Boston lending class   10.26 final
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Boston lending class 10.26 final Presentation Transcript

  • 1. How to finance your home October 26, 2011 Boston, MA
  • 2. Working with RedfinWorking with Redfin
  • 3. Working With Redfin is Different Service • Advocates: client-satisfaction bonuses, not commissions • Transparency: informed decisions • Best Agents: The right home for the right price No obligation • Switch Redfin agents • Pause and re-start your search any time • Tour on your schedule and pace Refund • You get up to 33% the commission The Best Results • Service: 97% would recommend us to a friendConsidering… Looking… Buying…
  • 4. How Commissions Work Example: You buy a home for $500,000 Traditional Agents Commission Seller’s Agent (2.5%) $12,500 Buyer’s Agent (2.5%) $12,500 Redfin Agents Commission Seller’s Agent (2.5%) $12,500 Redfin (66.67%) $8,334 Redfin Buyer (33.33%) $4,166 • Redfin refunds 33% of the buyer’s agent commission • Applied to closing costs • Remainder paid as a check within 10 days of closing • Refund is tax-free • Minimum Redfin fee: $6,000Considering… Looking… Buying…
  • 5. How Our Team WorksAgent•Responsible for your Field Agentssuccess•Writes your offer •Assists with Tours•Handles inspection •Assists inspections•Handles negotiations •Answers Questions You Coordinator •Schedules tours •Coordinates Agents •Answers QuestionsConsidering… Looking… Buying…
  • 6. A Little Bit About What We DoRedfin is a brokerage that’s usingtechnology and a customer-service focus tochange the real estate game in theconsumer’s favor.• What: a brokerage• How we are different: • Technology • Customer-service• Why: we want to change the game
  • 7. What We Have AccomplishedRedfin is a real estate brokerage that hashelped over 20,000 people buy or sell ahome; 97% would refer us to a friend.• Customers, not commissions• Informed decisions• The right home for the right priceNo obligationGet back up to 33% of our commission
  • 8. Mortgages
  • 9. Sofia Travayiakis
  • 10. Get Pre-Approved • A pre-approval letter is a letter from a bank or a lender estimating how much theyll lend a borrower • Help you establish how much you can afford and makes offer process go faster • Information needed: • W-2, two pay-stubs, tax returns (get them ready), bank statements • The process only takes a few days while banks get everything verified • The approval is good for 90 days, depending on lender • Ask for a few different amounts • Redfin asks that you get pre-approved before your third tourConsidering… Looking… Buying…
  • 11. Facts on Getting Pre-Approved • Applications are usually free and credit checks should not cost more than $20 • If you get multiple credit checks from multiple lenders within a 30 day period, this will only count as one credit check against your credit score • The application does not bind you to a lender, loan or rate • You will get a better idea of any other action items you need to complete before you can buy • Gives you a chance to discuss different financing options • Your pre-approval stays valid as long as your finances constant (check with your lender to see if they have limits on this) • Being pre-approved is required by sellers to consider offersConsidering… Looking… Buying…
  • 12. Organize Your Assets • Get ready for the down payment • Cash accounts (liquid funds) • 401(k), stocks, other investments • Gift funds? (Max. allowed varies) • Move funds around before you start shoppingConsidering… Looking… Buying…
  • 13. Review Your Debt • Pull credit report, look for errors • Figure out how much monthly income goes towards paying off debt: 28 – 33% healthy • Pay down balances to 1/3rd of credit available • Don’t open any new lines of credit • Don’t buy any big ticket items • Co-borrower will need to do the sameConsidering… Looking… Buying…
  • 14. Start Shopping for Lenders Compile a list of 4-6 lenders & brokers Good sources include: • Redfins partner lenders • Referrals from friends, family & co-workers • Banks or credit unions you have accounts with • A large, national bank with an advertised rate • Your real estate agent • Online review sites, such as Yelp • BEWARE OF OUT OF STATE LENDERS!!!Considering… Looking… Buying…
  • 15. Comparing GFE Results • Gather Good Faith Estimates (loan quotes) • A minimum of three, more is better • Compare similar loans • Program (FHA, conventional) • Timeframe (same day) • Compare costs side-by-side • Discount & origination points • Interest rates • Insurance premiums (FHA, PMI) • APR (interest rates + fees + points + PMI)Considering… Looking… Buying…
  • 16. Make Your Decision • When possible, get a loan commitment • Lock your interest rate (30 - 60 days) • Make alternative funds liquid (401k, stock) Good news! Loan payments are made in arrears, so your first loan payment won’t be for two months. You’ll have one month of no payments.Considering… Looking… Buying…
  • 17. Current Average Rates Type of Loan September 29, 2011 October 6, 2011 30-Year Fixed 4.01% 3.94% 15-Year Fixed 3.28% 3.26% 5/1 ARM 3.02% 2.96% 1-Year ARM 2.83% 2.95%Considering… Looking… Buying…
  • 18. Change to Jumbo Loan Limits One-Unit Limit until One-Unit LimitCounty name Sept. 30 starting Oct. 1Barnstable $462,500 $417,000Bristol $475,000 $426,650Dukes $729,750 $625,500Essex $523,750 $465,750Middlesex $523,750 $465,750Nantucket $729,750 $625,500Norfolk $523,750 $465,750Plymouth $523,750 $465,750Suffolk $523,750 $465,750
  • 19. Change to FHA Loan Limits One-Unit Limit until One-Unit LimitCounty name Sept. 30 starting Oct. 1Barnstable $462,500 $405,950Bristol $475,000 $426,650Dukes $729,750 $625,500Essex $523,750 $465,750Middlesex $523,750 $465,750Nantucket $729,750 $625,500Norfolk $523,750 $465,750Plymouth $523,750 $465,750Suffolk $523,750 $465,750
  • 20. Where Are Rates Headed?
  • 21. After Class… Please fill out the survey we’ll send this week along with this slide deck. We’d love to get your feedback on how the class could improve. To get even more info on the home buying process, check out our home buying guide: http://redfin.com/home-buying-guideConsidering… Looking… Buying…