How to Finance Your Home
Presented by: Redfin’s Orange County Team
January 20, 2014 Irvine, CA

Follow: @RedfinOC
Like: ht...
Working with Redfin

Slide 2 of 19
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%...
Your Redfin Credit

Slide 4 of 19
Partners in the Process
AGENT
Responsible for your success
Writes your offer
Handles negotiations

TRANSACTION
COORDINATOR...
Mortgages

Slide 6 of 19
Local Recommended Lenders

*In no way does Redfin
benefit financially from
recommending lenders –
we just think they’re gr...
Review Your Financial Situation
● Pull credit report, look for errors
● Establish comfort level for monthly payment
● Figu...
Organize Your Assets
●
●
●
●
●

Get ready for the down payment
Cash accounts (liquid funds)
401(k), stocks, other investme...
Pulling Credit: Is it harmful?
● Your credit report must be reviewed by a lender before you
can obtain a pre-approval
● If...
Getting Pre-Approved
A pre-approval letter is a letter from a bank or a lender estimating
how much they'll lend you
● Esta...
Facts on Getting Pre-Approved
● Applications are usually free and credit checks should not cost more
than $20
● If you get...
Types of Loans
● Conventional:
► As low as 5% down
► Fixed or adjustable rates, conforming or non-conforming
● Federal Hou...
Start Shopping for Lenders
Compile a list of 2-3 lenders & brokers
Good sources include:
● Redfin's partner lenders
● Refe...
Comparing GFE Results
●

Gather Good Faith Estimates (loan quotes)
► A minimum of three, more is better
► Compare similar ...
Where Are Rates Headed?
Type of Loan

January 1 2014

January 20, 2014

30-Year Fixed

4.51%

4.37%

15-Year Fixed

3.53%
...
Make Your Decision
● When possible, get a loan commitment
● Lock your interest rate (30 - 60 days)
● Make alternative fund...
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Redfin's Free Mortgage Class - Orange County, Ca

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  • 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 – Update each time with latest rate information]http://www.freddiemac.com/pmms/
  • Redfin's Free Mortgage Class - Orange County, Ca

    1. 1. How to Finance Your Home Presented by: Redfin’s Orange County Team January 20, 2014 Irvine, CA Follow: @RedfinOC Like: http://www.facebook.com/RedfinOC Slide 1 of 19
    2. 2. Working with Redfin Slide 2 of 19
    3. 3. 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 3 of 19
    4. 4. Your Redfin Credit Slide 4 of 19
    5. 5. Partners in the Process AGENT Responsible for your success Writes your offer Handles negotiations TRANSACTION COORDINATOR Prepares paperwork Works with escrow Slide 5 of 19 TOUR COORDINATOR Schedules tours Prepares paperwork ASSOCIATE AGENT Takes you to see homes Sees 50+ homes a week
    6. 6. Mortgages Slide 6 of 19
    7. 7. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders! Slide 7 of 19
    8. 8. 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 Slide 8 of 19
    9. 9. 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 Slide 9 of 19
    10. 10. 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 repeatedly Slide 10 of 19
    11. 11. Getting Pre-Approved 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? Information needed: ● W-2, two pay-stubs, tax returns, bank statements Slide 11 of 19
    12. 12. 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 Slide 12 of 19
    13. 13. 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 Slide 13 of 19
    14. 14. 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!!! Slide 14 of 19
    15. 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. 16. Where Are Rates Headed? Type of Loan January 1 2014 January 20, 2014 30-Year Fixed 4.51% 4.37% 15-Year Fixed 3.53% 3.41% 5/1 ARM 3.26% 3.17% 1-Year ARM 2.66% 2.66% Slide 16 of 19
    17. 17. 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. Slide 17 of 19
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