buying a home in today’s market jeff neistein branch manager wells fargo home mortage encino csun...

Buying a Home in Today’s MarketJeff Neistein

Branch Manager

Wells Fargo Home Mortage

Encino

CSUN

October 18, 2011

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Welcome!

Thank you for coming.

Let’s begin with introductions.

Make yourself comfortable.

Questions and answers after the presentation.

By attending this workshop, you are taking an important step toward buying a home -- for the first time, or as a move-up, second home, or investment buyer.

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Homeownership Works!

that’s still true today!

Homeownership may be the single most important investment you’ll make in your lifetime.

% Believing Homeownership is Still Part of the American Dream

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Finding #2: Home Ownership.The dream of homeownership is alive and well in America.

Source: WFHM New Normal Study, September 2010

In our study, consumers report that “owning a home” is second only to “becoming financially secure” in describing the American Dream.

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Source: Federal Reserve, Survey of Consumer Finances, 2007. Most recent data as of 4/26/2010

46X higherthan that of a typical renter

net worth of a typical homeowner is

The

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good investment?

Why can Homeownership be a

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After you’ve paid off your loan. . .

. . .you’ll own your homefree and clear

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Interest paid on mortgages is deductible for most homeowners.

Property taxes are deductible for most homeowners.

For most homeowners, there are no capital gains taxes when a primary residence is sold.

*See your tax advisor

And add to that. . . significant tax advantages* for homeownership

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Six Key Questions

Is now a good time to buy a home?

Is my credit good enough to qualify?

How much money will I need?

What type of mortgage financing should I get?

What is the homebuying process?

Why Wells Fargo?

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Is Now A Good Time To Buy A Home?

Wells Fargo Home MortgageHomebuyer Workshop

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Today is abuyer’s market

Sellers are more willing to make concessions.

Home prices have generally come down, improving

affordability.

Overall, good opportunities exist for financially qualified first-time homebuyers,

second-home buyers, and investors.

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Mortgage Rates

remain historically low

Interest rates depend on a wide variety of constantly changing financial and economic factors.

Source: Freddie Mac. Most recent data as of 4/26/2010

0%

3%

6%

9%

12%

15%

18%

1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

30-year Fixed-Rate MortgagesRates on Conventional, Conforming Loans

4th Qtr 2009: 4.92%1st Qtr 2010: 5.00%

Average, 1972-2009: 9.01%

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Is My Credit Good Enough to Qualify?


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Lender requirements have

tightened

You need to pay attention

to your credit score There are 3 credit bureaus Your score may impact the terms of your loan,

including:-- interest rate-- down payment requirement-- required level of documentation

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Even those with strong credit scores need to provide

more documentation

We have a checklist!A responsible lender

wants you in a loan you can re-pay

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What makes credit less-than-perfect?

Limited credit history

Excessive debt

Slow payments

Legal judgments

Past foreclosure or bankruptcy

New credit accounts

Numerous credit applications

Errors

But having credit problems isn’t necessarily the end of the story…

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It May Be Possible to Buy a Home

with Less than Perfect Credit

Work with us to see if you qualify

…and if you don’t, learn what you can do to help you qualify to buy a home in coming years

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How Much Money Will I Need?


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Three times to ask this question:

When considering your down payment

When determining closing costs

When comparing your mortgage payment to your monthly income

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Lenders ARE asking

for larger down payments…

…but qualified buyers do not need a

20% down payment to buy a house

Programs like FHA and VA loans are available with smaller down

paymentsPrograms with as little as 1-3.5% Down

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How much down payment?

Depends on:

Your credit score

The type of property

Property use primary residence, second home, or

investment

Local market conditionshigher down payments are requiredin areas with weak housing markets

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The trade-off:

the smaller your monthly principal and interest payment will be

the smaller many of your loan costs will be

The larger the down payment:

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Your closing costs

Should you pay points to lower your interest rate?

It depends on your circumstances – particularly your cash on hand and how long you expect to stay in your house.

Ask for a GFE

Points are funds you can pay at closing to lower your interest rate over the life of the loan

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Your Mortgage Paymentconsists of:

Plus property taxes, insurance premiums, and, if applicable,

mortgage insurance

Pays back the loan

Interest:

Charged on theoutstanding balance

Principal:

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What Type of Mortgage Financing Should I Get?


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Back to the basics: long-term, fixed-rate mortgage

Think twice about adjustable-rate mortgages

Real estate should be a long-term investment

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• What is the term of the loan?• What is the interest rate?• Is the rate fixed or adjustable?• When are the payments due? • What happens if I make a late payment?• Are taxes and insurance included in my monthly

payment?• What will my closing costs be? What’s included?

Wells Fargo will work with you to ensure

you understand the answers to these questions.

Questions to ask

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Get pre-approved for your loan first

– before house-hunting

This determines the upper limit of your price range

Borrow only as much as you feel comfortable borrowing

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Your best option:

Get a PriorityBuyer® pre-approval from Wells Fargo

Reliable in clearly specified loan amounts and terms on official Wells Fargo letterhead

It shows that you’re a serious homebuyer – you’ve already completed the application, the credit check, and the first loan-decision phase

A PriorityBuyer pre-approval is the shortest distance between the opening offer and the closing table

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.

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What Is theHomebuying Process?


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What is the Homebuying

Process?1. Work with a professional

“homebuyer team”

2. Financing, financing, financing… Get it right!

3. Shop with your real estate agent

4. Make your best offer

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What is the Homebuying

Process?5. Finalize your financing

6. Home inspections, appraisal, and insurance

7. Ensure you meet conditions of your loan approval

8. Final walk-through inspection

9. Close on your new home!

buying a home in today’s market jeff neistein branch manager wells fargo home mortage encino csun...

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