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Long Island - Lending - April 12, 2012


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Long Island - Lending - April 12, 2012

  1. 1. How to Finance YourHomeSlide 1 of 18
  2. 2. Working with RedfinSlide 2 of 18
  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 18
  4. 4. How Commissions WorkSlide 4 of 18
  5. 5. How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU COORDINATOR FIELD AGENT Schedules tours Takes you to see homes Prepares paperwork See 50+ homes a week Works with escrowSlide 5 of 18
  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 18
  7. 7. What We Have Accomplished● Redfin is a real estate brokerage that has helped over 20,000 people 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 18
  8. 8. MortgagesSlide 8 of 18
  9. 9. 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 9 of 18
  10. 10. 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 10 of 18
  11. 11. 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 11 of 18
  12. 12. 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 12 of 18
  13. 13. Start Shopping for Lenders● Compile a list of 4-6 lenders & brokers● Good 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 13 of 18
  14. 14. 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 14 of 18
  15. 15. 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.Slide 15 of 18
  16. 16. Current Average Rates Type of Loan March 22, 2012 March 29, 2012 30-Year Fixed 4.08% 3.99% 15-Year Fixed 3.30% 3.23% 5/1 ARM 2.96% 2.90% 1-Year ARM 2.84% 2.78%Slide 16 of 18
  17. 17. Where Are Rates Headed?Slide 17 of 18
  18. 18. Continental Credit “Your best ally in the journey to home ownership”Slide 18 of 18
  19. 19. 10 Years of Studying AlgorithmScoring - Understanding the composition of the 3 credit scores on your credit report. - Clearing up the largest misconceptions and myths in the industry. • (Pay or not to pay?) • (Is this reporting in error…or not?) • (Shouldn’t this have fallen off already?) • (They need to report my Car loan?) - What is truly removableSlide 19 of 18
  20. 20. EVERYTHING!!! • Collections • Judgments • Bankruptcies • Medical • BK items • Divorce Related • Charge Offs Items • Profit & Losses • Identity Fraud • Inquiries • Foreclosures • Tax Liens • Repossessions • Any and All LatesSlide 20 of 18
  21. 21. Upholding the FCRA1. Seeking out the Errors2. Our Detailed Investigation and Verification Process3. Finishing the investigations in time4. Forcing the Bureaus to make an economic decisionSlide 21 of 18
  22. 22. Removing the Negative and ErroneousInformation is Only Half the Battle! Types of Credit Used 10% New Credit - 10% Payment History 35% Length of Credit History 15% Amounts Owed 30%Slide 22 of 18
  23. 23. After Class…Please fill out the survey handed out at the beginningof class. 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: 23 of 18