On October 23rd, 2014, we updated our
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A Little Bit About Redfin
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
Save $4,000 on Average
OC: Low Inventory
OC List vs. Sold Home Prices
Orange County Area Overview
Local Recommended Lenders
In no way does
lenders – we just
think they’re great
Review Your Financial Situation
● Pull credit report, look for errors
● Establish comfort level for monthly payment
● Figure out how much monthly income goes towards debt typically 28 – 40% healthy
● Pay down credit balances to 1/3rd of high limit
● Don’t open any new lines of credit
● Don’t buy any big ticket items
● Determine source of funds
● Current employment status
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
Pulling Credit: Is it harmful?
● Your credit report must be reviewed by a lender before you
can obtain a pre-approval
● If you know your score, a lender should be able to give you
ballpark pricing for their loan products
● Maintaining a pre-approval
has a negligible impact on
your credit score
● Don’t allow lots of lenders to
pull your credit score
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
● Ask for a few different amounts
● Redfin asks that you get pre-approved before your third tour
● Are gift funds involved?
● How much do you have for a down payment?
● W-2, two pay-stubs, tax returns, bank statements
Facts on Getting Pre-Approved
● Applications are usually free and credit checks should not cost more
● If you get multiple credit checks from multiple lenders within a 30
day period, this will only count as one credit check against your
● 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
Types of Loans
► 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
► No down payment
Start Shopping for Lenders
Compile a list of 2-3 lenders & brokers
Good sources include:
● Redfin's 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!!!
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)
Where Are Rates Headed?
Type of Loan
January 2, 2013
Where Are Rates Headed?
Why all the Multiple Offers?
What’s driving the sudden demand for homes?
► Interest rates are rising
In October, 64.6% of listings faced multiple offers.
This is down from 72.2% in September.
► OC Winning Offers in October
23.1% sold over asking
5.0% were all cash
25.0% included a cover letter
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.
NEW! Express Loan Program
Right now in Orange County, 64% of offers are multiple
By using this program you will be able to offer:
· Little to No Loan Contingency
· Reduced Appraisal Contingency
· 21 Day Close
· Reduced Risk for the Seller
Express Loan Program
How It Works:
● Step 1: Certified Lender takes you through the underwriting process.
This usually happens in your first 10-14 days of escrow. You will need to
submit all your financial and other documentation to the lender. Once
you have full underwriter approval, it indicates to the seller that pending
a clean title and appraisal, your lender is ready to fund the loan.
● Step 2 : Your offer is made with terms that most, if any, other buyers
financing their home can compete with.
● Step 3 : Upon opening escrow your appraisal will be ordered as a rush.
This is a $100 fee which is covered by your Certified Lender.
● Step 4 : Upon a clear title and appraisal at or above the purchase price,
escrow closes in 21 days or less.
Get Started Right Away!
Thanks for Coming!
Questions? Get in touch:
Check out our upcoming classes: