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First time home buyer webinar usa


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First time home buyer webinar usa

  1. 1. Top 35QuestionsWatch As Often As YouLikeEmail Us For MoreInformation A Guid e To Und erstand ing The Process
  2. 2. Part 1 - Getting Started1. How Do I Know If I Am Ready To Buy A Home?Begin by asking yourself these questions.• D o I have a stead y incom e source?• Have I been em pl oyed for at least 3 years?• D o I have a good record of paying bill s?• D o I have long term bill (C ar loan) s?• D o I have m oney saved for a d own paym ent?• C an I afford a m ortgage right now?SummaryIf you answeredyes to thesequestions, you areprobably ready tobuy a home. Question 2
  3. 3. Part 1 - Getting Started2. How Do I Begin The Buying Process?Start by asking yourself these questions.• How m uch can you afford in a m onthly paym ent?• How m any bed room s d o you need ?• What area of town d o you l ike?• How im portant are school to you? s• How cl ose to work?• D o you want a cond o/ townhom e/ single fam il y?SummaryCreate a ‘I Want’list and answerthese questions. Question 3
  4. 4. Part 1 - Getting Started3. How Does Owning A Home Compare To Renting?O wning has m any benefits over renting.• O pportunity to buil equity. d• Forced savings.• Tax ad vantages.• Personal lifestyle preferences.• Eventuall l d ebt free with m ortgage payoff. y ive• M ore space.SummaryA home over thelong term offersmany financialbenefits well worthyour investment. Question 4
  5. 5. Part 1 - Getting Started4. How Do I Know How Much A Bank Will Lend To Me?Your lend er will consid er:• D ebt-to-incom e ratio.• C om pares your pre-tax incom e to housing and non-housing expenses.• Non-housing is long-term d ebt. (C ars, stud ent loan, child support, al ony) im• FHA: M ortgage shoul not exceed 29% of your gross dSummary incom e.• FHA: ‘I Can com bined with non-housing; should not exceedCreate a WhenAfford% sheet and incom e. 41 ’ of grosscalculate the• Also consid ers closing costs, d own paym ent, cred it history.answers to thesequestions. Question 5
  6. 6. Part 2 - Searching For & Finding Your Home5. What Should I Look For In A Neighborhood?Select a com m unity that bests allows you:• To live your lifestyl e.• Easy access to work and schools.• Easy access to public transportation.• Easy access to shopping, banking and m ed ical services.• C om m unities interests and activities.• Personal interest and activities.SummaryChoose aneighborhood thatis most likely toincrease in value!(People like living Question 6in.)
  7. 7. Part 2 - Searching For & Finding Your Home6. How Can I Find Out About Schools?Sim ply contact…• C ity school board .• C ounty school board .• Local schools for inform ation access.• Your real estate agent.• Internet search.• Interview teachers and parents.SummaryInvest quality timewhen searchingout school relatedinformation. Question 7
  8. 8. Part 2 - Searching For & Finding Your Home7. How Can I Find Out What Homes Are Selling For In My Preferred Neighborhood?Ask your real estate professional for…• Hom es currentl listed for sale. y• Hom es recently sold within last 90 d ays.• Hom es that d id not sell within l 90 d ays. ast• Your real estate agent has access to al this d ata. l• Your real estate agent will provid e you with a sum m ary.• Based upon this d ata you will know current m arket value.SummaryYour real estateagent can provideinformation for anyhome on the MLS. Question 8
  9. 9. Part 2 - Searching For & Finding Your Home8. How Can I Find Out About Property Tax Information?You have a few options…C. Your real estate agent has tax inform ation.D. Your local tax assessor’s office has inform ation.Note:1 . Your m ortgage interest and your property taxes are tax d ed uctibl e.2. Your real estate agent m ay be abl to offer ad d itional tax eSummary benefit inform ation.A home is both along terminvestment forequity gain and forimmediate tax Question 9benefits.
  10. 10. Part 2 - Searching For & Finding Your Home9. Is An Older Home A Better Value As Compared To A New Home?C onsid er the foll owing:C. O ld er hom es tend to be in established neighborhood .D. O ld er hom es m ay offer lower property taxes.E. O ld er hom es m ay required ad d ition m aintenance.F. Newer hom es have m od ern architecture.G. Newer hom es are l costly to m aintain. essSummaryH. Newer hom es tend to be m ore energy efficient.Personal preferenceultimately makes thefinal decisionbetween old andnew. Question 10
  11. 11. Part 2 - Searching For & Finding Your Home10. How Do I View A Home?C om pare it to your m inim um requirem ents and then consid er…C. Property l ocation, yard size, garage need s.D. Num ber of bed room s and bathroom s.E. Kitchen qual size, and cupboard space. ity,F. Features such as air cond itioner, firepl ace, security.G. C urrent m aintenance level (Repairs need ed ?) .H. C lose to schools, work, shopping, personal & com m unitySummary interests.Remember to reviewInternet, cell phone,TV cable reception,and availability. Question 11
  12. 12. Part 2 - Searching For & Finding Your Home11. How Do I Keep A Record Of All Homes I View?Ask your agent to…C. Ad d hom es to a listing cart.D. You wil keep a viewing record . lE. Use this record for com m ents on each hom e.F. Ask if you can take photos of each hom e.G. Always view hom es you’re m ost interested in at least 2 tim es.H. Always red uce total l of hom es viewed to top 3 favorites. istSummaryOnce you havereduced your list to 3favorites you are nowin the ‘buy’ decisionposition. Question 12
  13. 13. Part 2 - Searching For & Finding Your Home12. How Many Homes Should I View Before Deciding?There is no rule of thum b.C. The average buyer views 1 5 hom es.D. The average tim e for viewing all 1 5 hom es is 3 d aysSummaryWhat is important isto find a home bestmatching your needs,wants, andinvestment level. Question 13
  14. 14. Part 3 – After You Have Found Your Perfect Home 13. How Can I Feel Safe & Secure About The Condition of The Home? Includ e hom e inspection in your offer. C. Ask agent to write into offer a cond ition on hom e inspection. D. The average tim e required for inspection is 3 d ays. E. Typical cost of inspection is $200 to $500. F. Inspector gives you d etail report on cond ition of hom e. ed G. You m ay negotiate with sel on cost of repairs. ler Summary H. If not satisfied you can term inate your offer to purchase. A home inspection is a ‘must include’ condition in all offers placed on homes. Question 14
  15. 15. Part 3 – After You Have Found Your Perfect Home 14. Are There Any Other Inspections I May Need? Ad d itional inspections m ay be required for specific issues… C. Asbestos. D. Rad on gas. E. Water and wel l. F. Septic & run off. Summary Never buy a home without knowing the current state of each issue. Question 15
  16. 16. Part 3 – After You Have Found Your Perfect Home 15. Are There Other Issues I Need To Know About Before Buying? Yes… C. You wil need a lawyer. l D. You wil need hom eowner insurance. l E. Is the hom e in a fl ood plain? F. D oes hom e m eet current build ing cod es. G. Are there any local zoning issues? Summary Your real estate agent will be able to address these critical issues before you buy a home. Question 16
  17. 17. Part 4 – Placing An Offer of Purchase On A Home 16. How Do I Make An Offer On A Home? Your real estate agent wil d raft your offer consisting of: l C. The am ount of earnest m oney. D. D own paym ent & financing d etails. E. Your initial offer price. F. Your requested closing d ate. G. Length of tim e your offer is valid . H. All cond itions and d isclosures. Summary Your real estate agent will provide whatever additional offer inclusions required in your area. Question 17
  18. 18. Part 4 – Placing An Offer of Purchase On A Home 17. How Do I Determine Offer Price? Ask your agent for the fol lowing… C. A list of sim ilar hom es ‘recently sol ’ in the area. d D. A list of sim ilar hom es ‘now l isted ’ for sale in the area. E. A list of sim ilar hom es that ‘d id not sel in the area. l’ F. Ask how long the hom e has been on the m arket. G. D eterm ine why the sell is sel er ling. H. D eterm ine the ‘as is’ repair cond ition of the hom e. Summary It is critical for you to know what similar homes have recently sold for before placing an offer. Question 18
  19. 19. Part 4 – Placing An Offer of Purchase On A Home 18. What Is Earnest Money & How Much Do I Require? It is the am ount you ‘put d own’ with the offer. • It d em onstrates your seriousness to purchase. • It ranges between 1 % to 5% of offer price. • If your offer is accepted , it becom es part of your d own paym ent. • If your offer is rej ected , it is returned to you. • If accepted and later on you back out of d eal… it is lost. Summary Your real estate agent will advise you on the amount of earnest money required with an offer. Question 19
  20. 20. Part 4 – Placing An Offer of Purchase On A Home 19. Are There Any Other Issues I Need To Know? Yes… here are a few. • Hom e warranty insurance. • Hom e insurance. • C ost of heat & electricity. • Property taxes. • Hom e & property upkeep. Summary Gathering all the information before placing an offer is prudent advice. Question 20
  21. 21. Part 5 – After Your Offer Is Accepted20. What Happens When My Offer Is Accepted By The Seller?Your real estate agent wil give you d irections… such as: l• How to ful l all cond itions of the offer. fil• The hand ling of your earnest m oney.• D irection for legal issues.• Filing of paperwork.• Financing issues.SummaryYour real estate agentwill assist youbetween offeracceptance andclosing date. Question 21
  22. 22. Part 6 – Financing Your Home Purchase21. What Is A Mortgage?It is a financial l oan used to purchase a hom e.• It is a l egal cl lien on a hom e. aim• It secures the prom ise to repay the d ebt.• It has two features…• Paym ent of interest. (C ost of l oan)• Paym ent of principle. (Red uction of d ebt.)SummaryA mortgage is a longterm debt to finance along term investment. Question 22
  23. 23. Part 6 – Financing Your Home Purchase22. What Is Loan To Value & How Does It Affect A Mortgage?It is the am ount you borrow com pared to the price of the hom e.• Exam pl e…• $1 00,000 hom e with a 95% LTV m eans…• You can borrow up to $95,000 for a m ortgage.• Loans greater than 80% LTV require…• M ortgage insurance.SummaryMortgage insuranceprotects the lender ifyou default on yourpayments. Question 23
  24. 24. Part 6 – Financing Your Home Purchase23. What Type of Mortgage Should I Apply For When Financing?It is up to you… as you have options.C. Fixed Rate M ortgagesD. Ad j ustable Rate M ortgagesSummaryAsk your financialadvisor which optionis best for you. Question 24
  25. 25. Part 6 – Financing Your Home Purchase24. What Is A Fixed Rate Mortgage?Paym ents rem ain the sam e for the life, term , of the loan.C. You can choose a 1 5 year term or 30 year termD. Here are the ad vantages…E. Pred ictable paym entF. C ost rem ains sam e throughout the term .SummaryA fixed rate mortgageis not affected byincreases in interestrates or inflation. Question 25
  26. 26. Part 6 – Financing Your Home Purchase25. What Are The Advantages of Term Options?You have 30 year and 1 5 year term options.C. O n a 30 year term …D. D uring the first 23 years of the loan… m ore interest then principl is paid . eE. This gives you larger tax d ed uctions.F. O n a 1 5 year term …G. Lower interest rate.SummaryH. Equity is built faster as m ore principl is paid . eWhich is best? Manyenjoy paying off theirmortgages soonerrather than later. Question 26
  27. 27. Part 6 – Financing Your Home Purchase26. What Are ARMS Mortgages?It is an ad j ustable rate m ortgage.C. Paym ents increase or d ecrease subj to interest rates. ect (lim ited increase)D. You have several options.E. Balloon m ortgage: low rates for 1 to 7 years: (refinanced )F. Two Step m ortgage: rates ad j once and then rem ain for ust term .SummaryG. ARM S l inked to a specific ind ex or m argin.If you’re not concerned withH. Benefits: Lower initial rates, paym ents, and you m ay qualifyincrease in rates, another for larger m ortgage.move soon, or increase inyour income… ARMS havethe advantage. Question 27
  28. 28. Part 7 – Securing Your Loan27. How Do I Secure A Mortgage?Sim ply follow these steps.C. Pay stubs for last 3 m onths.D. W-2 form s for l 2 years. astE. Inform ation on long term d ebts.F. 3 recent bank statem ents.G. Tax returns for last 3 years.H. Sales contract with ad d ress of the property.SummaryDisclose all otherincome as it willhelp in your loanapproval process. Question 28
  29. 29. Part 7 – Securing Your Loan28. What Is The Difference Between Pre-Qualified and Pre- Approved?The d ifference is significant.C. Pre-Q ualified m eans you ‘m ay’ qual for a l ify oan.D. Pre-Approved is a lend er’s actual com m itm ent to give you a loan.SummaryChoose a lendercarefully based uponfinancial stability,reputation, and service. Question 29
  30. 30. Part 7 – Securing Your Loan29. How Can I Find Out About My Credit Rating?C ontact these com panies:C. Equifax (1 -800-685-1 1 1 1 )D. Trans Union (1 -800-91 6-8800)E. Experian (1 -888-397-3742)SummaryIf any information onthe report is in errorsimply contact eachcompany for repairdirections. Question 30
  31. 31. Part 7 – Securing Your Loan30. What Is A Credit Bureau Score?It is a num ber based upon your cred it history.C. It lets lend ers know of your past paym ent history.D. It lets lend ers know if you can repay a loan.E. The higher the score the m ore l ikely you’l receive loan l approval.SummaryThere is little you can doto instantly improve yourscore. By paying bills ontime your score naturallyincreases. Question 31
  32. 32. Part 7 – Securing Your Loan31. Are There Additional Financing Options I May Need To Know?Yes and you can contact:C. Your financial ad visorD. Your m ortgage brokerE. Your lend erF. Your agentG. RESPA. (Real Estate Settl ent Proced ures Act) emSummaryThere are also feesassociated withunderwriting the loanprocess. The fee isgenerally non- Question 32refundable.
  33. 33. Part 8 – Closing Activities32. What Are Closing Costs?It is the cost to close the sale and consists of:C. Attorney feesD. Property taxesE. Interests. (From cl d ay to 30 d ays to first paym ent) oseF. Loan originator fee. (covers l er ad m in costs) endG. First prem ium on m ortgage insuranceH. Record ing, survey, titl escrow tax, insurance policy fee, e,Summary fee d ocum entsYour real estate agent canprovide to you an estimateon closing costs. Question 33
  34. 34. Part 8 – Closing Activities33. Do I Get A Final Walk Through of The Home Before Closing?Yes and here is what you wil want to review: lC. D eterm ine if sel has repaired al Inspection Report issues ler lD. D eterm ine if fixtures in contract have rem ained in hom e.E. If your offer incl ed appliances… ensure each is in hom e. udF. If your offer incl ed hom e cl ud eaning… ensure it has been d one.SummaryG. C heck for ad d itional d am age.Your real estate agent iswith you on final homeinspection and will attemptto resolve all issues thatmay arise. Question 34
  35. 35. Part 8 – Closing Activities34. What Happens On Closing Day?B. You present your paid hom eowners insurance policy.C. The closing agent then lists the m oney you owe the seller.D. The closing agent then lists the m oney the seller owes you.E. The seller provid es proof of any and all inspections, warranties, etc.F. You then sign the m ortgage d ocum ent and the m ortgage note.SummaryG. The seller gives you the title of the hom e by signed d eed .The deed and mortgage agent the closing costs.H. You pay the lend er’sare recorded in theRegistry of Deeds.Congratulations you arenow a homeowner. Question 35
  36. 36. Part 8 – Closing Activities35. What Do I Get On Closing?Here is a brief sum m ary.C. Settlem ent Statem ent, HUD -1 Form .D. Truth-in-l ing statem ent. endE. M ortgage note.F. M ortgage or D eed of Trust.G. Bind ing sales contract.H. Keys to your new hom e.SummaryYour real estate agent willalso give you a wonderfulclosing gift to celebrateyour home purchase. Question 36
  37. 37. Part 9 – SummarySummaryThe hom e buying process…C. Looks far m ore com plicated than it real is in experience. lyD. Your real estate agent will walk you through the entire process.E. It is a thrill experience and one to enj ing oy.SummaryRemember to ask your realestate agent for additionalfinancing opportunitieswith HUD through its FHAprogram.