Buying a Home in Today’s Market Jeff Neistein Branch Manager Wells Fargo Home Mortage Encino CSUN October 18, 2011

1 Welcome!  Thank you for coming.  Let’s begin with introductions.  Make yourself comfortable.  Questions and answers after the presentation. By attending this workshop, you are taking an important step toward buying a home -- for the first time, or as a move-up, second home, or investment buyer.

2 Homeownership Works! that’s still true today! Homeownership may be the single most important investment you’ll make in your lifetime.

% Believing Homeownership is Still Part of the American Dream All ConsumersMillennial Hispanic/Latinos Millennial African/Americans Millennial Caucasians Finding #2: Home Ownership. The dream of homeownership is alive and well in America. Source: WFHM New Normal Study, September 2010 In our study, consumers report that “owning a home” is second only to “becoming financially secure” in describing the American Dream.

4 Source: Federal Reserve, Survey of Consumer Finances, Most recent data as of 4/26/ X higher than that of a typical renter net worth of a typical homeowner is The

5 good investment? Why can Homeownership be a

6 After you’ve paid off your loan......you’ll own your home free and clear

7 Interest paid on mortgages is deductible for most homeowners. Property taxes are deductible for most homeowners. For most homeowners, there are no capital gains taxes when a primary residence is sold. *See your tax advisor And add to that... significant tax advantages* for homeownership

8 Six Key Questions Is now a good time to buy a home? Is my credit good enough to qualify? How much money will I need? What type of mortgage financing should I get? What is the homebuying process ? Why Wells Fargo ?

9 Is Now A Good Time To Buy A Home? Wells Fargo Home Mortgage Homebuyer Workshop

10 Today is a buyer’s market Sellers are more willing to make concessions. Home prices have generally come down, improving affordability. Overall, good opportunities exist for financially qualified first-time homebuyers, second-home buyers, and investors.

11 Mortgage Rates remain historically low Interest rates depend on a wide variety of constantly changing financial and economic factors. Source: Freddie Mac. Most recent data as of 4/26/2010

12 Is My Credit Good Enough to Qualify? Wells Fargo Home Mortgage Homebuyer Workshop

13 Lender requirements have tightened You need to pay attention to your credit score There are 3 credit bureaus Your score may impact the terms of your loan, including: -- interest rate -- down payment requirement -- required level of documentation

14 Even those with strong credit scores need to provide more documentation We have a checklist! A responsible lender wants you in a loan you can re-pay

15 What makes credit less-than-perfect? Limited credit history Excessive debt Slow payments Legal judgments Past foreclosure or bankruptcy New credit accounts Numerous credit applications Errors But having credit problems isn’t necessarily the end of the story…

16 It May Be Possible to Buy a Home with Less than Perfect Credit Work with us to see if you qualify …and if you don’t, learn what you can do to help you qualify to buy a home in coming years

17 How Much Money Will I Need? Wells Fargo Home Mortgage Homebuyer Workshop

18 Three times to ask this question: WWhen considering your down payment WWhen determining closing costs WWhen comparing your mortgage payment to your monthly income

19 Lenders ARE asking for larger down payments… …but qualified buyers do not need a 20% down payment to buy a house Programs like FHA and VA loans are available with smaller down payments Programs with as little as 1-3.5% Down

20 How much down payment?  Depends on:  Your credit score  The type of property  Property use primary residence, second home, or investment  Local market conditions higher down payments are required in areas with weak housing markets

21 The trade-off: the smaller your monthly principal and interest payment will be the smaller many of your loan costs will be The larger the down payment:

22 Your closing costs Should you pay points to lower your interest rate? It depends on your circumstances – particularly your cash on hand and how long you expect to stay in your house. Ask for a GFE Points are funds you can pay at closing to lower your interest rate over the life of the loan

23 Your Mortgage Payment consists of: Plus property taxes, insurance premiums, and, if applicable, mortgage insurance Pays back the loan Interest: Charged on the outstanding balance Principal:

24 What Type of Mortgage Financing Should I Get? Wells Fargo Home Mortgage Homebuyer Workshop

25 Back to the basics: long-term, fixed-rate mortgage Think twice about adjustable-rate mortgages Real estate should be a long-term investment

26 What is the term of the loan? What is the interest rate? Is the rate fixed or adjustable? When are the payments due? What happens if I make a late payment? Are taxes and insurance included in my monthly payment? What will my closing costs be? What’s included? Wells Fargo will work with you to ensure you understand the answers to these questions. Questions to ask

27 Get pre-approved for your loan first – before house-hunting This determines the upper limit of your price range Borrow only as much as you feel comfortable borrowing

28 Your best option: Get a PriorityBuyer ® pre-approval from Wells Fargo Reliable in clearly specified loan amounts and terms on official Wells Fargo letterhead It shows that you’re a serious homebuyer – you’ve already completed the application, the credit check, and the first loan-decision phase A PriorityBuyer pre-approval is the shortest distance between the opening offer and the closing table A PriorityBuyer® preapproval is based on our preliminary review of credit information only and is not a commitment to lend. We will be able to offer a loan commitment upon verification of application information, satisfying all underwriting requirements and conditions, and providing an acceptable property, appraisal, and title report. Not available on nonconforming products.

29 What Is the Homebuying Process? Wells Fargo Home Mortgage Homebuyer Workshop

30 What is the Homebuying Process? 1. Work with a professional “homebuyer team” 2. Financing, financing, financing… Get it right! 3. Shop with your real estate agent 4. Make your best offer

31 What is the Homebuying Process? 5. Finalize your financing 6. Home inspections, appraisal, and insurance 7. Ensure you meet conditions of your loan approval 8. Final walk-through inspection 9. Close on your new home!

32 Thank you for attending! We’re happy to answer your questions... Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2010 Wells Fargo Bank, N.A. All rights reserved.