Redfin Peninsula Mortgage 1.15.14
Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

Redfin Peninsula Mortgage 1.15.14

on

  • 235 views

 

Statistics

Views

Total Views
235
Views on SlideShare
235
Embed Views
0

Actions

Likes
0
Downloads
3
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • [REQUIRED – please add the main presenter’s photos]
  • 5 minute break timer.To begin the timer, when in presentation view on the slide, click advance once and you will see the red appear from left to right. When the entire bar is red your break is up!
  • Point out reviewsUpdating this page: This should be updated based on your Local Rec. Lender. Just go to the page click “Print Screen.” Come back to this page, click on the large image, click delete, and then right click and paste. Size the images so it fits the page. The right click again and click “Send to back.”
  • [REQUIRED]
  • [REQUIRED]
  • We’ll stick around…

Redfin Peninsula Mortgage 1.15.14 Presentation Transcript

  • 1. Redfin’s Mortgage Class Redfin’s Peninsula Team January 15, 2014 Host: Regina Puzon @Redfin facebook.com/Redfin Slide 1 of 36
  • 2. A Little Bit About Who We Are Redfin is a real estate brokerage that has helped over 20,000 people buy or sell a home; 97% would refer us to a friend. ● Customers, not commissions ● Informed decisions ● Right home for the right price  No obligation  Commission credit Slide 2 of 36
  • 3. Redfin.com - Benefits of MLS Powered (Multiple Listing Service) ● All the homes for sale: 30% more listings ● You see what the agent sees: 4x the data ● Real-time market data: photos, details of just-sold homes Slide 3 of 36
  • 4. Real Estate Sites: What to Look For ● Has all the homes for sale ● Updated every 15 minutes ● Real-time sales data ● Insights from agents ● Lots of data ● Mobile apps Slide 4 of 36
  • 5. Understanding the Buying Process Slide 5 of 36
  • 6. Overview of a Purchase Research Search Offer Closing Neighborhoods Define Preferences Comparables Earnest Money Real Estate Agents Saved Search Draft Offer Docs Inspection Mortgage Options Home Tours Negotiate Loan application Preapproval Open Houses Mutual Acceptance Title Review Consider your needs Appraisal Financing Approval Closing Slide 6 of 36
  • 7. Understanding the Market Slide 7 of 36
  • 8. Burlingame Stats for Houses Slide 8 of 36
  • 9. Burlingame Stats for Condos Slide 9 of 36
  • 10. Current Market: Low Inventory Slide 10 of 36
  • 11. Current Market: Rising Prices Slide 11 of 36
  • 12. Burlingame Area Overview Slide 12 of 36
  • 13. Experience With Multiple Offers This occurs when inventory is down and buyer interest is up ● 5 Tips for Winning in a Bidding War ► Make the competition eat your dust  Stay a step ahead of other buyers  Set up saved searches & instant alerts ► Get pre-approved with a local lender & get underwriter approval ► Start the conversation early ► Write a letter & appeal to the seller ► Know your limits Slide 13 of 36
  • 14. Mortgages Slide 14 of 36
  • 15. Getting Pre-Approved Income oSalary—Past 30 days oHourly—Consistency and history oSelf-employed—Two year average Credit Assets o640 for FHA o680 for Conventional o720 for Rate Improvement o Down Payment o Closing Costs o Cash Reserves Slide 15 of 36
  • 16. Who Applies for the Loan? ● ● ● ● ● ● Joint Applicants: All for one, one for all No ―co-signors‖ allowed today Parents can be non-occupant co-borrowers Married people do not have to both be on the loan Once on the loan, always on the loan unless you refinance It is okay to be on ―‖title only‖ Slide 16 of 36
  • 17. Loan Amount Impact Criteria ● $417,000 -- Conforming Loan – Fannie/Freddie ► Lowest Rate for 30 fixed ► Desktop Approval Available – instant ● $625,500 – High Balance Conforming Loan – ► For High Cost Areas ► Higher Rate ► Credit Score sensitive ● $625,501 and up – Jumbo Loan ► Highest Rate ► Portfolio Approval, guidelines vary ► Lots of review ► ARMs very popular Slide 17 of 36
  • 18. Show Stable Employment Salaried Employee  W2’s are historic – 2 year history  Most recent paystubs – one month  Salary increases count immediately Self-Employed (most affected by lending changes)  Two Year History (Tax Years)  Same line of work (strategic) Hourly Wage Earner  Consistent hours over 1-2 year period  Verification of employment important Slide 18 of 36
  • 19. Loan for your Down Payment  Conventional – 20% down payment  Conventional – 5% for loans over $417,000  Conventional – 10% down, up to 625,500  FHA – 3.5% down, up to 625,500  VA – 0-3% down, lenders vary as to loan limit Size of down payment affects seller perception Slide 19 of 36
  • 20. Organize Your Assets Lenders Will Require 2 Months of Statements ●Liquid ► Do not move money around—hard to paper trail ► Large deposits and transfers are sourced ●Retirement Accounts (reserves) ► Consider a 401k Loan ► Provide all accounts to your lender ●Gift Funds ► Family members only Slide 20 of 36
  • 21. Review Your Debt | Credit History Know Current Credit Score Fix Errors ●Myfreecreditreport.com: pay to get your score; no affect on scores ●Limit credit checks by lenders ●There are 3 bureaus, middle score counts ●With co-borrowers, lowest middle score counts ●Remove duplicates ●Resolve disputes ●Reduce credit card debt (33% of limit) ●Do not open, close, or change credit lines Slide 21 of 36 ●Do not make large purchases
  • 22. 10-Minute Break 10 mins 5 mins Let’s Get Started! Slide 22 of 36 End
  • 23. How much can you borrow? Lenders tolerate more than most borrowers ● ● ● ● ● Fannie Mae – 45-47% of gross monthly income Freddie Mac – 45-49% Jumbo Lenders – 43% PMI Carriers – 41% FHA – 50-52% Slide 23 of 36
  • 24. Debt to Income Scenario oEarns $10,000/month oHas student loan $110 oWants to buy a home for $750,000 oHas 20% down payment o $10,000 x 43% = $4,300 o $4,300 – 350 (other debt) $600,000 Loan o30/Yr Fixed, 4.75% = Allowed $4,190/Month! = Qualified $4,036/Month! Slide 24 of 36 = $3,130 oProperty Taxes o1.25% on purchase price = $781 ($9,375/yr) oHomeowners Insurance = $125 ($1,500/yr) oTotal: $2,908+781+125
  • 25. Low Down Payment Scenario oEarns $6,500/month oHas car payment $300 oWants to buy a home for $500,000 oHas 10% down payment o $6,500 x 41% = $2,665 o $2,665 – 300 (other debt) = Limit $2,365/Month! Slide 25 of 36 $450,000 Loan o 30/Yr Fixed, 4.75% = $2,116 o Property Taxes o 1.25% on purchase price = $520 ($6,250/yr) o PMI = $203 o Homeowners Insurance = $100 ($1,200/yr) o Total: $2,116+520+100 +203 = Too High $2,939/Month!
  • 26. Choose a Lender Pre-Approval Letter is Critical ●Part of the offer ●Sellers want accountability, Local lenders preferred Using Referrals to find your lender ●From Redfin’s partner lenders ●From friends who recently financed a home ●From Realtor Research Your Lender ●Check Yelp, Berkeley Parents Network, Google ●Schedule a meeting by phone or in person Slide 26 of 36
  • 27. Questions to Ask Any Lender ● Please describe your mortgage banking experience? ● How many transactions do you close each year and what % are purchase transactions? ● What does a "loan pre-approval― with your bank involve? ● Do you pre-underwrite my application, subject to the property address? ● Who handles your appraisals? ● Do you know your underwriter's first name? ● If I provide everything you request, how long will it generally take to get loan approval? ● Are you available on weekends or evenings if needed? Slide 27 of 36
  • 28. Rate Shopping ● Within a one hour period, call your top three prospective lenders and ask: ► What is your rate for:  $417,000 and $625,500  Single Family Home  Assume 780 credit  Assume Owner Occupied  Assume 20% down payment (and what if I have 30% down?)  Assume no impounds  No points, no lender credits Slide 28 of 36 ● Then ask: ► What are the standard lender fees for this scenario? ► Can you close this in 30 days? ● Did you close your last three transactions on time? ● Did the homes appraise at or above the purchase price? ● Last ask: ● How can I learn more about you? (Realtors, web site, testimonials)
  • 29. Understand Your Costs Get a Good Faith Estimate o Itemized List of Fees: o Lender: Appraisal, Credit, Processing, Underwriting, Points o Escrow: Title Insurance, Documents, Notary Public o Government: Recording fee, Transfer Tax o Prepaid Items: Mortgage Interest, Homeowner’s insurance, impounds Loan payments are made in arrears, so your next loan payment will not be for almost two months! Slide 29 of 36
  • 30. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders! Slide 30 of 36
  • 31. Current Average Conforming Rates Type of Loan January 9, 2014 January 2, 2014 30-Year Fixed 4.51% 4.53% 15-Year Fixed 3.56% 3.55% 5/1 ARM 3.15% 3.05% 1-Year ARM 2.57% 2.56% Slide 31 of 36
  • 32. Review Your Financial Situation ● ● ● ● ● ● ● Pull credit report, look for errors Establish comfort level for monthly payment Pay down credit balances Don’t open any new lines of credit Don’t buy any big ticket items Source of money Current employment status Slide 32 of 36
  • 33. Get Pre-Approved Early A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you ● Establishes what you can afford & makes offer process go faster ● Good for 90 days, depending on lender Info needed: ● W-2, two pay-stubs, tax returns, bank statements Slide 33 of 36
  • 34. So What Now? ● ● ● ● ● ● ● Make sure it’s the right time for you Start browsing online Check out our Home Buying Guide Find the right agent Look for a local lender and get pre-approved Start seeing homes in person Make an offer & close the deal Slide 34 of 36
  • 35. Future Events! Slide 35 of 36
  • 36. Thanks for Coming! Questions? Get in touch: Regina Puzon regina.puzon@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events Slide 36 of 36