2010 Updated First Time Seminar
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The document summarizes information from a first time home buyers seminar. It discusses selecting a mortgage lender, understanding different loan types, getting pre-approved for a mortgage, making an offer on a home, getting a home inspection, required insurance, and the closing process. The seminar provides tips on becoming financially prepared, shopping for the best mortgage rates and real estate agents, and navigating the steps to purchasing a first home.
2010 Updated First Time Seminar
- 1. First Time Home Buyers SeminarPresented by:Barry A. Duffey
- 2. Who is Primary Residential Mortgage, Inc?Founded in 1998, PRMI is a debt-free companyHeadquarters in Salt Lake City, Utah275 offices nationwide in 47 statesMore than 1,900 employeesA variety of loan products from the nation’s top lenders: Primary Residential MortgageBank of AmericaWells FargoGMAC, SunTrust, CitiMortgage and more!
- 3. “A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. In addition, the value of your home may go up over the years. Finally, you’ll enjoy having something that's all yours—a home where your own personal style will tell the world who you are.”—U.S. Department of Housing and Urban Development
- 5. Money: What are Mortgages really made of?CreditFICO Score, Overall ProfileCapacityIncome, Debt to Income Ratio CollateralLoan to Value
- 6. The Keys to Becoming a Home OwnerOrganizeWatch Spending and SavingsNo question is a bad question.Elevate your Credit ScoreRead (and Understand) the Fine Print
- 8. How much can you afford?Debt-to-Income Ratio—the lower the better:It shouldn’t exceed 36%, though there are exceptionsHow to calculate your debt-to-income ratio:Calculate your total monthly income: Include wages, overtime, guaranteed commissions/bonuses, alimonyIf income varies, calculate average based on last two yearsAdd up your monthly debt payments: Include credit cards, car loans, student loans, mortgage paymentsDivide monthly debt payments by total monthly income —This is your debt-to-income ratio $2,000.00 (total monthly debt)÷ $6,000.00 (total monthly income) ------------ 0.33 or 33%
- 9. Mortgage Shopping“Shopping around for a home loan or mortgage will help you to get the best financing deal. A mortgage—whether it’s a home purchase, a refinance, or a home equity loan—is a product, just like a car, so the price and terms may be negotiable. You’ll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of dollars.”—The Federal Reserve Board
- 10. Basic Loan Types and ProductsConventionalFederal Housing Administration (FHA)Veteran’s Affairs (VA)- 100% LTV Virginia Housing Development Authority (VHDA)- 100% LTVUnited States Dept. of Agriculture (USDA)- 100% LTV30 Year Fixed15 Year FixedARM
- 11. Cost InformationInterest RatePointsOrigination FeeFeesDown Payments Mortgage Insurance“Shop, Compare, Negotiate: Get the best deal that you can!”—Federal Reserve Board
- 12. Pre-ApprovalOnce you’ve found a mortgage company you’re comfortable with, get pre-approved This essentially gives you a budget for your house“Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt, and credit history.”—http://money.cnn.com/magazines/moneymag/money101/lesson8/index.htm
- 13. Good Faith Estimate (GFE)Required by the Real Estate Settlement Procedures Act (RESPA) within 72 hours of applicationProvided by mortgage lenderGives an estimate of fees due at closing, including:Loan feesFees to be paid in advanceReservesTitle chargesGovernment chargesAdditional chargesActual closing costs can differ from GFE
- 14. Realtor ShoppingDemand ExcellenceLook for CommitmentWho will work for you?Consider EducationOn-going trainingUp to date market knowledgeConduct InterviewsInterview agents to find the “right fit”http://ired.com/buymyself/canale/art3.html
- 15. Home ShoppingIs it THE house? Consider the…CommuteAmenitiesSchool SystemCan you really afford it?Remember, starter homes are just that —a start
- 16. The OfferWhat are the steps to making an offer?Negotiating a sales priceAsking Price Initial Purchase OfferAcceptance of Offer and Counter-OfferMake an offer in writingProposed Purchase PriceConcessionsConveyancesHome inspection contingencesEarnest MoneyAcceptance
- 17. Home InspectionA home inspection is a 3rd party evaluation of a home’s condition by a trained expert. During a home inspection, a qualified inspector takes an in-depth and impartial look at the property you plan to buy. The inspector will:Evaluate the physical condition: the structure, construction and mechanical systems.Identify items that should be repaired or replaced.Estimate the remaining useful life of the major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes.
- 18. Insurance Title insuranceLender’s TitleOwner’s Title (optional)Homeowners insuranceFlood insurance
- 19. ClosingWhat to expectWhat you need to know?Cash to Closing?HUD-1 Settlement StatementDo terms match what was quoted?Do not be pressured into signing!