Easterseals and Freddie Mac present Housing Guidance with

Easterseals and Freddie Mac present Housing Guidance with Credit. Smart® November 15, 2018

Easterseals Yolanda Green • Digital Marketing and Social Media Manager for Easterseals National headquarters • 18 years of experience producing digital marketing content • Worked 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 Easterseals / Freddie Mac Housing Series

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. Easterseals / Freddie Mac Housing Series

Get to Know Your Producer Maheen Qureshi • 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. Easterseals / Freddie Mac Housing Series

Get to Know Your Presenter Cora Fulmore • • • 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 Neighbor. Works since 1994. Credit. Smart® trainer since 2001. Easterseals / Freddie Mac Housing Series

Easterseals of Greater Houston Katy Thorstenberg • • • Katy 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. Easterseals / Freddie Mac Housing Series

Go. To. Webinar Platform Toll Number: 1 -415 -655 -0060 Access Code: 138 -367577 Webinar ID: 189 -132379 1 2 3 Easterseals / Freddie Mac Housing Series 7

Agenda • Why Ownership • Cost of Buying • Rights and Responsibilities as a Homeowner • Understanding the Loan Process o Who are the Players • What are my choices – Shopping for a Home • Home Inspection & Survey • Insurance - Protecting your Asset • Closing Remarks • Evaluations Easterseals / Freddie Mac Housing Series 8

Why Homeownership? 9

Homeownership Buying 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 • 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 Easterseals / Freddie Mac Housing Series 10

Is Homeownership a Good Idea? • Affordability • Interest rates are low • Large inventory to choose from in some markets • Builder incentives Easterseals / Freddie Mac Housing Series 11

Homeownership is a BIG STEP Documentation Checklist • Most recent paycheck stubs • W 2’s for the last two years • Award letters for SSI, SSDI (if applicable) • • Most recent bank statements Tax returns for the last two years List of debts and assets Signed IRS 4506 -T Proof 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/mortga geapplication. pdf Easterseals / Freddie Mac Housing Series 12

Qualifying for the Mortgage 13

Four C’s of Credit Capital Any asset that can be converted into cash to make payments: • Cash in savings • Investments • Property equity and other assets Capacity Your ability to take on the new debt and make the required payments for the new loan. Credit Collateral The asset that will Your personal be used to secure credit history the loan. including: • Total debt The property • Delinquent value must equal accounts or exceed the • Available credit loan amount. • Payment history Easterseals / Freddie Mac Housing Series

How does the lender view DEBT? FHA 31% -43% USDA 29% -41% VA Monthly Debt 41% CONV 28% -36% Compensating Factors will also be considered. Debt Ratio Gross Monthly Income Easterseals / Freddie Mac Housing Series 15

Financial Consideration Based on Your Loan Type and Lender Job History & Stability Monthly Fixed Debt income 2 years ratio to monthly Credit Profile 580 - 640 Cash Reserve 1 -2 months Current vs. Anticipated Debt must show manageability Price Range debts based on income & Easterseals / Freddie Mac Housing Series 16

Credit Score Requirements Based on loan product • FHA Loans – 580/640 range • VA Loans – at least 620 • USDA 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. ) Easterseals / Freddie Mac Housing Series 17

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. ” Easterseals / Freddie Mac Housing Series 18

Homeownership Reality 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. ) Easterseals / Freddie Mac Housing Series 19

Down Payment Assistance State & Local Assistance There is HELP! Down Payment https: //downpaymentresource. com Assistance Easterseals / Freddie Mac Housing Series 20

Costs Associated With Purchase • Earnest money deposit • Application fee • Home inspection fee • Down payment • Closing costs • Moving expenses $1, 000. 00 - $5, 000. 00 $500. 00 - $250. 00 - $1, 000. 00 3 - 10% of home price 3 - 9% of loan amount $2, 000. 00 - $5, 000. 00 Easterseals / Freddie Mac Housing Series 21

Homeownership Myth “I need almost perfect credit to buy a home, but I can’t do anything to improve my credit rating. ” Easterseals / Freddie Mac Housing Series 22

Homeownership Reality You do not need perfect credit but the higher your score, the more options you have when looking for a mortgage. CAUTION: Before using a credit repair company, make sure you understand all fees and promised services. Beware of credit repair scams. Easterseals / Freddie Mac Housing Series 23

Poll Question Using a credit counseling/debt management company will destroy my credit. A. True B. False Easterseals / Freddie Mac Housing Series 24

Poll Question Using a credit counseling/debt management company will destroy my credit. A. True B. False Easterseals / Freddie Mac Housing Series 25

Poll Question Can an employer get a copy of your credit report without your permission? A. Yes B. No Easterseals / Freddie Mac Housing Series 26

Poll Question Can an employer get a copy of your credit report without your permission? A. Yes B. No Easterseals / Freddie Mac Housing Series 27

House Hunting Resources • Local Builders • Relatives/Friends • Newspaper • Real Estate • Internet Search Agents/MLS • Real Estate Listings Owned (REO) • Local • Non-Profits • For Sale By Owners 28

Know the Housing Professionals 29

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 30

Conducts initial interview, gathers all financial documents, completes the loan application for borrower, responsible for the loan from application through closing Loan Originator 31

Verifies all pertinent information contained in the application and orders the property appraisal Loan Processor 32

Assesses risk and makes the final decision to accept or reject the loan based on the lender’s risk criteria Underwriter 33

Covers the lender’s loss if a borrower cannot make the mortgage payments Mortgage Insurer 34

Checks the structure and mechanical parts of a property and prepares a written report describing major problems Home Inspector 35

Determines the fair market value of a property Appraiser 36

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 37

Guides you through the homebuying process Housing Counselor 38

Checks the boundaries of property Surveyor 39

Provides homeowner’s insurance policy to protect a home from casualty and liability Property Insurance Agent 40

Steps in the Process 41

Home Inspection Property Survey Easterseals / Freddie Mac Housing Series 42

Remember… Fair Housing – It’s Your Right! Easterseals / Freddie Mac Housing Series 43

“Protecting your ASSET” Question Can you identify the different types of insurances that you may or will need when purchasing a home? 44

“Protecting your ASSET” Mortgage Life Insurance ◦ Protects your family Title Insurance Lender’s Policy ◦ Protects the Lender Owner’s Policy ◦ Protects the Owner Homeowner’s Insurance ◦ Protects the Owner Additional Coverage ◦ Hurricane Coverage ◦ Flood Insurance Warranty Policy ◦ Protects the Owner 45

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 Easterseals / Freddie Mac Housing Series 46

Tips on Avoiding Borrowing Pitfalls Here are some helpful tips to follow when applying for a mortgage loan: • Ask about additional fees. • Say NO to “easy money. ” • Understand the total • Shop around. package. • Find out about prepayment penalties. • Work with legitimate credit counselors. • Make sure documents are correct. • If you’re not sure, • Make sure documents don’t sign! 47 are complete.

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 Easterseals / Freddie Mac Housing Series 48

Resources 49

Helpful Resources • Easterseals/ Freddie Mac Financial Education recorded webinars • Credit. Smart curriculum • Freddie Mac Housing Professionals Resource Center Subscription page • HUD Approved Housing Counseling Agency Search • HUD’s mortgage borrower’s rights • Lead Disclosure Rule • Fraud prevention • Types of scams and to report fraud Easterseals / Freddie Mac Housing Series 50

Helpful Resources • Down 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 Easterseals / Freddie Mac Housing Series 51

Thank You! Your Feedback Matters. Easterseals / Freddie Mac Housing Series 52