My newly released presentation on what you should know when buying your first home.

1. Buying Your First Home
what first-time buyers need to know about mortgages
PRESENTED BY
MIKE P. JOHNSON
Mortgage Specialist, NMLS ID 847494
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

2. Where to Start?
• You might know what you’re looking for
– Where you might like to live
– What kind of house appeals to you
– When you’d like to move
• But none of this can happen until you know:
HOW MUCH HOUSE CAN
YOU AFFORD?
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

3. Who Can Help?
• Your Loan Officer
– Knows your community, local and regional
programs and is a home financing expert
• Internet
– Lots of information available,
difficult to compare apples-to-apples
• Your REALTOR®
– Knows the homes in your area,
good guide to the entire process
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

4. How Much?
• Rent = Mortgage
• How much house you can afford depends on
a lot of things*:
– Your employment
– Your savings
– Your credit card and other loan balances
– Your FICO or credit score
– Your future plans
* The Buyer Worksheet on LendRIGHT.com can help you prepare for a conversation with a loan officer
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

5. Your Credit Score
• Credit plays a big role in qualifying for a mortgage
– Make sure your credit situation is as good as it can be
• Check your credit score for accuracy
• Close any unused credit card accounts
• Ensure you are up-to-date on all payments owed (credit cards, auto
loans, etc.)
• Do not apply for any new credit cards
• Avoid major purchases on credit
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

6. Down Payment
• The amount YOU pay up front to purchase the
house. It is a percentage of the sale price:
– Example: $150,000 house
• 5% down = $7,500
• 10% down = $15,000
• 20% down = $30,000
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

7. The Loan
• There are many different kinds of loans, available.
Different loans may be right for different people,
depending on a number of factors:
– Your current financial situation
– How you expect your finances to change
– How long you intend to keep your house
– How comfortable you are with your mortgage payments
changing in the future
– What kind of home you want to buy (house, condo, farm, etc.)
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

8. The Language
• There are some basic terms you need to know before
looking at mortgage types:
– Adjustable Rate Mortgage – often called an ARM
– Borrower (that’s you)
– Down Payment
– Equity
– Fixed Rate Mortgage
– Interest Rate
– Lender (that’s me)
– Principal
– Private Mortgage Insurance – often called PMI
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

9. The Common Options
• Fixed-Rate Mortgage
– Usually 30-, 20- and 15-year options
– Monthly payments stay the same
• Some variation if you include insurance and taxes
– Better when rates are low and you plan to stay in the home for
an extended period of time (5+ years)
• ARM
– Permits changes/adjustments to the interest rate
– Usually stays the same for an initial period of time.
• Example: a 3-year ARM would mean the initial interest rate would
stay the same for the first three years, then would adjust each year
beginning with the fourth year.
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

10. More Choices
• First Time Home Buyers often have additional
resources:
– State/local home buying programs
• (insert examples specific to your community here)
– Federal Mortgage Programs (FHA loans)
– Veterans Programs (VA loans)
– USDA Financing
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

11. Getting Started
• Meet with a Mortgage Professional
– Review your financial situation/plans
– Understand your mortgage options
– Apply for Prequalification or Preapproval
• You will know how much the lender is willing to lend you, which
tells you how much house you could buy
• This puts you in a good position to go house hunting!
» Gives you better negotiating power
» Gives you preference if the seller receive multiple offers
» Realtors may not work with you until you are able to share
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

12. Things to Know
• Interest Rate vs. APR (Annual Percentage Rate)
• Discount Points & Origination Fees
• Other Costs to anticipate
(your Lender & Realtor can help you here)
– Appraisal
– Credit report
– Title work
– Recording Fees
– Taxes
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

13. Happy House Hunting!
• Find A Realtor
• Attend Open Houses
• Find the home you want!
– CONSIDER A RATE LOCK as you narrow down your choices
• Ask about the costs involved, what it protects and for how long
• Make an offer!
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

14. Offer Approved?
• Once your offer is approved, it’s time to apply for
your loan.
– Your credit, income and asset information will be formally
reviewed and collected.
– Information about the house will be collected and verified
– You will need to secure Homeowners Insurance
• We also strongly recommend you schedule a Home Inspection
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

15. Important Documents
• Purchase Agreement
– Sets the date for your closing
– Spells out the events that must take place BEFORE closing
• Good Faith Estimate (GFE)
– Lists all fees paid before closing, all closing costs and any
escrow costs you will encounter
– The Lender is required to provide this within 3 days after
your loan application has been completed
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

16. Closing
• Closing is simply the meeting between you, the
seller and the lender where the property (and the
money) officially change hands. You will:
– Sign legal documents
• Agreement between you and the lender
• Agreement between you and the seller
– Pay Closing Costs, Escrow and
Down Payment (via cashier’s check)
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784

17. Find Out More
Mike P. Johnson
Mortgage Banker
NMLS ID 847494
Newport Beach, CA
Direct: (949) 529-0784
mjohnson@mikepjohnson.com
ftin
Mike P. Johnson Mortgage Banker www.mikepjohnsonloans.com
(949) 529-0784
Schedule a FREE
Loan Consultation