North end mortgage class 7.19.12

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  • 1. How to Finance YourHomePresented By: Kathi Kelly-Billings & Dietrich MiklautschJuly 19, 2012 Bothell, WASlide 1 of 19
  • 2. Working with RedfinSlide 2 of 19
  • 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 ► We’ll refund a portion of the commission back to you The Best Results ► Service: 97% would recommend us to a friendSlide 3 of 19
  • 4. We Share Our Commission With You• Applied to closing costs• Refund is tax-free
  • 5. How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU FIELD AGENT COORDINATOR Takes you to see homes Schedules tours See 50+ homes a week Prepares paperwork Works with escrowSlide 5 of 19
  • 6. A Little Bit About What We Do Redfin is a brokerage that’s using technology and a customer-service focus to change the real estate game in the consumer’s favor. ● What: a brokerage ● How we are different: ► Technology ► Customer-service ● Why: we want to change the gameSlide 6 of 19
  • 7. What We Have AccomplishedRedfin is a real estate brokerage that has helped over 20,000people buy or sell a home; 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 commissionSlide 7 of 19
  • 8. MortgagesSlide 8 of 19
  • 9. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 9 of 19
  • 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 tourSlide 10 of 19
  • 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 offersSlide 11 of 19
  • 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 shoppingSlide 12 of 19
  • 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 sameSlide 13 of 19
  • 14. Start Shopping for LendersCompile a list of 4-6 lenders & brokersGood 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!!!Slide 14 of 19
  • 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)Slide 15 of 19
  • 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, soyour first loan payment won’t be for two months.You’ll have one month of no payments.Slide 16 of 19
  • 17. Current Average Rates Type of Loan July 5, 2012 July 12, 2012 30-Year Fixed 3.62% 3.56% 15-Year Fixed 2.89% 2.86% 5/1 ARM 2.79% 2.74% 1-Year ARM 2.68% 2.69%Slide 17 of 19
  • 18. Where Are Rates Headed?Slide 18 of 19
  • 19. After Class…Please fill out the survey handed out at the beginning ofclass. We’d love to get your feedback on how theclass could improve.To get even more info on the home buying process,check out our home buying guide:http://redfin.com/home-buying-guideSlide 19 of 19