Atlanta mortgage class 12 12 12


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Atlanta mortgage class 12 12 12

  1. 1. How to Finance Your HomePresented By:Laurie Nixon – Redfin’s Atlanta TeamDecember 12, 2012 Atlanta, GA Slide 1 of 36
  2. 2. Working with RedfinSlide 2 of 36
  3. 3. Working With Redfin is Different Service ► Advocates: client-satisfaction bonuses, not commissions ► Transparency: informed decisions ► Best Agents: The right home for the right price No obligation ► Switch Redfin agents ► Pause and re-start your search any time ► Tour on your schedule and pace Refund ► We’ll refund a portion of the commission back to you The Best Results ► Service: 97% would recommend us to a friendSlide 3 of 36
  4. 4. We Share Our Commission With You • Applied to closing costs • Refund is tax-freeSlide 4 of 36
  5. 5. How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU ASSOCIATE AGENT COORDINATOR Takes you to see homes Schedules tours See 50+ homes a week Prepares paperwork Works with escrowSlide 5 of 36
  6. 6. A Little Bit About What We Do Redfin is a brokerage that’s using technology and a customer-service focus to change the real estate game in the consumer’s favor. ● What: a brokerage ● How we are different: ► Technology ► Customer-service ● Why: we want to change the gameSlide 6 of 36
  7. 7. What We Have AccomplishedRedfin is a real estate brokerage that has helped over 20,000people buy or sell a home; 97% would refer us to a friend.● Customers, not commissions● Informed decisions● The right home for the right price No obligation Get back up to 33% of our commissionSlide 7 of 36
  8. 8. MortgagesSlide 8 of 36
  9. 9. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 9 of 36
  10. 10. Get Pre-Approved ● A pre-approval letter is a letter from a bank or a lender estimating how much theyll lend a borrower ● Help you establish how much you can afford and makes offer process go faster ● Information needed: ► W-2, two pay-stubs, tax returns (get them ready), bank statements ● The process only takes a few days while banks get everything verified ● The approval is good for 90 days, depending on lender ● Ask for a few different amounts ● Redfin asks that you get pre-approved before your third tourSlide 10 of 36
  11. 11. 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 offersSlide 11 of 36
  12. 12. 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 shoppingSlide 12 of 36
  13. 13. Review Your Debt● Pull credit report, look for errors● Figure out how much monthly income goes towards paying off debt: 28 – 33% healthy● Pay down balances to 1/3rd of credit available● Don’t open any new lines of credit● Don’t buy any big ticket items● Co-borrower will need to do the sameSlide 13 of 36
  14. 14. Start Shopping for LendersCompile a list of 2-3 lenders & brokersGood sources include:● Redfins 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 36
  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 36
  16. 16. 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, soyour first loan payment won’t be for two months.You’ll have one month of no payments.Slide 16 of 36
  17. 17. Current Average Rates Type of Loan November 29, 2012 December 6, 2012 30-Year Fixed 3.32% 3.34% 15-Year Fixed 2.64% 2.67% 5/1 ARM 2.72% 2.69% 1-Year ARM 2.56% 2.55%Slide 17 of 36
  18. 18. Where Are Rates Headed?Slide 18 of 36
  19. 19. Putting it all together to findYOUR homeSlide 19 of 36
  20. 20. Highlights of Redfin’s Site● Search by zip code or neighborhood● Saved searches/instant alerts● Agent notes● Download results● Price your home● Forums● Home buying guide● Home inspection guide● Any questions about the site?Slide 20 of 36
  21. 21. What to Ask Any Agent● Is this your full-time job?● Familiar with foreclosures or short-sales?● Where were your last five deals?● Who else will be working with me?● Will you show me all properties for sale?● When am I committed to working with you?● Has a client ever filed a complaint?● How are you paid?● Can I see some reviews of your work?Slide 21 of 36
  22. 22. Redfin’s Partner Program Partner agents are employed by other brokerages, but have teamed up with us to provide Redfin-Certified service to a wider range of customers. We’ll refer you to a partner agent when: ► A home is outside of our direct service area ► A home is below our price minimum ► We’re experiencing an unusually high customer demand We survey all partner agent clients ► All surveys are published on their Redfin page ► 97% of customers would recommend Redfin partnersSlide 22 of 36
  23. 23. Traditional vs. RedfinSlide 23 of 36
  24. 24. TouringSlide 24 of 36
  25. 25. Making the Most of Your Tour1. Bring a camera, notebook & tape measure 9. Peek into the attic2. See how much sunlight the place gets 10. Bring a marble or two3. Check the bathrooms for rot & mold 11. When sharing a wall, make sure it’s thick4. Look for wavy or discolored wood siding 12. Ignore the appliances and carpets5. Make sure water spouts drain away from 13. Check the closets house 14. Get the disclosure packet6. Take stock of storage space 15. Compare the property’s tax records to the7. Turn off any music playing in house listing details8. Check for hardwood floorsSlide 25 of 36
  26. 26. How Touring with Redfin Works ● Up to six homes per tour in two hour blocks ● Go on as many tours as you need ● Led by agent or field agent ● Need to be verified ● No obligationSlide 26 of 36
  27. 27. Home Inspection andOther ContingenciesSlide 27 of 36
  28. 28. Home Inspection● We recommend that you have a home inspection● Home Inspections are performed early in the due diligence period● $350 to $800+ depending upon the size of the house● Your agent will accompany you● Your time to evaluate the property● Types of Due Diligence ► Specialized Inspections – Structural, Stucco, Septic, Sewer Scopes, Well, Specialized Roof, Tree, Pool, Radon Test, Air Quality/Mold Test, Termite & Pest ► Survey ► Other – Schools, Crime, Traffic, Sex Offender, etc.Slide 28 of 36
  29. 29. Other Contingencies● Appraisal Contingency ► Performed in conjunction with financing ► Appraisal report must be completed prior to the expiration of the Appraisal Contingency Period● Financing Contingency ► Buyer must make full application for the mortgage with their selected lender within 3 days of binding agreement ► Lender must provide a loan commitment letter or denial letter prior to the expiration of the Financing Contingency Period● Title – Owner must provide clear title to the property● Other – Contingencies on sale or lease of other property, etc.Slide 29 of 36
  30. 30. Closing – what youneed to knowSlide 30 of 36
  31. 31. Closing: HUD–1 SettlementHUD-1 Settlement Statement – Lists all fees/charges/creditsBy law, the final costs listed on your HUD-1 must be within 10% of the estimates provided on your Good Faith Estimate (GFE).● Lender charges ► Includes origination fee, appraisal fee, credit report, insurance and tax escrows● Title charges ► Includes settlement fee, and owner’s and lender’s title insurance● Government charges ► Includes recording fees, recordation taxes and property taxesSlide 31 of 36
  32. 32. Attorney Closings● What does the Attorney do? ► Prepares the final documents, including the HUD-1 ► Represent the buyer’s lender ► Conducts the closing ► Examines and clears the title to the property ► Records the deed, mortgage and any other recordable instruments ► Issues title insurance to the lender and the buyerSlide 32 of 36
  33. 33. Closing: Title Insurance● Lender and Owner Title Policies● Title insurance guarantees that the property is clear and marketable● 2 types of Owner title insurance policies ► Limited (Standard) Protection against pre-closing defects in title ► Enhanced (Eagle) Costs 20% more than Standard policy Covers post closing fraud, forgery, identity theft Increases with value of the property up to 150% of original price Includes coverage for: mechanic’s liens, invalid permits, forced removal of structure, unrecorded easements, unrecorded leases,Slide 33 of 36
  34. 34. Closing Day● You’ll have a final walk-through on closing ● Closing typically takes 1 hour day or just before ● Get keys and take possession!● What to bring: ► Government issued photo ID ► Certified check or wired fundsSlide 34 of 36
  35. 35. So What Now?● Make sure it’s the right time for you● Start browsing online● Check out our Home Buying Guide and Events page● Find the right agent● Look for a lender and get pre-approved● Start seeing homes● Make an offer & close the dealSlide 35 of 36
  36. 36. After Class…Please fill out the survey handed out at the beginning ofclass. We’d love to get your feedback on how theclass could improve.To get even more info on the home buying process,check out our home buying guide: 36 of 36