhanna (01:22)
Let's do it. All right. Awesome. So what we're doing right now, we're to talk about some things. First things first, every week, you know, Danny and I and everybody else, we talked to buyers who could buy a home, but they just don't know it yet. Like for example, they're going to have these myths that they hear from, you know, their friends or their neighbors who are not really in the industry. mean, it's fine to have those conversations, but

you have to talk to a professional. know, you're not going to talk to your best friend or your neighbor when you know, you break your leg. You know, you have to go and talk to a physician that specializes in, you know, musculoskeletal injuries. So certain like myths that we hear, ⁓ Danny, it's like, you know, I need that perfect credit score, you know, or I need that 20 % down payment. ⁓ other things are like, ⁓ if I pull my credit, you know, it's going to hurt.

my credit score or my chances or maybe I should just wait for the rates to drop. So these things, we see them every week in multiple transactions. And today we're going to break down what actually matters and what doesn't. So before I share my screen to any, any other myths that you're hearing, people just come at you with right away when you start talking about things.

Daniel Benjamin (02:36)
No, I was gonna say I agree with everything you said and then also, you know price drops I think a lot of people not know we know now we're waiting for rates to drop but for a while there was a prices to come down So yeah, but we'll get into some details on those but that's definitely a myth that I see

Adam Youhanna (02:54)
yeah, definitely. Yeah, that's one of the big ones as well. That's probably I would put that top two.

Daniel Benjamin (02:58)
Yeah, I think that was that was probably the biggest one for a while and then now it's now it's the rates.

Adam Youhanna (02:59)
Alright, cool.

So first thing I want to talk about is literally that myth. You know, my credit just isn't good enough. I need a perfect credit score. Okay. For example, for your credit score range, okay, let's just take a look at this Google thing that I'm sharing. Okay. So for conventional loans, which is kind of the cream of the crop, you can get away with a six 20 minimum score. Okay. Now granted, the higher the credit score, the better.

But if you feel like you're in this range, like between a 660 and a 680, you could still qualify for a conventional loan. If you can qualify for a conventional loan, then you're in a good position because if you can't, then we have to start exploring other options. Like for example, an FHA loan or maybe going about it in a different way where we do a portfolio loan, which is called a non QM. For example, another one that we have is that FHA

you can do a 580 credit score with the minimum down payment of three and half percent. But if your credit score say falls under 580, if it's between 500 right here and 579, you can still get approved. just need, for example, something else to compensate, right? It's called compensating factors, which is having that 10 % down payment or higher.

Now, as you can see here, if you're a veteran, we try to take care of our veterans as much as we can. So we don't have an official minimum credit score. Lenders do like to see it at least at 620 because, for example, if you're above 620, then you can start getting the better interest rates. And then once you get above 645 credit score, then you're able to get a 0 % down payment given your status as a veteran will allow you to do so.

The other two things that we look at is USDA loans, which is pretty similar to VA. Now USDA stands for United States Department of Agriculture. So this helps, or this is for people that are looking in rural areas with low to moderate income and they want to buy a house there or maybe even build something. So that typically has a low credit score, typically around like an FHA 580 to 620.

Then when you go to jumbo, jumbo loans are big, big size loans, right? So you're looking at right now above for most counties in the country, it's like an $835,000 loan or higher. Okay, so that of course, you're going to need a higher credit score because you know, it's a riskier thing. As far as the ranges go, okay, these are the minimums. So what I want to just bring up is this little

picture right here okay. How your credit score holds the keys to your mortgage approval. Now people always want to be right here. I need a 760 ⁓ to qualify. No, we just went over the minimums that you need. So I like this kind of rainbow graph here because a lot of them show that an excellent credit score is 800 or above right and I think

that my personal opinion from what I've seen is 760 and above would be excellent. But anything from like 700 to 760 is very still very good or 720 to 760. So there are areas right so even if you have a fair credit score, don't be discouraged if everything else is good, your income is good, you have a good amount of assets, good amount of money allocated on the side for your

for your down payment and closing costs, don't let the credit score deter you from making that move. as far as getting down here, like I said earlier, you're going to need some compensating factors. So for example, if your credit score is a 575, remember I just said that you've got to compensate for it with a 10 % down payment, you can't do the 3.5 % unfortunately, but still.

credit score being in that range, you want to compensate so that the lender has more trust in you to be able to approve you. So that's just what I wanted to share, just my two cents here on the credit. And Danny, if you have anything that you want to add to it, feel free to take it away.

Daniel Benjamin (07:27)
So sounds ⁓ similar like we talked about on the last episode with levers. ⁓ Credit is just one of the levers that the lender uses. So if you have a lower credit score, they'll still approve, but you might have to come with a bigger down payment or have a higher interest rate or something, but they'll still get approved. Right?

Adam Youhanna (07:45)
Definitely.

what about, do you often hear about people that tell you what their credit score is and like where they get their credit score from?

Daniel Benjamin (07:53)
Yeah, I I do hear that a lot. mean, obviously a lot of people use credit karma. I feel like ⁓ also every credit card, every credit card that I have at least offers some sort of credit reporting tool or credit score. But, you know, I know you've taught me that there are three bureaus ⁓ that can range pretty drastically sometimes. And then there's also, I didn't know this until recently, the vantage score versus the FICO score. Right.

Adam Youhanna (08:18)
Yeah. Yeah. So Vantage score is, yeah. Yeah. So Vantage score is kind of like a consumer credits credit bureau, right? They're still using the three credit bureaus, but the credit score is used differently. So that means like there's different aspects of your credit score. For example, ⁓ having late payments could affect you more on a FICO score than it could on a Vantage score. ⁓ You know,

Daniel Benjamin (08:19)
So what's the main difference with that?

Adam Youhanna (08:45)
pretty soon they're gonna like merge them or you're be able to choose which one you want to use. ⁓ But yet what we look at as lenders is the actual FICO score. Now each bureau has a different one that could be a FICO 8.0. It could be a FICO 3.0 with TransUnion or something. So it's a little different but FICO is more in line to what lenders use.

Danny, your credit card, you have like a Capital One credit card, know, when you go in the app, it'll tell you, hey, your FICO score is this. That's something that's gonna be closer to what we're looking at and what we pull up than the actual Vantage score is gonna be.

Daniel Benjamin (09:24)
So FICO is what lenders are mostly looking at.

Adam Youhanna (09:27)
Mm-hmm. Now have you heard about the changes that are gonna be coming out?

Daniel Benjamin (09:30)
No.

Adam Youhanna (09:31)
Well, I mean in the future, I mean they're trying to make it to have it where more first-time home buyers they're able to kind of use like if they put that they've been renting right and they're making on-time rental payments and stuff like that that's gonna count as a positive for them right or if they have ⁓ What you can do is you can do something called ⁓ a self report This is like a little tip here for people like a hack. You can do a self report. Have you heard of that?

Daniel Benjamin (09:58)
But I mean, I know not all things report. So is that something where you can report stuff like like your rent or?

Adam Youhanna (10:02)
Yeah.

Yeah. Like rent utilities. have people that I've had them add like their Netflix account, like literally on their credit report. It'll show up self reported and it'll say Netflix account, no lay payments. So it helps strengthens your profile as a buyer. So with the changes they're going to make, yeah, what the changes are going to make, it's going to be helpful. I'm not sure if they're going to merge it to something called, ⁓

Daniel Benjamin (10:20)
That's pretty cool.

Adam Youhanna (10:27)
I think it's called ⁓ FICO 4.0T, I think it is, where they kind of merge them or the lenders are going to be able to pick and choose whether they're going to pull up somebody's FICO or pull up somebody's Vantage score.

Daniel Benjamin (10:42)
Interesting, okay. And that's coming in the near future, you said?

Adam Youhanna (10:44)
Yeah,

it was supposed to be the end of last year, but of course they're taking a little bit longer for it because it's not easy to finalize the details of it. There's a lot of little pieces that you have to kind get right before it comes out, otherwise it's going to be chaos.

Daniel Benjamin (10:57)
Okay. And then to talk about credit too. I feel like, I mean, in general, I feel like people sometimes wait ⁓ to buy a house for multiple reasons. And one of them is credit ⁓ and waiting, you know, can cost you a lot, like appreciation, which we've seen a ton of in the past few years, rent savings, ⁓ principal pay down, know, tax savings. So there's a lot, you know, of savings that you can get with owning a home.

Adam Youhanna (10:57)
Yeah.

Daniel Benjamin (11:24)
And I feel like people sometimes wait and they kind of will miss the boat quote unquote. Right. And so what are things that you've seen people do? know credit repair, like I know people that do credit repair and it's pretty cheap. Like it's a couple hundred bucks. And, but even beyond that, like, I think there's a lot of stuff you can do directly with the credit bureaus, right. To, kind of get your credit better pretty fast. mean, I've seen credit scores go up like a couple hundred points. Some people like.

really really fast, like I said, just by paying someone to do it or doing it yourself. But what are some things that you see that people can do to kind of speed up getting their credit fixed, you know, quickly so that they can not miss the boat?

Adam Youhanna (12:05)
Yeah, definitely. So first things first, we have an in-house kind of company that we're partnered with that help my clients out with their credit. So what I do is I pretty much have a meeting with them.

After I have a talk with my client, let them know, say, listen, I could help you with this as much as I possibly can, but I don't have the tools to be able to do certain things. So that's when I send them to the team and I talk to the team and tell them like, this is the time frame we're looking at. This is the credit score goal that we want to be at. Tell me what are the best, most efficient ways to get this score boosted. Let's say, for example, 40 points. ⁓

Let's say, for example, somebody wants to buy something within the next three months, right? Because let's say their lease is up in four months on their rental. So they want to get out of there as quickly as possible. So we want to get them to the best position possible. And I always say like, investing in a good credit score is very important. Would you agree?

Daniel Benjamin (13:04)
100 % yeah. For more than just buying a house too, yeah exactly.

Adam Youhanna (13:05)
Like, and it's not just for a house.

Exactly. Yeah. You're buying a car. You're getting a credit card. mean, just in general, your credit is pretty much an on paper, ⁓ profile of how responsible you are as a consumer. Right? So a couple of things we see is like, you know, I always have to look at the credit report and I look at it in detail and there's certain things that we could possibly do. For example, I'm not going to get into much detail, but

there was a client that their credit score, can't remember what exactly it was, right? It was like a 707. And then their credit utilization, which means that the balance that they had on their credit cards divided by how much total they could use on their credit cards was like 33%. So there's a threshold. If you get under 30%, your credit score boosts up. So I literally had him pay like $800 down.

on a credit card, didn't even have to pay it off. Put it $800 down, next month's credit report came on, he took that 707 and I think he went up to a 725. So a quick 18 point boost and a lot of people don't know this, like, hey, 18 points is not a big deal. But when we look at the rates that we're giving you, you fall in buckets, right? And it's by every 20 points. So he was in that bucket between 700 and 719.

Now he went to that bucket to 720 to 739. So going from one bucket to another can make a big difference on your interest rate. So that was one time where it was super helpful and it was super quick.

Daniel Benjamin (14:34)
huge.

Yeah, and it's something, I mean, like you said, just paid, he didn't even pay it off, he just paid it down.

Adam Youhanna (14:41)
Yeah, like this is something that is just like a belief that people have that keeps them frozen. You know, it's like an excuse that they want to have so that they don't kind of go and take that leap and try to buy a place, right? But they don't realize that, you know, you're holding your back, you're holding yourself back too much.

Daniel Benjamin (14:59)
Interesting. Yeah, that makes sense. I mean, I've seen it too. it's very cool. Cool. So now ⁓ I guess another lie that we hear a lot beyond credit score is down payment, right? I think we've talked about it in our other episodes as well. But, you know, I need 20 % down as I feel a big myth that I hear a lot. I'm sure you hear a lot. ⁓ But yeah, what's we know? What's your thought on that? I know for me, like

Adam Youhanna (15:00)
Yeah.

Yeah, 100%.

Daniel Benjamin (15:25)
We talked about in the last episode, like there's a lot of levers you can pull when you're making an offer. You can, you know, adjust your closing time. can raise your earnest money. can change the price a little bit. You can have escalation clauses, appraisal gaps, a lot of different, different ways to adjust an offer. And I do see 20 % get accepted all the time, especially right now. mean, you know, a lot of our, not a lot, but there's definitely listings in Arizona that are.

Adam Youhanna (15:29)
Okay.

Daniel Benjamin (15:54)
can get stale and if a seller gets an offer, they're willing to take it because they haven't gotten any other offers or they're getting really low traction. So if it's under 20%, they're still like, hey, that's fine. The person's qualified, so might as well take it. So I do see it all the time where offers do get accepted under 20%. I've had buyers do that. I've sold houses that way.

I think that's a big misconception. So I don't know if you have any scenarios where you can show us kind of the difference between down payments if you're under 20 % and what that entails.

Adam Youhanna (16:29)
Yeah, definitely. And you know what, let me throw something in there and I'm sure you've seen this plenty of times where, you know, you'll see a pre approval for a client that says they're putting, let's say 10 % down, right? So if it's a $500,000 house, they're putting 50,000 down payment. But then when it's time to write the contract for the house, they want, let's say they're putting 5 % down.

Right? So this is typically a conversation that you and I have and me and the borrower have. So for example, if they're buying a home that needs some work, right? We don't want them to deplete their savings on just the down payment and closing costs. So we tell them, hey, instead of putting 50,000, put 25,000 and then, you know, fix that bathroom that needs a new shower, you know, or ⁓ get new appliances in your laundry room. Right? Let's say if something's going to cost you

15,000 to do, you can lower your down payment amount and then be able to take that money, keep it in your hand and put it in towards, you know, stuff that needs to get fixed ⁓ or, you know, renovated to the way that the buyer wants it. Now, have you, let me ask you real quick before I jump into mine. Have you had a scenario where you changed your down payment amount and the listing agent,

had something to say about it, like, hey, this is not what the pre-approval says.

Daniel Benjamin (17:43)
No, not really. And if they do have anything to say, just have them talk to you. I include the mortgage lender, so normally you, on all my offer emails so that if the listing agent ever has questions, they can reach out to you directly. I think once they talk to you, they're a little more comfortable. But I've never had that happen where they kind of... I think the main thing is the pre-approved amount is within the loan amount on our offer now.

Adam Youhanna (18:03)
Yeah, exactly.

Daniel Benjamin (18:11)
I can't have someone that's pre-approved for $200,000 and then we change our down payment and now the loan is $230,000. I think it still has to fall within that range, most of time, no, it's never been an issue on my end.

Adam Youhanna (18:18)
Hmm.

Yeah, so that's exactly my point. So they're not really going to complain about it. Everybody just wants to get to the closing table, buyer, seller, realtors, attorneys, if necessary, title, me. So they're not going to have an issue with it if things change. However, you might still get some questions. Like I've had some questions and there's times where I brought it up proactively like, listen, their pre-approval says 10 % down, but you know, that was a blanket 10 % down.

Daniel Benjamin (18:31)
That's it.

Adam Youhanna (18:51)
right with this specific house, you know, they want to do work here. They need they want to fix up the backyard for their kids. They want to do this. The garage needs a new door, stuff like that. Then I'll be able to let them know. ⁓ But yeah, I mean, that was exactly why I asked you that question.

And those of you that are not, you know, watching this on, you know, YouTube or anything, where you're listening to it on Spotify or on the podcast app. ⁓ If this is something that you are interested in, go to the YouTube and you could see the visuals here because the visuals, I'll always say it, the visuals help you learn things a lot better than just hearing them. Okay. And retaining that info.

So right now what I'm pulling up is down payment minimums for each program. So let's start from least to most. Okay, so a VA loan, you can get put as low as 0 % down payment USDA loan, same thing, 0 % down payment, conventional loan. If you're a first time home buyer, and your profile allows you to, you can put as little as 3 % down.

Okay, sometimes if two people are buying a home, one of them is a first time home buyer, you could still put 3 % down. Okay, so that's super helpful.

Daniel Benjamin (20:03)
Just

a reminder that first time homebuyer, I think you mentioned last time, is not technically first time, right? It could be within the last three years or something like that. What was it?

Adam Youhanna (20:11)
Yep.

Exactly. Yeah. So first time home buyer, let's say you owned a home before right now we're shooting this video on February 17th, 2026. If you sold your home before February 17th, 2023, and now you want to buy one again, you're considered a first time home buyer. So I'm glad you actually brought that up and I'm glad you made me look at the date. Shout out to Michael Jordan. Today's his birthday, the goat.

Daniel Benjamin (20:39)
Michael Jordan, yeah.

⁓

Adam Youhanna (20:42)
Back to this FHA loans minimum three and a half percent. Okay. FHA loans with under a 580 credit score. You have to put 10 % down. Jumbo loans. Take this with a grain of salt when it says 5 % to 20%. 20 % is pretty much a standard. Okay. You could do 10 % down, but you would need literally

the other 10 % in like reserves or you need 12 months worth of reserves. Reserves means whatever your monthly payment is, you need that times 12 or, times 12 for 12 months in a liquid account, like a bank account or something. So that's going to be a tough part. But yeah, I would always say that. So, I mean, the key takeaway from this is your, you don't need 20 % down.

Okay, and also I'm going to show you something else here that'll show you that it might not even be worth it to wait to put 20 % down, like to save up that 20%. And I'll show you here. this is something, this is a tool that I have. Danny, can you see this or should I zoom in more?

Daniel Benjamin (21:54)
could see it, but let's zoom in,

Adam Youhanna (21:56)
Okay, so again, if you're watching this on YouTube, I know all these numbers here are probably going to be overwhelming. But let's just focus on the highlighted sections. Okay. So right now I have four columns here. Okay. So this option one is only putting 3 % down. The other one is putting 5 % down. The other one's putting 10 % down. The other one's putting 20 % down. So I show this to

Clients for example who don't know how much they want to put down payment, right? So when I show them this it kind of gives them a better idea because now they can kind of Align their down payment amount with what they feel comfortable paying each month, right? So let's go down here Okay, of course the purchase price is an important factor, but it's the same across the board Okay, loan amounts gonna be different based on your down payment amount. Okay, let's say interest rate for everybody is the same Okay, let's just keep everything on an even keel apples to apples

6 % across the way. Now, if you're putting 3 % down, 5 % down or 10 % down, as you can see in this row, you're going to have PMI mortgage insurance. Okay. If you put 20 % down, you don't have that. So let's go down to this line right here, which is super important on a house. Okay. So Danny, let's pretend you're looking for a house. Your budget is you want

20, let's say 2900 is the max you want to go. Okay. If you're putting 3 % down your monthly payment, okay. Just your mortgage is going to be 2908. Okay. So mortgage, just the principle and interest. If you go and put 5 % down, okay, this is your monthly payment. Okay. If you want to do some math, this is only a $60 drop.

And I feel like that's important because I want you to think between these two options. Is that $60 a month worth it to put an extra $10,000 down payment? To some people it is to get that lower monthly payments. Some people would be like, man, I could take that 10,000 extra and just put it somewhere else. I can invest it. I can keep it in my pocket for a rainy day and whatnot. So these are options that we're giving you so you could see. This third option.

Daniel Benjamin (23:59)
Yeah.

you

Adam Youhanna (24:15)
putting 10 % down. you're at 26.98. So this is a $210 difference. Putting 20 % down, you're going to see this big drop to 23.98. Why? Because this PMI fell off and you're also putting $100,000 down payment. Okay. And that's where you get this amount. 23.98. That's where you see that big difference between 3 % down and 20 % down.

So Danny, pretending that you're somebody that's looking to buy a house after seeing this, what runs through your head? Like from what you see?

as a buyer.

Daniel Benjamin (24:55)
I mean,

as a buyer, would say, the higher down payment kind of, doesn't change the monthly payment as much as people think. But what I see is like, what I'm thinking is like different scenarios, right? Like someone that has a ton of money or wants to be safer and not pay mortgage insurance, fine, do the 20 % down. Or you're buying a house that's moving ready, you don't have to do any renovations, you'll still have cash.

⁓ go ahead and do that. But for someone that wants to preserve capital, putting 15 grand down is what, what did we say was ⁓ not even a five or a little over a $500 difference. mean, some people are going to want to preserve $85,000 to not save 500 bucks a month, you know? ⁓ so it's just, I think that's why the communication between all of us, right. Realtor mortgage advisor, borrower.

Needs to happen because we can kind of figure out where where everyone sits like I know plenty of people that Would say no I want that I want to put the 20 % down and save the mortgage insurance and and have the lower monthly payment and I know people that Like no, let's let's preserve capital, you know, especially people that could put their money to work ⁓ I think I know a lot of people that could take 85 grand and make a lot more than 500 bucks a month that you know, so they're just

Adam Youhanna (26:14)
Exactly.

Daniel Benjamin (26:23)
all situation based and us kind of all staying on the same page really helps figure out what is best for the borrower.

Adam Youhanna (26:32)
100 % agree and I'm glad that you said that because like Danny and I and others in our industry should not tell the buyers what to do. We should provide them with the necessary information so that they start running through the scenarios like how Danny just did. Okay. And this is not scripted. I asked Danny what he thought and he was telling me what's playing out in his mind. Mind you, Danny's been a homeowner. Danny's been an investor. He's been a flipper. He's been a wholesaler.

So his mind is running at four times the speed as everybody else's. So Danny, for example, going off what you just said, putting 15 % down, 3%, taking that 85,000 and make it go to work for you. I know this is going off topic, but that 85,000 for you, Danny Benjamin, what could you possibly do with that?

Daniel Benjamin (27:25)
man, there's a lot. I mean, if you want to play it safe, you could put it in like an index fund, but I don't think you'll make the 500 bucks a month there. But still, yeah, there's that. There is for me marketing. think marketing has a great return. Whether it's marketing to buy my next flip or to find my next lead for a buyer or seller. ⁓ You could buy a rental at that price. ⁓ That's probably enough for a couple of down payments for rentals.

and still cashflow. ⁓ You could flip a property, you know, I could go get a hard money loan and use that 85 grand for my down payment and rehab costs and make a lot more than the 500 bucks a month. So it's got, it's pretty endless. I mean, that's kind of what I would do, but you know, there's people in all sorts of industries that can figure out ways to make a lot of money off that 85 grand. But then, you know, there's some people that are like, Hey,

Adam Youhanna (28:20)
Yeah, instead of just parking it.

Daniel Benjamin (28:23)
Yeah, you know, or some people are like, hey, this is my personal house. I'd rather be safe, you know, and just leave the 85 grand in there. And that's, that's totally cool too. Like, you know, I've been there as well where it's like, Hey, I want equity in my house. I want to mitigate any risks, any downturns, any of that, you know, a lot of things can happen and Hey, this is the house my family's sleeping in. So sometimes you don't want to look at just a straight investment investor mindset. Cause

There's a lot of like emotions when it comes to your personal house that's the roof over your head and your family's head. Sometimes you want to be a little safer. So I kind of see both sides of that.

Adam Youhanna (29:03)
Yeah, exactly. And just so we can just segue to the next topic, like this is just proof right here that like if somebody has 15,000 to put to that house, let's just throw another 10,000 with closing costs. They have 25,000 to put in. mean, realistically, how long is it going to take you to go from having 25,000 in the bank to saving up to get 100,000 in the bank?

or $100,000 plus $10,000 closing cost, you're going from $25,000 to $110,000. So think about how much you've struggled, how much you've had to sacrifice to get $25,000 in the bank. Now you're going to have to quadruple that. By the time you do that, this $500,000 house is going to be worth $600,000. So you're kind of going to end up backpedaling more than taking that step forward, which is something that a lot of people don't think about.

and I feel like they're not getting advised on, which is unfortunate.

Daniel Benjamin (30:06)
I talked about it earlier, like there's a lot of people that have waited that and a lot of things have changed in that waiting time between prices, rates. There's been a lot to change and I hear that a lot, right? I think this is the next lie or the myth I should call it, not a lie, but I should wait for rates to drop. And we've been seeing that for, man, we're in 2026 now, four years. I think it was almost to the day four years ago when interest rates doubled overnight.

⁓ or was it sometime at the beginning of 2022? So it's been four years, ⁓ literally since people, I've been hearing that myth, right? I should wait for rates to drop and, ⁓ I've, you know, I've seen people get priced out. I've seen houses go up in value, ⁓ where, know, people, people should have bought, but, know, they may have had a little bit of a higher rate than where we're at now, but they've got priced out. ⁓ you know, and and I've seen people that did buy that have won.

Adam Youhanna (30:38)
Yeah, you're right, literally.

Daniel Benjamin (31:03)
in appreciation, ⁓ principal pay down, like a lot of different things where, you know, from the time they bought to now, they've seen a lot of positives come out of that. So yeah, I don't think, you know, waiting for rates to drop. I don't think waiting for any speculative things is a good idea. I talked about it before, like I'm not the speculative type. So it's like, Hey, if you can afford a house at whatever the rate is today, kind of.

Adam Youhanna (31:22)
You have.

Daniel Benjamin (31:28)
and you like a house, like it's kind of good to lock it in. You really don't have to stay with that rate forever too. Obviously there's refinancing and stuff like that. So ⁓ yeah, I don't really, I don't really like waiting for rates to drop to, to buy something. Cause also you don't know what's going to happen. you know, ⁓ rates can stay the same forever. And now prices went up and, or that one dream house you had is gone or rates go up even like, you know.

Adam Youhanna (31:47)
Mm-hmm.

Daniel Benjamin (31:56)
I we've seen it, so I don't like the speculative waiting.

Adam Youhanna (31:58)
Yeah. mean, people,

like you're saying people want long-term, like those are people that bought during the beginning phases of COVID, right? Where people were scared, like, we don't know what's going to happen, but somebody bought maybe a week or a month before COVID was declared. So they ended up winning. And like, let's say for example, they bought it at a 5 % interest rate, which was higher at that time, you know, in late 2019, early 2020. And then

rates went down and end of 2020, all of 2021, they were super low. So these people took advantage of the rates dropping and then they ended up refinancing into the two percents. And then now their home has appreciated on average across the country, let's just say 40 % in five years. So if they bought a house for $400,000 back then, 40 % of that it's what? and

60,000. So it's five worth 560 now.

Daniel Benjamin (32:56)
which is not common.

Yeah, it's not a common appreciation rate, but I mean, it's a reality. It happens literally, you So, yeah.

Adam Youhanna (33:00)
No, it's definitely not.

Definitely.

It's tough. I like I want to talk about the waiting. I have this conversation, especially in the last two years, I've had this with maybe 80 % of my clients and I've had realtors bring over their clients to talk with me.

just because I have like these tools and this platform that I could bring it up to them and show it to them visually. And they love it. And it helps kind of put things in perspective for them. So let me share my screen again. ⁓ Let me know when you're able to see it.

Got it? Okay, cool. So this tool that I have is called the cost of waiting tool. Okay, so this is gonna put a lot of things in perspective. So if you're listening to this on Spotify or on podcast, it's gonna be tough to follow along without seeing it. Okay, so we're gonna be showing the YouTube watchers.

a lot of things right now. So when you get a chance to go back and watch it on YouTube, so let's go down here, we're gonna work on this thing backwards. Let's say today you're looking at a house that's $500,000. Okay.

we know interest rates are high. So let's say down here, the highlighted portion right here is showing 6 % interest rate. So the next couple of columns is saying, okay, what if I wait six months or what if I wait one year? Okay. What people look at is, hey, rates are expected to go down, which I mean, again, it's speculative, but with the information that we're getting, you know, all the economic data that we're seeing, that it looks like it's going to be dropping, not down to 3%, 2%, 4%. No, it's going to drop a little bit.

So let's say in a year's time we're able to get down to that 5.5 % rate. What people think about is just having that tunnel vision of interest rates being lower. But what happens every time the interest rate drops ⁓ half a percent, there's about 1, I think 1.5 million more people that can get approved.

for a loan that we're not able to before. So that rate drop just pretty much through so much more competition at you where now the value of the home has gone up. like if you look at it in a year, let's say the property goes up 3.3%, which is pretty modest, pretty average, okay. So let's say that house now is 516,000, okay.

Daniel Benjamin (35:37)
Standard, yeah.

Adam Youhanna (35:45)
from 500,000 to 516,000, but this is something that people are not also thinking about. 516,000, you're gonna have multiple offers on there. If you're gonna have so many more people that are now qualified, you're gonna have so much more competition. This house can get to go, it can go up to 530,000 when it's all said and done. Somebody's gonna pay that much for it, maybe even 540,000. So now you just screwed yourself, excuse my language.

by waiting a year, not getting the house you want, because not only did it go up 16,000, it went up another 15,000 because there's a lot more demand for it, a lot more ⁓ attraction to it, a lot more offers that are going in. So this is something that people don't pay attention to, unfortunately. Appreciation is something that you have to keep in mind and you have to keep in mind when the rates go down, the competition level goes up.

It's just like when you're playing competitive sports. When you're playing competitive sports, let's say you start at the high school level, great. When you move up to college, you're going to get a lot more competition. It's going to get harder and harder. Then you go to the professional level, it's going to get a lot more difficult, a lot more competition being thrown your way. So you're kind of putting yourself in a bad situation. But let's just take a look at it this way. Let's go down here again. Let's say the monthly payment. If you were to buy something now,

Daniel Benjamin (36:44)
Man, definitely will go up.

Adam Youhanna (37:11)
your monthly payments 2698. Let's round it up to 2700 for our listeners. 2700, but if you buy it a year from now, your monthly payment is going to be say, let's say 2640. Okay. That's a $60 a month drop, which you know, it's pretty good. $60 a month savings is very good. You know, it's going out to dinner with your family. So let's take that amount right here in this box on the right. Okay. This is the payment difference.

So right here it's exact, it's $53 a month difference. Over that one year of time that you waited to buy the home, you've saved $636. Just by waiting, which is great. Hey, you saved $636 for the whole year. Now I want you to think about refinancing. Let's say you buy the home now at that rate, 6%.

you refinance a year down the road. Okay. Refinance rates are usually around $4,000 as you can see right here. Let's take that into consideration. Okay. So $4,000 you're going to be thrown away refinancing. If you buy the house now, you're going to throw away another $636 in your higher monthly payment. That's $4,636 in one year's time that you're going to be losing out on. Right. But now let's take a look at the appreciation.

If the house goes up, like Danny said, standard 3.3%, that house you bought for $500,000 is not worth $516,000. So you just made $16,000 by doing nothing. By just owning the home. It's like putting money in a savings account. You just owned a home and you made $16,000 in one year. So if you look at this top box right here, you're benefiting almost $12,000 by buying this house today.

versus waiting one year from now. Did that make sense Danny? Did that help kind of clarify things?

Daniel Benjamin (39:12)
Yeah,

that's huge. mean, that's, yeah.

Adam Youhanna (39:19)
People don't think about the appreciation part. They just think about the monthly payment savings because of the interest rate. But imagine, yeah. Yeah.

Daniel Benjamin (39:27)
Well, like you said, it's tunnel vision, right? Like it's, ⁓

it's emotion. It's, it's, it's people knowing that rates were at two and a half percent and now they're paying six, six and a half, whatever, you know, so it's just, it's, it's somewhat of that instead of like actually looking at data, which that's why I like this. It's these are fat, you know, this is facts, like appreciation at 3 % is, you know, you might, it's standard. It's, it's over time. It averages out to that. So this is not, you know, not far fetched. This is.

Pretty legit. love looking at it like this because you don't think about that. you think about, you know, you think about, like I said, just that number, like, okay, rates are at 6 % and I want to be at five even or five and a half. But then you, you don't really think about how also how small of a difference that is in your monthly payment. You know, it's, and then the changes you can make later after you've locked in to a house and then.

Adam Youhanna (40:01)
No.

Mhm.

Daniel Benjamin (40:23)
the amount your house appreciates in that time too. So it's huge.

Adam Youhanna (40:28)
Yeah,

it's the main point of this is getting that information out to the buyers. ⁓

Two things that I always do, actually three things. What I show them is that first thing I showed with the comparison, right? 5%, 10%, 20 % down. So I have something called surf and turf. Okay, so the meat steak is going to be that lone comparison with the different mounts, right? Then this thing is going to be like the lobster.

Okay. Waiting the cost of waiting. And then the next thing I do is, is something where, you know, in the market where you have to overbid for a home, that's kind of like, you know, the shrimp or whatever it is. ⁓ that these three things I show to almost all my buyers, especially when they're in a market that's pretty competitive and where they're going to get multiple offers on it. It's, it's just super important to get this information out there. No matter who you are, whoever you're working with, this type of knowledge,

is going to help a lot of people put things into perspective and they're going to be able to have that the right information, not just information, but the right information to have them make a decision that's going to help benefit them and their family and the wealth that they're going to build.

Daniel Benjamin (41:37)
Yeah, I agree. It's huge.

Adam Youhanna (41:38)
Yeah.

But yeah, so I mean, we, we, ⁓ focused on that for a good amount of time. what I quickly want to just talk about is, ⁓ talking to a lender is hurting the credit, right? When you're talking to a lender and you're pulling your credit, just know that that credit is that credit report is

able to be used for 90 days. So it's not like every time you look at a house, you have to go and pull your credit and get an updated one. No, we could use yours. Today's February 17th. We could use it till May 17th. So a lot of people don't, don't realize that. But like, you know, I deal with this a lot, Danny, I'm sure you do too. Like, what do you say to people that when you tell them, Hey, go talk to a lender and

get a pre-approval, like what are some things that you hear from people about like getting their credit pulled?

Daniel Benjamin (42:26)
That's definitely a myth that I hear a lot is, hey, talking to lender is going to pull my credit, which is going to hurt my credit. And then I explained to them, for one, I think it doesn't hurt your credit as badly as most people think to begin with. And then second off, like you said, a pre-approval is good for 90 days. So ⁓ I tell people, hey, you need to talk to a lender. And there's a couple of reasons I see a lot of heartbreak when people don't talk to lenders. ⁓

You know, a couple of reasons I see that one is that people sometimes don't talk to a lender and get ahead of themselves and start looking at houses, right? It's really fun to go on Zillow and figure out where you want to live and look at houses and hit me up and say, Hey, let's go check this house out. And I see people that don't have a pre-approval or even a prequel yet. And they look at homes and then the homes sell.

If it's a good deal, sells pretty quickly and then by the time they get their prequel or pre-approval, it's too late for me to submit an offer. So I see that type of heartbreak where you find this dream home and then we kind of jump the gun. So I always tell people, before you even start looking at houses, I would have a prequel for a couple of reasons. One is that, and two is also know where you stand. Know how much you can afford.

what you qualify for. You might be looking at houses that are outside of your range, or you might be not looking at houses that you think you couldn't afford, but you can. So talking ⁓ to a mortgage advisor really helps because it hones in on what your situation is and there's no guessing game. It's not, hey, I think I can afford this, or I think I could only go up to this amount, or I think my monthly payment is going to be this. You're to get some more concrete numbers.

And a piece of paper that can allow us to go submit offers so you won't miss out on houses that aren't, uh, or, know, that you fall in love with. Um, and another thing that I see a lot is people thinking they can, uh, you know, going back to, what I was just saying, it's just people pull their credit score and they try to piece together this math equation that on their own, that they should be really talking to a lender about, right? Like they go on credit karma.

and think they're going to get approved because they have a high credit score or credit score that falls within the range of what you need. then like we talked about earlier, that's their vantage score and not their actual FICO score that the lender is going to look at. there's a lot of like, and you obviously know there's so many moving pieces to what you do that it's really, really, really important that people talk to you first to see.

if they actually are going to get approved and what their scenario looks like. you know, I would say overall, like uncertainty costs more than the credit pull being uncertain of all those things that I talked about, you know, I think that can, you know, kind of make things worse in the long run than just talking to a lender. Like that, the credit pull is not most of the time, not really going to make that much of a difference, but uncertainty will. Does that make sense?

Adam Youhanna (45:16)
Yeah.

Yeah, a hundred percent,

a hundred percent. I mean, it's sad. Like you said, sometimes people are delaying that process out and heartbreak comes, you know, they don't get their stuff in and time to get the pre-approval or pre-qual and the offer is already accepted before they could even have a chance to put an offer in. That's heartbreak.

Daniel Benjamin (45:49)
Yeah, yeah, I see it all

a lot. Yeah

Adam Youhanna (45:52)
And even the other way that you were talking about is like, okay, what I would add to it is like, okay, let's say they are waiting because they're looking at credit karma and they're looking at credit karma and it's not giving all the details of their credit report. So let's say they have something that's in collections, right? And that's causing them to maybe not get approved.

So now they don't know that because they're like, credit karma says I have a seven 20. I'm good. But then now let's say they come by me and I'm like, Hey, you have this collection or Hey, you had a car repossessed that you didn't even know about because you co-signed it for your cousin. Now you're putting yourself in a situation like in a hole that you can't dig yourself out of in that short period of time. So it's like, I always tell people like, it's what I've seen is people's credit score go down by like a max of 2%.

So if somebody has an 800 credit score, I've seen it go down 15 points, which it's not gonna do anything for you. I know there's buckets, but going from an 800 to 785 is not gonna affect your interest rate at all. I've seen some people where their credit score didn't even move. I've seen people that had dropped four points, five points. It's not gonna do anything. And like you said, uncertainty costs more than the actual credit pool. So that was a great way that you put it, and I agree with you 100%.

But it's sad that we still, every day we still have to see it no matter how much we drum into it.

Daniel Benjamin (47:13)
And then Adam, so I hear a myth a lot and I see it happen, right? Like where someone wants to buy a house, they talk to a lender, the lender says no, and then they're just out, right? They give up and they're like, hey, I don't get approved for a mortgage, but then I have them talk to you and you're the, what does that guy call you? The magic man. So you're the magic man and make things happen. So where's that from?

Adam Youhanna (47:26)
Yeah.

Magic man

from ⁓

So I

have to be the magic man, you're El Diablo from Talladega Nights with Wolf Feral. Yeah, so.

Daniel Benjamin (47:41)
That's right. So yeah, so

I hear that a lot. know, and okay, I want you to kind of touch on that because I, you know, we do see that.

Adam Youhanna (47:50)
Yeah, so I mean, you don't want somebody to kind of just look at the standard stuff, right? Like, of course we have to look at the income, we have to look at assets, and we have to look at your credit score or your credit report. But sometimes people just look past the actual credit report. They just look at the credit score and they're like, maybe people that do a high volume of like loans that they want something that's done right, that they can do right away.

Daniel Benjamin (48:14)
Easy.

⁓

Adam Youhanna (48:16)
that

they don't want to nurture, which I mean, it's fine. mean, everybody has their own like business process, right? It's not me to say it's the right way or the wrong way. Me personally, no matter what my volume is or the amount of people that I have, I still want to go and kind of try to extend that olive branch per se and help them get to where they want to be because you know, that one person that I'm helping out looking at it from a, from a business perspective.

could turn into another five more people. ⁓ And that also could be them having that opportunity to be able to buy a place, be a homeowner, which they say is the American dream. So that's something that I've seen a lot. And I always tell people, hey, I know some realtors have their go-to lender, which is great. Do you see something that they're not able to get done?

just bring it over by me, bring me some documents and then let me see if I can, you know, turn it around and make it work somehow, whether it's now or a month from now.

Daniel Benjamin (49:17)
You had a story that's coming to me now about a condo, right? That you closed on and then I think it was a few months later, a realtor called you and was like, hey, our lender couldn't close. ⁓ I saw that you did a loan here. Can you help me out? And you were able to get that closed, right?

Adam Youhanna (49:27)
yeah, yeah.

my God, yeah. ⁓ quick story. Okay. So I was able to, it was, my wife's aunt was looking to buy in a condo. We got her in, ⁓ everything worked out great. Everything worked out smoothly. And you know, it's, it's my wife's aunt. So, you know, I'm going to do everything that I can. I gave her an amazing rate and she didn't speak to anybody. Maybe a couple of weeks later, I had a realtor message me.

Hey, we can't get this deal done. And we saw that you closed a couple of weeks ago. So what did you do? And why can't we do it? So I'm not going to say who they were working with or what big lenders, but I took a look at it I was able to get it done. And then it turned out that in that building alone, I did ⁓ five different loans for because people were having trouble doing it.

Yeah, I mean that worked out great because I've grown to another four or five real estate partners just by that condo building, you know, where they kind of came to me for that second opinion and we were able to get it done. So yeah, that's just, that's an opportunity right there.

Daniel Benjamin (50:44)
Yeah, and I see it a lot. mean, even as ⁓ for myself as a borrower, being self-employed, I've seen it where a lot of lenders don't even want to deal with me. ⁓ It's usually, like you said, bigger companies and people that are, know, especially when refinances were going crazy and, you know, loan officers were doing a really high volume. They're like, they don't want to deal with the extra work, right? But I know that you, ⁓ you've helped me out with non QM stuff, which is like a non

Adam Youhanna (51:06)
You're right.

Daniel Benjamin (51:12)
What does QM even stand for? it qualified or a qualified mortgage? So yeah, I know we did a bank statement loan for me because I was self-employed with less than two years of income, which most lenders want to see. So, but you were able to kind of prove my income in different ways. ⁓ And so you have ways of, that's why I like working with brokers ⁓ more than just like a big lending company. Cause I feel like you guys have more.

Adam Youhanna (51:15)
qualified mortgage.

Daniel Benjamin (51:37)
options and different ways to strategize and come up with the right plan for my scenario instead of just like a cookie cutter. Hey, send me your W2, you know, because a lot of times that doesn't work.

Adam Youhanna (51:45)
Mm-hmm.

Yeah, mean, it's like you said, any loan officer can do cookie cutter deals, right? It's not hard, anybody could do it. It's just, there's a small percentage of people that one, wanna take on a difficult scenario, two, be able to have the creativity to think outside the box and be able to try to get it done, three, set up a plan on how to get it done and actually execute it, you know? And...

You know, like how you said, we had to go a different route with a non-QM. A lot of places don't even want to touch it, right? Just because they don't have the programs for it. They don't go non-QM. They just do regular QM, which we talked about. But yeah, I mean, there's different ways to do things. And we always want to explore every avenue before we say no. And when we say no,

It's usually followed up with, it's a no for right now, but not forever. Here's what we need to do. We set up a game plan and get them ready, whether it's three months down the road or a year down the road. But like, yeah.

Daniel Benjamin (52:45)
Yeah, and I ⁓

think that's why team alignment really matters a lot, right? All of us working together, being on the same page. ⁓ As a realtor, I want to know the goals, right? Like you said, it's no right now, it's like, hey, what do we need to do so that I can help get to that point? And then at that point, I can start looking for houses or stuff like that. So it's just like having a good team and...

Adam Youhanna (52:50)
Mm-hmm.

Daniel Benjamin (53:09)
You know, a mortgage advisor, a realtor that kind of all work together and work towards one goal is huge.

Adam Youhanna (53:15)
Mm-hmm. 100%. And I don't know what we're at for time right now, but ⁓ one thing that I do want to say is when we talk about things that you should do, there's also things that you should not do. ⁓ Doing things that you're not supposed to do.

is like the fastest way for you to like kill your deal. Right? So like you tell me, Danny, like what are some things that, you know, we probably talked about this, I think it was the last episode, but tell me like, what are some things that people should absolutely not do?

Daniel Benjamin (53:59)
Yeah, I mean, we did talk about some detail in episode two, so I'll go through them really quick. But if you haven't listened to that episode, I think you should go back and listen to that because it's very helpful with these things. know, stuff like we've talked about opening new credit cards ⁓ or even a credit poll, right? Like we did talk about credit polls going against your credit sometimes. So if it's like even if you just go to the dealership to see what your rate would be, that can impact things. ⁓ Large unexplained deposits, job changes. ⁓

Adam Youhanna (54:04)
Hmm.

Mm-hmm.

Mm-hmm.

Daniel Benjamin (54:28)
not showing up during the escrow, stuff like that. ⁓ But like I said, it's heavily in detail on episode two and I think whoever hasn't listened to that should definitely go back and listen to that and episode one as well.

Adam Youhanna (54:40)
Definitely. So what should they do instead of that stuff?

Daniel Benjamin (54:43)
So we did a home buying game plan on our last episode. We have a PDF available. ⁓ And that shows, you know, lot of detail of, the, your plan and the steps that it takes to get a home. So Jeff Lee reach out to us. think, you know, what buyers should do instead is, is reach out to experts, right? Reach out to a lending expert, reach out to a real estate expert and, ⁓ you know, just really.

Adam Youhanna (54:51)
Mm-hmm.

Daniel Benjamin (55:09)
come up with a game plan. Every situation is different. Every scenario is different. Having us on your side really helps. So definitely reach out to us. One, reach out for the game plan. I'll provide it to anybody. You can either comment plan below on any platform or go to our websites, reach out to us. Mine's youragentdanny.com and Adam's, is mortgageadvisoradam.com. Yep. So pretty easy.

Adam Youhanna (55:33)
Mm hmm. Or you could reach out to us.

I'm heavily on Instagram. Danny, I think you are too.

Daniel Benjamin (55:38)
Yep.

Yep. yeah, reach out to us. I think that's ⁓ the best thing to do. Let's get a conversation going and start working on a plan.

Adam Youhanna (55:41)
could always message us there.

Definitely cool. Anything you want to say to wrap it up?

Daniel Benjamin (55:50)
You you want to be clear, right? Like,

yeah, you know, want to just having clarity builds a lot of confidence ⁓ in a lot of and especially the home buying scenarios. don't guess. Let's, talk to us. Let's get some confidence going. Let's figure out, like I said, your situation and let's get some clarity. No more guessing.

Adam Youhanna (56:10)
Definitely, awesome. Well, I mean, I don't have anything else to add to that. So anything do you want to just add right away real quick before we log off?

Daniel Benjamin (56:16)
⁓ yeah.

No, ⁓ that's pretty much it. Obviously, subscribe, like, comment, reach out to us. We appreciate you guys listening and we'll be back with another banger next week.

Adam Youhanna (56:27)
Of course.

Yeah, we will. Danny, what do you want to talk about on the next on the next podcast?

Daniel Benjamin (56:35)
I was thinking about talking about some investing maybe some hard money loans, DSCR loans, buying rentals, buying flips. You know, that's kind of what I've been doing for the last five ish years before I got into some retail deals. So I know that piques a lot of people's interest. So I'd love to get into some of those.

Adam Youhanna (56:41)
Ooooo

Awesome. We're going to put some stuff out in the next week. We're going to ask you guys have any questions or any scenarios you want to run by us, whether it doesn't matter what market it's in. If it's in California market, Arizona market, Illinois, Wisconsin, doesn't matter. Let us know what your questions are and we will address them in the next podcast. So let's do it. We'll be out next week with another episode.

and we'll see everybody soon.

Daniel Benjamin (57:21)
Alright guys, thanks for tuning in.