By Michael Lasater #
*Please silence your cell phone
and save texting for breaks.
*Thank you.
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*Commitment to the
financial well being of
our clients.
*Licensed loan officer
with over 10 years of
experience.
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*Understand Lender Revenue
*Change the way you buy and sell homes
*Generate More Sales
*Put buyers in equitable position
*Make More Money
Inventory – The good the bad and the ugly
Buyer’s market or Seller’s market?
Are we competing against other offers?
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Buyer’s agents – do your clients need
concessions?
Listing agents – Are your sellers willing to
pay concessions?
Where are values going?
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Full price offer
No Seller concessions or repairs
As Is Condition
Fast Closing
Due Diligence
No Contingencies
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*Buyer
*Seller
*Agent
*Lender
• Lender fees
• Title fees
• Pre-paid/escrow account
• 3rd Party fees : appraisal, credit, flood
• Additional costs: Review appraisal etc.
• Mortgage Insurance
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Monthly vs. Up Front
Seller paid premium
Lender paid premium
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Short term strategy
Long term strategy
Interest rate vs. MI rate
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Is it better to pay more for a house or less
for a house?
Higher sales price = lower rate
Lower sales price = higher rate
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Financial Health
Higher rates pay higher yield
The yield is used as a lender credit to pay
costs
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FNMA
FHLMC
FHA VA USDA
Owner Occupied
LTV/CLTV
90.01 or greater
75.01 to 90.00
75.00 or less
3%
6%
9%
6%
Maximum all loans
4%
Maximum all loans
Note:
Vet cannot pay
closing fee or
termite inspection
No Seller Contribution Limit*
Closing cost can also be financed up to 100% of appraised
value.
Non-Owner Occupied 2% Maximum all
LTV's
N/A N/A N/A
FNMA
Homepath
Follow standard
maximum's with the
exception of LTV's
over 90% allow up to
6% concessions
N/A N/A N/A
If a seller grants credits, it assumed that
the selling price could be negotiated lower
by the exact amount of said credit.
To allow for a seller credit, the property
would have to appraise for the higher sales
price.
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*The difference in payment:
$257,500 loan amount with 3% closing costs
including 1% origination @ 4.00% = $1229.34
$250,000 loan amount 0% origination @ 4.25% =
$1229.85
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No Seller Concession
Buyer in equitable position
Financial well being
Facilitate more transactions
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By increasing the loan amount to pay closing
costs it will take 20 months at P & I $1229 to
get back to the original sales price of
$250,000.
A lender paid option keeping the sales price
at $250,000 with a rate of 4.25% (same
payment of $1229), in 20 months the new
balance is $242,875.
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Loan amount $257,500 @ 4% rate and P & I
payment is $1229.34 (we added the closing
costs to the loan amount)
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Date Interest Principal Balance
Aug, 2013 $858.33 $371.01 $257,128.99
Sep, 2013 $857.10 $372.25 $256,756.74
Oct, 2013 $855.86 $373.49 $256,383.25
Nov, 2013 $854.61 $374.73 $256,008.52
Dec, 2013 $853.36 $375.98 $255,632.54
Jan, 2014 $852.11 $377.24 $255,255.30
Feb, 2014 $850.85 $378.49 $254,876.81
Mar, 2014 $849.59 $379.76 $254,497.05
Apr, 2014 $848.32 $381.02 $254,116.03
May, 2014 $847.05 $382.29 $253,733.74
Jun, 2014 $845.78 $383.57 $253,350.17
Jul, 2014 $844.50 $384.84 $252,965.33
Aug, 2014 $843.22 $386.13 $252,579.20
Sep, 2014 $841.93 $387.41 $252,191.79
Oct, 2014 $840.64 $388.71 $251,803.09
Nov, 2014 $839.34 $390.00 $251,413.09
Dec, 2014 $838.04 $391.30 $251,021.78
Jan, 2015 $836.74 $392.61 $250,629.18
Feb, 2015 $835.43 $393.91 $250,235.27
Mar, 2015 $834.12 $395.23 $249,840.04
Loan amount is $250,000 @ 4.25% rate and
P & I payment is $1229.85 (we used a
lender credit to pay for the closing costs)
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Date Interest Principal Balance
Aug, 2013 $885.42 $344.43 $249,655.57
Sep, 2013 $884.20 $345.65 $249,309.91
Oct, 2013 $882.97 $346.88 $248,963.04
Nov, 2013 $881.74 $348.11 $248,614.93
Dec, 2013 $880.51 $349.34 $248,265.59
Jan, 2014 $879.27 $350.58 $247,915.02
Feb, 2014 $878.03 $351.82 $247,563.20
Mar, 2014 $876.79 $353.06 $247,210.14
Apr, 2014 $875.54 $354.31 $246,855.82
May, 2014 $874.28 $355.57 $246,500.25
Jun, 2014 $873.02 $356.83 $246,143.43
Jul, 2014 $871.76 $358.09 $245,785.33
Aug, 2014 $870.49 $359.36 $245,425.97
Sep, 2014 $869.22 $360.63 $245,065.34
Oct, 2014 $867.94 $361.91 $244,703.43
Nov, 2014 $866.66 $363.19 $244,340.24
Dec, 2014 $865.37 $364.48 $243,975.76
Jan, 2015 $864.08 $365.77 $243,609.99
Feb, 2015 $862.79 $367.06 $243,242.93
Mar, 2015 $861.49 $368.36 $242,874.56
$257,500 @ 4% what happens in 10 and 20 years?
Date Int Prin Bal
Aug 2023 $676.23 $553.12 $202,315.58
Aug 2033 $404.74 $824.60 $120,597.96
$250,000 @ 4.25% what happens in 10 and 20 years?
Date Int Prin Bal
Aug 2023 $703.40 $526.45 $198,081.64
Aug 2033 $425.21 $804.64 $119,253.86
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The math shows how buyers gain equity
faster with lender paid costs vs. seller paid
costs.
In 20 months we avoided an additional
$7,500 to the price to cover costs,and
gained equity of $7,100
The payment was within 51 cents!
20+ year break even point
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Thank you for coming!!!