By John Aretos, CEO of Police Mortgage
Back in the day, I’m talking like 1990s, early 2000s, 20% down was the standard. You wanted to avoid private mortgage insurance as a result.
So that was always the thing growing up. When I bought my first house, my old man told me, “Hey, make sure you put 20% down.” But he grew up in a world where you had to put 50% down.
Today there are a number of promotions and a lot of incentives that are built in to allow somebody to buy a home with less than 20% down. Obviously, part of that is just the product offering.
There’s conventional loans, FHA loans, and VA loans. Each one of those has a unique set of properties that fits a certain type of customer.
Let’s start with the VA loans. Obviously, that’s for Veterans Active Duty and that is probably going to be, to this day, your best deal in town. If you’re a veteran, you have VA eligibility. Most veterans know how to obtain their certificate of eligibility. If not, we can help them with that. We can also answer questions such as “How long is a VA pre-approval good for?”
VA loans are true, no money down transactions because you can buy a home with no money down. You can even refinance your home through the VA. And that’s without having to pay monthly mortgage insurance for not having that 20% down.
VA loans do have a funding fee, but that funding fee is based on time on the service. It’s also based on whether or not you have any kind of VA disability.
A VA loan is a very unique product. When it comes to police mortgages we like to do VA loans for those who also served in the military. First responders also many times have spouses that work in the Air Force, Army Reserves, and other military branches.
For FHA loans you have to put 3.5% down. FHA loans have very competitive interest rates. In some cases those rates are below market.
FHA does have a mortgage insurance premium that you have to pay monthly plus the other premium that gets financed similarly to VA. The monthly premium for FHA is a little high but FHA loans fit a specific set of needs. FHA loans allow for a higher ratio, which means that somebody can buy more home for their income.
FHA is also much more lenient on credit issues. At the National Police Credit Union, another subsidiary like Police Mortgage of Chicago Patrolmen’s Federal Credit Union, we have a policy of wanting the buyer to have a least a 620 credit score or higher. Some people can be below 600 and still get a FHA loan, but we have a higher standard since even a 620 credit score is not ideal. You still can qualify for a loan through FHA that you otherwise wouldn’t be able to qualify for through conventional.
That brings us to the conventional loan. This is where things can get confusing because conventional loans used to require 20% down. Conventional loans are Fannie Mae or Freddie Mac.
However, recently what has happened is things are going back to the 2008 financial crisis when Fannie Mae and Freddie Mac were doing 100% loan-to-value deals. Now they’re going up to 99%. So 1% down payment.
And there’s this thing called median income, which is based on the county you live in in the country or the state that you live in.
They can take a certain percentage of the median income, which is based upon the county or state you live in, and if you are within that annual income range then you qualify for a 1% down deal with reduced mortgage insurance.
My thought on that is if you’re trying to buy a home and you’re not a veteran you may want to think twice. If you are looking at loans for law enforcement and you have as little as 1% down, you really have to have everything else in line.
You have to have perfect credit. You have to have some assets. And you still have to prove that the 1% you have was saved on your own.
While you can go as low as 1% down for conventional, I don’t recommend it. But through conventional if you do 5% down, or even if you do at least 3% down on conventional loan, you can get a reasonable rate and a reasonable cost of mortgage insurance per month. Also there’s no collection of mortgage insurance annually through a premium.
So, those are the mortgage programs. You can go as low as 1% down but not without a lot of hoops to jump through. At Police Mortgage, we enjoy sitting down with people and learning about their situation. Each person has a certain niche that they may fall into based on a need and we pride ourselves on finding their niche based upon the down payment they can afford.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, go to www.policemortgage.com or call 312-499-8878.
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I have my bachelor’s in business administration and have been involved in the banking industry for over 10 years. During this time, I managed two of the Chicago Patrolmen’s Federal Credit Union locations prior to transitioning to Police Mortgage. I have family members who are police officers with the Chicago Police Department. My work has been very rewarding, and I take pride in having assisted countless members and their families with their financial needs and financial wellness. My hobbies include exploring new restaurants in the city and running for marathons that support pediatric cancer foundations and Chicago Police Memorial Foundation’s Run To Remember. I come from a large family primarily from the south side of Chicago and love to share all the diversity and beauty the city has to offer with my two children.
I am honored to grow up in a multi-generational family of Chicago Police Officers. I joined Police Mortgage in the summer of 2020 and love the opportunity to help both first-time buyers and repeat clients alike achieve their dreams of purchasing a home. Having been born and raised in the south suburbs of Chicago, I happily live in the Lakeview neighborhood today. Along with my two younger sisters, I am a graduate of the University of Illinois at Urbana-Champaign and a lifelong Chicago Bears fan. I have a strong passion for food and love exploring the vast array of restaurants throughout our city. Nothing makes me happier than spending a summer afternoon on a golf course with family and friends!
I joined my brother at Police Mortgage as a loan officer in August of 2021 after a 10-year career in sales and marketing. Most recently, I worked as a Senior Account Executive for Ricoh North America, an office electronics company, where my main responsibilities were building new client relationships and maintaining over 400 existing customer accounts. I believe my work experience has transferred over to the mortgage industry well, because I am able to multi-task effectively while working with multiple customers. The skillset I learned in my previous employment allows me to stay organized and to manage my time well for my customers. My number one goal is always to make the loan process as quick and painless as possible for our borrowers. I am excited to further develop the Police Mortgage brand with my brother. It is a unique situation, and I believe working in an office together allows us to help our borrowers even more due to streamlined communication and our ability to help each other with our respective files. I like to spend my free time relaxing, watching sports, exercising, going out to eat with my wife, and trying to keep up with our three daughters – all under five years old!
After graduating from the University of Missouri in 2015, I moved to Chicago where I began a career in marketing at a firm called Ansira. I sought a career change and contacted Police Mortgage, where I was first introduced to the mortgage industry. I have spent the last 5 years training with our CEO, John Aretos, who has taught me all of the intricacies of the mortgage process. I love finding solutions for our clients to help them purchase the home of their dreams. I feel a huge sense of accomplishment when helping homebuyers, especially first-time homebuyers, all the way through the loan process, from pre-approval to closing day. I recently moved back to my hometown of St. Louis, where we opened a new office. I am excited to help start this new chapter for Police Mortgage. My wife, Megan, and I are happy to be back in our hometown. We are always checking out new outdoor events such as music or food festivals – anywhere we can take our dog, Remy!
As the CEO of an organization associated with serving the Police and their loved ones, I am privileged to play a role in helping our clients achieve their life’s financial goals. Our mission is to make the home buying or refinancing process as comfortable as possible, providing our clients with competitive products and excellent service.
I was born and raised in the Chicago metropolitan area, and I have a deep-rooted love and appreciation for the diverse culture which makes our city so special. My two older siblings and I grew up working in our parent’s restaurant, which instilled a work ethic and sense of family that I carry with me to this day.
I am a graduate of Indiana University and have been involved in the mortgage industry for nearly 25 years, helping thousands of clients save money or finance the home of their dreams. My passions are passing down my love of food, music, art, snow skiing, and red wine to my three children, who motivate me to be a better person each and every day!
