Buying a Home in Today s Mortgage Environment? Time to Refinance?

Transcription

1 Buying a Home in Today s Mortgage Environment? Time to Refinance? Presented by John Garofalo, Regional V.P. Equity Resources, Inc. NMLS # Crabbs Branch Way Rockville, Maryland 20855

2 House Keeping Cell Phones Bathrooms Questions Real Estate Investment Seminar

3 Topics Discussed Mortgage Process Variables for Approving a Loan Income, Assets, Liabilities, Credit Approval Documentation Reasons to Refinance (Better Cash Flow, Shorter Term, Cash Out to Consolidate Debt) Refinancing cost Versus Rate Streamlines HARP (Underwater Properties)

4 Mortgage Process Origination Processing Underwriting Closing

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8 Approving a Loan AUS (Automated Underwriting System) Ratios Top (Total Housing Payment divided by Monthly Income) Bottom (Total Housing Payment plus Other Monthly Debt divided by Monthly Income) Credit (Monthly Amount, Lates, and Credit Score) Assets (Liquid and Non-Liquid) Appraisal (Property Evaluation)

9 Income Gross Monthly Pay Before Tax The 4506 T: What Relevance Does This Carry?

10 Types of Income Salaried Self Employed Commission/Overtime/ Part time Dividends/Interest Earnings Business/Investment Earnings Pension/Social Security Benefits Veterans Administration Benefits Unemployed Compensation Public assistance Alimony/Child Support Disability

11 Liabilities Installment Revolving

12 Installment Debt Mortgage Auto Student Loan Personal Loans/Employee Based Loans 401-K Loans Alimony/Child Support

13 Revolving Debt Credit Cards Equity Lines Furniture/Best Buy Purchases

14 Assets Liquid Non-Liquid Reserve Requirements

15 Types of Assets Checking/Savings Accounts Mutual Funds/Stocks/Bonds Cash Value of Life Insurance Policy Retirement Accounts Gifts Sale of Hard Assets

16 The Importance of Credit Scores Credit Score Improvement? Experian (Fair Isaac) Equifax (Beacon) TransUnion (Classic) 580/680/720

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23 Generally Speaking What Affects Credit Scores Up or Down? Most Recent 2-Year History is Most Critical High Balances on Credit Cards. Pay to 30 Percent of Limit or 50 Percent of Limit Don t Pay Off Collections That Show 2-Years Old. Will Adversely Affect Score. Look At Date of Last Activity Current Delinquency Always Hurt. Need to Bring Current Never Pay Account Fully to 0, Leave $10 Scores in Low 500s probably 5-6 Months Out From Getting a Loan

24 What If Scenarios Equity Resources Tool

25 EQUITY RESOURCES 580 Scores FHA & USDA Most Lenders 640 Co-borrower: 1 or 2 credit scores ok Alternative credit is more difficult 4 sources and one must be rental history

26 DOCUMENTATION

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29 Income Assets Debts Alimony/Child Support Rental DOCUMENTATION SHEET Would you like us to contact you regarding the purchase of a home? Name Contact Phone

30 Sourcing Deposits Over $500

31 Reasons to Refinance Lower Rate (Better Cash Flow) Shorter Term Cash Out (Consolidate Debt or Other Reason)

32 Refinance Cost? Versus Rate 3-Year Rule

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35 FHA or VA IRRLL s Interest Rate Reduction Refinance Loans

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38 HARP Home Affordable Refinance Program DU Refinance Plus LP Open Access Freddie Mac s Version

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