Easterseals and Freddie Mac present - PowerPoint Presentation

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Easterseals and Freddie Mac present Housing Guidance with CreditSmart®

November 15, 2018

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EastersealsDigital Marketing and Social Media Manager for Easterseals National headquarters18 years of experience producing digital marketing contentWorked with Easterseals to advocate and support people with disabilities for 4 years

Manage, create, and implement social media content, strategies and campaigns by monitoring conversations within the disability space

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Yolanda Green

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Webinar Accommodations: All participants will receive a copy of the webinar presentation slides, complete with speaker notes and handouts, via email after the webinar. If you have a specific question you’d like to ask, but are unable to type it into the question box on the webinar platform, please email your question to webinar@easterseals.com

, and we’ll respond to your question ASAP. This webinar is being recorded, and a captioned version will be posted on http://www.easterseals.com/explore-resources/living-with-disability/webinar-freddie-mac-financial-housing-guidance.html in the coming weeks. With that, I’ll pass the mic to our friends at Freddie Mac.

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Maheen Qureshi

Get to Know Your Producer

14+ years of experience in housing outreach, financial inclusion, and environmental finance.

Worked at Freddie Mac for 11 years, managing national financial capability and housing outreach initiatives.Committed to the economic empowerment of underserved communities.

Multi-lingual; has lived in Pakistan, Myanmar, the Philippines, Indonesia and the United States. Served on the Board of SAALT, a national advocacy organization, for four years, and participates in various mission-oriented leadership activities.

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Cora Fulmore

Get to Know Your Presenter

Manager/Owner of the Mortgage & Credit Center, LLC.

Creator of The Counselor’s Corner, Inc., an online training center for housing professionals, with more than 4,000 members.

Co-organizer of the first Florida Housing Counselor Network, statewide.

More than 35 years of experience in mortgage and credit counseling and training.

National Consultant for many organizations, current faculty member of NeighborWorks since 1994.

CreditSmart

®

trainer since 2001.

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Easterseals of Greater HoustonKaty is a Down Payment Assistance Program coordinator, HUD-certified Housing Counselor, and a Licensed Master Social Worker at Easterseals Greater Houston who provides financial coaching and pre-purchase counseling for families working towards homeownership.She has worked with people with disabilities for more than 14 years.

She conducts HUD-certified Homebuyer Education Classes and monthly down payment assistance workshops covering local, state and federal assistance programs for low-income first-time homebuyers.

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Katy Thorstenberg

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GoToWebinar Platform

Toll Number: 1-415-655-0060 

Access Code: 138-367-577

Webinar ID: 189-132-379

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AgendaWhy OwnershipCost of BuyingRights and Responsibilities as a HomeownerUnderstanding the Loan Process

Who are the PlayersWhat are my choices – Shopping for a HomeHome Inspection & SurveyInsurance - Protecting your Asset

Closing Remarks

Evaluations

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Why Homeownership?

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HomeownershipBuying a home is a big commitment.Builds equity – great asset-building tool if financially ready for homeownership

For most of us, it will be the biggest purchase we’ll make in our lifetime

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According to the National Association of Realtors, it also usually ties us to one place for about 12 years

It's important to consider all of the financial factors of homeownership before you sign any dotted lines

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Is Homeownership a Good Idea?

Affordability

Interest rates are low

Large inventory to choose from in some markets

Builder incentives

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Homeownership is a BIG STEPDocumentation ChecklistMost recent paycheck stubsW2’s for the last two yearsAward letters for SSI, SS, SSDI

(if applicable)Most recent bank statementsTax returns for the last two yearsList of debts and assets

Signed IRS 4506-TProof of timely rental payments

Divorce papers (if applicable)Bankruptcy papers (if applicable)

Start collecting these documents today.

Give the lender copies, you keep the originals.

https://www.balancepro.net/education/pdf/mortgageapplication.pdf

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Qualifying for the Mortgage

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Four C’s of CreditAny asset that can be converted into cash to make payments:Cash in savings

InvestmentsProperty equity and other assets

Capital

Ca

pacity

Your ability to take on the new debt and make the required payments for the new loan.

Your personal credit history including:

Total debt

Delinquent accounts

Available credit

Payment history

Credit

Collateral

The asset that will be used to secure the loan.

The property value must equal or exceed the loan amount.

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How does the lender view DEBT? FHA

31% -43%

VA

41%

CONV 28% -36%

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USDA

29% -41%

Compensating Factors will also be considered.

Debt

Ratio

Gross Monthly Income

Monthly Debt

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Financial Consideration

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Job History & Stability

2

years

Monthly Fixed Debt

r

atio to monthly income

Credit Profile

580 - 640

Cash Reserve

1-2 months

Current vs. Anticipated Debt

must show manageability

Price Range

based on income & debts

Down Payment Assistance

varies based on market

Based on Your Loan Type and Lender

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Credit Score RequirementsBased on loan productFHA Loans – 580/640 rangeVA Loans – at least 620USDA Loans – minimum 640

Conventional Loans - at least 620

(Please note that the score requirement is specific to the loan product, so this may vary. Your lender may also have guidelines that may require higher scores than what we have identified.)

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Homeownership Myth

“Homeownership is too expensive. I need to make a large down payment, as much as 20 percent or more, to get a mortgage.”

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Homeownership Reality

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Generally, you should expect to make

at least a 3 to 10 percent down payment.

(Note that you may be required to pay mortgage insurance if you make a

down payment of less than 20 percent.)

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Down Payment Assistance

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State & Local Assistance

There is HELP!

Down Payment Assistance

https://downpaymentresource.com

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Costs Associated With Purchase

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Earnest money deposit

Application fee

Home inspection fee

Down payment

Closing costs

Moving expenses

$1,000.00 - $5,000.00

$500.00 - $1,000.00

$250.00 - $1,000.00

3 - 10% of home price

3 - 9% of loan amount

$2,000.00 - $5,000.00

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Homeownership Myth

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“I need almost perfect credit to buy

a home, but I can’t do anything

to improve my credit rating.”

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Homeownership Reality

CAUTION:

Before using a c

redit repair company, make sure you understand all fees and promised services

. Beware of credit repair scams.

You do not need perfect credit but the higher your score, the more options you have when looking for a mortgage.

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Poll Question

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Using a credit counseling/debt management company will destroy my credit.

A.

True

B. False

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Using a credit counseling/debt management company will destroy my credit.

A.

True

B.

False

Poll Question

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Can an employer get a copy of your credit report without your permission?

A. Yes

B. No

Poll Question

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Can an employer get a copy of your credit report without your permission?

A. Yes

B.

No

Poll Question

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House Hunting ResourcesLocal Builders

NewspaperInternet Search

Real Estate Owned (REO)

Local Government

Relatives/FriendsReal Estate Agents/MLS Listings

Non-Profits

For Sale By Owners (FSBOs)

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Know the Housing Professionals

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 Performs duties, such as studying property listings, interviewing prospective clients, accompanying clients to property site, discussing conditions of sale, and drawing up the contract

Realtor

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Conducts initial interview, gathers all financial documents, completes the loan application for borrower, responsible for the loan from application through closing

Loan Originator

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Verifies all pertinent information contained in the application and orders the property appraisal

Loan Processor

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Assesses risk and makes the final decision to accept or reject the loan based on the lender’s risk criteria

Underwriter

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Covers the lender’s loss if a borrower cannot make the mortgage payments

Mortgage Insurer

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Checks the structure and mechanical parts of a property and prepares a written report describing major problems

Home Inspector

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Determines the fair market value of a property

Appraiser

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Researches the history of a home’s previous owners through public records and provides a title report, or abstract, of the chain of title

Title Insurance Officer

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Guides you through the homebuying process

Housing Counselor

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Checks the boundaries of property

Surveyor

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Provides homeowner’s insurance policy to protect a home from casualty and liability

Property Insurance Agent

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Steps in the Process

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Home Inspection

Property Survey

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Remember…

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Fair Housing – It’s Your Right!

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“Protecting your ASSET”

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Question

Can you identify the different types of insurances

that you may or will need when purchasing a home?

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Mortgage Life Insurance

Protects your family

Title Insurance

Lender’s PolicyProtects the Lender

Owner’s PolicyProtects the Owner

Homeowner’s Insurance

Protects the Owner

Additional Coverage

Hurricane Coverage

Flood Insurance

Warranty Policy

Protects the Owner

“Protecting your ASSET”

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Avoid Scams

Because lending transactions often seem complicated, it’s not unusual for borrowers to rely on the expertise of professionals for guidance through the process.

But what if the “professional” you choose is actually a scam artist or predator – looking to push you into a costly or risky situation? If you don’t know the signs of a potential scam, you could become a victim.

Know the difference between legitimate opportunity and predatory or abusive lending.

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Tips on Avoiding Borrowing PitfallsSay NO to “easy money.”

Shop around.Find out about prepayment penalties.Make sure documents are correct.

Make sure documents are complete.

Ask about additional fees.

Understand the total package.

Work with legitimate credit counselors.

If you’re not sure, don’t sign!

Here are some helpful tips to follow when applying for a mortgage loan:

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The Loan Closing Process

Loan estimate reviewed 3 days before closing

Closing date is set

Final walk-through

Verify identity

Appraisal

Survey

Cashier’s check is required

Mortgage documents and disclosures are signed

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Resources

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Helpful ResourcesEasterseals/ Freddie Mac Financial Education recorded webinars

CreditSmart curriculum

Freddie Mac Housing Professionals Resource Center Subscription page

HUD Approved Housing Counseling Agency Search

HUD’s mortgage borrower’s rightsLead Disclosure Rule

Fraud prevention

Types of scams and to report fraud

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Helpful ResourcesDown Payment Resource – http://downpaymentresource.com/

HUD REO – http://www.hudhomestore.com/Home/Index.aspx

Freddie Mac REO –

https://www.homesteps.com/Fannie Mae REO – https://www.homepath.com/

National Low Income Housing Coalition – http://nlihc.org/

HUD Buying a Home –

http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home

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Thank You!

Your Feedback Matters.

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