1. Residential Mortgage Corporation A Mind to Build Proper Planning for the First-time Homebuyer

2. Residential Mortgage Corporation What to Expect Intent: To clear up the confusion of buying a home Purpose: To strengthen our financial IQ Goal: To be a successful homeowner

3. Residential Mortgage Corporation Home Buying Objectives The Financial Benefits of Buying A Home The Process of Buying a Home The Cost of Buying a Home Programs that will help you Buy a Home The proper Mindset to Buy a Home

4. Residential Mortgage Corporation Biggest Mistakes When Buying Not having a relationship with a Certified Mortgage Planning Specialist Not knowing how to shop for a mortgage Not staying consistent with the initial plan of action Not factoring in long term goals Not fully understanding the terms of the Loan Listening to too many people outside the transaction

5. Residential Mortgage Corporation Biggest Mistakes When Buying Continued Getting tied into looking for homes before getting a solid preapproval Allowing the loan officer to tell us what to pay on a monthly basis Shopping for a home based on a “Program” We allow the process to become emotional

6. Residential Mortgage Corporation MODULE I The Awesome Benefits of Homeownership

7. Residential Mortgage Corporation The Financial Benefit of Homeownership Tax Write-off

8. Residential Mortgage Corporation Example of 2 nd tax benefit Single Person $250,00.00 Married Couple $500,000.00 TAX FREE

9. Residential Mortgage Corporation The Financial Benefits of Homeownership Leverage Equity Benefit Automatic Savings Investment opportunities

10. Residential Mortgage Corporation The Immediate Benefits of Homeownership Interest rates and property prices are at historical lows Sellers are paying closing cost Community programs available for help 1 st time home buyers

11. Residential Mortgage Corporation MODULE II The Process, Programs, & Pecos

12. Residential Mortgage Corporation Preparing for the Loan Application Last two pay stubs ( 30 day period) Last two W-2 forms (2013, 2014) Last two bank statements/asset statements 12 months of canceled rental checks Credit explanation letter, if necessary Landlord and employment contact information

13. Residential Mortgage Corporation The Process Step One: Education Step Two: Pre-qualification Step Three: Pre-approval Step Four: Search for property (ratified contract) Step Five: Formal loan application Step Six: Processing Step Seven: Underwriting Step Eight: Celebration

14. Residential Mortgage Corporation 4 C’s of Approval Credit- Your character Capital- Your money Capacity- Your ability to make payments Collateral-Y our property selection

15. Financial Stewardship How is your score determined? Payment History 35% Amounts Owed 30% Length of history 15% New Credit 10% Types of Credit 10%

16. Residential Mortgage Corporation Finding Capital First-Time Homebuyer IRA Withdrawal Have a yard sale Cash in Vacation Tax Refund Income Tax Withholdings ( increase exemptions) Equity Sharing Seller Financing Gift Funds Local Community Programs Borrow from 401k or Retirement Plan

17. Residential Mortgage Corporation Capacity How Much Can you afford?? For which of you, intending to build a tower, sitteth not down first and counteth the cost, whether he have sufficient to finish it? Luke 14:28

18. Residential Mortgage Corporation Debt to Income Ratio This calculation is based on your monthly debt and proposed mortgage payment divided by your gross monthly income A maximum monthly back end debt to income Ratio (DTI) of 45% is required (above 620) Example Gross Income: $60,200 / 12 = $5016.66 Monthly Debt: $500 + $1200 = $1700 $1700 / $5016.66 = 34%

19. Financial Stewardship Get prepared for Upfront Cost Credit Report - $25 Earnest Money Deposit $1000 - $2000 Inspection $300 - $600 Appraisal $425 - $450 Homeowners Insurance $300 - $600

20. Residential Mortgage Corporation Two cost of buying a Home Down Payment – 3.5% Closing Costs – 6.0% Total needed will be 9.5% between the Program, The Seller, and YOU!

21. Residential Mortgage Corporation Example: Purchase Price = $100,000.00 Down payment (3.5%) = $3,500.00 Closing (6.0%) = $6,000.00 Total needed = $9,500.00 Seller can pay (0-6%) Program/credit You!!

22. Residential Mortgage Corporation “I Can’t Afford to buy a home” Escalation clauses Effective interest rate Inflation over time Home appreciation Interest rate environment

23. Residential Mortgage Corporation Mortgage Programs FHA- 3.5% down payment VA- 0% down payment Conventional- 3% down payment USDA- 0% Down payment $100 FHA- $100 down FHA 203k Financing (full/streamline)-3.5% down Officers/Teachers Next Door Program

24. Residential Mortgage Corporation Mortgage Programs HPAP- For DC Residence EPAP- For DC Residence MAP- Ann Arundel County My HOME- Prince Georges County New Neighbor Program- College Park Program CDA- Maryland State Program (You’ve earned it Program) HOC – Montgomery County

25. Residential Mortgage Corporation In Conclusion 5 Keys to a successful Home buying experience Separate emotion from the buying process. Have Realistic Expectations Don’t Give Up! Protect your confidence Know that buying a home is tactical/tool

26. Residential Mortgage Corporation MODULE III Your Money Blueprint The Proper Mind Set to Build a Home

27. Financial Stewardship Ministry Example of an Effective System Collect all checks in envelope and deposit at end of month Make all bill payments at one time (change due dates) Deposit enough to pay bills only (put rest in savings) Become a member of NSL Credit Union (and deposit money monthly) Have a specific allowance 1 credit card with max limit (purchases above $20.00…payoff EVERY month.

28. Financial Stewardship Ministry Example of a Effective System Implement the “2 week rule” (wants) 10% Tithe Save 20% of net, or 10% of gross Identify one spouse as the CFO (meet once a month for min 1 hour) Have a relationship with a Mortgage Prof. Have written plan for 5, 10, 15 years Know your monthly survival Number

29. Financial Stewardship The 3 Financial Miracles

30. Residential Mortgage Corporation Totally different thinking! Wealthy People have a lot of money and spend little Poor people have little money and spend a lot Wealthy people work to earn money for their investments Poor people work to earn money to live today Wealthy people buy assets Poor people buy expenses Wealthy people collect land Poor people collect bills Wealthy people constantly learn and grow Poor people think they already know

31. Residential Mortgage Corporation Thank you for your Time! Derick W. Hungerford 301-773-9811 ext 102 dhungerford@rmc-mortgageloan.com Amindtobuild.com Get your book today!