1 Mortgage Options that Solve and Sizzle Presented by: Lynne A. Coverdale, MBA Salin Bank & Trust Company

 Mortgage Loan Programs  Conventional  Fixed  Hybrid ARM  Conforming  Jumbo  Government  FHA  VA  USDA  Portfolio/Niche Products  Doctor loan program  Community Hero Program  First-time homebuyer program 2

 Purchase  Conventional - Range of 75 – 97%  Government  FHA – 96.5% %  VA – 90% - 100%  USDA 100%  Portfolio/Niche Products  Doctor loan program 85 – 100%  Community Hero Program 97 – 100%  First-time homebuyer program 95 – 97%  Possible grant money 3

 Refinance  Conventional 80 – 89.9%  Government  FHA 96.5%  VA 90 – 100%  USDA 100%  Portfolio/Niche Products  Doctor loan program 95 – 100%  Community Hero Program N/A  First time home-buyer program N/A 4

 Consolidate Debt  Lower Payment  Reduce Term  Save interest  Tax deductions 5

Scenario:  Client has home worth $400,  Owes  $200, on current mortgage  30 year fixed with 25 years left rate is 4.50% ($1, PI)  $30,000 credit card debt ranging  Rates range from 6.99 – 21.99% (average int $324)  $15,000 in personal unsecured loan  Rate 7.99% - ($100 per month interest)  Possible Solution  Refinance to include credit cards and unsecured loan  New loan $250,700 includes mortgage, cc and personal loan  Term: 20 year fixed  Rate: 3.75%  $1, PI versus $1, for PI mortgage and interest only for other debt  Benefits  Consolidate Debt  Lower Payment  Reduce Term  Save interest (See amortization schedule)  Tax deductions 6

 Need to buy home before selling current home  Swing (aka bridge) loan  Piggy-back loan  Niche  Doctor  Work needs to be done on home  Asset- secured loan  Mortgage once work completed  Personal unsecured line of credit  Post-closing  Home Equity Line of Credit (HELOC)  Construction permanent loan 7

 Put least amount down – avoid monthly mortgage insurance  Piggy-back  LPMI  Single Premium  Seller contribution  Seller pays points  Seller buys out mortgage insurance 8

 Scenario 1:  Need to buy home before selling current home  Option  Swing (aka bridge) loan  Details  Current home worth $300,000  Owes $100, on current home  New home price $500,000  Buyers don’t want to put current home on market yet due to chaos would cause on family and showings, etc.  Need money out of current home to buy new 9

 Scenario 1:  Need to buy home before selling current home  Option  Swing (aka bridge) loan  Solution  Swing loan against current home for $240,000 (80% ltv)  Swing pays off $100,000 loan and nets $140,000 for down on new home  Payment on swing interest only at prime + 1% $900 estimated int. pmt.  The interest-only swing payment replaces the current mortgage payment which typically includes principal and interest and taxes and insurance  Swing loan available for 12 months  Cost $400 fee when payoff loan  Loan for new home - $400,000  $100, down payment  $40,000 for moving expenses and other expenses and savings  No mortgage insurance 10

 Scenario 2:  Put least amount down, avoid mortgage insurance and jumbo loan pricing  Option  Piggy-back loan  Details  New home price $600,000  Only want to put down $30,000  They want to keep the majority of their assets in investments WITH YOU! 11

 Scenario 2:  Put least amount down, avoid mortgage insurance and jumbo loan pricing  Option  Piggy-back loan  Solution  First mortgage for $417,  Fixed rate 30 year fixed 3.75%  Principal and interest payment: $1,931  Home equity line of credit (2 nd mortgage) for $153,000  Prime + 1.5% - interest only payments  = $638 (varies with prime)  Recommendation to pay as though a 30 year fixed  $ PI 12

 Scenario 2:  Put least amount down, avoid mortgage insurance and jumbo loan pricing  Option  Piggy-back loan  Comparison  Piggy-back loan  Total payment PI and I $2,569  Total payment PI and PI $2,752  Down payment $30,000  One Jumbo loan  $480,000 loan year fixed  Payment for PI $2,  20% down $120,000 (an extra $90,000 out of the market) 13

 Scenario 2:  Put least amount down, avoid mortgage insurance and jumbo loan pricing  Piggy Back 14

 Scenario 2:  Put least amount down, avoid mortgage insurance and jumbo loan pricing  One loan jumbo: 15

 Scenario 2:  Put least amount down, avoid mortgage insurance and jumbo loan pricing  Benefits  Piggy-back  More tax deductibility ($23,104 vs. $20,243  Check with tax advisor  Earn more money on the funds invested (the extra $90,ooo) that was not used as down payment ($450 per month est.)  The $90,000 not used for down payment would become $120,440 if the investments were earning an average of 6% over the first 5 year period; $161,176 after 10 years at 6% average  One loan  One loan versus two loans and one being a variable rate  Lower monthly payment 16

 Helpful/Consumer Resources  Mortgage related:  Resources/CalculatorsIndex Resources/CalculatorsIndex  Resources/LoanPrograms Resources/LoanPrograms  nter/Glossary.asp nter/Glossary.asp  Resources/Closing Resources/Closing 17

 Helpful/Consumer Resources  General Consumer   or optout   

My contact information: Lynne Coverdale Salin Bank and Trust 8455 Keystone Crossing Dr. Indianapolis, IN – direct – cell 19