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Phoenix loan shopping class 6.7.12


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Phoenix loan shopping class 6.7.12

  1. 1. Loan Shopping 1
  2. 2. Today’s ClassDetermining what you can affordInterviewing the Loan Officer andMortgage CompanyCost Estimate vs. Good-Faith EstimateRatesProperty TypeTime to PickRealtor PerspectiveResourcesConclusionQ&A 2
  3. 3. Determine what you can afford Ready for Homeownership Down payment options plus other expenses How long do you plan to be in the house Estimated Payments What can you afford – Determining what you can afford worksheet LO Perspective Job / Income Stability Source of Down payment Loan Program best suited for situation 3 Loan Program with lowest rate / payment
  4. 4. Determine what you can afford Goal(s) of Ownership How long do you plan on living in the home  Your history  Break-even analysis Example: Conventional $5,000 down payment of $507 vs FHA of $3,500 with $557 payment = Break-Even? Fixed Rate vs Adjustable Mortgage Down payment options  20% down vs all other’s Future Plans 4  Turn in to Rental  Sale home
  5. 5. Interviewing the LO & Mortgage Company Programs Available Conventional Financing FHA Financing VA Financing HomePath Financing USDA Financing Government / Bond Programs Portfolio LoansWhen searching for a home different loan options may be available based onproperty type. It’s key to know some of the limitations your lender may have like 5Renovation type loans
  6. 6. Interviewing the LO & Mortgage Company Online vs. Local Point of Contact (s) Availability Lender vs Broker Paperwork Needed Rates Importance of Face to Face Closing Opportunities 6
  7. 7. Review Cost Estimate Cost Estimate vs. Good-Faith Estimate • Non-Binding • Similar to “Old” Good-Faith • Easy to produce • Not an official document 7
  8. 8. Good-Faith Estimate Cost Estimate vs. Good-Faith Estimate Page 1 • Identifying information • Line 1: date & time interest rate offer good through • Line 2: date all other settlement charges are good through. Must be 10-days from date of issue to allow you to shop for a loan. • Line 3: Interest Rate Lock Period such as 30, 45 or 60 days (It does not mean you are locked) • Line 4: Discloses the number of days prior to going to settlement that you must lock your interest rate. • Summary of Loan • Escrow information 8 • Summary of Settlement Charges
  9. 9. Good-Faith Estimate Cost Estimate vs. Good-Faith Estimate Page 2 • Block 1: Lenders charges and points • Block 2: Your credit or charge point(s) for the specific interest rate chosen. • Block A: The addition or subtraction of your Block 1 and Block 2 • Your Charges for all other settlement services, Block 3 through 11 • Block 3 Required Services we select • Block 4 Title services and lender title insurance • Block 5 Owner’s Title Policy • Block 6 Required Services that you can shop for • Block 7 Government recording charges • Block 8 Transfer taxes • Block 9 Initial deposit for your escrow account • Block 10 Daily Interest charges 9 • Block 11 Homeowner’s Insurance
  10. 10. Good-Faith Estimate Cost Estimate vs. Good-Faith Estimate Page 3 • Understanding which charges can change at settlement • Using the tradeoff table • Using the shopping chart 10
  11. 11. Dodd-Frank Wall Street Reform and Rates and all things equal Consumer Protection Act Most comprehensive financial regulatory reform measures taken since the Great Depression = RULES ARE CHANGING Loan Officer Compensation Requirements of Good-Faith Estimate and Truth-in-Lending Changed Circumstances 11
  12. 12. Rates and all things equal Determining Rates Program offered Credit Scores Down payment Property type Closing Date or Lock Period 12
  13. 13. Rates and all things equal Comparing Mortgage Payment Principle & Interest Mortgage Insurance Taxes Homeowner / Hazard Insurance Homeowners Association Dues 13 Special Assessments
  14. 14. Rates and all things equal Property Type Builder Deals Non-Single family houses (Condo’s) Government Programs tied to specific houses Homepath Appraisal Concerns 14 Lending restrictions
  15. 15. Decision Time Decision Time1. Try to narrow your list down to two or three companies / loan officers • What are you main concerns i.e. rates, availability, timely responses, etc2. How far out are you from closing • 60 days or less most lenders will start locking / guaranteeing a rate3. What is your overall comfort level at this point in the process 15
  16. 16. Realtor’s Top Priorities Realtor’s Perspective1. THE DEAL CLOSES2. Contract Get’s Accepted • Common Problems with contract accept • Your Lender • Realtor’s Lender3. Communication with Lender4. Virtual Lender vs. Local Lender • Knowledge of local market • Face to Face meeting • Where is underwriting, doc drawing, and processing 16 departments.
  17. 17. How can a lender help?• Automated Underwriting System Realtor’s Perspective • Desktop Underwriting (DU) • Loan Prospector (LP)• Availability • Weekends • Call listing agent • Confidence to speak on your behalf• Pre-qualification forms • State Specific • Loan Status Update (LSU) • Prequalification Form (PQF) 17• Partner Lender – The hidden value
  18. 18. Customer Resources Government Agencies Conclusion Family Friends Co-Workers Websites Open Book Internet 18
  19. 19. In the end Be comfortable with you are working with. Careful of too good to be true, especially in today’s ever changing regulatory Conclusion environment. DODD/FRANK! Processing your loan  Be prepared for additional requirements.  Call the previous lender on your short-list if something doesn’t seem right. Lending requirements can be different from company to company so discuss your situation with each lender.  Income calculation  Large Deposits  Buy-and bail regulations 19
  20. 20. Conclusion 20 Q&A
  21. 21. Thank you 21