Redfin's Free Mortgage Class - Irvine, CA


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  • [REQUIRED – Update with local home in the $400-$500 range, ideally listed by Redfin]Talking points:- Refund is based on your list price not offer price.- You’ll get it as a closing credit or check after close, depending on your lender
  • [REQUIRED – Update with local lender]
  • [REQUIRED – Update each time with latest rate information]
  • Redfin's Free Mortgage Class - Irvine, CA

    1. 1. Slide 1 of 18 How to Finance Your Home Presented by: Redfin’s South OC Team September 18, 2013 Irvine, CA Follow: @Redfin Like:
    2. 2. Slide 2 of 18 Working with Redfin
    3. 3. Slide 3 of 18 A Little Bit About Who We Are 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 ● Right home for the right price  No obligation  Commission credit
    4. 4. Slide 4 of 18 Save $4,000 on Average
    5. 5. Slide 5 of 18 Mortgages
    6. 6. Slide 6 of 18 Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
    7. 7. Slide 7 of 18 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
    8. 8. Slide 8 of 18 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
    9. 9. Slide 9 of 18 Pulling Credit: Is it harmful? ● Your credit report must be reviewed by a lender before you can obtain a pre-approval ● If you know your score, a lender should be able to give you ballpark pricing for their loan products ● Maintaining a pre-approval has a negligible impact on your credit score ● Don’t allow lots of lenders to pull your credit score repeatedly
    10. 10. Slide 10 of 18 Getting Pre-Approved A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you ● Establishes what you can afford & makes offer process go faster ● Good for 90 days, depending on lender ● Ask for a few different amounts ● Redfin asks that you get pre-approved before your third tour ● Are gift funds involved? ● How much do you have for a down payment? Information needed: ● W-2, two pay-stubs, tax returns, bank statements
    11. 11. Slide 11 of 18 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
    12. 12. Slide 12 of 18 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
    13. 13. Slide 13 of 18 Start Shopping for Lenders Compile a list of 2-3 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!!!
    14. 14. Slide 14 of 18 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)
    15. 15. Slide 15 of 18 Where Are Rates Headed? Type of Loan September 12, 2013 September 5, 2013 30-Year Fixed 4.57% 4.57% 15-Year Fixed 3.59% 3.59% 5/1 ARM 3.22% 3.28% 1-Year ARM 2.67% 2.71%
    16. 16. Slide 16 of 18 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.
    17. 17. Slide 17 of 18 NEW! Express Loan Program Right now in Orange County, 84% of offers are multiple offer situations By using this program you will be able to offer: · Little to No Loan Contingency · Reduced Appraisal Contingency · 21 Day Close · Reduced Risk for the Seller
    18. 18. Slide 18 of 18 Express Loan Program How It Works: ● Step 1: Certified Lender takes you through the underwriting process. This usually happens in your first 10-14 days of escrow. You will need to submit all your financial and other documentation to the lender. Once you have full underwriter approval, it indicates to the seller that pending a clean title and appraisal, your lender is ready to fund the loan. ● Step 2 : Your offer is made with terms that most, if any, other buyers financing their home can compete with. ● Step 3 : Upon opening escrow your appraisal will be ordered as a rush. This is a $100 fee which is covered by your Certified Lender. ● Step 4 : Upon a clear title and appraisal at or above the purchase price, escrow closes in 21 days or less. Get Started Right Away!