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A Complete Guide to the CalSTRS 80/17 Home Purchase Loan
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A Complete Guide to the CalSTRS 80/17 Home Purchase Loan

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The CalSTRS 80/17 is the single most beneficial loan program available to employees of California's Public School or Community College Systems or School districts

The CalSTRS 80/17 is the single most beneficial loan program available to employees of California's Public School or Community College Systems or School districts

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  • 1. A Complete Guide to the CalSTRS 80/17 Purchase Loan Revised and Updated on January 30 th , 2009 Presented By: Broadview Mortgage Corporation Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]
  • 2. A Complete Guide to the CalSTRS 80/17 Purchase Loan
    • The Purpose and Goals of this Class
    • To Create and Empower Home Owners
    • Educate you about the Specialty Financing Options for Education Professionals
    • Empower you with the ability to make educated decisions in the home buying process
    • Enable you to make sound financial decisions based on information, education and experience
  • 3. A Complete Guide to the CalSTRS 80/17 Purchase Loan
    • Topics We Will Cover In This Class
    • A Complete Guide to CalSTRS 80/17
    • “ Red Flags” – What to watch out for
    • IRS Guidelines for $7,500 Federal Tax Credit – Program ends July 1 st , 2009
    • What’s the next step?
    • Wrap Up and Take Aways
  • 4. A Complete Guide to the CalSTRS 80/17 Purchase Loan
    • Ask Questions throughout presentation
      • You may type questions in at any time during the presentation – Questions box on your screen
      • CalSTRS loan specialists are standing by to answer your questions during the presentation
      • This is an interactive learning environment. You will get the most value by having your specific questions answered
      • The only dumb question is the one you don’t ask
    • Write number down now in case you get disconnected
      • 1-866-667-6724
  • 5. A Complete Guide to CalSTRS 80/17
    • Who’s Eligible for a CalSTRS 80/17?
      • Any employee of a California public school or community college
        • Can work in any capacity
        • Can work in school district
        • Pay check stub from public school system
      • If you are eligible for CalSTRS pension benefits
        • Provide certificate of eligibility
        • Do not have to be currently employed
      • Any eligible borrower makes family eligible
  • 6. A Complete Guide to CalSTRS 80/17
    • How CalSTRS benefits from the 80/17
      • CalSTRS pension fund invests in mortgage notes as mortgage backed securities
        • CalSTRS is not a lender and does not do loans
      • Payments go back into CalSTRS pension fund
      • Contributes to the growth and stability of your retirement system as a member of CalSTRS
      • Broadview Mortgage is an approved Lender on CalSTRS website - See link on site
  • 7. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 Compared to FHA
    • Lower Down Payment than FHA
      • 3.5% Down as of January 1 st , 2009
    • Interest Rates as compared to FHA
    • No UPFRONT Mortgage Insurance Premium
      • FHA increased to 1.75%
    • No MONTHLY Mortgage Insurance
      • FHA increased to .55%
    • FHA vs CalSTRS Closing Costs
      • FHA lower up front / CalSTRS lower total cost
    • CalSTRS - No cost to lock or rate
  • 8. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 Compared to FHA
    • FHA is a GREAT program as a Plan B
      • Low down payment requirements
      • Low up front closing costs
      • Aggressive interest rates
      • 6% seller concessions from seller
      • Flexible qualifying guidelines
      • Non occupying co-signers allowed to qualify
      • CalPERS members may be eligible for 100% financing using FHA 1 st mortgage
    • If you are eligible and qualify for the CalSTRS 80/17 there is simply no comparison. Period
  • 9. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Max Loan Amounts
    • Conforming Loan Amount
      • Up to $417,000
        • First mortgage loan amount
      • $521,250 Max Purchase Price
    • Jumbo Loan Amount
      • Up to $536,082
        • First mortgage loan amount
        • Max total loan amounts $650,000
      • Up to $670,103 Max Purchase Price
    • Jumbo interest rate is typically 1% higher
  • 10. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Property Qualifications
    • Eligible Properties
      • Single Family Residence - Detached
      • Condominiums / Townhomes - Attached
      • Planned Urban Development (PUD)
    • Must be owner Occupied
    • Must be located in State of California
    • Cannot own any other properties
      • Mobile home not on a permanent foundation and on leased lot/park is not considered real property
  • 11. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Loan Structure
    • Max 1 st Loan Amount - 80%
      • Qualify on 80% Only
      • Increases your purchasing power
    • Max 2 nd Loan Amount - 17%
      • No payments for first 5 years
    • 30 Year fixed rate loan only
    • Same interest rate for both loans
    • One time free float down – both loans
  • 12. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Second Mortgage
    • Second Mortgage Loan
      • Deferred payments for 5 Years
      • Simple interest accrues for deferred period
      • Accrued interest added to principle balance
      • Fully amortized over remaining 300 months
    • No surprises guarantee - You will know exactly what your payments will be
      • Although you qualify on first mortgage only, we will always send you a good faith estimate with total payment
  • 13. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Second Mortgage
    • Calculating Monthly Payment – Based on $300,000 Purchase Price
    • $51,000 loan amount
    • x 5.125% interest rate
    • $2,613.75 annual accrued interest
    • x 5 years deferral period
    • $13,068.75 total accrued interest for 5yrs
    • + $51,000 original loan balance
    • $64,068.75 61 st month new total principle with deferred interest
    • + $ 136.81 15 days interim interest – attend “Closing Costs” class
    • $64,205.56
    • $64,205.56 Amortized for 25 years = $380.03 payment
  • 14. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Down Payment
    • Down payment requirements
      • 3% down payment
      • 1% from buyer’s own funds
    • Sources of Down Payment and Closing Costs
      • Down Payment - Borrower's own funds
      • Down Payment - Gift from relative
      • Down Payment – Grant from government agency
      • Closing Costs - Seller contributions up to 3%
      • Closing Costs - Borrower's own funds
      • Closing Costs - Gift from relative
  • 15. A Complete Guide to CalSTRS 80/17
    • Additional Low and No Down Payment Options for CalPERS Members
      • Maximum purchase price $350,000
      • Use CalPERS FHA 1 st - Maximum 96.5% LTV
      • Personal loan secured by PERS
        • Not borrowed from PERS account
      • Can borrow up to 5% of value of home
      • Up to 50% of Member’s current contribution
        • Maximum $18,421
      • Minimum loan term is 1 year / Max is 15 years
      • Must be primary residence
      • Can be used toward down payment only
      • Attend 100% Financing for CalPERS class
  • 16. A Complete Guide to CalSTRS 80/17
    • Other CalSTRS 80/17 Highlights
    • No Income limits
    • You do not have to be a first time homebuyer
    • You cannot own any other properties
    • Minimum FICO Scores
      • 620 for Loan Amounts up to $400,000
      • 680 for Loan Amounts up to $650,000
        • Combined 1 st & 2 nd Loans
    • Interest Rate lock requires Property Address
      • Typically rate is locked when offer is accepted
    • If offer falls out – Rate lock is lost as well
  • 17. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 - What Makes it Different
    • Cannot buy interest rate down
      • Below market / Set by CalSTRS
    • Cannot “roll in” closing costs into rate
    • Fannie Mae – Pricing Adjustments
      • Declining Market - .25%
      • High LTV Flex 97 - .5%
      • Risk based credit score pricing
        • None at 740 FICO
    • Potentially lower cost than FHA - may require more money brought to the closing table
  • 18. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Review
      • Only 3% down payment required
      • No upfront mortgage insurance premium
      • No monthly mortgage insurance premium
      • Qualify for 80% first mortgage only
      • 17% second mortgage deferred for 5 years
      • No income or first time home buyer limits
      • Up to 3% seller concessions for closing costs
      • Rates set by CalSTRS
      • One time Free float down
      • Interest rate can be locked once offer accepted
  • 19. A Complete Guide to CalSTRS 80/17
    • “ Red Flags” - What to watch out for
      • Community programs designed to benefit specific members of the education community
      • CalSTRS loans have fixed rates and fees
        • Interest rates set daily by CalSTRS
        • Origination fees set by CalSTRS
        • Can not charge discount points
    • Be sure to tell your Realtor / Lender that you are an education professional
      • Ask them for special programs available to you
      • CalSTRS, CalPERS, ECTP (discontinued),
  • 20. A Complete Guide to CalSTRS 80/17
    • “ Red Flags” - What to watch out for
    • Common Signs that lender is not an expert
      • Agent recommends lender but not program
      • Lender isn’t CalSTRS 80/17 Expert
      • FHA is presented as an option/solution
      • GFE doesn’t have LLPA’s
        • Declining Market - .25%
        • Flex 97 High LTV - .50%
        • Credit Score 740 or less - ?%
      • Interest Rates do not match website
        • Ask what today’s rate is – then check the site
  • 21. $7,500 Federal Tax Credit
    • No-interest loan paid back over 15 years
      • Begin paying back 2 years after claim
    • Must purchase on or before July 1 st , 2009
      • Between April 8th, 2008 and July 1 st , 2009
    • Must be first time home buyer
      • Can not have owned in past 3 years
    • 10% of purchase price up $7,500
    • $7,500 - Married filing joint or Single taxpayer
    • Married filing separate $3,750
  • 22. $7,500 Federal Tax Credit
    • Home bought in 2008 can be claimed on 2008 returns
    • Home bought in 2009 can be claimed on 2008 (or amended 2008) return
    • Income limit is $150,000 for married couple
      • Phase out maximum is $170,000
    • Income limit is $75,000 for single taxpayer
      • Phase out maximum is $95,000
    • Loan is paid back in 15 equal installments
      • Deducted from refund on future returns
      • Added to tax liability on future returns
  • 23. $7,500 Federal Tax Credit
    • You would be ineligible for Tax Credit if:
      • Your income exceed the phase-out range
      • You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild
      • You stop using your home as your main home
      • You sell your home before the end of the year
      • You are a nonresident alien
      • Your home financing comes from tax-exempt mortgage revenue bonds - CalHFA
      • You owned another main at any time during the three years prior to the date of purchase
  • 24. Great market, Great program What’s the next Step?
    • Very First Step – Get pre-approved for financing
    • Get pre-approved for the maximum you can qualify for – Be prepared for competition
    • Work with a buyer’s agent – Fiduciary duties require that your best interests are represented
    • Work with a Real Estate Agent that is familiar with these special home purchase programs
  • 25. A Complete Guide to CalSTRS 80/17
    • Wrap up and Take Aways
      • We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA and Community based down payment assistance programs
      • We are a direct Lender that specializes in FHA & VA Refinance, Streamline and Purchase loans.
      • We are more than happy to be your “second opinion” if you are already working with someone
      • We are committed to educating and empowering homeowners - Join us for future classes
  • 26. A Complete Guide to CalSTRS 80/17
    • Wrap up and Take Aways
      • You will receive a “Thank you” email with links to the information we’ve talked about here today
        • Copy of power point presentation
        • Secure on-line loan application
        • Links to tools and resources we talk about in all of our classes
        • Link to CalSTRS website to follow rates
        • Dream Home Finder request
        • More info on the $7,500 tax credit – link
        • A schedule of all upcoming classes
  • 27. Upcoming Home Buyer Classes
    • A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application
    • A Complete Guide to Buying Foreclosures and Short Sales
    • A Complete Guide to Closing Costs and the Good Faith Estimate
    • A Complete Guide to the CalPERS Home Loan Program – No down option
    • A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals
    • A Complete Guide to FHA Purchase Loan Options
    • Check back often for upcoming classes
  • 28. Thank you for Attending Your input is Valuable Please complete 2 question survey when you log off Presented By: Broadview Mortgage Corp. Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]