Learn more about becoming a homeowner

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Martin Hunter
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1 Learn more about becoming a homeowner Ethan Hudson Home Mortgage Consultant NMLSR ID [Location] [Date]

2 2 Welcome! By attending this event, you are taking an important step toward your homeownership goal. This event will help you gain a basic understanding of how the home buying and home financing process works. So you ll know what to expect and be better able to make informed decisions.

3 Today we ll address: Preparing to buy your home Credit basics Home financing basics Loan application process 3

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5 How does renting compare to buying?

6 How does renting compare to buying? Homeownership means: Renting means:

7 How does renting compare to buying? Homeownership means: A portion of your total payment reduces your mortgage principal balance Renting means: Entire payment goes to the property owner

8 Homeownership is a long-term commitment If you: Have a stable income Pay your bills on time Plan to stay in your home Feel prepared for this responsibility then you may be ready to own a home.

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10 What type of expenses should I plan for?

11 How much could I borrow? Debt-to-income ratio Housing-to-income ratio 36% or less 28% The percentage of your gross monthly income or that less is spent on monthly debt payments The percentage of your gross monthly income that is spent on monthly housing payments Monthly income before taxes Monthly income before taxes For illustrative purposes only

12 How much could I borrow? Mortgage, insurance, and taxes Other monthly obligations Savings, debts, or loans Groceries and household supplies Childcare / Daycare Clothing, shoes, and accessories Transportation Gifts and charitable donations Internet, cable, phone Travel and entertainment Other home costs Utilities Maintenance Repairs

13 What do lenders consider? 36% Income Current debts and Credit history Assets and available funds The property Do I have a source of income to make monthly payments? Do I pay my bills, loans, credit cards and other debt on time? Do I have enough funds for a down payment and closing costs? What s the market value of the property I want to purchase? What s my credit history? My credit score? Do I have a lot of other outstanding debt? Additional funds for reserve which may cover several months of payments?

14 What should my down payment be? Principal Amount Interest Amount

15 How can I save for a down payment? Pay yourself first Spend less, save more Create a spending plan

16 What s the difference between a prequalification and a preapproval? Prequalification Preapproval Cost No fee or obligation No fee or obligation Result A opinion of your home price range An estimate of your home price range Credit check No credit check involved Includes a credit check

17 What are the benefits of a preapproval? Know your estimated price range and shop confidently Assure the seller Close sooner Having a preapproval letter gives you an estimate of how much you may be able to borrow and lets your Realtor know the approximate price range to search within for you. Preapproval may allow for a faster closing, because some of the loan work is already started. Preapproval lets sellers know you have a lender willing to proceed with the mortgage application process. Keep in mind that a preapproval is a preliminary review of information you provide, and is not a commitment to lend.

18 What should I know about loan options? CONVENTIONAL Mortgage not obtained under a government program GOVERNMENT Mortgage obtained under a government program

19 Components of a mortgage payment Principal Interest Taxes Insurance For illustrative purposes only

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21 What is a credit report? A. Information about you B. Public Record Information C. Collection agency account information D. Your credit history E. Inquiries You can request a free credit report from each of the three main credit bureaus annually at

22 What is a credit score? 850 Loan amount Credit score 300 For illustrative purposes only

23 How are credit scores calculated?

24 How do credit scores affect loan pricing?

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26 Is the loan application process difficult?

27 Loan Application Process Meet with your Home Mortgage Consultant Financial and property review Preparing to close Attend your closing

28 What should I do during the loan process? Provide accurate information Return calls promptly Get homeowners insurance quotes and a home inspection Maintain your credit

29 What is closing? The final appointment where you: Sign documents Pay fees Complete the transaction Get the keys to your new home

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Resources Home Lending Learning & Planning

com/mortgage/home-loans Credit information

31 Resources Home Lending Learning & Planning Center Credit information Calculators Loans & Programs Checklists Guides My FirstHome My Home Roadmap sm Talk to a Home Mortgage Consultant Hands on Banking

How can Wells Fargo help? As a fair and responsible lending leader, Wells Fargo is ready to help you find financing that serves your immediate and long-term home financing needs.

32 How can Wells Fargo help? As a fair and responsible lending leader, Wells Fargo is ready to help you find financing that serves your immediate and long-term home financing needs. Wells Fargo Home Mortgage consultants are trained to pay attention to your goals, help you understand your options, and clearly explain how different loan programs work. So you can make informed decisions. 32

33 33 Thank you for attending We look forward to helping you achieve your homeownership goals. Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A Wells Fargo Bank, N.A. All rights reserved. NMLSR ID # Animated REV 10/16

Your guide to fnancing your frst home. Brought to you by:

Your guide to fnancing your frst home Brought to you by: Are you ready to become a homeowner? Buying your frst home is exciting, but you re likely to have lots of questions. This guide can help you by