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Oakland mortgage class - Juy 26, 2012


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Oakland mortgage class - Juy 26, 2012

  1. 1. How to Finance Your Home July 26, 2012 Emeryville Follow: @RedfinSanFrancisco Like: 1 of 19
  2. 2. Working with RedfinSlide 2 of 19
  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 19
  4. 4. How Commissions Work We refund back part of our commission to you! • Subject to lender approval • Applied to closing costs • Refund is tax-freeSlide 4 of 19
  5. 5. Partners in the Process AGENT TOUR Responsible for your success COORDINATOR Writes your offer Schedules tours Handles negotiations Prepares paperwork TRANSACTION FIELD AGENT COORDINATOR Takes you to see homes Prepares paperwork Sees 50+ homes a week Works with escrowSlide 5 of 19
  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 19
  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 a portion of our commissionSlide 7 of 19
  8. 8. MortgagesSlide 8 of 51 Slide 8 of 19
  9. 9. Getting Pre-Approved Income oSalary—Past 30 days oHourly—Consistency and history oSelf-employed—Two year average Credit Assets o 660 for FHA o Down Payment o 680 for Conventional o Closing Costs o 720 for Rate Improvement o Cash ReservesSlide 9 of 19
  10. 10. Show Stable EmploymentSalaried Employee o W2’s are historic o Most recent paystubs o Raises count immediatelySelf-Employed o Two Year History o Same line of workHourly Wage Earner o Consistent hours over 1-2 year period Slide 10 of 19
  11. 11. Organize Your Assets Lenders Will Require 2 Months of Statements ●Liquid ► Do not move money around—hard to paper trail ●Retirement Accounts ► Consider a 401k Loan ●Gift Funds ► Family members onlySlide 11 of 19
  12. 12. Review Your Debt | Credit HistoryKnow Current Credit Score Know Your Debt Tolerance●—$19.95 to get your ●Cost of rentingscore ●Tax benefits of home ownership●Use your mortgage lender’s report ●Budget considerationsFix Errors●Remove duplicates Lender Tolerance May Be●Resolve disputes Different●Reduce credit card debt ●45% debt to income ratio is allowed●Do not open, close, or changecredit lines●Do not make large purchases Slide 12 of 19
  13. 13. Loan ScenarioHome Buyer $320,000 LoanoEarns $5,000/month o30/Yr Fixed 4% of LoanoHas car payment $350 = $1,528oWants to buy a home for oProperty Taxes$400,000 o1.41% on purchase priceoHas 20% down payment = $470 o $5,000 x 45% = $2,700 oHomeowners Insurance o $2,700 – 450 (other = $75 debt) oTotal: $1528 + $470 + $75 = Qualified $2,073/Month!= Allowed $2,250/Month! Slide 13 of 19
  14. 14. Choosing a LenderPre-Approval letter●Part of the offer●Sellers want accountabilityUsing Referrals●From Redfin’s partner lenders●From friends who recently financed a home●From realtor●From Yelp, Berkeley Parents Network Meet Your Lender!Slide 14 of 19
  15. 15. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 15 of 19
  16. 16. Current Average Rates Type of Loan July 12, 2012 July 19, 2012 30-Year Fixed 3.56% 3.53% 15-Year Fixed 2.86% 2.83% 5/1 ARM 2.74% 2.69% 1-Year ARM 2.69% 2.69%Slide 16 of 19
  17. 17. Where Are Rates Headed?Slide 17 of 19
  18. 18. Make Your DecisionGet a Good Faith Estimate o Itemized List of Fees: o Origination o Credit report o Transfer Tax o Discount Fee o Title insurance o Recording o Processing o Escrow fees o Underwriting o Prepaid items Good news! Loan payments are made in arrears, so your first loan payment will not be for almost two months! Slide 18 of 19
  19. 19. 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: 19 of 19