CalSTRS 80/17 Webinar  Dec 4th 2008
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CalSTRS 80/17 Webinar Dec 4th 2008

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A Complete guide to the CalSTRS 80/17 Home Purchase program originally presented on Dec 4th, 2008

A Complete guide to the CalSTRS 80/17 Home Purchase program originally presented on Dec 4th, 2008

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CalSTRS 80/17 Webinar Dec 4th 2008 Presentation Transcript

  • 1. A Complete Guide to the CalSTRS 80/17 Purchase Loan Originally Presented Thursday, December 4 th , 2008 Presented By: Broadview Mortgage Corporation Presenter: Scott Schang, CalSTRS Specialist Contact Information: Phone: 866-667-6724 [email_address]
  • 2. A Complete Guide to the CalSTRS 80/17 Purchase Loan
    • Topics We Will Cover In This Class
    • Overview of California Real Estate Market
    • A Complete Guide to CalSTRS 80/17
    • Things you should know about getting started
    • Wrap Up and Take Aways
  • 3. 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 current California Real Estate market and Financing Options
    • Empower you with the ability to make educated decisions in the home buying process
    • Introduce you to Broadview Mortgage Corporation as your CalSTRS 80/17 experts
  • 4. A Complete Guide to the CalSTRS 80/17 Purchase Loan
    • Topics We Will Cover In This Class
    • Ask Questions throughout presentation
      • You may type questions in at any time during the presentation – Questions box on your screen
      • CalSTRS 80/17 specialists are standing by to answer your questions during the presentation
      • 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. Overview of the California Real Estate Market
    • Being At The Right Place / Right Time
    • What it means to be in a Buyer’s Market
        • Supply and demand
        • Many homes for sale
        • Few home buyers in market
        • Credit market offers few options
    • Why CA Market is a “Perfect Storm”
      • Affordability Factor up
      • Median Home Prices Down
      • Specialty Programs for Home Buyers
  • 6. Overview of the California Real Estate Market
    • California Housing Affordability Index
      • Index used to determine the percentage of families that could afford a home
    • Method Used to Determine Affordability
      • Median Home Prices
      • Interest Rates
      • Down Payment – 10% used for index
      • Statistical Data for area incomes
    • Value as a Comparative Analysis
      • Affordability approaching 2003 numbers
      • 2003 home sales and affordability 30 year highs
  • 7. Overview of the California Real Estate Market
  • 8. Overview of the California Real Estate Market
    • Most California home prices have dropped more than 20% since July of 2007
  • 9. Overview of the California Real Estate Market
    • Many California home prices have dropped more than 30% since July of 2007
  • 10. California Real Estate Market in the News
    • HEADLINE: Southern California home sales jump 65 percent in September
      • Mercury News, Silicon Valley – Oct. 20 th , 2008
      • LOS ANGELES — Southern California home sales jumped 65 percent in September from a year ago, as plummeting prices fueled by foreclosures lured more buyers.
      • Last month's median home price in the six-county region fell 33.2 percent to $308,500, compared with $462,000 in September 2007.
  • 11. California Real Estate Market in the News
      • HEADLINE: Bargains Boost SoCal Home Sales a record 67% in October!
        • OC Register, Nov. 18 th
      • Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67%
      • The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007.
  • 12. 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
  • 13. A Complete Guide to CalSTRS 80/17
    • Why CalSTRS offers the 80/17
      • CalSTRS pension fund invests in mortgage notes as mortgage backed securities
        • CalSTRS is not a lender and does not do loans
      • Countrywide services loans on CalSTRS behalf
        • Send out mortgage statement and collects payments
      • 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
  • 14. 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
  • 15. 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
      • No penalty for lower credit scores
    • If you are eligible and qualify for the CalSTRS 80/17 there is simply no comparison. Period
  • 16. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 – Max Loan Amounts
    • Conforming Loan Amount
      • Up to $417,000
        • First mortgage amount
      • $521,250 Max Purchase Price
    • Jumbo Loan Amount
      • Up to $520,000
        • First mortgage amount
      • Up to $650,000 Max Purchase Price
    • Jumbo interest rate is typically 1% higher
  • 17. 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
    • Can not own any other properties
      • Mobile home not on permanent foundation and located in park/leased land not considered real property – Still eligible
  • 18. 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
      • Anytime in first 40 days
  • 19. 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
  • 20. 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
  • 21. 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 can not 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
  • 22. A Complete Guide to CalSTRS 80/17
    • CalSTRS 80/17 - What Makes it Different
    • Can not buy interest rate down
      • Below market / Set by CalSTRS
    • Can not “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
    • Much lower cost than FHA but may require more money brought to the closing table
  • 23. 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
  • 24. A Complete Guide to CalSTRS 80/17
    • Bait and Switch “Red Flags”
      • Community programs designed to benefit specific members of the community
      • CalSTRS loans have fixed rates and fees
        • Buyer Benefit - Lenders can’t charge more
      • What to watch out for……
        • Agent recommends lender but not program
        • Lender isn’t CalSTRS 80/17 Expert
        • FHA is presented as an option/solution
          • Underwriting guidelines changed
          • Approval can not be changed if locked
    • CalSTRS loans can close in weeks – Call us!
      • Escrow can often be delayed without penalty
  • 25. Things you should know about getting started
      • 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
      • Work with a Lender that is already familiar with this program
  • 26. Wrap up and Take Aways
      • Home prices have dropped 20-50% and homes are twice as affordable as they were 2 or 3 years ago
      • Teachers and Employees in California Public Schools and Community Colleges have more purchasing power than many other buyers in the market
      • Opportunities like this happen once in a lifetime
      • Educate yourself on the process. Do not take anyone’s “word for it”.
  • 27. Wrap up and Take Aways
      • We are the Lender for all CalSTRS, CalPERS, CalHFA, FHA & VA, Conventional and Jumbo Loans.
      • We can Refer you to a qualified Real Estate Agent in your area
      • 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
  • 28. Wrap up and Take Aways
      • You will receive a “Thank You” email that will include all of our contact information for questions
      • Link to tools, resources and on-line forms:
        • Getting Approved for a CalSTRS loan
        • Find a Qualified Real Estate Agent
        • Contact a loan specialist to answer questions
        • Dream home finder
        • Informative and educational YouTube library
    • Bookmark and check back often for upcoming home buyer classes
  • 29. Upcoming Home Buyer Classes
    • A Complete Guide to Buying Foreclosures and Short Sales
        • What you need to know about Short Sales
        • What you need to know about Foreclosures
        • Road Map to Home Ownership
        • How to find and hire a Real Estate agent
    • Real Estate Agent Round Table
        • Open Q&A with Experienced Agents talk about buying home in this market
    • Check back often for upcoming classes
  • 30. Schedule a Live or Private Home Buyer Workshop
    • Live or private on-line classes available
    • Call me to schedule time / place
    • No minimum for on-line classes
    • Open and Extensive Q & A
    • Expanded topics – create your own
      • Choose loan programs
      • Choose topics
  • 31. Thank you for Attending Please Join us for one of our other educational home buyer classes Presented By: Broadview Mortgage Corp. Presenter: Scott Schang, CalSTRS Specialist Contact Information: Phone: 866-667-6724 [email_address]