Everything you need to know before you buy your first home. Includes steps of the process, descriptions of financing options, lender red flags and credit score information.

1. HOME BUYER’S
WORKSHOP
Take%a%digital%
copy%of%this%
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2. TODAY’S AGENDA
WELCOME
OUR TEAM
MARKET TRENDS
THE BUYING
PROCESS
app pack
QUESTION &
ANSWER

3. our team
LINDA DUCHENE
Real Estate Agent
Prudential Verani Realty
SONIA GAUTHIER
Title Insurance Agent
Broker’s Title & Closings, LLC
SHIRENE HODGSON
Branch Manager
Residential Mortgage Services, Inc.
CHRISTINA MACKEY
Assistant Manager
Prudential Verani Realty

4. home buyers
is this you?

5. what would
you like to
learn
today?

7. WHY BUY A HOUSE TODAY?
1.BEST LONG TERM INVESTMENT
2.MORTGAGE DEDUCTION TAX CREDIT
3. LOW INTEREST RATES
4. stability & security
5. HOME PRICES ON THE RISE

8. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

9. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

10. 1
MORTGAGE
FINANCING
For$informa*on$purposes$only$and$is$not$a$commitment$to$lend$as$defined$by$Regula*on$Z,$Sec*on$226.2.$$Programs,$rates,$terms$and$condi*ons$are$subject$to$change$at$any$*me.$$
Availability$dependent$upon$approved$credit$and$documenta*on$level,$acceptable$appraisal,$and$market$condi*ons.$$Residen*al$Mortgage$Services,$Inc.$is$a$Maine$Corpora*on$
headquartered$at$24$Christopher$Toppi$Drive,$South$Portland,$ME$$04106.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$
Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$
No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$
License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$

11. 1
MORTGAGE
FINANCING
Shirene Hodgson, NMLS#89135
RMS/Residential Mortgage Services
1 Club Acre Lane Bedford, NH 03110
Shirene.Hodgson@RMSmortgage.com/www.TeamShirene.com
Direct: 508-332-4882/Fax: 781-998-0564

12. 1
GETTING SERIOUS: RUNNING THE NUMBERS
A PRE-QUALIFICATION GUIDES YOUR HOME SEARCH
•Preliminary calculations to estimate the amount of money you can
reasonably afford to spend on a mortgage each month
•Loan amount and program you would likely qualify for
•Getting prequalified for a loan is important:
•Establishes your credibility as a potential buyer with your
real estate agent and potential sellers
•Helps identify unknown credit issues (if any)
•Establishes the price range for your new home

13. 1
getting started
4 Categories Lenders Review...
income
credit
assets
collateral
(Property)

14. 1
save essential paperwork: docs - 101
LENDERS TYPICALLY REQUIRE:
•Most recent Paystubs covering 30 day period
•W-2 forms & 1040’s for the past 2 tax years
•Last 2 years Federal Tax Returns (all pages and schedules)
•Two most recent Bank Statements for each account on your
application; (all pages, even if blank)
•Most recent Retirement Statement (IRA/401K)
•Photo ID (current)

15. 1
red flags
Watch for: Business Write-off’s as they are deducted from income (i.e.
mileage, Form 2106 – unreimbursed expenses, Schedule C etc.)
CASH is NOT allowed!
Watch for: large deposits over $999 into your Checking or Savings accounts
if not payroll related must be documented for the past 2 months.
Disclose any Child Support or Alimony
File and Pay any Taxes due
No large purchases during home buying process (i.e. Cars, Furniture, etc.)
No job changes!

16. 1
FINANCING OPTIONS
Residential loan options:
•Rural Development, USDA
•Single Family, Owner Occupied Only
•Income Restrictions
•Property Location Restrictions
•Appraisal higher than Purchase price, can roll in closing costs
•VA Loans (for Veterans)
•1 – 4 Unit, Owner Occupied Only
•No Mortgage Insurance
•If using rental income to qualify on multi-family – need landlord experience and 6
months total payment in reserves

17. 1
FINANCING OPTIONS
•FHA (Federal Housing Administration)
•1 – 4 unit, Owner Occupied
•Loan Limits Apply
•Down payment and closing costs can be from a Gift from a relative
•Multi-family – No landlord experience needed, but 3 – 4 units require 3 months
total payment in reserves
•203k Rehab program available for properties that need TLC
•State Bond Programs - First time homebuyer options
•Income limits apply
•RMS is #1 NH Housing lender & ME State Housing (Income limits apply)
•MA & ME State Housing
•Conventional and Jumbo financing
1 – 4 unit, Owner Occupied, 2nd Home, Investment
•
•Larger down payment requirement

18. 1
down payment
alternate options:
•Gift Funds from Relatives
•Penalty-free IRA payouts for
first-time buyers
•Grant programs (i.e. NH
Housing)
•Employer programs

19. 1
CREDIT IS KING
CREDIT 101
Lenders will review your Credit Report
for the following items when qualifying
for a mortgage:
•Credit Cards
•Personal Loans
•Auto Loan
•Leases
•Mortgage Loans
Lenders look for 12 months of no late
payments on all accounts

20. 1
CREDIT IS KING
CREDIT 101
•Most Investors and programs require a
minimum 640 middle score
•Review your credit report as soon as possible
to verify that all information reported is correct
•Go to www.AnnualCreditReport.com for a free
report once a year
•Prior to having your credit pulled, go to:
www.OptOutPreScreen.com and do the online
5 year electronic opt out. Helps protect your
score and eliminates junk mail.

21. 1
tips to increase your credit score
•DO all your rate shopping in 14 days!
•DO NOT open any new credit accounts during the mortgage process.
Wait until after the loan has closed.
•DO NOT close out your credit cards. Try pay down the balances at or
under 50% of the line amount.
•DO NOT miss any payments!

22. 1
tips to increase your credit score
•DO NOT open numerous trade lines in a short time period (i.e. new car
loan, new credit cards, new store cards in a short time period)
•MOVE revolving debt (credit card or store credit) to installment debt
(personal loan).
•If you have a collection account on your credit report that is OLDER
than 3 years, pay it off AFTER you seek a home loan or as directed by
the underwriter.
•Specific questions or concerns, please reach out to me.

23. 1
employment 101
keep in mind
•Lenders will verify employment for a full 2
years prior to application. Recent job
changes, with no gaps in employment,
may be acceptable if in the same field.
•Any gaps in employment must be
explained in writing.
•Less than 2 years employment is
acceptable if recently graduated from
school or served in the military.

24. 1
RENT vs own scenario
If you currently pay $1,400 in Rent – you could buy a house for…
Purchase Price = $175,000
FHA Min Down payment 3.5% = $6,125
Loan Amount = $171,830 (includes FHA UFMIP)
Est Rate = 4.25% (APR 5.841%)
Principal and Interest Payment = $845
Est Tax $4,200/year = $350
Est Insurance $600/year = $50
Monthly Mortgage Ins (PMI) = $189
Total Monthly Payment = $1,434
For$informa*on$purposes$only$and$is$not$a$commitment$to$lend$as$defined$by$Regula*on$Z,$Sec*on$226.2.$$Programs,$rates,$terms$and$condi*ons$are$subject$to$change$at$any$*me.$$
Availability$dependent$upon$approved$credit$and$documenta*on$level,$acceptable$appraisal,$and$market$condi*ons.$$Residen*al$Mortgage$Services,$Inc.$is$a$Maine$Corpora*on$
headquartered$at$24$Christopher$Toppi$Drive,$South$Portland,$ME$$04106.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$
Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$
No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$
License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$

25. 1
rates, rates, rates
Lowest rate may not always be the best deal…
•Rates can change multiple times a day depending on the bond market
•All lenders should be within 0.125 – 0.25 percent of each other if they are quoting you the same loan
product for the same lock period on the same day
•Speaking with too many people will lead to confusion later in the process and too many inquiries can
lower your credit scores
•A lower rate may mean there is a pre-payment penalty with that loan or points
•A lower rate on the wrong program may cost you more money in the long run
Internet Companies…
May offer a lower rate but watch the fees and fine print. Remember, if it seems too good to be true, it
usually is!
***Your rate is not guaranteed until you lock it in!

26. 1
getting help
assemble your team
Three types of companies who offer
mortgages:
1.brokers
2.community banks
3.lenders (i.e. RMS)
The RMS Difference:
In-house underwriting, processing and closing
(complete control of your file from start to finish)
For$informa*on$purposes$only$and$is$not$a$commitment$to$lend$as$defined$by$Regula*on$Z,$Sec*on$226.2.$$Programs,$rates,$terms$and$condi*ons$are$subject$to$change$at$any$*me.$$
Availability$dependent$upon$approved$credit$and$documenta*on$level,$acceptable$appraisal,$and$market$condi*ons.$$Residen*al$Mortgage$Services,$Inc.$is$a$Maine$Corpora*on$
headquartered$at$24$Christopher$Toppi$Drive,$South$Portland,$ME$$04106.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$
Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$
No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$
License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$

27. 1
biggest financial transaction
of your life
WORK WITH SOMEONE WHO IS LOOKING OUT FOR YOUR BEST INTEREST!
•Look for a Mortgage Advisor who will work with you to find the best financing option for your
situation.
•Look for someone willing to follow up with you on a regular basis to make sure your loan still
meets your long and short term financial goals.
•Remember, closing costs are just as important as a low rate! Ask for a Good Faith Estimate!
•Finding a real estate agent
•RMS works hard to establish effective relationships with knowledgeable and experienced
realtors

28. your new house
is waiting!
For$informa*on$purposes$only$and$is$not$a$commitment$to$lend$as$defined$by$Regula*on$Z,$Sec*on$226.2.$$Programs,$rates,$terms$and$condi*ons$are$subject$to$change$at$any$*me.$$
Availability$dependent$upon$approved$credit$and$documenta*on$level,$acceptable$appraisal,$and$market$condi*ons.$$Residen*al$Mortgage$Services,$Inc.$is$a$Maine$Corpora*on$
headquartered$at$24$Christopher$Toppi$Drive,$South$Portland,$ME$$04106.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$
Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$
No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$
License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$

29. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

30. 2
INITIAL CONSULTATION
This will be your first business meeting where
you’ll discuss:
•
•
•
•
Agency Disclosure & Agent’s Role
Contract
Understanding Your Needs & Expectations
Defining Your Priorities
DOCUMENTS
• Agency Relationship Disclosure
• Exclusive Buyer-Agency Agreement
• Needs & Expectations Form

31. 2
buyer’s role
Here are some of the things you can do to help
ensure a successful transaction:
• Be flexible in your availability to schedule
home showings
•Be cautious about saying anything to a seller or
their agent that could divulge your situation,
motivation or weaken your negotiating position,
especially regarding price or urgency to buy.

32. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

33. 3
HOME SEARCH
You and your agent should work together to
find the perfect house.
•
•
•
•
•
Search the internet
realtor.com
trulia
zillow
verani.com

36. 3
HOME SEARCH
You and your agent should work together to
find the perfect house.
•
•
•
•
Search the internet
Attend open houses
Be flexible when scheduling a showing
Be ready to act
DOCUMENTS
• Property Disclosure
• Lead Paint Disclosure

37. 3
THE HOME SEARCH
YOUR AGENT IS THERE FOR YOU
•
•
•
•
•
Review price range, payment and
financial priorities
Help you select properties that
most closely meet your unique
needs and interests
Suggest other homes if your
search becomes too limited
Schedule showings
Interact with the seller or their real
estate professional

38. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

39. 4
making the offer
•
•
•
•
•
•
•
Buyers make offer, but must be accepted
by sellers
Sellers can accept, reject or make a
counter-offer
The P&S is legally binding
Loose Deposit if you default
It spells out:
• Your purchase terms and conditions
• Closing date and time
• Any special conditions
• An inspection contingency
• Financing commitment & mortgage type
Sign and return it with a deposit
Seller must also sign
DOCUMENTS
• Purchase & Sale Agreement

40. 4
ernest money deposit
This is what you put down on the house with
your offer and goes toward the overall
purchase price.
•Deposit amount can vary. Typically ,in
NH, $1000 or % of purchase price
•Made payable to the listing agent’s
company who holds it until closing
•Deposit applied towards the closing cost

41. 4
home inspection
You have the right to bring in a professional
home inspector to examine the property and
give you a comprehensive overview of any
repair issues.
•Must be completed within a certain
timeframe
•If a major repair is discovered you could
request a price adjustment, suggest
another agreeable solution or opt out of
contract completely

42. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

43. 5
title and approval
•
Broker’s Title & Closing, LLC. is a full
service title company.

44. 5
what is a title
company ?
when will you need one?
A Licensed Title Insurance Agent
• Lenders
• Owners
Hired to Handle Real Estate Transactions
• Lender
• Buyer
• SELLER

45. 5
what is title
insurance ?
PROTECTS YOU FROM:
Hidden,Defects,in,
the,Title,,Hidden,
Restric9ons,,
Covenants,,38%,
•Confusion from similarity of names
•Forged documents
•Signatures of minors or mentally incompetent persons
•Mistakes in recording legal documents
•Undisclosed or missing heirs
•Fraud
•Misrepresentation of marital status
•Prior tax liens
•Clerical errors in public records
•Wills not probated
•Claims by others that they own an interest in your property
Errors,in,the,
Registry,of,
Deeds,,2%,
Legal,Access,,
undisclosed,Heirs,,
Invalid,
Condominium,,7%,
Undischarged,
Mortgage,
Liens,,10%,
Searching,and,
Closing,Errors,,
16%,
Taxes,,Assessments,,
Associa9on,Fees,,27%,

46. 5
what the heck is
a hud?
(Housing & Urban Development
settlement STATEMENT)
This is a form that itemizes fees and other
closing costs in a real estate transaction.
•Who prepares it?
•What is on it?
•What is its importance?
DOCUMENTS
•Settlement Statement (HUD-1)

47. the buying process
1
2
3
4
5
6
financing
agent
consultation
home search
offer, agreement
due diligence
title &
loan approvAL
closing

48. 6
THE closing
DOCUMENTS
•Settlement Statement (HUD-1)

49. 6
timeline of a purchase
Offer&accepted&on&a&property&&
Purchase&and&Sales&Agreement&
InspecLons&done&on&property&
TITLE&SEARCH&ORDERED&with&Broker’s&Title&&&Closing&by&LENDER&but&BUYERS&CHOICE&
Lender&provides&commitment&of&financing&subject&property&&
Lender&works&with&Buyers&to&get&loan&finalized&and&ready&to&close&

50. 6
timeline of a purchase
Broker’s(Title(works(with(Lender,(Buyers,(Sellers(and(Realtors(to(prepare(all(
documents(and(ensure(property(free(and(clear(of(all(liens(when(conveyed(
Lender(issues(“clear(to(close”(
Broker’s(Title(prepares(the(HUD(once(Lender(provides(“the(package”(
All(par8es(meet(with(the(Closer(from(Broker’s(Title(to(sign(the(paperwork,(and(
monies(due(are(collected(and(disbursed(
Broker’s(Title(takes(care(of(all(the(post(closing(requirements(

51. stay on top of
your search

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54. Q
A

55. HOME BUYER’S
WORKSHOP