CalSTRS 80/17 Webinar Nov 20th 2008 Updated Master

A Complete Guide to the CalSTRS 80/17 Purchase Loan Updated Presentation originally broadcast on November 20 th , 2008 Presented By: Broadview Mortgage Corp. Presenter: Scott Schang, CalSTRS Specialist Contact Information: Phone: 866-667-6724 [email_address]

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
Everything you need to know about the $7,500 Federal Tax Credit - Update
Things you should know about getting started
Wrap Up and Take Aways

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 as THE CalSTRS 80/17 Expert

Topics We Will Cover In This Class
Questions and Answers
You may type questions in at any time during the presentation – Questions and Answers Box
CalSTRS 80/17 specialists are standing by to answer your questions during the presentation
I will answer questions live at end of webinar
The only dumb question the one you don’t ask
Write number down now in case you get disconnected
1-866-667-6724

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

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

Most California home prices have dropped more than 20% since July of 2007

Many California home prices have dropped more than 30% since July of 2007

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, a real estate tracking firm said Monday.
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, according to San Diego-based MDA DataQuick.

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.

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

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

CalSTRS 80/17 – Max Loan Amounts
Conforming Loan Amount
Up to $417,000
$521,250 Max Purchase Price
Jumbo Loan Amount
Up to $520,000
Up to $650,000 Max Purchase Price
Jumbo interest rate is typically 1% higher

CalSTRS 80/17 – Property Qualifications
Eligible Properties
Single Family Residence
Condominiums
Planned Urban Development (PUD)
Must be owner Occupied
Must be located in State of California
Can not own any other properties

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
Anytime in first 40 days

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
How to permanently lower your payments
Principle reductions reduce term only on fully amortized loan programs
Pay second down any time during first 5 years
Result is long significant long term interest savings

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

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

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

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
Interest rate can be locked once offer accepted

Bait and Switch “Red Flags”
Community programs designed to benefit specific members of the community
CalSTRS loans have fixed 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
Loan Approval is automated and instant
Conditions include contract and inspections
CalSTRS loans can close in weeks
Escrow can often be delayed without penalty

Everything you need to know about the $7,500 Federal Tax Credit
Purchase home between April 1 st 2008 and July 31 st 2009
Must be first time home buyer
Can not have owned in past 3 years
$7,500 tax credit Regardless of Filing Status
Income can not exceed $150,000 for married couple
Income can not exceed $75,000 for single
Credit paid back over 15 years
May be able to claim credit before purchase
Adjust W4 withholdings to increase take home

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

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
California Teachers, Public Employees and First Time Home Buyers 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”.

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

You will receive a “Thank You” email that will include all of our contact information for questions
Access to Applications and Resources:
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

Upcoming Home Buyer Classes
A Complete Guide to Buying Foreclosures and Short Sales
Saturday, Nov 22 nd – 10:00am – 11:30am
Road Map to Home Ownership
How to find and hire a Real Estate agent
What you need to know about Short Sales
What you need to know about Foreclosures
Real Estate Agent Round Table
Saturday, Nov 29 th – 10:00am to 11:30am
Open Q&A with Experienced Agents talk about buying home in this market
Check back often for upcoming classes

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

Thank you for Attending Please make suggestions and recommendations for future on-line class topics Presented By: Broadview Mortgage Corp. Presenter: Scott Schang, CalSTRS Specialist Contact Information: Phone: 866-667-6724 [email_address]

CalSTRS 80/17 Webinar Nov 20th 2008 Updated Master

by Scott Schang

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CalSTRS 80/17 Webinar Nov 20th 2008 Updated Master Presentation Transcript