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First Time Home Buyers Presentation
Transcript of First Time Home Buyers Presentation
To Buy or Not to Buy?
Why You Should Buy a Home
You have a family and need room to grow
You expect to stay put for 5 or more years
You want a home that is difficult to rent
You’re handy & and ready to invest
You’ve saved up a down payment
Why You Shouldn’t Buy a Home
You don’t have a good reason like family or schools
You can’t afford the down payment
You can rent for much less
You plan on moving soon
You’re worried about job security
Documents You'll Need
30 days of Paycheck Stubs
2 years of Tax Returns (Must be Filed!)
30 days of Bank Statements
Each deposit over $800 needs paper trail
2 years of W2’s from consistent job history
Change of Industries could impact income calc
Organize your Assets
Get ready for the down payment
Cash accounts (liquid funds)
401k, stocks, other investments
Gift funds? (max. allowed varies)
Move funds around early
Review your Debt
Pull credit report, look for errors
Disputes Often need to be cleared
Collections can be required to be resolved
Figure out how much monthly income goes towards debt: 28 –33% healthy – 45-50% max
Pay down credit card balances to 1/3rd
Don’t open any new lines of credit
Don’t buy any big ticket items
Co-borrower will need to do the same
The Full Monthly Payment:
Principal & Interest
Don’t forget Property Taxes!
Home Owners (Hazard) Insurance
Private Mortgage Insurance
Flood Insurance (If Required)
Different Loan Programs
FHA – 3.5% Down – 640 FICO
VA - 0% Down – 620 FICO
Conventional – 5% Down – 660 FICO
What is PMI? How is it calculated?
What is a split loan? (80/10/10, 80/15/5)
Why would you do this?
Jumbo & Super Jumbo
Government loans are backed by federal or state agencies. In general, they answer the needs of first-time homebuyers by offering:
More flexible credit guidelines
Allowance for smaller or no down payments
Types of government loans include FHA, VA, USDA
Conventional loans, which are not backed by the government, suit the needs of both first-time and move-up homebuyers.
Types of conventional loans include:
Conforming (loan amounts up to $417,000)
Jumbo (loan amounts over $417,000)
The 8 Steps to Closing
Offer Accepted/ Purchase Contract
Clear to Close
Closing & Funding
What causes loan DELAYS?
Taxes Not filed correctly or on time
IRS takes 2-3 weeks to send transcript, if unfiled add 4 weeks to the process after filed
Appraisal has issues
Borrower SLOW to submit documents
Credit requires repair
Assets not ready (Funds not available or properly documented)
Piecemeal Documents sent in
Missing a Survey for the property
Divorce not complete
What causes loan denials?
Missing Alimony/Child Support in Income/Debt Calculations
Recent Late Payments (Credit cards, Mortgages)
Unsettled Judgment's on Credit
Too Many Disputes (boosts score artificially)
Not Enough trade lines on Credit Report
Deferred Student Loans start soon
Open New Trade Line before closing
Insufficient Job History (3 years in same industry)
Too many deductions on Taxes (Self Employed Borrowers)
Commissions or Bonus makes up most of income (no 2 year history)
Ways we can help
Credit Review & Repair
Underwrite before you are under contract!
Gather & Organize supporting documents before preapproval
Round the clock access for Q&A
Underwrite without a Contract
Affordability Scenarios for your buyers
Open House Preapprovals & flyers
Weekly Updates on all clients
A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you
Establishes what you can afford & makes offer process go faster
Good for 90 days, depending on lender
Ask for a few different amounts
Similar, yet different from pre-qualification
Who am I?
Branch Manager and Loan Originator
11 years in Mortgage Industry
Previously worked at RMC Vanguard and APB
Fastest growing Branch of NFLP ~30 employees
Started in Sales with IBM
Proud father of a 9 year old girl
Happy Hour on us!
By Douglas Hoffman
281-686-2594 - Cell