VA financing- Serving the homeownership needs of those who serve our country

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1 VA financing- Serving the homeownership needs of those who serve our country Paul M. Carter Home Mortgage Consultant NMLSR ID Warwick City Hall Warwick, RI September 12, 2012

2 Agenda Current industry situation VA product overview VA business-building benefits VA marketing support Why work with Wells Fargo? 2

3 Current industry situation At Wells Fargo Home Mortgage, we understand the challenges you may face in today s market: Tighter credit requirements Fewer qualified buyers Unrealistic buyer and expectations 3

4 Product overview VA loans are backed by the U.S. Department of Veteran Affairs. They were originally created to make housing attainable for U.S. military veterans. Who is eligible for a VA loan? Active duty personnel Homebuyers with previous qualifying military service Reservists, National Guard and Coast Guard personnel with qualifying service Unmarried surviving spouse of a veteran who died as a result of service-related activities Honorably discharged servicemembers May be extended to Public Health Service Officers, cadets / midshipmen in the Army, Navy, Air Force and Coast Guard academy * United States Department of Veterans Affairs Web site, April 21, 2008 For Commercial Use Only 4

5 Product overview Our extensive product line includes government fixed and adjustable-rate VA loans that may help: Eligible veterans (first-time and repeat buyers) Homebuyers with limited funds for down payment Buyers looking for flexible credit qualifying guidelines Buyers who need jumbo loan amounts For Commercial Use Only 5

6 Product overview VA loans have flexible approval guidelines: No income restrictions No minimum credit score for loans under $700,000 Expanded qualifying ratios Nontraditional credit histories may be accepted 1 1. Homebuyer education is required for customers who are approved * United States solely Department on nontraditional of Veterans Affairs credit Web site, histories. April 21, ** For loan amounts up to the 1-unit conforming loan limit. Borrower must have sufficient entitlement. For Commercial Use Only 6

7 Product overview VA loans have cost-cutting features: No down payment option on conforming loans Gift funds may be used to cover down payment and closing costs Seller can contribute up to 4% above and beyond customary closing costs and prepaids * United States Department of Veterans Affairs Web site, April 21, 2008 ** For loan amounts up to the 1-unit conforming loan limit. Borrower must have sufficient entitlement. For Commercial Use Only 7

8 Product overview More VA loan cost-cutting features: No mortgage insurance required, and VA funding fee may be financed or waived No prepayment penalty Adjustable-rate mortgages (ARMs) have below-market start interest rates and the lowest allowable margins and caps 2 2. Interest rates may increase after consummation. For Commercial Use Only 8

9 Product overview VA loans are assumable: When homeowners are ready to sell, qualified buyers can assume responsibility for a VA mortgage at the existing rate and original loan terms Buyers must apply and meet income, asset and credit qualifying guidelines Buyers must occupy the property as a primary residence Buyer benefits: Lower interest rate and mortgage payment if assumed rate is lower than market rates Potentially shorter mortgage term REALTOR benefits: Attract more prospective buyers Market your listing with built-in financing 9

10 Your role in the VA loan process Ask every buyer and seller if they are VA eligible With buyers: Suggest they contact Wells Fargo to help them: Get their VA Certificate of Eligibility (COE), which states the amount of entitlement for which they are eligible Look into a PriorityBuyer 3 preapproval to help determine their home price range 1 With sellers: Ask if the existing financing on their home is a VA loan. If yes, get specifics (fixed or adjustable, interest rate and remaining term). If the interest rate is below current market rates: Mention the loan assumption option in MLS and other marketing Discuss possible seller concessions 3. 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 or for certain FHA transactions. For real estate professionals. For Commercial Use Only 10

11 Business-building benefits VA loans can be used to finance a variety of listings: Single-family primary residences (attached and detached) 2-4 unit properties VA-approved condos PUDs Manufactured housing New construction from VA-approved builders Occupancy requirements VA purchase transactions are for owner-occupied, principal residences only In some cases the spouse may satisfy the occupancy requirement For Commercial Use Only 11

12 Business-building benefits Create opportunities: Market your listings with temporary of permanent interest rate buydowns If you're working with a seller who has existing VA financing, use the loan assumption feature to help their property stand out Serve more needs: VA loans fulfill all kinds of home financing needs VA loans can help first-time, move-up and downsizing homebuyers achieve their goals For Commercial Use Only 12

13 Business-building benefits Team-up with a Wells Fargo Military Mortgage Express home mortgage consultant to: Develop local marketing plans to help attract military customers Work together at events that will help us gain visibility with potential customers, including military Home buying seminars Relocation fairs Installations Relationships with local groups and organizations that support the military (Navy League, Military Saves, USO, etc.) Gain access to advertising and campaign support materials, including brochures and flyers * United States Department of Veterans Affairs Web site, April 21, 2008 For Commercial Use Only 13

14 Marketing support Leverage our VA marketing and advertising tools to set yourself apart: Ask every client if they have VA eligibility. Help prospects better understand how they may qualify for a home with VA financing Generate new leads through joint advertising with division of costs For Commercial Use Only 14

15 Why work with Wells Fargo? Wells Fargo Home Mortgage is there for you in all the ways you told us that matter most: We work with you to build business, approve buyers and close deals leveraging our StagecoachPriority value package including: PriorityBuyer preapprovals 4 Single Source program Buyer Connections SM capabilities 4. 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 or for certain FHA transactions. 15

16 Why work with Wells Fargo? StagecoachPriority value package: Get the most out of the time and effort you spend showing homes with our reliable PriorityBuyer preapproval letter 5, it: Confirms your buyers are credit-checked and have completed the first loan decisioning phase Provides reliable, preapproved financing in clearly specified loan amounts and terms on official Wells Fargo letterhead 5. 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 or for certain FHA transactions. 16

17 Why work with Wells Fargo? StagecoachPriority value package: Benefit from one connection to multiple lending options. Our Single Source program provides products that span a variety of customer needs. You have the advantages of a single point of contact backed by an integrated team of mortgage professionals who can lend in all 50 states. Products and programs Conventional loans Renovation financing Non-conforming (Jumbo portfolio) loans The Relocation Mortgage Program Downpayment assistant programs (DAPs) FHA & VA loans New construction financing Home equity financing Property types Single-family Condo Investment properties Vacation/second homes REO and short sale properties 17

18 Why work with Wells Fargo? StagecoachPriority value package: Through our Buyer Connections SM capabilities, we have the ability to identify and introduce buyers and sellers who are not yet working with an agent and recommend those customers to REALTORS and builders in local markets. 18

19 Why work with Wells Fargo? Leverage the strength of Wells Fargo We re committed to being a leader in: Keeping you informed about products, programs and industry changes Sharing best practices from real estate industry professionals Leading homebuyer educational resources including My FirstHome SM online educational program and My Home Roadmap SM service The My Home Roadmap SM service provides up to four sessions (an estimated 2 hours) of free financial coaching with a National Foundation for Credit Counseling (NFCC) certified counselor from a NFCC member organization that will be paid for by Wells Fargo Home Mortgage. At your option, you may purchase additional coaching sessions or services or decide to participate in another NFCC member agency program. Program may change or be discontinued at any time. 19

20 Questions? Let s get started today. Thank you for your time. Paul M. Carter Home Mortgage Consultant NMLSR ID Warwick City Hall Warwick, RI September 12, 2012 This information is for use by mortgage professionals only and should not be distributed or used by consumers or other third-parties. Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A Wells Fargo Bank. N.A. All rights reserved. NMLSR ID # REV 9/12 20