2010 January Home Buying Seminar
-
Upload
eileen-horan -
Category
Documents
-
view
870 -
download
0
Transcript of 2010 January Home Buying Seminar
![Page 1: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/1.jpg)
BUY A HOME ON THE SAN FRANCISCO PENINSULA
2010Aimee Snodgrass Klarich
Realtor ® Alain Pinel Realtors
Burlingame, Ca
Business [email protected]
www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage CaliforniaSan Mateo, Ca
Business [email protected]
![Page 2: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/2.jpg)
Aimee KlarichRealtor ®
http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California
• How the Stimulus Plan benefits first time home buyers
• Tax Credits available for home ownership• Why buy a home in 2010?
• Steps for a successful home or condo purchase• Differences between owning a condo vs a
single family home in San Mateo County• How to finance your home purchase?
• State of the San Mateo County real estate market
• 2010 Peninsula Real Estate Forecast
HOME BUYING SEMINAR
PRESENTATION TOPICS
![Page 3: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/3.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Stimulus Plan benefits local buyers by enabling them to qualify for specific loan programs with lower interest rates.
• $8000 First Time Home Buyer tax credit on purchases through 6/30/10 for qualified buyers.
• $6500 Tax Credit for current qualified homeowners
• San Mateo County is a Buyer’s Market giving home buyers more negotiation power than we have seen in years.
• Mortgage rates remain historically low but are projected to increase.
Eileen HoranMortgage Broker
Mortgage California
WHY BUY A HOME IN 2010?
![Page 4: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/4.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• You build wealth as value appreciates
• It can be a tax write-off
• House expenses usually increase slower than renting
• You have much more flexibility in how you use, decorate and make physical changes to your home
• Pride of homeownershipEileen Horan
Mortgage BrokerMortgage California
WHY BUY A HOME?
![Page 5: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/5.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
The "American Recovery and Reinvestment Act of 2009," was signed by President Obama on February 17th, 2009.
On the housing front, the good news is that the legislation resets the conforming loan limit cap at $729,750, up from $625,500. San Mateo County, San Francisco County and numerous other counties in California experienced a marked decrease in their conforming loan and FHA limits on Jan. 1, 2009 and the stimulus bill reinstates 2008 loan limits through Dec. 31, 2009.
On Nov 13th, 2009, congress extended this thru Dec. 31st, 2010.
This means lower interest rates for those getting a loan between the $729,750 and $625,500.
Eileen HoranMortgage Broker
Mortgage California
STIMULUS PLAN
![Page 6: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/6.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
The bill also increases the first-time home buyer credit from $7,500 to $8,000.
It also extended the expiration date for the credit from July 1, 2009 to Dec. 1, 2009. However, on November 3rd, 2009, it was extended until June 30th, 2010.
See Appendix for more details
Eileen HoranMortgage Broker
Mortgage California
STIMULUS PLAN
![Page 7: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/7.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
Homeowners who currently do not qualify for aid under the federal housing-rescue plan still may qualify for tax credits on energy-efficient upgrades.
Homeowners may qualify for up to $1,500 in tax credits for adding qualifying windows, doors, insulation, roofs, heating and cooling equipment, water heaters, and wood andpellet stoves.
The installations must take place in 2009 or 2010 to qualify for the tax credit.
Eileen HoranMortgage Broker
Mortgage California
OTHER TAX CREDITS
![Page 8: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/8.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California
RENTING VS BUYING A HOME• $1000 per month in rent
• 5% annual rent increase
• After 5 years you have spent $66,307 in rent.
• Net equity gain: $ 0
• You have nothing to show after spending all this money.
![Page 9: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/9.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
The rent you pay could build equity in your own real estate.Using this chart, find your month rental payment and you can determine how much money you are “giving away” in rent and interest (5%) over 10, 20, 30 years. Rent plus 5% Earned Interest
Rent 10 Years 20 Years 30 Years
$ 800 $ 124,225 $ 328,826 $ 665,806
$ 1,000 $ 155,282 $ 411,033 $ 832,258
$ 1,200 $ 186,388 $ 493,240 $ 998,710
$ 1,400 $ 217,395 $ 575,447 $ 1,165,162
$ 1,600 $ 248,451 $ 657,653 $ 1,331,613
$ 1,800 $ 279,508 $ 739,860 $ 1,498,065
$ 2,000 $ 310,564 $ 822,067 $ 1,664,517
$ 2,200 $ 341,628 $ 904,274 $ 1,830,968
$ 2,400 $ 372,776 $ 986,480 $ 1,997,420
$ 2,600 $ 403,732 $ 1,068,636 $ 2,163,872
$ 2,800 $ 434,790 $ 1,150,894 $ 2,330,324
$ 3,000 $ 465,846 $ 1,233,100 $ 2,496,694
Eileen HoranMortgage Broker
Mortgage California
RENTING VS BUYING A HOME
![Page 10: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/10.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
The government rewards homeownership through write-offs and deductions on your taxes.
Homeowner Deductions• Mortgage Interest Payments• Property Taxes• Discount points (closing costs)
• It is customary in San Mateo County that buyers pay closing costs. This is negotiable.
Eileen HoranMortgage Broker
Mortgage California
HOMEOWNERS HAVE TAX DEDUCTIONS
![Page 11: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/11.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California
TAX DEDUCTION EXAMPLE: 3 Bedroom 1 Bath Single Family HomeEast Side San Mateo• Home Price• 20% Down
Payment• Home Mortgage• Interest Rate• Annual Interest
Paid• Annual Property
Tax• Total Deductions
$500,000 $100,000 $400,000 5.50% 22,000 6,250 $28,250
![Page 12: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/12.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California
TAX DEDUCTIONS = TAX SAVINGS
Home No Home
Annual Income $100,000 $100,000
Total Deductions
$28,250 0
Taxable Income
$71,750 $100,000
Tax Rate 28% 28%
Annual Taxes $20,090 $28,000
Annual Savings
7,910 0
![Page 13: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/13.jpg)
TAX DEDUCTION EXAMPLE
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
2 Bedroom 1 Bath CondominiumWest Side San MateoPurchase Price $340,000Buyers Combined Annual Salary $65,000 (28% Tax Bracket)
Purchase Price $ 340,000
Minus Down Payment (10% down) 34,000
Loan Amount $ 306,000
Monthly Principal & Interest $ 1737
Property Taxes + Mortgage insurance (Monthly Rate) $ 481
Monthly HOA Fees (Condominium) $ 320
Gross Monthly Payment $ 2538
Less Monthly Tax Savings (deduction of interest and property taxes) $ 527
Net Monthly Payment After Tax Benefit $ 2011
Rental Pricing for Unit $ 1,400
Difference Between Homeownership & Renting $ 571
Eileen HoranMortgage Broker
Mortgage California
![Page 14: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/14.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Months of Inventory is used as an analytical tool in determining who holds the power in negotiations.
Months of Inventory = # homes of sale/#homes sold
Supply and Demand…
Months of Inventory <4 = Seller Market
Months of Inventory =4 = Flat Market
Months of Inventory >4 = Buyer MarketEileen Horan
Mortgage BrokerMortgage California
WHAT IS A BUYER’S MARKET?
![Page 15: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/15.jpg)
In Sept 07, months of inventory increased and moved the home market into a buyers market.*
San Mateo County Single Family Homes
* Cities within the county vary from the total.
BUYERS MARKET: SAN MATEO COUNTY SINGLE FAMILY HOMES
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
![Page 16: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/16.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
At an aggregate level, San Mateo County continues to be a buyers market. Months of Inventory based on closed sales was 4 last month vs 4.7 a year ago.
Eileen HoranMortgage Broker
Mortgage California
STATE OF THE MARKET (MAY 09): SAN MATEO COUNTY SINGLE FAMILY HOMES
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
![Page 17: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/17.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
• Inventory was down 25% to last year• Unit Sales were down 14% to last year• Most note worthy was the significant increase in pending sales: up 5% to last year.
• Average Days On Market was 54 days vs 48 last year
• Avg Sales Price vs. Original List Price: 93%
Median Sales Price: $728,000 (-14% to last year)Each city, neighborhood and area shows a different picture. Schools, commute, weather are all key factors in the variances between cities and areas.
Eileen HoranMortgage Broker
Mortgage California
STATE OF THE MARKET (MAY 09):SAN MATEO COUNTY SINGLE FAMILY HOMES
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
![Page 18: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/18.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
What drove the 14% decrease in the median home price?
• A significant increase in home sales below $500,000
• A significant decrease in home sales above $1,000,000
Eileen HoranMortgage Broker
Mortgage California
STATE OF THE MARKET (MAY 09): SAN MATEO COUNTY SINGLE FAMILY HOMES
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
![Page 19: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/19.jpg)
In August of 07, months of inventory increased and moved the condo market into a buyers market.*
* Cities within the county vary from the total county picture.
San Mateo County Condos and Townhomes
BUYERS MARKET: SAN MATEO COUNTY CONDOS &TOWNHOMES
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
![Page 20: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/20.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
At an aggregate level, San Mateo County continues to be a buyers market. Months of Inventory based on closed sales was 4.5 last month vs 5.3 a year ago.
Eileen HoranMortgage Broker
Mortgage California
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
STATE OF THE MARKET (MAY 09): SAN MATEO COUNTY CONDOS & TOWNHOMES
![Page 21: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/21.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
• Inventory was down 21% to last year• Unit Sales were down 7% to last year.• Average Days on Market was 67 days vs 59 last year
• Avg Sales Price vs. Original List Price: 92%
Median Sales Price: $420,000 (-21% to last year)Each city, neighborhood and area shows a different picture. Schools, commute, weather are all key factors in the variances between cities and areas.
Eileen HoranMortgage Broker
Mortgage California
STATE OF THE MARKET (MAY 09): SAN MATEO COUNTY CONDOS & TOWNHOMES
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
![Page 22: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/22.jpg)
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
What drove the 21% decrease in the median condo & townhome sales price?
• A significant increase in home sales below $500,000
• A significant decrease in home sales between $500,000 - $1,000,000
Eileen HoranMortgage Broker
Mortgage California
All reports are published Jan. 2009, based on data available at the end of Dec. 2008. All reports presented are based on data supplied by San Mateo County Association of Realtors. Neither the Associations nor their MLSs guarantee or are in anyway responsible for their accuracy. Data maintained by the Associations or their MLSs may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
STATE OF THE MARKET (MAY 09): SAN MATEO COUNTY CONDOS & TOWNHOMES
![Page 23: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/23.jpg)
0%
3%
6%
9%
12%
15%
18%
1972 1976 1980 1984 1988 1992 1996 2000 2004
30-year Mortgage Rateson Conventional, Conforming Loans
Source: Freddie Mac
4th Quarter, 2007: 6.24%Jan/Feb 2008: 5.83%
Average, 1972-2007: 9.22%
MORTGAGE RATES ARE HISTORICALLY LOW
Aimee Snodgrass KlarichRealtor®
http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California
![Page 24: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/24.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
LOCATION, LOCATION, LOCATION
• Bridgeless commutes to San Francisco and Silicon Valley
• Employment opportunities• No more land to build upon since we are flanked
by the bay and the ocean• Moderate weather• Good schools
Eileen HoranMortgage Broker
Mortgage California
WHY BUY A HOME ON THE SAN FRANCISCO PENINSULA?
![Page 25: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/25.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• The foreclosure rate of existing homes is low vs other counties allowing the county to bounce back faster
Eileen HoranMortgage Broker
Mortgage California
WHY BUY A HOME ON THE SAN FRANCISCO PENINSULA?
![Page 26: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/26.jpg)
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California
WHY BUY A HOME ON THE SAN FRANCISCO PENINSULA?
CA Rank (% Sub-Prime Loans to total
hsg units) County
Num of Subprime
ARMs
% Total SP share of total
hsg units
% Already Reset
% to Reset in
2009
% to Reset in 2010+
1 San Bernardino 37,300 9.0% 70% 23% 7%2 Riverside 36,700 8.7% 73% 20% 7%3 San Joaquin 12,300 8.4% 77% 18% 5%4 Merced 4,200 8.3% 76% 19% 5%5 Kern 12,400 8.1% 70% 24% 6%
15 Sacramento 21,300 6.0% 79% 15% 5%22 Los Angeles 79,200 3.7% 68% 24% 8%32 San Diego 21,500 2.9% 74% 17% 9%34 Orange 17,900 2.7% 72% 20% 8%49 San Mateo 2,400 1.5% 75% 17% 8%51 San Francisco 1,400 0.7% 71% 21% 7%
TOTAL CALIFORNIA 364,800 4.1% 66% 17% 7%
San Mateo County sub-prime loans are only 1.5% of total housing units.
SOURCE: FirstAmerican CoreLogic, LoanPerformance Data, U.S. Census Bureau, and Federal Reserve Bank of New YorkDec 07
![Page 27: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/27.jpg)
ADVICE FROM FIRST-TIME HOME BUYERS: Top 10 Answers from a Survey of 1000 Buyers by
California Association of Realtors on advice they would give other home buyers.
1 Do your own homework on the Internet
2 Get a good understanding of the type of mortgage you are getting
3 Check the agent's references
4Make sure the agent pre-qualifies homes before showing them to you
5 Get pre-qualified for a mortgage by more than one lender
6Find out how frequently the agent is going to be in contact with you
7 Don't use the seller's agent
8 Make any agent you use prove they will negotiate hard for you
9 Get your financing locked in as soon as possible
10 Find out how fast the agent is going to get back to you
![Page 28: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/28.jpg)
WHO’S WHO IN REAL ESTATE ?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Lender: Qualifies buyer and provides the home financing.
• Buyers Agent (Realtor ® ): Fiduciary responsibility to buyer(s)
• Selling Agent (Realtor ® ): Fiduciary responsibility to seller(s)
• Escrow Officer: Neutral 3rd party manager of the transaction
• Appraiser: Hired by lender to confirm property values
• Inspectors: Provide insight into the condition of a home Eileen Horan
Mortgage BrokerMortgage California
![Page 29: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/29.jpg)
TIMELINE OF BUYING A HOME
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Initial Consultation and Planning: Lender or Realtor
• Get Pre-Approved for a loan• Search for a Home• Find a Home• Submit an Offer and Negotiate• Final Agreement on Terms and Price• Open Escrow with a Title Company.• Deposit your earnest money deposit into Escrow Account• Appraisal and other further needed inspections and reports• Secure Home Insurance as a requirement of the lender• Removal of remaining contingencies• Final Inspection and Walk Through of Home• Secure loan funds. Deposit your remaining funds into escrow.• Record Deed of Title• You take possession of property
Eileen HoranMortgage Broker
Mortgage California
![Page 30: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/30.jpg)
FINANCING A HOME PURCHASE
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Meet with a Lender to see how much you qualify for.
Your qualifications are based on the following:• Credit • Income• Assets
The most important part of this is for you to decide how much you WANT to pay on a monthly basis.
Eileen HoranMortgage Broker
Mortgage California
![Page 31: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/31.jpg)
IS MY CREDIT GOOD ENOUGH?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• It’s a fact: qualifying criteria has gotten tighter than in previous years.
• Homebuyers need to pay more attention to their credit scores than they did before.• Credit history • Your credit score may impact your interest rate.• Your credit score may impact your down payment
requirements.• But you don’t need perfect credit to buy a home.
Eileen HoranMortgage Broker
Mortgage California
![Page 32: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/32.jpg)
HOW MUCH MONEY DO I NEED?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• For a down payment?Source of Down Payment:
Checking/SavingsMoney Market/StocksGift FundsBorrow from a 401k, 403b, etc.
Your money must be seasoned• For closing costs?
AppraisalProcessing and UnderwritingTitle & EscrowWhat are Pre-Paids?Interim interestInsuranceImpounds
Eileen HoranMortgage Broker
Mortgage California
![Page 33: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/33.jpg)
HOW MUCH MONEY DO I NEED?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Monthly Payment Expenses:• Your monthly payments include:
• Principal & Interest.• Property Taxes • Insurance • Mortgage insurance - if your down payment is less
than 20%.• Association fees - if applicable.
• Your maximum monthly payment is calculated using:• Your housing monthly debt.• Your other debt
• Again, the most important part is to be comfortable with the calculated monthly payment:
• Repairs and maintenance costs are part of homeownership.
Eileen HoranMortgage Broker
Mortgage California
![Page 34: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/34.jpg)
WHAT TYPE OF MORTGAGE SHOULD I GET?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• What type of documentation will be required?
• 2 pay stubs• 2 years W2s and Federal Tax Returns• 2 months bank statements
• What type of product?• What kind of rate?• How long a term?
Eileen HoranMortgage Broker
Mortgage California
![Page 35: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/35.jpg)
WHAT TYPE OF MORTGAGE SHOULD I GET?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• We’ll help you select the product type that meets your needs:
• Conforming loans up to $417,000* for a single-family.
• Jumbo Conforming loans $417,001 up to $729,750*
• Jumbo loans greater than $729,750*.• Combination loans: conforming first + a
second mortgage.• Government loans: FHA & VA.
*The conforming ceiling of $417,000 has been raised in high-cost housing markets starting 01/01/2009. The loan limit on these “conforming jumbo” loans varies by location but doesn’t exceed $729,750 in the continental U.S. Eileen Horan
Mortgage BrokerMortgage California
![Page 36: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/36.jpg)
WHAT TYPE OF MORTGAGE SHOULD I GET?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Fixed-Rate(FRM)
Adjustable-Rate(ARM)
3,5,7,10 year ARM
• Rate is usually higher than an ARM rate or a Hybrid.
• The principal and interest portion of the mortgage payment stays the same through the entire term.
• Stable, easy to budget.
• May want to refinance if rates go lower.
• Usually starts with a lower rate than an FRM or hybrid.
• The rate may adjust every year, changing the monthly payment.
• Rate may eventually be higher than the rate for a fixed-rate loan.
• The shorter the term of the fixed portion, the lower the interest rate
• Interest only during the fixed years are optional
What kind of rate?
Eileen HoranMortgage Broker
Mortgage California
![Page 37: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/37.jpg)
WHAT TYPE OF MORTGAGE SHOULD I GET?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
40-Year 30-Year 15-Year
• Rate is higher.• Payments are lower because they are spread out for a longer period.
• Easier to qualify for a larger loan amount.
• Pay more interest and it takes longer to build equity.
• Rate is lower than a 40-year, higher than 15-year.
• Payments are higher than a 40-year, but lower than a 15-year.
• Pay less interest than a 40-year, but more than 15-year.
• Rate is lower.• Payments are higher.
• Pay the least amount of interest over the life of the loan.
How long a term?
Eileen HoranMortgage Broker
Mortgage California
![Page 38: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/38.jpg)
TIMELINE OF BUYING A HOME
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Initial Consultation and Planning: Lender or Realtor® • Get Pre-Approved for a loan• Select Your Team of Professionals• Search for a Home• Find a Home• Submit an Offer and Negotiate• Final Agreement on Terms and Price• Open Escrow with a Title Company.• Deposit your earnest money deposit into Escrow Account• Appraisal and other further needed inspections and reports• Secure Home Insurance as a requirement of the lender• Removal of remaining contingencies• Final Inspection and Walk Through of Home• Secure loan funds. Deposit your remaining funds into escrow.• Record Deed of Title• You take possession of property
Eileen HoranMortgage Broker
Mortgage California
![Page 39: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/39.jpg)
CHOOSING THE RIGHT REALTOR
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Things to consider…• How well does the agent know the market you are
considering? How will the agent help focus your search?
• How well does he or she listen to you?• Do you feel that the agent will be respectful of your
desires, enabling (not forcing) you to make your own decisions?
• Do you feel they will negotiate hard for you?• Do you feel a rapport?• Are they clear on their services and expectations?• Per the survey of Home Buyers from CAR:
• Check references• What online services does the Realtor provide?
Eileen HoranMortgage Broker
Mortgage California
![Page 40: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/40.jpg)
CHOOSING THE RIGHT HOME
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
Meet with a Realtor®• Discuss present and future housing needs and wishes• Single Family Home, Condo or Townhome• Number of bedrooms and bathrooms• Home square footage and lot size• One story vs two story• Desired neighborhoods• Location vs. commute to work/school• Desired amenities (garage, laundry, pool, etc)• Your family size- current and projected• Hobbies or special needs to accommodate• Preferred condition of the property (fixer upper?)• Any non-negotiable points for you• Current housing and terms of current contracts• Learn and discuss types of salesAimee’s Buyer Services Packet in Appendix
Eileen HoranMortgage Broker
Mortgage California
![Page 41: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/41.jpg)
TIMELINE OF BUYING A HOME
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Initial Consultation and Planning: Lender or Realtor® • Get Pre-Approved for a loan• Select Your Team of Professionals• Search for a Home• Find a Home• Submit an Offer and Negotiate• Final Agreement on Terms and Price• Open Escrow with a Title Company.• Deposit your earnest money deposit into Escrow Account• Appraisal and other further needed inspections and reports• Secure Home Insurance as a requirement of the lender• Removal of remaining contingencies• Final Inspection and Walk Through of Home• Secure loan funds. Deposit your remaining funds into escrow.• Record Deed of Title• You take possession of property
Eileen HoranMortgage Broker
Mortgage California
![Page 42: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/42.jpg)
NEGOTIATION HOMEWORK: HOW MUCH SHOULD I OFFER?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Know the sales history of similar sold properties within the area over the past 3-4 months.• Compare sale and list price• Months of Inventory• Days on market
• Know the current property offer and disclosure packet activity, if any
• Know the property condition and short-term repair expenses (including HOA Assessments)
• Know the seller's situation and motivation for selling. • Examples of other things to negotiate on other than price:
• Closing Costs• Repairs • 30 day rent backs
• Know your financing options and have your pre-approval letter from your lender for the exact offer price
Eileen HoranMortgage Broker
Mortgage California
![Page 43: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/43.jpg)
MAKING AN OFFER ON A PROPERTY
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Your offer will be written on a Purchase Contract by your Realtor.
• Traditionally, the accepted deposit (earnest money) is 3% of the offer price.
• The down payment and amount financed will be determined. • Understand what is included with the purchase of the home as
in fixtures & appliances and negotiate accordingly.• Decide on needed inspections and contingencies to be
negotiated into the contract• Examples of Contingencies
• Financing• Appraisal• Property Condition
• The close of escrow date will need to also be negotiated• The lender will most often influence the closing date so your
lending partner must be involved during the negotiation process
Eileen HoranMortgage Broker
Mortgage California
![Page 44: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/44.jpg)
YOU’RE IN CONTRACT… NOW WHAT?
Aimee Snodgrass KlarichRealtor ®
http://www.AimeeKlarich.com
• Open Escrow with a Title Company. • Traditionally done by your Realtor.
• Deposit your earnest money deposit into the Escrow Account
• Complete appraisal and inspections• Secure home insurance as a requirement of the
lender• Remove contingencies (if all is satisfactory)• Final Inspection and Walk Through of Home• Secure loan funds. Deposit your remaining funds
into escrow.• Record Deed of Title• You take possession of the property
Eileen HoranMortgage Broker
Mortgage California
![Page 45: 2010 January Home Buying Seminar](https://reader038.fdocuments.in/reader038/viewer/2022110118/554df098b4c905ee578b5012/html5/thumbnails/45.jpg)
ECONOMY THROUGH 2009
• Recession through mid--2009• Improved outlook in second half 2009• Weak job picture, unemployment rate up• Inflation no longer a concern – for now• Permanent Stimulus Package in 2009• CRITICAL CONCERN: How soon will
financial system stabilize and enable economic activity to return to normal? Once the market turns around, the fed level to slow inflation will be increased interest rates. Aimee Snodgrass Klarich
Realtor ® http://www.AimeeKlarich.com
Eileen HoranMortgage Broker
Mortgage California