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CalSTRS 80/17 Webinar Nov 20th 2008 Updated Master

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Updated power point presentation of A Complete Guide to the CalSTRS 80/17 home purchase program

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CalSTRS 80/17 Webinar Nov 20th 2008 Updated Master

  1. 1. A Complete Guide to the CalSTRS 80/17 Purchase Loan Updated Presentation originally broadcast on November 20 th , 2008 Presented By: Broadview Mortgage Corp. Presenter: Scott Schang, CalSTRS Specialist Contact Information: Phone: 866-667-6724 [email_address]
  2. 2. A Complete Guide to the CalSTRS 80/17 Purchase Loan <ul><li>Topics We Will Cover In This Class </li></ul><ul><li>Overview of California Real Estate Market </li></ul><ul><li>A Complete Guide to CalSTRS 80/17 </li></ul><ul><li>Everything you need to know about the $7,500 Federal Tax Credit - Update </li></ul><ul><li>Things you should know about getting started </li></ul><ul><li>Wrap Up and Take Aways </li></ul>
  3. 3. A Complete Guide to the CalSTRS 80/17 Purchase Loan <ul><li>The Purpose and Goals of this Class </li></ul><ul><li>To Create and Empower Home Owners </li></ul><ul><li>Educate you about the current California Real Estate market and Financing Options </li></ul><ul><li>Empower you with the ability to make educated decisions in the home buying process </li></ul><ul><li>Introduce you to Broadview Mortgage as THE CalSTRS 80/17 Expert </li></ul>
  4. 4. A Complete Guide to the CalSTRS 80/17 Purchase Loan <ul><li>Topics We Will Cover In This Class </li></ul><ul><li>Questions and Answers </li></ul><ul><ul><li>You may type questions in at any time during the presentation – Questions and Answers Box </li></ul></ul><ul><ul><li>CalSTRS 80/17 specialists are standing by to answer your questions during the presentation </li></ul></ul><ul><ul><li>I will answer questions live at end of webinar </li></ul></ul><ul><ul><li>The only dumb question the one you don’t ask </li></ul></ul><ul><li>Write number down now in case you get disconnected </li></ul><ul><ul><li>1-866-667-6724 </li></ul></ul>
  5. 5. Overview of the California Real Estate Market <ul><li>Being At The Right Place / Right Time </li></ul><ul><li>What it means to be in a Buyer’s Market </li></ul><ul><ul><ul><li>Supply and demand </li></ul></ul></ul><ul><ul><ul><li>Many homes for sale </li></ul></ul></ul><ul><ul><ul><li>Few home buyers in market </li></ul></ul></ul><ul><ul><ul><li>Credit market offers few options </li></ul></ul></ul><ul><li>Why CA Market is a “Perfect Storm” </li></ul><ul><ul><li>Affordability Factor up </li></ul></ul><ul><ul><li>Median Home Prices Down </li></ul></ul><ul><ul><li>Specialty Programs for Home Buyers </li></ul></ul>
  6. 6. Overview of the California Real Estate Market <ul><li>California Housing Affordability Index </li></ul><ul><ul><li>Index used to determine the percentage of families that could afford a home </li></ul></ul><ul><li>Method Used to Determine Affordability </li></ul><ul><ul><li>Median Home Prices </li></ul></ul><ul><ul><li>Interest Rates </li></ul></ul><ul><ul><li>Down Payment – 10% used for index </li></ul></ul><ul><ul><li>Statistical Data for area incomes </li></ul></ul><ul><li>Value as a Comparative Analysis </li></ul><ul><ul><li>Affordability approaching 2003 numbers </li></ul></ul><ul><ul><li>2003 home sales and affordability 30 year highs </li></ul></ul>
  7. 7. Overview of the California Real Estate Market
  8. 8. Overview of the California Real Estate Market <ul><li>Most California home prices have dropped more than 20% since July of 2007 </li></ul>
  9. 9. Overview of the California Real Estate Market <ul><li>Many California home prices have dropped more than 30% since July of 2007 </li></ul>
  10. 10. California Real Estate Market in the News <ul><li>HEADLINE: Southern California home sales jump 65 percent in September </li></ul><ul><ul><li>Mercury News, Silicon Valley – Oct. 20 th , 2008 </li></ul></ul><ul><ul><li>LOS ANGELES — Southern California home sales jumped 65 percent in September from a year ago, as plummeting prices fueled by foreclosures lured more buyers, a real estate tracking firm said Monday. </li></ul></ul><ul><ul><li>Last month's median home price in the six-county region fell 33.2 percent to $308,500, compared with $462,000 in September 2007, according to San Diego-based MDA DataQuick. </li></ul></ul>
  11. 11. California Real Estate Market in the News <ul><ul><li>HEADLINE: Bargains Boost SoCal Home Sales a record 67% in October! </li></ul></ul><ul><ul><ul><li>OC Register, Nov. 18 th </li></ul></ul></ul><ul><ul><li>Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67% </li></ul></ul><ul><ul><li>The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007. </li></ul></ul>
  12. 12. A Complete Guide to CalSTRS 80/17 <ul><li>Who’s Eligible for a CalSTRS 80/17? </li></ul><ul><ul><li>Any employee of a California public school or community college </li></ul></ul><ul><ul><ul><li>Can work in any capacity </li></ul></ul></ul><ul><ul><ul><li>Can work in school district </li></ul></ul></ul><ul><ul><ul><li>Pay check stub from public school system </li></ul></ul></ul><ul><ul><li>If you are eligible for CalSTRS pension benefits </li></ul></ul><ul><ul><ul><li>Provide certificate of eligibility </li></ul></ul></ul><ul><ul><ul><li>Do not have to be currently employed </li></ul></ul></ul><ul><ul><li>Any eligible borrower makes family eligible </li></ul></ul>
  13. 13. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 Compared to FHA </li></ul><ul><li>FHA is a GREAT program as a Plan B </li></ul><ul><ul><li>Low down payment requirements </li></ul></ul><ul><ul><li>Low up front closing costs </li></ul></ul><ul><ul><li>Aggressive interest rates </li></ul></ul><ul><ul><li>6% seller concessions from seller </li></ul></ul><ul><ul><li>Flexible qualifying guidelines </li></ul></ul><ul><ul><li>No penalty for lower credit scores </li></ul></ul><ul><li>If you are eligible and qualify for the CalSTRS 80/17 there is simply no comparison. Period </li></ul>
  14. 14. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 – Max Loan Amounts </li></ul><ul><li>Conforming Loan Amount </li></ul><ul><ul><li>Up to $417,000 </li></ul></ul><ul><ul><li>$521,250 Max Purchase Price </li></ul></ul><ul><li>Jumbo Loan Amount </li></ul><ul><ul><li>Up to $520,000 </li></ul></ul><ul><ul><li>Up to $650,000 Max Purchase Price </li></ul></ul><ul><li>Jumbo interest rate is typically 1% higher </li></ul>
  15. 15. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 – Property Qualifications </li></ul><ul><li>Eligible Properties </li></ul><ul><ul><li>Single Family Residence </li></ul></ul><ul><ul><li>Condominiums </li></ul></ul><ul><ul><li>Planned Urban Development (PUD) </li></ul></ul><ul><li>Must be owner Occupied </li></ul><ul><li>Must be located in State of California </li></ul><ul><li>Can not own any other properties </li></ul>
  16. 16. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 – Loan Structure </li></ul><ul><li>Max 1 st Loan Amount - 80% </li></ul><ul><ul><li>Qualify on 80% Only </li></ul></ul><ul><ul><li>Increases your purchasing power </li></ul></ul><ul><li>Max 2 nd Loan Amount - 17% </li></ul><ul><ul><li>No payments for first 5 years </li></ul></ul><ul><li>30 Year fixed rate loan only </li></ul><ul><li>Same interest rate for both loans </li></ul><ul><li>One time free float down </li></ul><ul><ul><li>Anytime in first 40 days </li></ul></ul>
  17. 17. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 – Second Mortgage </li></ul><ul><li>Second Mortgage Loan </li></ul><ul><ul><li>Deferred payments for 5 Years </li></ul></ul><ul><ul><li>Simple interest accrues for deferred period </li></ul></ul><ul><ul><li>Accrued interest added to principle balance </li></ul></ul><ul><ul><li>Fully amortized over remaining 300 months </li></ul></ul><ul><li>How to permanently lower your payments </li></ul><ul><ul><li>Principle reductions reduce term only on fully amortized loan programs </li></ul></ul><ul><ul><li>Pay second down any time during first 5 years </li></ul></ul><ul><ul><li>Result is long significant long term interest savings </li></ul></ul>
  18. 18. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 – Down Payment </li></ul><ul><li>Down payment requirements </li></ul><ul><ul><li>3% down payment </li></ul></ul><ul><ul><li>1% from buyer’s own funds </li></ul></ul><ul><li>Sources of Down Payment and Closing Costs </li></ul><ul><ul><li>Down Payment - Borrower's own funds </li></ul></ul><ul><ul><li>Down Payment - Gift from relative </li></ul></ul><ul><ul><li>Down Payment – Grant from government agency </li></ul></ul><ul><ul><li>Closing Costs - Seller contributions up to 3% </li></ul></ul><ul><ul><li>Closing Costs - Borrower's own funds </li></ul></ul><ul><ul><li>Closing Costs - Gift from relative </li></ul></ul>
  19. 19. A Complete Guide to CalSTRS 80/17 <ul><li>Other CalSTRS 80/17 Highlights </li></ul><ul><li>No Income limits </li></ul><ul><li>You do not have to be a first time homebuyer </li></ul><ul><li>You can not own any other properties </li></ul><ul><li>Minimum FICO Scores </li></ul><ul><ul><li>620 for Loan Amounts up to $400,000 </li></ul></ul><ul><ul><li>680 for Loan Amounts up to $650,000 </li></ul></ul><ul><ul><ul><li>Combined 1 st & 2 nd Loans </li></ul></ul></ul><ul><li>Interest Rate lock requires Property Address </li></ul><ul><ul><li>Typically rate is locked when offer is accepted </li></ul></ul><ul><li>If offer falls out – Rate lock is lost as well </li></ul>
  20. 20. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 - What Makes it Different </li></ul><ul><li>Can not buy interest rate down </li></ul><ul><ul><li>Below market / Set by CalSTRS </li></ul></ul><ul><li>Can not “roll in” closing costs into rate </li></ul><ul><li>Fannie Mae – Pricing Adjustments </li></ul><ul><ul><li>Declining Market - .25% </li></ul></ul><ul><ul><li>High LTV Flex 97 - .5% </li></ul></ul><ul><ul><li>Risk based credit score pricing </li></ul></ul><ul><ul><ul><li>None at 740 FICO </li></ul></ul></ul><ul><li>Much lower cost than FHA but may require more money brought to the closing table </li></ul>
  21. 21. A Complete Guide to CalSTRS 80/17 <ul><li>CalSTRS 80/17 – Review </li></ul><ul><ul><li>Only 3% down payment required </li></ul></ul><ul><ul><li>No upfront mortgage insurance premium </li></ul></ul><ul><ul><li>No monthly mortgage insurance premium </li></ul></ul><ul><ul><li>Qualify for 80% first mortgage only </li></ul></ul><ul><ul><li>17% second mortgage deferred for 5 years </li></ul></ul><ul><ul><li>No income or first time home buyer limits </li></ul></ul><ul><ul><li>Up to 3% seller concessions for closing costs </li></ul></ul><ul><ul><li>Rates set by CalSTRS </li></ul></ul><ul><ul><li>Interest rate can be locked once offer accepted </li></ul></ul>
  22. 22. A Complete Guide to CalSTRS 80/17 <ul><li>Bait and Switch “Red Flags” </li></ul><ul><ul><li>Community programs designed to benefit specific members of the community </li></ul></ul><ul><ul><li>CalSTRS loans have fixed fixed rates and fees </li></ul></ul><ul><ul><ul><li>Buyer Benefit - Lenders can’t charge more </li></ul></ul></ul><ul><ul><li>What to watch out for…… </li></ul></ul><ul><ul><ul><li>Agent recommends lender but not program </li></ul></ul></ul><ul><ul><ul><li>Lender isn’t CalSTRS 80/17 Expert </li></ul></ul></ul><ul><ul><ul><li>FHA is presented as an option/solution </li></ul></ul></ul><ul><ul><li>Loan Approval is automated and instant </li></ul></ul><ul><ul><ul><li>Conditions include contract and inspections </li></ul></ul></ul><ul><li>CalSTRS loans can close in weeks </li></ul><ul><ul><li>Escrow can often be delayed without penalty </li></ul></ul>
  23. 23. Everything you need to know about the $7,500 Federal Tax Credit <ul><li>Purchase home between April 1 st 2008 and July 31 st 2009 </li></ul><ul><li>Must be first time home buyer </li></ul><ul><ul><li>Can not have owned in past 3 years </li></ul></ul><ul><li>$7,500 tax credit Regardless of Filing Status </li></ul><ul><li>Income can not exceed $150,000 for married couple </li></ul><ul><li>Income can not exceed $75,000 for single </li></ul><ul><li>Credit paid back over 15 years </li></ul><ul><li>May be able to claim credit before purchase </li></ul><ul><ul><li>Adjust W4 withholdings to increase take home </li></ul></ul>
  24. 24. Things you should know about getting started <ul><ul><li>Very First Step – Get pre-approved for financing </li></ul></ul><ul><ul><li>Get pre-approved for the maximum you can qualify for – Be prepared for competition </li></ul></ul><ul><ul><li>Work with a buyer’s agent – Fiduciary duties require that your best interests are represented </li></ul></ul><ul><ul><li>Work with a Real Estate Agent that is familiar with these special home purchase programs </li></ul></ul><ul><ul><li>Work with a Lender that is already familiar with this program </li></ul></ul>
  25. 25. Wrap up and Take Aways <ul><ul><li>Home prices have dropped 20-50% and homes are twice as affordable as they were 2 or 3 years ago </li></ul></ul><ul><ul><li>California Teachers, Public Employees and First Time Home Buyers have more purchasing power than many other buyers in the market </li></ul></ul><ul><ul><li>Opportunities like this happen once in a lifetime </li></ul></ul><ul><ul><li>Educate yourself on the process. Do not take anyone’s “word for it”. </li></ul></ul>
  26. 26. Wrap up and Take Aways <ul><ul><li>We are the Lender for all CalSTRS, CalPERS, CalHFA, FHA & VA, Conventional and Jumbo Loans. </li></ul></ul><ul><ul><li>We can Refer you to a qualified Real Estate Agent in your area </li></ul></ul><ul><ul><li>We are more than happy to be your “second opinion” if you are already working with someone </li></ul></ul><ul><ul><li>We are committed to educating and empowering homeowners </li></ul></ul>
  27. 27. Wrap up and Take Aways <ul><ul><li>You will receive a “Thank You” email that will include all of our contact information for questions </li></ul></ul><ul><ul><li>Access to Applications and Resources: </li></ul></ul><ul><ul><ul><li>Getting Approved for a CalSTRS loan </li></ul></ul></ul><ul><ul><ul><li>Find a Qualified Real Estate Agent </li></ul></ul></ul><ul><ul><ul><li>Contact a loan specialist to answer questions </li></ul></ul></ul><ul><ul><ul><li>Dream home finder </li></ul></ul></ul><ul><ul><ul><li>Informative and educational YouTube library </li></ul></ul></ul>
  28. 28. Upcoming Home Buyer Classes <ul><li>A Complete Guide to Buying Foreclosures and Short Sales </li></ul><ul><ul><li>Saturday, Nov 22 nd – 10:00am – 11:30am </li></ul></ul><ul><ul><ul><li>Road Map to Home Ownership </li></ul></ul></ul><ul><ul><ul><li>How to find and hire a Real Estate agent </li></ul></ul></ul><ul><ul><ul><li>What you need to know about Short Sales </li></ul></ul></ul><ul><ul><ul><li>What you need to know about Foreclosures </li></ul></ul></ul><ul><li>Real Estate Agent Round Table </li></ul><ul><ul><li>Saturday, Nov 29 th – 10:00am to 11:30am </li></ul></ul><ul><ul><ul><li>Open Q&A with Experienced Agents talk about buying home in this market </li></ul></ul></ul><ul><li>Check back often for upcoming classes </li></ul>
  29. 29. Schedule a Live or Private Home Buyer Workshop <ul><li>Live or private on-line classes available </li></ul><ul><li>Call me to schedule time / place </li></ul><ul><li>No minimum for on-line classes </li></ul><ul><li>Open and Extensive Q & A </li></ul><ul><li>Expanded topics – create your own </li></ul><ul><ul><li>Choose loan programs </li></ul></ul><ul><ul><li>Choose topics </li></ul></ul>
  30. 30. Thank you for Attending Please make suggestions and recommendations for future on-line class topics Presented By: Broadview Mortgage Corp. Presenter: Scott Schang, CalSTRS Specialist Contact Information: Phone: 866-667-6724 [email_address]

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