A Complete Guide to the CalSTRS 80/17 Home Purchase Loan

A Complete Guide to the CalSTRS 80/17 Purchase Loan Thank you for attending We will begin in a moment Class Scheduled to begin at 6:00pm Homeownership Educator Scott Schang Branch Manager Broadview Mortgage Corporation 1-866-667-6724

CalSTRS 80/17 Purchase Loan Purpose and Goals Purposes of this class: To leave you a comprehensive understanding of the CalSTRS 80/17 home loan Goal: To empower you with the education and information you need to make informed decisions about your home loan options Goal: Arm you with the ability to identify misinformation or misleading tactics of inexperienced lenders & brokers

CalSTRS 80/17 Purchase Loan Ask Questions throughout presentation You may type questions in at any time during the presentation – Questions box on your screen Homeownership experts are standing by to answer your questions during the presentation This is an interactive learning environment. You will get the most value by having your specific questions answered The only dumb question is the one you don’t ask Write number down now in case you get disconnected 1-866-667-6724

CalSTRS 80/17 Purchase Loan Topics We Will Cover In This Class A Complete Guide to CalSTRS 80/17 “ Red Flags” – What to watch out for Tips and Tricks Wrap Up and Take Aways

CalSTRS 80/17 Purchase Loan How CalSTRS benefits by the 80/17 CalSTRS pension fund invests in mortgage notes as mortgage backed securities CalSTRS is not a lender and does not do loans Payments go back into CalSTRS pension fund Contributes to the growth and stability of your retirement system as a member of CalSTRS

CalSTRS 80/17 Purchase Loan Who’s Eligible for a CalSTRS 80/17? Any employee of a California public school or community college Can work in any capacity Can work in school district Pay check stub from public school system If you are eligible for CalSTRS pension benefits Provide certificate of eligibility Do not have to be currently employed Any eligible borrower makes family eligible

CalSTRS 80/17 Purchase Loan CalSTRS 80/17 Compared to FHA Lower Down Payment than FHA 3.5% minimum for FHA 3% required for CalSTRS Interest Rates as compared to FHA Set by CalSTRS – Cannot be manipulated by lenders FHA rates are set by lender and can vary greatly No UPFRONT Mortgage Insurance Premium No MONTHLY Mortgage Insurance 3% Down payment – No Mortgage Insurance

CalSTRS 80/17 Purchase Loan Max Loan Amounts Conforming Loan Amount Up to $417,000 First mortgage loan amount $521,250 Max Purchase Price Jumbo Loan Amount Up to $536,082 First mortgage loan amount Max total loan amounts $650,000 Up to $670,103 Max Purchase Price Jumbo interest rate is typically 1% higher

CalSTRS 80/17 Purchase Loan Property Qualifications Eligible Properties Single Family Residence - Detached Condominiums / Townhomes - Attached Planned Urban Development (PUD) Must be owner Occupied Must be located in State of California Cannot own any other properties Mobile home not on a permanent foundation and on leased lot/park is not considered real property

CalSTRS 80/17 Purchase Loan Loan Structure Max 1 st Loan Amount - 80% Qualify on 80% Only Increases your purchasing power Max 2 nd Loan Amount - 17% No payments for first 5 years 30 Year fixed rate loan only Same interest rate for both loans One time free float down – both loans If the rates go up – you’re protected If the rates drop – you may lower your rate

CalSTRS 80/17 Purchase Loan CalSTRS 80/17 – Second Mortgage Second Mortgage Loan Deferred payments for 5 Years Simple interest accrues for deferred period Accrued interest added to principle balance Fully amortized over remaining 300 months No surprises guarantee - You will know exactly what your payments will be Although you qualify on first mortgage only, we will always send you a good faith estimate with total payment

CalSTRS 80/17 Purchase Loan Down Payment & Closing Costs Down payment requirements 3% down payment 1% from buyer’s own funds Sources of Down Payment and Closing Costs Down Payment - Borrower's own funds Down Payment - Gift from relative Down Payment – Grant from government agency Closing Costs - Seller contributions up to 3% Closing Costs - Borrower's own funds Closing Costs - Gift from relative

CalSTRS 80/17 Purchase Loan CalSTRS 80/17 Highlights No Income limits You do not have to be a first time homebuyer You cannot own any other properties Minimum FICO Scores 620 for Loan Amounts up to $400,000 680 for Loan Amounts up to $650,000 Combined 1 st & 2 nd Loans Interest Rate lock requires Property Address Typically rate is locked when offer is accepted If offer falls out – Rate lock is lost as well

CalSTRS 80/17 Purchase Loan Costs Controlled by CalSTRS Cannot buy interest rate down Below market / Set by CalSTRS Cannot “roll in” closing costs into rate Fannie Mae – Pricing Adjustments Declining Market - .25% Risk based credit score pricing None at 740 FICO Potentially lower cost than FHA - may require more money brought to the closing table

CalSTRS 80/17 Purchase Loan CalSTRS 80/17 – Review Only 3% down payment required No upfront mortgage insurance premium No monthly mortgage insurance premium Qualify for 80% first mortgage only 17% second mortgage deferred for 5 years No income or first time home buyer limits Up to 3% seller concessions for closing costs Rates set by CalSTRS One time Free float down Interest rate can be locked once offer accepted

CalSTRS 80/17 Purchase Loan “ Red Flags” - What to watch out for Community programs designed to benefit specific members of the education community CalSTRS loans have fixed rates and fees Interest rates set daily by CalSTRS Origination fees set by CalSTRS Cannot charge discount points for rate There have been many instances of lenders / real estate agents misleading or misinforming buyers Ignorance is ok – Not knowing is not unethical Pushing FHA to make more money is common CalSTRS loans can close in 30 days or less

CalSTRS 80/17 Purchase Loan “ Red Flags” - What to watch out for Agent recommends lender but not program All of our agent partners know about CalSTRS FHA is presented as the first option or a solution to a “later” occurring problem GFE doesn’t have LLPA’s Declining Market - .25% Credit Score 740 or less - ?% Not all approved lenders/brokers are experts Ask your loan officer how many they have closed Ask for references from the company

Tips & Tricks Very First Step – Get pre-approved for financing Work with a Real Estate Agent that is familiar with these special home purchase programs Work with a lender that has an expertise in this program – Ask for and call references It’s ok to pay more than the appraised value Continue to educate yourself! Take your time, make informed and empowered decisions throughout the home buying process

CalSTRS 80/17 Purchase Loan Wrap up and Take Aways We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs We would love an opportunity to earn your business, we truly have an expertise in this program - we work with it every single day We are more than happy to be your “second opinion” if you are already working with someone We are more than happy to recommend you to a qualified Real Estate Agent that shares our values and passion for education - familiar with CalSTRS

Thank You for Attending If you enjoyed this class – Tell a friend  Please tell us how we’re doing Follow up email includes a link to “Praise” page Your feedback is greatly appreciated For more information 1-866-667-6724 Homeownership Educator Scott Schang Branch Manager Broadview Mortgage Corporation

A Complete Guide to the CalSTRS 80/17 Home Purchase Loan

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A Complete Guide to the CalSTRS 80/17 Home Purchase Loan