Realtor Powerpoint _08-34_ by MarijanStefanovic

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									  Bokern Realty– serving St. Louis since 1901.




Home Buying Educational Seminar
The WU Employer Assisted Housing Program
Bokern Realty– serving St. Louis since 1901.




  Agenda
    WU Employer Assisted Housing Program
    •   Program highlights
    •   Neighborhoods
    Home Financing
    •   Benefits of homeownership
    •   Preparation
    •   Loan programs
    •   Credit
    Home Buying
    •   Process
    •   Inspections
    •   Closing
Bokern Realty– serving St. Louis since 1901.




 WU Employer Assisted Housing
   Program Highlights

     •   Forgivable loans for qualified WU employees and graduate students


     •   Up to $5,000 at closing or 5% if under $100,000 home sale price


     •   May be used for either down payment or closing costs


     •   Can only be used once, limited to a first-come, first-serve basis


     •   Home must be located in one of the redevelopment neighborhoods
  Bokern Realty– serving St. Louis since 1901.




            OTHERS




Skinker-Debaliviere                              West End
Bokern Realty– serving St. Louis since 1901.




                              Home Financing
Bokern Realty– serving St. Louis since 1901.




  Benefits of Homeownership
   •    Tax breaks

   •    Property Appreciation/Gains

   •    Equity

   •    Savings

   •    Predictability

   •    Freedom

   •    Stability
Bokern Realty– serving St. Louis since 1901.




  Qualifying
   4 C’s of Lending

     • Capital (savings)
           – Do you have enough cash for the down payment?
           – Do you have enough cash for emergencies?


     • Capacity (income)
           – Can you repay the debt?


     • Character (credit history)
           – Will you repay the debt?


     • Collateral (house)
           – Will the lender be fully protected if you fail to repay the loan?
Bokern Realty– serving St. Louis since 1901.




  Glossary of Terms
   What Lenders Look For
     •   Debt to Income Ratios
          – Relationship between current consumer debts and current income
          – Determines percentage of income available for mortgage payment
          – Determines program qualification

     •   Down payment
          – The higher the down payment, the lower the loan amount

     •   Reserves
          – How much money do you have saved?
          – How much will be left after closing?
Bokern Realty– serving St. Louis since 1901.




  Glossary of Terms
   What is MI and LTV?

     •   MI –Mortgage Insurance protects the lender against borrower
         default
           – PMI is mandatory on any conventional loan that exceeds 80% Loan to
             Value (LTV)
           – The borrower may request the cancellation of PMI when the loan
             reaches 80% LTV (either through appreciation of the property or
             reduction of principal)
     •   LTV is a ratio calculated in the following way:


                                       Loan Amount
                                          Sale Price
Bokern Realty– serving St. Louis since 1901.




  How Much Can You Afford?
   Debt-to-Income Ratios
     •   28/36 qualifying ratio for conventional loans

     •   28% equals the maximum percentage of your monthly gross income for
         housing expenses (PITI)

     •   36% equals the maximum percentage of your monthly gross income for
         housing expenses + recurring debt

     •   FHA loan ratios are 29/41
 Bokern Realty– serving St. Louis since 1901.




       Principal & Interest Payments
Loan                                                    Interest Rates

Amount      5.5%      6.0%       6.5%      7.0%             7.5%         8.0%      8.5%      9.0%      9.5%

   50,000      283        300       316          333             350        367       384       402       420

   60,000      340        360       379          399             420        440       461       483       505

   70,000      397        420       442          466             489        514       538       563       589

   80,000      454        480       506          532             559        587       615       644       673

   90,000      511        540       569          599             629        660       692       724       757

  100,000      568        600       632          665             699        734       769       805       841

  110,000      625        660       695          732             769        807       846       885       925

  120,000      681        719       758          797             839        880       923       966      1,009

  130,000      738        780       822          865             909        954      1,000     1,046     1,093

  140,000      795        839       885          931             979       1,027     1,076     1,126     1,177

  150,000      852        899       948          998           1,049       1,101     1,153     1,207     1,261

  160,000      908        959      1,011        1,064          1,119       1,174     1,230     1,287     1,345

  170,000      965      1,019      1,075        1,131          1,189       1,247     1,307     1,368     1,429

  180,000     1,022     1,079      1,139        1,198          1,259       1,320     1,384     1,449     1,513

  190,000     1,079     1,139      1,203        1,265          1,329       1,393     1,461     1,530     1,597

  200,000     1,136     1,199      1,267        1,332          1,399       1,466     1,538     1,611     1,681
Bokern Realty– serving St. Louis since 1901.




  How Much Can You Afford?
   Calculate Other Components

     •   Mortgage Insurance (if applicable)
           – 1% of the loan amount


     •   Property Taxes
           – Between .75% - 1.5% of the value of the property


     •   Homeowner’s Insurance (if house)
           – $500 - $1000 annually


     •   Condo Fee (if condo)
           – $75-$170
Bokern Realty– serving St. Louis since 1901.




  How Much Can You Afford?
   Add All The Payments Together

     • Purchase $150,000 condo with 100% financing.
     • Current Market Interest Rate for the loan is 6.5%
     • Principal and Interest Payment from the chart       $948
     • Condo Fee                $90.00
     • Property Taxes $75.00 per month ($900.00 annual)
     • Hazard Insurance                  $75.00
     • Total the payments                      $1188
Bokern Realty– serving St. Louis since 1901.




   Monthly Homeownership Cost
     $150,000 loan amount                            Single-Family   Condo
     at 6%, 30-year loan                                 Home
     Mortgage Payment (PITI)
           OTHERS
     Principal & Interest                                $900        $900
     Real Estate Taxes (1-1.5%)                          $150        $150


                         75%
     Hazard Insurance                                    $100        $0-50
     Utilities
     Gas                                                 $45          $40
     Electric                                            $45          $40
     Water                                               $20          $0
     Sewer                                               $20          $0
     Trash                                                $0          $0
     Maintenance Fund (1% per year)                      $150         $75
     Condo Fees                                                      $150
                                           Totals:      $1430        $1405
Bokern Realty– serving St. Louis since 1901.




   Estimated Costs

     Down
                             Pre-Closing                           Closing
    Payment
          OTHERS                                                    Costs
                                               -Earnest Money
                                                                             -Title Insurance
                                               -Appraisal
                                                                             -Loan Fees (1 ¼%)
                                               -Inspection
                                                                             -Escrows
                                               -Loan Application
                                                                             -Survey
                                               -Hazard
                                               Insurance
    0 – 20%                     $1500                               2.5%
Bokern Realty– serving St. Louis since 1901.




  Types of Mortgage Products
   30 Year Fixed Mortgages – the rate is fixed for 30 years.
         – Benefits include guaranteed protection from loan payment increase for
            the life of the loan
         – Disadvantage is a higher interest rate
         – This loan is perfect for somebody looking to stay in their home for
            more then seven years
   A.R.M. – Adjustable Rate Mortgage
         – The rate stays constant for a period of typically 3, 5 or 7 years and
            then adjusts according to an index
         – Benefits include a lower monthly payment for the initial fixed period
         – Disadvantage is that the interest rate will start fluctuating after the
            initial period
Bokern Realty– serving St. Louis since 1901.




  Loan Programs
  Credit Impaired (Fannie Mae’s Expanded Approval Program)
        – Offers competitive interest rate
        – Expanded credit and financial qualifications
        – Fixed or ARM

        – 100% financing available
        – Requires $500 – 3% of purchase price for closing costs
  Down-Payment Assistance
        – Examples include Fannie Mae’s Flex 97, Flex 100, and Community
           Solutions for Healthcare Professionals
        – $500 funds
        – Up to 40 year terms
        – Disadvantage is that Mortgage Insurance (MI) will be added to your
           monthly payment and is expensive.
Bokern Realty– serving St. Louis since 1901.




  Loan Programs
  Pledges Securities (Merrill Lynch’s Pledges Assets Mortgage)
        – Pledge securities only from immediate family in lieu of down payment
        – Higher LTV requirements, 39%
        – Pledged assets still earn interest, dividends
        – Fixed or ARM (max 30 year terms)

        – 100% financing available
        – Stocks, bonds, mutual funds, annuities, etc.
  Future Income Loans (Merrill Lynch’s Emerging Professionals)
        – Time in school considered for employment history
        – 100% financing
        – Up to 30 year terms, fixed rate or ARMs
        – Disadvantage is that Mortgage Insurance (MI) is required
        – Interest rate will be higher
Bokern Realty– serving St. Louis since 1901.




  Loan Programs
  Simultaneous Second Mortgages
        – Objective is to avoid MI when you do not have 20% down payment
        – First mortgage is for 80% of the sale price
        – The second is amortized for 15 years
Bokern Realty– serving St. Louis since 1901.




  Credit
   Your Credit Score & How a Lender Uses It

     •   The credit bureau risk score is a summary of the information in your credit
         file

     •   Scores range from 300-850
          – Score ranks consumers according to risk

     •   The higher the score, the lower the risk of default

     •   Scores assess past bill paying history to predict future behavior

     •   Scores are used to perform a risk analysis which helps predict the
         likelihood of loan repayment
Bokern Realty– serving St. Louis since 1901.




  Credit
   Common Credit Problems

     •   Multiple credit cards used to their limit
     •   Obtain new credit when existing debts remain unpaid
     •   Pattern of late payments on current debts
     •   Charge-offs




     •   Bankruptcies
     •   Judgments
     •   Foreclosures
Bokern Realty– serving St. Louis since 1901.




  Credit
   Solving Credit Problems

     •   Pay off or pay down debts

     •   Resolve unpaid debts

     •   Write letters to credit bureaus for corrections

     •   Settle with collection agencies

           – Phone and utility companies make frequent mistakes and report them
             on your credit
           – These mistakes cost borrowers a lot of money
Bokern Realty– serving St. Louis since 1901.



  Steps to Buy a Home
      Get Ready to Buy
      •   Get a REALTOR
      •   Find a Lender for Preapproval
      •   Search for a home
      •   Submit a contract to the Seller
      Prepare to Close
      •   Get a home inspection
      •   Meet Lender’s conditions
      •   Close on the property
Bokern Realty– serving St. Louis since 1901.



  Buyer’s Timeline
   Paperwork Month 2
     Month 1                         Month 3          Month 4        Month 5     Month 6

     Preapproval (1-2 days)

                         Home Shopping ( 2 – 4 months)

                                 Write contract ( 1 – 5 days)

                                   Inspection Period (10 -20 days)



                                        Loan Processing (3 weeks)



                                                                      Closing!
Bokern Realty– serving St. Louis since 1901.




   Writing A Contract
     • Consider what to include:
           – Closing costs
           – Refrigerator
           – Home warranty
     • Include earnest money:
           – $500 minimum to 1% of asking price
           – Shows earnest, commitment to close
           – Goes towards Buyer’s closing costs/down payment
     • Determine closing date:
           – Often a negotiable date
Bokern Realty– serving St. Louis since 1901.




   Home Inspection
     •     Overall home construction and condition, including
           major mechanical systems.
     •     Contract is contingent on satisfactory inspection.
     •     Inspection period lasts approximately 2 weeks after
           an accepted contract.
     •     Inspections cost approximately $300 - $400.



                            Resolve inspection contingency
         Inspection
           Report
                            Ask for repairs / compensation
                            Terminate contract and get earnest money back
Bokern Realty– serving St. Louis since 1901.




   Contract to Close
   Process takes approximately 4 – 6 weeks

                                   REALTOR
                                 •Order home
                                 inspection ($400)             Buyer
                                 •Notify title co &           •Satisfy lender
                                 lender                       conditions
                                                              •Order homeowner
                                                              insurance


                        Lender
                        •Order appraisal        Title Co. Closer
                        ($400)
                                                      •Order title insurance
                        •Meet loan
                        commitment date               •Order survey
                                                      •Transfers deed
Bokern Realty– serving St. Louis since 1901.




 St. Louis Metro Area




                                                   33% increase over
                                                   the next 10 years.




   Median Price of Existing Single-Family Home   Source: Moody’s Economy and Forbes
Bokern Realty– serving St. Louis since 1901.



    St. Louis City Neighborhoods


          OTHERS
Bokern Realty– serving St. Louis since 1901.



  St Louis County


          OTHERS
Bokern Realty– serving St. Louis since 1901.




                                               Hwy 40
          OTHERS                               Construction
Bokern Realty– serving St. Louis since 1901.




   Needs Assessment
   What do you require in your next home? And what additional amenities would
   you like to have? Distinguishing between “needs” and “wants” will be important
   as we travel together toward your next home purchase. Let’s be sure to
         OTHERS
   discuss the following items, and where you’d rate their importance:

   •   Location
   •   Price range       75%
   •   Lifestyle
   •   Short term/long term goals
   •   Style/architecture
   •   Schools
   •   Neighborhoods
   •   Space and size
Bokern Realty– serving St. Louis since 1901.



  Free Pre-Approval / Credit
   Team of Lenders



                         Mortgage
                          Brokers              Banks




                           WU
                        Employer               Merrill
                        Assistance             Lynch
                         Lenders
Bokern Realty– serving St. Louis since 1901.




  Surveys

								
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