Home Buying Class Slides
- 2. What We’ll Cover 01 Preparing to Buy 02 Finding Your Home 03 Getting Your Home & Closing 04 Questions
- 4. First things first: Is it the right time to buy? Renting vs owning Length of ownership Lifestyle priorities Personal finances Consider:
- 5. Your housing payment should not exceed 35% of your income. Have your income and monthly spending info handy 25% is recommended Use our free online calculator to get an estimate of your monthly payment REDFIN ADVANTAGE Use our Home Affordability Calculator to help determine your budget. redfin.com/how-much-house-can-i-afford %
- 6. Accessibility and response time are key when finding a lender. Lender reviews Big banks vs. local lenders Direct lender vs. brokerage Referrals Also consider: REDFIN ADVANTAGE Redfin Agents can recommend a preferred lender in your area.
- 7. Basic Mortgage Terminology The interest rate and term of the loan are negotiated and set for the life of the loan. The terms of fixed-rate mortgages can range from 10 years to 40 years. Fixed-Rate Adjustable-Rate The interest rate is fixed for an initial period (usually 1, 3, or 5 years). After that, the rate adjusts in set intervals based on the market index. Points Points are fees paid to a lender up front in exchange for a lower interest rate on a loan. This is known as a "buydown." Each point is equal to 1% of the loan amount. Origination Fee Borrowers pay an origination fee to the lender. This may include: application fee, appraisal fee, fees for all the follow-up work, and other costs associated with the loan. LTV is the ratio of a loan to the value of the home being purchased. A typical loan for an 80% LTV will require a 20% down payment. Loan-to-Value Ratio (LTV) Private Mortgage Insurance (PMI) When the loan amount is greater than 80% of a home's value, the borrower pays for PMI to guarantee the lender is covered if the borrower defaults. %
- 8. Pre-approval is required to write a strong offer! Pre-Approval Type Description Offer Strength* Pre-Qualification Auto-generated letter based on stated income and assets Low Traditional Pre-Approval Credit report Income Assets Loan officer review Medium Underwritten Pre-Approval Credit report Income Assets Underwriter review High *General rule of thumb: the more information you provide, the stronger the offer.
- 9. Get pre-approved before you start looking for homes. This is what you’ll need: Credit report Credit score Credit Rating & History Investments & Assets Residence History 2 months of statements 401(k) docs Landlord information (2 years) Mortgage documents (2 years) Bank account information Student loans Credit card debt Car loans Total Debt Down Payment Work History Proof of funds W-2 forms Pay stubs Tax return docs
- 10. Common Loan Products Conventional Loans FHA Loans VA Loans Loan Description Credit Score Rate Options Down Payment Conforming: Conform to Fannie Mae and Freddie Mac guidelines Jumbo loans: Exceed conforming limits Require private mortgage insurance (PMI) Veteran benefit allowing low down payment but no PMI Good–Excellent Fixed and Adjustable As low as 5%–20% Fair–Good Fair–Good Fixed and Adjustable Fixed and Adjustable As low as 0%As low as 3.5%
- 12. Understanding your market can help you make a winning offer. Your local market trends Median sale price # of homes for sale Days on market Our market data is updated every 5 minutes! A local Redfin Agent can meet with you to discuss current market trends. REDFIN ADVANTAGE
- 13. Easily compare neighborhoods on Redfin.com. Decide what's most important to you. Walkability Commute School ratings REDFIN ADVANTAGE View tour and offer insights from Redfin Agents for each listing and neighborhood.
- 14. The Redfin Estimate Same-day tours The Redfin Refund See home values with the Redfin Estimate. The most accurate estimate available for homes on the market. Save $2,000 on average at closing. We contribute part of our commission to your closing costs. Request a tour instantly and see homes on your schedule.
- 15. Same-day tours The Redfin Refund Get inside fast: book same-day tours. The Redfin Estimate The most accurate estimate available for homes on the market. Save $2,000 on average at closing. We contribute part of our commission to your closing costs. Request a tour instantly and see homes on your schedule.
- 16. The Redfin Refund Save $2,000 on average when you buy with Redfin. The Redfin Estimate The most accurate estimate available of homes on the market. Save $2,000 on average at closing. We contribute part of our commission to your closing costs. Same-day tours Request a tour instantly and see homes on your schedule.
- 17. See homes in person and know what to look for. Open houses Home tours Tour checklist Location & noise level Level floors & layout Daylight Storage space
- 18. Ask these important questions to find the right agent: How many clients have you helped this year? How quickly can you get me into a home? How many sales have you handled in my search area? Can I see reviews from your past clients? Read client reviews of all Redfin Agents on Redfin.com. REDFIN ADVANTAGE
- 19. Getting Your Home & Closing
- 20. You found a home you love. It’s time to make an offer! Your Redfin Agent will: Set a price strategy Discuss bidding war situations Review contingencies
- 21. Common Contingencies The buyer must get approved for a mortgage loan to be able to buy the home. Financing Contingency Inspection Contingency This allows the buyer to get the home inspected and negotiate further if there are repair issues. The inspection usually happens 5–7 business days after mutual acceptance. Sale Contingency The success of the offer depends on the sale of the buyer's current home. Appraisal Contingency The success of the offer depends on an appraisal confirming a value for the home that is equal to or greater than the buyer's offer amount. The success of the offer depends on whether the home's title, which documents the history of ownership, is clear of any liens. Title Contingency
- 22. The Closing Process Deposit Earnest Money Funds must be transferred within two days after going mutual. Mutual Acceptance The seller has accepted your offer. Now the closing process begins! Execute Contingencies Any contingencies written into your offer will be completed during this time. Professional Appraisal This is the bank’s proof that the home is worth the purchase price and loan. Final Loan Approval Your finances have been processed and approved! Closing Costs 2%-5% of purchase price; includes lender fees, title insurance, appraisal, inspection, etc. Closing Day! Get your keys, attend the closing, and celebrate! Typically takes 30 days
- 23. What’s next? Fill out a strategy session card to talk to a Redfin Agent about your home search. ● Email or call directly – take a business card ● Download our app and start touring with Redfin
- 24. Questions? Thank you for coming!