PRESENTED BY: JAKE PLANTON AND SCOTT WERNER MARCH 26TH, 2011 Home Buying 101

LOAN OFFICER WITH ROSE CITY MORTGAGE Jake Planton

Benefits of Home Ownership Advantages  A place of your own  Tax benefits  Long-term investment  Stable housing costs

Are You Ready? What should you consider before buying a home?  Steady income and stable employment  Looked at your financials? Can you afford a monthly mortgage payment?  Money for down payment and closing costs?  How long do you plan to live in your new home?  Do you foresee a career change in the near future that might require you to relocate?  Do you have a good credit history or good record of paying bills and other debt?

Different Types of Loans Conventional- Most widely used, 5% minimum down payment, higher credit needed (680+), tighter guidelines. FHA- Insured by government, 3.5% minimum down payment, credit scores down to 640, less strict guidelines. Example: Funds to close can be all from a gift. VA- Guaranteed by the VA, 100% financing available, credit scores down to 640, more paperwork, less strict guidelines. USDA- Rural properties, 100% financing available, credit down to 640.

What You Will Need ~For Pre-Approval~ Pay stubs for the last month. Consecutive W-2 forms for last 2 years. Signed personal tax returns with all schedules for last 2 years. Bank or investment statements for past 2 months. Information about your assets and long-term debts. Credit account information. Personal identification information.

PITI Your monthly mortgage payment will generally reflect the following costs: P = Principal I = Interest T = Taxes I = Insurance M.I. = Mortgage Insurance

Now That You Have Started Rules of the Lending Road  Do not change jobs while getting the loan.  Do nothing with your credit, including getting new credit, until loan is closed.  No large deposits you can not paper trail.

REALTOR WITH BRIDGETOWN REALTY Scott Werner

You are Building a Team  Loan Officer  Realtor  Title and Escrow  Inspector  Insurance Agent  Repair and Trades People  Appraiser  Lender

 LICENSED REALTOR LEGAL RESPONSIBILITIES  COORDINATION POINT PERSON  RESOURCES  EXPERIENCE  MARKET KNOWLEDGE  PROPERTY ACCESS Select a Broker to Represent You

Find a Broker Who…  You are comfortable with  Is a good communicator  Is available  Is diligent and thorough  Has references ( who have had a professional working contacts)  Loan Officer, Friends, Relatives

Finding A Home  Needs  Wants  Vetoes  Budget  Matching your lists to the market

Searching for a Home  Computer Search Engines RMLS.com  Signs  Word of mouth  Realtor  Homequest

Making an Offer  Price  Seller Concessions  Contingencies appraisal, loan, inspection, other (eg.selling)  Earnest Money  Provisions  Closing Date  Type of Financing

Counter Offer    To Mutual Agreement In Contract In Escrow

“Open Escrow” Title and Escrow: One Company with Two Functions

Title  Opening Escrow will begin the research phase of Property’s Title’s past  The research guarantees the Title you will receive at closing is correct and Indisputable ownership.

Escrow Neutral Third Party Holds Buyer's earnest money Assures specifics of contract and law are being performed and are completed prior to Closing Assist buyers and sellers with all of the deed transfer paperwork Assist buyers with the Loan documents Distribute the funds Records the new owner in the County Recorders Office

Disclosures

Inspections  House Plumbing Electrical Roof Furnace Leaks  Oil Tanks  Sewer system  Radon?

Repair Addendum ‘Buyer has completed Inspections and wishes to proceed with the transaction, with the following provisions’: Negotiating repairs~ Seller may accept, reject, or counter. Lender/Appraiser may require repair on property before funding the loan.

Repairs  Prior to closing  Seller’s Control  Buyers Input  BIDS

Red Flags and Pitfalls

Cost of Realtor Services to Buyer

Thank You! Any Questions?