Welcome to our HangOut!!Questions and Answers forFirst Time Home Buyers

Information provided byEleanor and Steve ThorneMortgage Lenders NMLS #60596 Vanessa Mouton Go Realty

October 29, 2013

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

We encourage you to ask questions. There are likely several other people who want to know the very same things you do.

If you have specific questions that we need to answer in a one on one session - we are glad to do that, and there’s NO FEE for seeking our advice.

We want to help you make an informed decision - not do a “sales job” on you.

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Most Buyers Have3 Questions

● How Much Will It Cost To Buy A House?

● What Will My Payments Be?● Can I Qualify?

What Are YOUR Questions???Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Closing Cost Estimate for $250,000 Sales Price USDA Loan

Description / $ Range Example

Sales Price 250000

Downpayment USDA and VA Loans have NO Down Payment, FHA requires 3.5%, Conventional Loans require 5% 0

Loan Amount Sales Price minus Down Payment 250000

Upfront Mortgage Insurance (PMI) Fees

Varies by Loan Type - any loan with less than 20% down will have some type of PMI. All Government Backed Loans have Upfront PMI Fees / USDA Fees are 2%, FHA are 2.75%, VA Fees for 1st Use are 1.5% 5000

Total Loan Payments Are Based On Origination fees, Daily Interest, Title Insurance are all based upon this amount 255000

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Closing Costs Example Cost Estimate

Origination Fee Typically 0 Could be as high as 1% 0

Discount Points Typically 0 Could be as high as 1% 0

Appraisal Fee Typically $400 400

Credit Report Fee Typically $20 to $35 20

Bank Fees / Commitment Fee Typically $800 to $1400 795

Tax Service Fee Typically around $80 80

Attorney Fees Typically no more than $575 550

Recording Fees Varies by Area Typically between $120 and $175 150

Title Insurance Varies by Loan size, a $170K loan is $300 405

Flood Certification Usually under $25 20

Total Closing Costs 2420

PrePaid Items Example Cost Estimate

Property Taxes Normally 6 Months Collected 1400

Daily Interest Charges / Per Diem InterestLoan Amount X Interest Rate divided by 365 multiplied by number of days from closing to end of the month / Closing on 10/30 at 4.25% = 29.69 a day 60

Hazard Insurance Premium Banks Collect 1 full year of premium plus 3 months reserves 781

Home Owner Association Dues Banks Collect 3 months 0

PMI Reserves

Banks Collect 3 months of the "annual" or monthly PMI charges if there are any / USDA Monthly Charges are .4%, VA doesn't charge monthly, FHA charges 1.35% and Conventional PMI averages .85% if you are putting 5% down (but varies based upon credit score) 0

Total PrePaid Items 2241

Closing Costs are generally broken into 3 parts… Closing Costs, which are “hard fees” paid to Service Providers, Prepaid Items that cover your Escrow account and “Other Charges.” Many times a Seller will not cover the Prepaid or “other items” if not written correctly in the offer.

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Other Charges Example Estimate of Costs

Home Inspection Typically between $350 and $425 375

Termite Report Typically $75 75

Well Inspection Water test runs $125 0

Survey Banks don't require a Survey- but they run between $300 to $450 0

Total Other Charges 450

Attorneys will occasionally order an appraisal as a routine part of doing a closing - always ask the Attorney, because the Lender is usually not including those costs in the closing estimate they prepare for you.

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

How Much It Might Cost To Buy a $250,000 House with a USDA Loan

Total Cost Of ALL Closing Costs Closing Cost + Prepaid Items + Other Charges 5111

Plus Down Payment 0

Minus Costs Paid TO THE Seller / Earnest $$ and Due Diligence $$

This can vary widely - but usually you will need at least $500 to $750 $750

Minus Costs Paid BY THE SELLER This is a negotiated amount. The Appraisal will need to support the closing costs 4000

How Much Cash You Need At Closing $361

TOTAL COST OF BUYING THE HOUSE Due Diligence Dollars / Earnest Money PLUS what you pay at closing $1111

Steve Thorne #NMLS 60596 River Community Bank, NA919 649 5058 SThorne@mortgages.rcbna.com

First Time Home Buyer MCC in NCIncome Limits Wake, Johnston, Franklin County

● 1 - 2 People in Household $75,000● 3 or more in Household $85,000

Income Limits Durham, Orange, Chatham County● 1 - 2 People in Household $81,000● 3 or more in Household $85,000

Income Limits Harnett County● 1 - 2 People in Household $56,000● 3 or more in Household $64,000

Steve Thorne #NMLS 60596 River Community Bank, NA919 649 5058 NC Mortgage Experts SThorne@mortgages.rcbna.com

MCC is a Mortgage Tax Credit Available to First Time Home Buyers in NC - Gives you more Purchasing Power. Must be under the maximum income limits for the county and it requires a 640 middle credit score to qualify.

Qualified Income Sources:

● Gross Income Before Taxes

● Part Time Gross Income If There’s an 2 year Record of working the same P/T job

● Income Reported on Tax Returns 2 years

● Child Support / Alimony Received 12 months

● Bonus, Shift Differential, Overtime, Commissions received for at least 2 years will be averaged

What Is “Household “Income??Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Low Down Payment Mortgage Options for First Time Home Buyers in NC

FHA Loans: 3.5% down payment, no income limits, 600 to 620 credit scores, down payment can be a gift. Monthly “PMI” rate is higher.

VA Loans: No down payment, no income limits, 620 credit scores, no monthly “PMI”

USDA Loans: No Down Payment, House must be within USDA Eligible Area, Maximum Income Limits per County, LOW monthly “PMI” rates, 640 Credit Scores

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Credit TipsMinimum Credit Score Details You Should Know:● Minimum Credit Score means 2 scores over the number● 640 is minimum for MCC, USDA and Conventional Loans● 660 is the minimum for the 3% Grant Program● 620 is generally the minimum for VA and FHA, although in CERTAIN

CASES (read few) we can go down to 600 on FHA● A Co-Borrower will NOT help you qualify if you have bad credit

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Credit Tips● Look at Credit Karma (we make nothing on this - we’ve just found

them to be pretty accurate)● Pay Down the Balance on Credit Cards so that the balance is no more

than ⅓ of the credit limit.● Use Your Credit Cards at least once every 3 months, do NOT pay

them all the way to Zero - “carry” $20 dollars of interest from month to month.

● Have at least 3 Credit Cards open - look at a Secured Card from WalMart, or your Bank - be careful with Credit Unions

● Don’t let any more BAD credit hit your report. If someone NEW threatens collection, set up a payment plan and pay them $7 a month.

● DON’T pay off collections until you speak with a loan officer

Steve and Eleanor Thorne NMLS # 60596 919 694 5058 NC Mortgage Experts @isellmoney steveATSteveThorneOnlineDOTcom

Credit Tips● Have at least 3 Credit Cards open -

look at a Secured Card from WalMart, or your Bank - be careful with Credit Unions

● Don’t let any more BAD credit hit your report. If someone NEW threatens collection, set up a payment plan and pay them $7 a month.

● DON’T pay off collections until you speak with a loan officer

First Time Home Buyer Resources

Eleanor and Steve Thorne River Community BankNMLS # 60596

919 649 5058@isellmoney@SteveThorneNC

eleaVor@gmail.comsthorne@rcbna.mortgages.com

First Time Home Buyer NC Presentation Description

First Time Home Buyer, NC Mortgage Questions Answered

A Google Hangout: First Time Home Buyer Programs in North Carolina offer many options. Most First Time Home Buyers want to know how much it will cost to buy a house, how much their monthly mortgage payment will be, and if they qualify. This is a Google Hangout Session we presented to cover closing costs for First Time Home Buyers in NC, minimum credit score requirements for a home loan in NC and First Time Home Buyer Programs that have down payment assistance.

Reference: http://ncfhaexpert.com/first-time-homebuyer/first-time-home-buyer-programs-nc/

We covered USDA Home Loans NC and the USDA Eligible Area Maps that are changing. USDA Home Loans in NC have a minimum credit score requirement of 640, if you are also applying for First Time Home Buyer Tax Credits - however, USDA Loans have no down payment requirement.

Reference: http://ncfhaexpert.com/usda-loans/whats-deal-nc-usda-eligible-area-map-changes/

If you are not applying for First Time Home Buyer Mortgage Tax Credits in 2013, the minimum credit score for a USDA Home Loan NC is 620. The NCHFA offers North Carolina First Time Home Buyers the ability to buy a home, and receive a 3% grant. The program has a minimum credit score requirement, and the statewide income limit is $85,000 in 2013, and the Minimum Credit score for the program is 660.

Reference: http://ncfhaexpert.com/first-time-homebuyer/tax-credit-for-first-time-homebuyers-in-nc/

The NCHFA Program also offers Mortgage Tax Credits (MCC) which are in place as long as the borrower owns the home - and increases the purchasing power for First Time Home Buyers in NC. The minimum credit score for the MCC for First Time Home Buyers in NC is 640.

Reference: http://ncfhaexpert.com/fha/how-the-mortgage-tax-credit-2013-works/

VA Loans have minimum credit scores of 620, and there's no down payment requirements. FHA Home Loans in NC require a 3.5% Down payment, but that money can come from a gift, or the NCHFA Grant program. The FHA PMI rates, the USDA PMI rates and the VA Loan mortgage insurance premiums are detailed for 2013 in the closing cost breakdown.

Sellers are allowed to pay for a Home Buyers closing cost, but First Time Home Buyers should be aware of what costs are "typically" covered by Sellers - sometimes a contract is written to say the Seller will ONLY cover Closing Costs "UP TO" and a dollar figure. This could mean that the Seller is unwilling for any of the Seller Paid Closing Costs to cover the First Time Home Buyer "soft costs" including a home inspection, taxes and homeowners insurance.

Reference: http://ncfhaexpert.com/first-time-homebuyer/sales-concessions/

One closing cost example shows how a first time home buyer could buy a house in North Carolina with total cost out of pocket less than $1200. No down payment and Seller paid closing costs options should be negotiated in the contract and we strongly suggest that First Time Home Buyers in NC get the best deal by using a Real Estate Professional.

Reference: http://ncfhaexpert.com/first-time-homebuyer/first-time-home-buyer-purchasing-plan/

Although not in the slides, we also discussed the ways a First Time Home Buyer in NC can get the best mortgage rates by working with a Bank that offers all of the First Time Home Buyer Programs available - not all North Carolina banks offer Single Parent Grants to buy a home, or the Mortgage Tax Credit for First Time Home Buyers. Steve and Eleanor Thorne NMLS #60596 help First Time Home Buyers NC by offering Hangouts on Google Call them 919 649 5058 for updates

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