1 / 87

Welcome to Homebuyer Education

Welcome to Homebuyer Education. Sponsored by the Washington State Housing Finance Commission. Class Instructors. Add Your Names Here Add Your Names Here. What we will cover. Steps to Homeownership Owning vs renting How Much Can You Afford? Selecting a Loan Program

sirius
Télécharger la présentation

Welcome to Homebuyer Education

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Welcome toHomebuyer Education Sponsored by the Washington State Housing Finance Commission

  2. Class Instructors • Add Your Names Here • Add Your Names Here

  3. What we will cover • Steps to Homeownership • Owning vs renting • How Much Can You Afford? • Selecting a Loan Program • Down payment and Closing Costs • How to Shop for a Lender & Real Estate Professional – • Selecting a Home • The Importance of a Home Inspection • House Key Program • Loan Closing • Foreclosure Prevention and Early Delinquency Intervention • Home Maintenance • Consumer Protection Resources • Community Resources for Further Counseling or Other Assistance. • Fair Housing • Predatory Lending • How Going Green Saves You Money 23 benchmarks set by WSHFC

  4. Agenda • The Home Buying Process • Lender Curriculum • Assistance Programs • Real Estate Curriculum • Q & A’s and Resources

  5. The Home Buying Process • Steps to Homeownership • Owning vs renting • The Players in the Home buying Process • The Benefits of Getting Loan Pre-Qualified & Pre-Approved Before Searching for a Home • Shopping for a Lender

  6. The Steps to Homeownership Education Credit History Budget Research Loan Pre-Approval Your Priorities The Search You’re Home! The eight steps recommended by the Washington Homeownership Center

  7. Owning vs. Renting Benefits of Renting Your Home… • Low maintenance costs • Freedom to move • Lower monthly payments • No risk of losing investment Benefits of Owning Your Home… • Pets • Yard • Décor • Tax savings • Building equity

  8. Owning vs. Renting Things to keep in mind about owning…. • Yard work • Home improvements/maintenance • Larger monthly payments - Property Taxes - Homeowners Insurance

  9. The Players in the Homebuying Process • Who are they? • What role do they play?

  10. Pre-Approval • What is the difference between pre-approval and pre-qualified? • Why is it important to get pre-approved before you shop for a home? • Good Faith Estimate • Truth In Lending (TIL) • APR

  11. Shopping for a Lender • Get referrals and interview different lenders • Questions to ask • Difference between broker and loan officer

  12. Lender Curriculum • How Much Can You Afford? • Credit • Budgeting • Selecting a Loan Program • Down payment & Closing Costs

  13. Credit History– Why it is Important Your score and history will: • Affect the interest rate you will be offered. • Determine what loan program will be offered.

  14. Credit • Read your credit report • Correct errors on your report • How to build your credit • Maintain good credit history • Check credit at least annually • What is a credit score • How to increase your credit score

  15. Credit Repair & Counseling The Homeownership Hotline sponsored by WSHFC 1 – 877- 894- HOME (4663) Or for a list of counselors statewide: http://www.wshfc.org/buyers/counseling.htm

  16. Budgeting Basics Set Financial Goals • Eliminate debt • Six months of expenses saved • Set investment goals Treat Your Savings Like An Expense • 10% of all income saved or invested • Automatic withdrawals

  17. Budgeting Basics • Eliminate credit card debt • Put your money to work • Educate yourself • Plan for future expenses • Pay yourself first

  18. Budgeting Basics ABC Your Budget – track what you spend for 30 days… A: Expenses you need and can do nothing about today (mortgage, car payment) B: Expenses you need, but CAN do something about today (groceries, clothing) C: Things you want (cable TV, lattes, movies, eating at restaurants)

  19. Budgeting Basics • How much do you CURRENTLY spend on housing? • How much CAN you spend and how much do you WANT to spend on housing?

  20. Documents You Will Need • 2-3 years tax returns • 2 years of W-2s • 2 most recent pay stub • Last 3 months of bank statements • Credit card information • Information on any other loans • Landlord information

  21. Types of Loans • Conventional (or Conforming) • FHA • VA • USDA • Sub Prime & Non-Conforming • Portfolio • Jumbo

  22. Types of Loan Terms • Fixed Rate • Adjustable Rate • Interest Only • 15 / 20 / 30 / 40 years • Balloon

  23. How Much Can You Afford How Much Can You Afford? What the bank is looking at: • Debt-to income ratios • The 3 “C”s – Credit, Capacity & Collateral • Down payment What the bank is looking at: • Debt-to income ratios • The 3 “C”s – Credit, Capacity & Collateral • Down payment

  24. How Much Can You Afford How Much Can You Afford? Calculating how much house payment you can afford depends on your income and currentdebt Gross monthly income $_3,000__ x .41 = $1,230 Minus total monthly minimum debt payments - $300 Total housing payment you can afford = $930 PITI (Principle, Interest, Tax, Insurance) Calculating how much house payment you can afford depends on your income and currentdebt Gross monthly income $ 3,000 x .41 = $1,230 Minus total monthly minimum debt payments -$ 300 Total housing payment you can afford = $ 930 PITI (Principle, Interest, Tax, Insurance)

  25. How Much Can You Afford How Much Can You Afford? Housing Expense-to-Income Ratio Principle and Interest: $ 690 Hazard Insurance: $ 73* Real Estate Taxes: $ 117* Mortgage Insurance: $ 73 Homeowner’s Association: $ 0 Subordinate Financing: $ 0 _______ $ 930.00 Housing Expense-to-Income Ratio Principle and Interest: $ 690.00 Hazard Insurance: $ 73.00* Real Estate Taxes: $ 117.00* Mortgage Insurance: $ 73.00 Homeowner’s Association: $ 0.00 Subordinate Financing: $ 0.00 ___________ $ 930.00

  26. How Much Can You Afford How Much Can You Afford? To calculate total payment/income • Take your monthly housing debt and divide by your monthly income • $930 divided by $3,000 = .31 which is the same as 31% To calculate “total payment to income” ratio: Take your monthly housing debt ($930) and divide by your monthly income ($3000) Example: $930 / $3,000 = .31 which is the same as 31%

  27. How Much Can You Afford How Much Can You Afford? Total Expense-to-Income Ratio: • total house payment • plus total monthly minimum debt payments • divided by gross monthly income Example: $930 + $300 = $1200 divided by $3,000 = .41 or 41% Total Expense-to-Income Ratio = • total house payment • plus total monthly minimum debt payments • divided by gross monthly income Example: $930 + $300 = $1230 divided by $3,000 = .41 or 41%

  28. How Much Cash Will You Need? • Down payment: Percentage of the value of the house • Private mortgage insurance (PMI) • Closing costs • Items to be paid before closing (pre-paids): • Appraisal (also considered Closing cost) • Inspection (also considered Closing cost) • Homeowners insurance • Taxes

  29. Assistance Programs • WSHFC Home Advantage Program • WSHFC Down Payment Assistance Programs • USDA, HUD • Community Land Trusts • Other DPA Programs statewide

  30. Washington State Housing Finance Commission Home Advantage First Mortgage Competitive interest rate • DO NOT need to be 1st time homebuyer • $97,000 statewide income limit • No acquisition limit, no recapture tax • Automatically eligible for up to 4% of loan amount in DPA -0% interest 2nd mortgage

  31. Washington State Housing Finance Commission Down Payment Assistance Programs • Home Advantage 2nd mortgage (up to 4% of loan amount)** • Home Advantage Rebound ** • HomeChoice • House Key Schools • House Key Veterans • Home Advantage Built New • House Key Plus Seattle (Subject to funding) • House Key Plus ARCH (Subject to funding) **Down payment assistance program must be used in conjunction with Home Advantage 1st mortgage. These are All Second Mortgages – These are not grants Only one WSHFC DPA program can be used.

  32. Washington State Housing Finance Commission Home Advantage Second Mortgage Loan • 0% interest –deferred, NO Payment • Up to 4% of first mortgage loan amount Statewide • Statewide Income Limit $97,000 (based on household income determined by lender) • Balloon loan – comes due in full 30 years, or if sell, refinance

  33. Washington State Housing Finance Commission Home Advantage Rebound Second Mortgage Loan • 0% interest –deferred, NO Payment • Up to $10,000 Statewide • Statewide Income Limit $97,000 (based on household income determined by lender) • Balloon loan – comes due in full 30 years, or if sell, refinance • Must purchase a foreclosed, bank owned or short sale

  34. Washington State Housing Finance Commission HomeChoice Person with a disability or a family member with a disability (ADA) • Up to $15,000 • 1% simple interest, Deferred, No payments • One on One Counseling required Income Limits: • King & Snohomish Counties: $88,200 • Kitsap County: $74,000 • Thurston County:  $74,200 • Island County $73,000 • All Other Counties: $71,400

  35. Washington State Housing Finance Commission House Key Schools • Up to $10,000 • 3% interest on a 10 year term Any Employee of Private or Public School K -12, Community Colleges or Technical Colleges. Income Limits: • King & Snohomish Counties: $88,200 • Kitsap County: $74,000 • Thurston County:  $74,200 • Island County $73,000 • All Other Counties: $71,400

  36. Washington State Housing Finance Commission House Key Veterans Second Mortgage • Up to $10,000 • 3% interest on a 10 year term • Veterans honorably discharged Income Limits: • King & Snohomish Counties: $88,200 • Kitsap County: $74,000 • Thurston County:  $74,200 • Island County $73,000 • All Other Counties: $71,400

  37. Washington State Housing Finance Commission Home Advantage Built New Second Mortgage • Up to $10,000 • 3% interest on a 10 year term • Newly Constructed, Never Occupied Income Limits: • King & Snohomish Counties: $88,200 • Kitsap County: $74,000 • Thurston County:  $74,200 • Island County $73,000 • All Other Counties: $71,400

  38. Washington State Housing Finance Commission • House Key Plus Seattle • Up to $45,000 • 3% interest rate - Deferred, No Payments • Borrower must contribute 1% or $2500 whichever is greater • City limits of Seattle • 80% Area Median Income & below • (lower than House Key first mortgage income limits) • Shared Appreciation • Extra Inspection and Forms

  39. Washington State Housing Finance Commission House Key Plus ARCH • Up to $30,000 • 4% simple interest – Deferred, No Payments, • Borrower must contribute 2% of own funds • One on One Counseling required • 80% Area Median Income & below (same as HK + Seattle) • Extra Inspection and Forms • Available in 15 Eastside Cities

  40. Washington State Housing Finance Commission Federal Home Loan Bank Grant • For homebuyers in the City of Everett or employed by the Boeing Company in Everett • Up to $500 grant towards closing costs • Must work with a FHLB & WSHFC Participating lender. Subject to Funding

  41. Mortgage Credit Certificate MCCs are not mortgages...  It is a tax credit which means fewer tax dollars can be withheld from your regular paycheck, increasing your take-home pay.  The lender can use the credit to help increase your buying power. It is strongly recommended that you contact a tax professional before applying for an MCC in order to determine the potential benefits an MCC may provide for your specific tax situation. http://www.wshfc.org/buyers/MCCprogram.htm

  42. Mortgage Credit Certificate MCC eligibility requirements include: • The MCC is available with new purchase loans • Must be a first time homebuyer, unless purchasing in a targeted area. • Recapture Tax Applies • Income and Acquisition Limits • Owner Occupied • Home Buyer Education is required • Must work with a WSHFC MCC participating lender

  43. Recapture Tax ** Applies to the WSHFC Mortgage Credit Certificate program only Recapture only applies if all 3 of the following occur: • Your home is sold or disposed of within 9 years of being purchased, for reasons other than your death; • There is a capital gain on the sale of your home, AND • Your household income for the year in which you sell your home exceeds federal recapture tax limits. See your lender for current limits.

  44. Rural USDA Programs 502 Direct Loan (work directly to USDA) Income limits: up to 80% of area median income Location: rural community with less than 10,000 population Loan amount: may be up to 100% of appraised market value Down Payment: not required (Please Note: WSHFC DPA Programs CAN NOT be used with USDA direct) www.rurdev.usda.gov/wa/ 502 Guarantee (work with a lender that offers USDA) Income limits: up the 115% of area median income Location: rural community with less than 10,000 population Down payment: not required (ALL WSHFC DPA Programs CAN be used with USDA 502 Guaranteed) Subject to Funding

  45. HUD 184 HUD 184 Indian Home Loan Guarantee Program • Funds can be used to purchase and/or rehabilitate an existing home, or construct a home • Must be an Alaskan Native or Native American, to participate in program • Down payment as low as 1.25% • Long term fixed rate financing with loan to value ratios as high as 150% • Nontraditional methods may be used to demonstrate borrower’s credit and income • No income limits

  46. HUD 203k Streamline HUD 203k Streamline Rehab Program • Include funds for eligible repairs to the base loan amount. • No minimum repair cost – maximum amount up to $35,000 • Can be used to purchase and rehabilitate an existing home. • Same credit and down payment requirements as an FHA loan. • Can be used with the Home Advantage First mortgage program and WSHFC Down Payment Assistance programs. • Please note: only selected Home Advantage lenders offer the 203k Streamline product. • Visit Hud.gov for a list of eligible repairs and verify with your lender.

  47. Community Lending Funding Note • Be aware that specialty financing options have limited funding so you will want to ensure your program is available when you are in the home buying process. • Organizations make every attempt to maintain continuous funding but they occasionally exhaust their assistance programs. • All Housing Assistance programs are subject to funding availability Subject to Funding

  48. Down Payment Assistance Programs by Region

  49. Region 1Clallam, Grays Harbor, Jefferson, Kitsap, Mason, and Thurston Counties

  50. Aberdeen Neighborhood Housing Services • Up to 20% of appraised value • Grays Harbor County • Housing Education (HUD Approved) • Housing Rehab loans City of Bremerton • Housing Rehab Loans Community Frameworks- Bremerton • Built in Bremerton DPA Housing Kitsap (Kitsap County Consolidated Housing Authority) • Up to $20,000 • Must purchase in Kitsap County outside Bremerton City limits Region 1

More Related