free home buyer's workshop
Post on 18-Oct-2014
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HOME BUYER’S WORKSHOP
Take%a%digital%copy%of%this%presenta4on%
TODAY’S AGENDA
app pack
OUR TEAM
THE BUYING PROCESS
MARKET TRENDS
QUESTION & ANSWER
WELCOME
our team
CHRISTINA MACKEYAssistant ManagerPrudential Verani Realty
SHIRENE HODGSONBranch ManagerResidential Mortgage Services, Inc.
LINDA DUCHENEReal Estate AgentPrudential Verani Realty
SONIA GAUTHIERTitle Insurance AgentBroker’s Title & Closings, LLC
home buyersis this you?
what would you like to learn today?
1.BEST LONG TERM INVESTMENT
2.MORTGAGE DEDUCTION TAX CREDIT
3. LOW INTEREST RATES
WHY BUY A HOUSE TODAY?
4. stability & security
5. HOME PRICES ON THE RISE
2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
MORTGAGE FINANCING
1
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.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$
MORTGAGE FINANCING
Shirene Hodgson, NMLS#89135
RMS/Residential Mortgage Services1 Club Acre Lane Bedford, NH 03110Shirene.Hodgson@RMSmortgage.com/www.TeamShirene.comDirect: 508-332-4882/Fax: 781-998-0564
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GETTING SERIOUS:
•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
RUNNING THE NUMBERSA PRE-QUALIFICATION GUIDES YOUR HOME SEARCH
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getting started
credit
collateral (Property)
income
assets
4 Categories Lenders Review...
1
save essential paperwork:
•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)
docs - 101LENDERS TYPICALLY REQUIRE:
1
red flagsWatch 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 AlimonyFile and Pay any Taxes dueNo large purchases during home buying process (i.e. Cars, Furniture, etc.)No job changes!
1
FINANCING OPTIONSResidential 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
1
•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
FINANCING OPTIONS1
down paymentalternate options:
•Gift Funds from Relatives
•Penalty-free IRA payouts for first-time buyers
•Grant programs (i.e. NH Housing)
•Employer programs
1
CREDIT 101Lenders will review your Credit Reportfor the following items when qualifyingfor a mortgage:
•Credit Cards•Personal Loans•Auto Loan•Leases •Mortgage Loans
Lenders look for 12 months of no latepayments on all accounts
CREDIT IS KING1
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.
CREDIT IS KING1
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!
1
•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.
1 tips to increase your credit score
employment 101keep 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.
1
If you currently pay $1,400 in Rent – you could buy a house for…
Purchase Price = $175,000FHA Min Down payment 3.5% = $6,125Loan Amount = $171,830 (includes FHA UFMIP)Est Rate = 4.25% (APR 5.841%)
Principal and Interest Payment = $845Est Tax $4,200/year = $350Est Insurance $600/year = $50Monthly Mortgage Ins (PMI) = $189Total Monthly Payment = $1,434
RENT vs own scenario
For$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.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$
1
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!
rates, rates, rates1
getting help
1.brokers
2.community banks
3.lenders (i.e. RMS)
assemble your teamThree types of companies who offer mortgages:
The RMS Difference:In-house underwriting, processing and closing
(complete control of your file from start to finish)
1
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.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$
•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
biggest financial transaction of your life
1
WORK WITH SOMEONE WHO IS LOOKING OUT FOR YOUR BEST INTEREST!
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.$$NMLS$ID#$1760;$ME$Supervised$Lender$License$No.$SLM2537;$Licensed$by$the$New$Hampshire$Banking$Department,$NH$Mortgage$Banker$License$No.$8816YMB;$MA$Mortgage$Lender$License$No.$MC1760;$MA$Mortgage$Broker$License$No.$MC1760;$CT$Mortgage$Correspondent$Lender$License$No.$14352;$RI$Lender$License$No.$20092626LL;$RI$Loan$Broker$License$No.$20122931LB;$Licensed$Mortgage$Banker$Y$New$York$State$Department$of$Financial$Services,$NY$Mortgage$Banker$License$No.$B500942;$FL$Mortgage$Lender$License$No.$MLD232$$
2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
INITIAL CONSULTATIONThis will be your first business meeting where you’ll discuss:
• Agency Disclosure & Agent’s Role• Contract• Understanding Your Needs & Expectations• Defining Your Priorities
• Agency Relationship Disclosure
• Exclusive Buyer-Agency Agreement
DOCUMENTS
2
• Needs & Expectations Form
buyer’s roleHere 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.
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2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
3HOME SEARCH
You and your agent should work together to find the perfect house.
• Search the internet• realtor.com• trulia• zillow• verani.com
HOME SEARCHYou 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
• Property Disclosure
• Lead Paint Disclosure
DOCUMENTS
3
YOUR AGENT IS THERE FOR YOU
THE HOME SEARCH3
• 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
2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
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
• Purchase & Sale Agreement
DOCUMENTS
4
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
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
2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
title and approval• Broker’s Title & Closing, LLC. is a full
service title company.
5
when will you need one?A Licensed Title Insurance Agent
!
what is a title company ?
• Lenders
• Owners
Hired to Handle Real Estate Transactions
• Lender
• Buyer
• SELLER
5
PROTECTS YOU FROM:•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
what is title insurance ?
5
Undischarged,Mortgage,Liens,,10%,
Taxes,,Assessments,,Associa9on,Fees,,27%,
Hidden,Defects,in,the,Title,,Hidden,Restric9ons,,
Covenants,,38%,
Legal,Access,,undisclosed,Heirs,,
Invalid,Condominium,,7%,
Errors,in,the,Registry,of,Deeds,,2%,
Searching,and,Closing,Errors,,
16%,
(Housing & Urban Development settlement STATEMENT)
what the heck is a hud?
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?
5
•Settlement Statement (HUD-1)
DOCUMENTS
2
agentconsultation
1
financing
the buying process
3
home search
4
offer, agreementdue diligence
5
title &loan approvAL
6
closing
THE closing
DOCUMENTS
6
•Settlement Statement (HUD-1)
Lender&works&with&Buyers&to&get&loan&finalized&and&ready&to&close&
Lender&provides&commitment&of&financing&subject&property&&
TITLE&SEARCH&ORDERED&with&Broker’s&Title&&&Closing&by&LENDER&but&BUYERS&CHOICE&
InspecLons&done&on&property&
Purchase&and&Sales&Agreement&
Offer&accepted&on&a&property&&
timeline of a purchase6
Broker’s(Title(takes(care(of(all(the(post(closing(requirements(
All(par8es(meet(with(the(Closer(from(Broker’s(Title(to(sign(the(paperwork,(and(monies(due(are(collected(and(disbursed(
Broker’s(Title(prepares(the(HUD(once(Lender(provides(“the(package”(
Lender(issues(“clear(to(close”(
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(
timeline of a purchase6
stay on top of your search
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HOME BUYER’S WORKSHOP
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