Redfin's Free Mortgage Class - Denver, CO

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Redfin's Free Mortgage Class - Denver, CO

  1. 1. How to Finance Your Home Karla Kirkpatrick Adams Redfin Denver Team December 11, 2013 Denver, CO @Redfin Facebook.com/Redfin
  2. 2. Denver Team Michelle Ackerman Denver Metro Area Iona Botton Denver, North Suburbs, Boulder Paul Stone Denver Listing Specialist
  3. 3. Working with Redfin
  4. 4. A Little Bit About Redfin Redfin has refunded more than $100 Million to customers and reaches $8 Billion in home sales; 97% would refer us to a friend. ● Customers, not commissions ● Informed decisions ● Right home for the right price  No obligation  Commission credit
  5. 5. Your Redfin Credit
  6. 6. Make Sure They’re a Good Fit Click here when you decide See all deals & reviews
  7. 7. Partners in the Process AGENT Responsible for your success Writes your offer Handles negotiations TRANSACTION COORDINATOR Prepares paperwork Works with escrow TOUR COORDINATOR Schedules tours Prepares paperwork ASSOCIATE AGENT Takes you to see homes Sees 50+ homes a week
  8. 8. Mortgages
  9. 9. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  10. 10. Review Your Financial Situation ● Pull credit report, look for errors ● Establish comfort level for monthly payment ● Figure out how much monthly income goes towards debt typically 28 – 40% healthy ● Pay down credit balances to 1/3rd of high limit ● Don’t open any new lines of credit ● Don’t buy any big ticket items ● Determine source of funds ● Current employment status
  11. 11. Get Pre-Approved ● A pre-approval letter is a letter from a bank or a lender estimating ● ● ● ● ● ● how much they'll 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 tour
  12. 12. 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 offers
  13. 13. 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 shopping
  14. 14. Types of Loans ● Conventional: ► As low as 5% down ► Fixed or adjustable rates, conforming or non-conforming ● Federal Housing Administration Loan (FHA): ► Always have mortgage insurance ► Buyers need only a 3.5% down payment ● VA Guaranteed Loan: ► Veterans, active duty personnel, reservists/national guard, surviving spouses ► No down payment
  15. 15. Start Shopping for Lenders Compile a list of 4-6 lenders & brokers Good sources include: ● Redfin's 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!!!
  16. 16. 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)
  17. 17. Where Are Rates Headed? Type of Loan November 27, 2013 November 21, 2013 30-Year Fixed 4.29% 4.22% 15-Year Fixed 3.30% 3.27% 5/1 ARM 2.94% 2.95% 1-Year ARM 2.60% 2.60%
  18. 18. Where Are Rates Headed?
  19. 19. 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, so your first loan payment won’t be for two months. You’ll have one month of no payments.
  20. 20. After Class… Please fill out the survey that was handed out at the beginning of class. We appreciate the feedback! Check out our upcoming classes and events at: www.redfin.com/events Questions? Get in touch: Karla Kirkpatrick Adams karla.adams@redfin.com

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