Redfin's Free Mortgage Class - Chicago
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Redfin's Free Mortgage Class - Chicago

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  • http://www.freddiemac.com/pmms/
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspx
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspx

Redfin's Free Mortgage Class - Chicago Presentation Transcript

  • 1. Slide 1 of 22 How to Finance Your Home Hosted by Colette Abraham of Redfin, Colette.abraham@redfin.com
  • 2. Slide 2 of 22 Working with Redfin
  • 3. Slide 3 of 22 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 friend
  • 4. Slide 4 of 22 The Redfin Refund You buy and pay for your dream home. The 5% sales commission is split. The Listing Agent gets 2.5% commission. Your Buyers’ Agent gets 2.5% commission. You save with Redfin. Redfin keeps a portion as our fee.
  • 5. Slide 5 of 22 What We Have Accomplished ● 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 ● The right home for the right price ● No obligation ● Get back a portion of our commission
  • 6. Slide 6 of 22 Buying a Home Talk to Lender Search Homes Negotiate Offer to Contract Attorney Review – 5 bus. days Inspection – 5 bus. days Loan Commitment – ~30 days - - - - - - - - - - - - - - - - Home-Sale/Close contingency Other inspection contingencies Contingency Periods Appraisal Final Walkthrough Closing Redfin Rebate…
  • 7. Slide 7 of 22 Overview of a Purchase Research Neighborhoods Real Estate Agents Mortgage Options Preapproval Consider your needs Search Define Preferences Saved Search Home Tours Open Houses Offer Comparables Draft Offer Docs Negotiate Mutual Acceptance Closing Earnest Money Inspection Loan application Title Review Appraisal Financing Approval Closing
  • 8. Slide 8 of 22 Mortgages
  • 9. Slide 9 of 22 Review Your Financial Situation To Buy or Not to Buy ● Pull credit report, look for errors ● Establish comfort level for monthly payment ● Figure out how much monthly income goes towards debt: 28 – 33% healthy ● Pay down credit balances to 1/3rd ● Don’t open any new lines of credit ● Don’t buy any big ticket items ● Source of money ● Current employment status
  • 10. Slide 10 of 22 Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  • 11. Slide 11 of 22 Get Pre-Approved ● A pre-approval letter is a letter from a bank or a lender estimating how much they'll 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 tour
  • 12. Slide 12 of 22 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 offers
  • 13. Slide 13 of 22 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 shopping
  • 14. Slide 14 of 22 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 same
  • 15. Slide 15 of 22 Start Shopping for Lenders Compile a list of 3-4 lenders & brokers Good sources include: ● Redfin Open Book ► Redfin Certified lenders ► Reviews you can trust ● Your real estate agent ● Friends, family & co-workers ● Banks or credit unions you have accounts with ● Beware of out-of-state lenders!
  • 16. Slide 16 of 22 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)
  • 17. Slide 17 of 22 Types of Loans ● Conventional: ► As low as 5% down ► Fixed or adjustable rates, conforming or non-conforming ● Federal Housing Administration Loan (FHA): ► Always have mortgage insurance ► Buyers need only a 3.5% down payment ● VA Guaranteed Loan: ► Veterans, active duty personnel, reservists/national guard, surviving spouses ► No down payment ● Ask your lender if they have special loan programs ► Example: BB&T Chips Program
  • 18. Slide 18 of 22 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.
  • 19. Slide 19 of 22 Where Are Rates Headed? Type of Loan July 18, 2013 July 25, 2013 30-Year Fixed 4.37% 4.31% 15-Year Fixed 3.41% 3.39% 5/1 ARM 3.17% 3.16% 1-Year ARM 2.66% 2.65%
  • 20. Slide 20 of 22 Where Are Rates Headed?
  • 21. Slide 21 of 22 Open Book ● Redfin Certified Providers ● Every professional is reviewed and all reviews are shown ● Search for local: ► Inspectors ► Lenders ► Attorneys
  • 22. Slide 22 of 22 After Class… Please fill out the survey handed out at the beginning of class. 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-guide Interested in having Redfin host a free 1 hour home buying session at your company? Let us know. We’ll provide lunch!