Ft Homebuyer Gn 50 91810


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Ft Homebuyer Gn 50 91810

  1. 1. The Joy of Buying Your First Home<br />GN-50-91810<br />
  2. 2. Agenda<br />Homeownership brings…..<br />What is Homeownership?<br />Preparation <br />Budgeting, Savings, and Credit<br />Qualifying<br />Loan Programs <br />Are you ready to buy a home?<br />2<br />
  3. 3. What is Homeownership?<br />The American dream<br />An opportunity to provide for family<br />A tax deduction<br />Property appreciation<br />Having the nicest lawn on the block<br />Your own backyard<br />Your own garage<br />3<br />
  4. 4. Homeownership brings…….<br />Sense of community<br />Stability<br />Tax benefits (Consult your tax advisor)<br />Stable housing costs<br />Potential appreciation<br />4<br />
  5. 5. The Home Buying Process<br />The Home buying Team: Who is Involved?<br /><ul><li>Real Estate Agent
  6. 6. Mortgage Broker
  7. 7. Home Inspector Professional
  8. 8. Appraiser
  9. 9. Surveyor
  10. 10. Insurance Agent
  11. 11. Attorney
  12. 12. Escrow/Title Officer</li></ul>5<br />
  13. 13. Preparation<br />
  14. 14. Preparation<br />Two things have to happen:<br />Find a home<br />Qualify for a loan<br />7<br />
  15. 15. 4 C’s of Lending<br />Capital (savings)<br />Do you have enough cash for the down payment and closing costs?<br />Do you have enough cash for emergencies?<br />Capacity (income)<br />Can you repay the debt?<br />Character (credit history)<br />Will you repay the debt?<br />Collateral (house)<br />Will the lender be fully protected if you fail to repay the loan?<br />8<br />
  16. 16. What Lenders Look For<br />Debt to Income Ratios<br />Relationship between current consumer debts and current income<br />Is your income high enough?<br />Are your debts low enough?<br />Down payment<br />The higher the down payment, the lower the loan amount<br />Reserves<br />How much money do you have saved?<br />How much will be left after closing?<br />Do you pay your bills on time?<br />Credit reports<br />Non-traditional credit<br />9<br />
  17. 17. Preparing to Buy a Home<br />Daily Spending Diary <br />Decrease Spending & credit card use<br />Entertainment (movies, dinners out)<br />Clothes<br />Dry cleaning<br />Budgeting Tools<br />10<br />
  18. 18. Budgeting<br />What is a budget?<br />A budget is a plan for managing your income and expenses<br />11<br />
  19. 19. Make Budgeting Easier<br />Decide who pays bills<br />Know when bills are due<br />Open a checking account & savings account<br />Check interest rates on all of your loans<br />Pay down high cost loans & credit cards<br />Involve family in saving process<br />use coupons<br />find bargains<br />cut back on eating out<br />12<br />
  20. 20. Budgeting Tips<br />Plan expenses according to current income<br />Establish budget for six months to one year<br />Keep record-keeping simple<br />Set money aside for maintenance & emergencies<br />Get consensus from entire family – make it a family project<br />Pay yourself first - SAVE!<br />13<br />
  21. 21. SAVINGS<br />14<br />
  22. 22. Importance of Saving<br />Pay yourself first<br />Consider savings via payroll deduction<br />Bank your change at the end of the day<br />Bank surprises<br />Bonuses and gifts<br />If you can save $2.00 a day @ 2% interest you will have saved over $1,500 in 2 years<br />That is one less Starbucks coffee each day<br />15<br />
  23. 23. CREDIT<br />16<br />
  24. 24. The Importance of Credit <br />What does it mean to a lender<br />Applying for credit<br />Managing credit<br />17<br />
  25. 25. How Lenders Use A Credit Score<br />Scores assess past bill paying history to predict future behavior<br />Scores are used to perform a risk analysis which helps predict the likelihood of loan repayment<br />18<br />
  26. 26. Credit Scores<br />The credit bureau risk score is a summary of the information in your credit file<br />Scores range from 300-850 <br />Score ranks consumers according to risk<br />The higher the score, the lower the risk of default<br />19<br />
  27. 27. Common Credit Problems<br />Multiple credit cards used to their limit<br />Obtain new credit when existing debts remain unpaid<br />Pattern of late payments on current debts<br />Bankruptcies<br />Judgments<br />Charge-offs<br />Foreclosures<br />20<br />
  28. 28. Solving Credit Problems<br />Cancel unnecessary credit <br />Pay off or pay down debts<br />Resolve unpaid debts<br />Write letters to credit bureaus for corrections<br />Settle with collection agencies<br />21<br />
  29. 29. Easy Steps to Build Credit<br />Open a checking and savings account to pay bills easily<br />Establish credit by<br />Applying for a small loan using savings as collateral<br />Applying for a credit card and using it minimally<br />Applying for a loan with a co-signer<br />Establish non-traditional credit<br />22<br />
  30. 30. Easy Steps to Build Credit<br />Rent payments<br />Electric and other utility payments, car insurance<br />Child care or child support payments<br />Any other recurring expense<br />Non-traditional credit sources must be in your name<br />23<br />
  31. 31. Know Your Credit<br />Request a copy of your credit report<br />Review for accuracy<br />Dispute inaccurate information<br />Send a letter to the 3 credit bureaus if you have a dispute<br />Pay all past due accounts as soon as you can<br />Negotiate with creditors if you can’t pay in full<br />If blemishes are severe - consider credit counseling<br />24<br />
  32. 32. Credit Reporting Agencies<br />25<br />
  33. 33. QUALIFYING<br />26<br />
  34. 34. A House Payment Includes<br />PITI<br />Principal<br />Interest<br />Taxes<br />Insurance<br />27<br />
  35. 35. Pre-Qualification<br />Determines how much mortgage you qualify for<br />Informal, no obligation<br />Figure is an estimation - not exact<br />28<br />
  36. 36. Approval<br />Commitment from lender: “conditional approval” for a predetermined amount<br />Based on verified information<br />29<br />
  37. 37. Are You Ready to Buy a Home?<br />First Steps:<br />Review your employment<br />Have I been employed on a regular basis for 2 years?<br />Evaluate your sources of income<br />Is my income steady?<br />Do I have money saved for a down payment & closing costs?<br />Analyze your current expenses<br />Do I have a budget?<br />Can I handle a monthly mortgage payment, taxes, insurance, repairs?<br />Can I handle unexpected events?<br />Determine the status of your credit history<br />Do I have established credit?<br />Have I paid my bills on time?<br />Yes - I want to own a home<br />Am I familiar with what is required to qualify for a home loan?<br />Am I willing to work towards preparing myself to become a homeowner?<br />30<br />
  38. 38. Now’s The Time To Buy<br />First Time Home Buyer Tax Credit $8,000<br />Interest Rates all time lows<br />Home prices bottomed out<br />Get more home for your money<br />31<br />
  39. 39. Rent vs. Buy<br />See handout for comparison<br />32<br />
  40. 40. LOAN PROGRAMS& LOAN TYPES<br />33<br />
  41. 41. Loan Programs<br />Government insured loans<br />FHA Loans<br />VA Loans<br />Conventional mortgage loans<br />Affordable loan programs – 0-5% down payment<br />Special loan programs<br /> - IHFA (Tax Credit 2nd)<br />Down payment assistance programs<br />34<br />
  42. 42. Loan Types<br />Fixed-rate loans<br />Adjustable rate loans<br />35<br />
  43. 43. Sample Programs<br />Standard Conforming 30 Yr. Fixed<br />Conforming 20 Yr. & 15 Yr.<br />FHA<br />ARM’s/Hybrids<br />36<br />
  44. 44. READY?<br />
  45. 45. The Closing Process<br />Sign mortgage or deed of trust<br />Sign your mortgage note & other loan documents<br />Bring funds to close on your home<br />Verify insurance policies<br />GET THE KEYS TO YOUR HOME!<br />Is this something you want to do???!!!<br />38<br />
  46. 46. Life As A Homeowner<br />Stay within your budget<br />Make your mortgage payment top priority <br />Any mortgage payment difficulties - CONTACT THE LENDER IMMEDIATELY<br />Use cost-effective energy savings measures<br />Hire a reputable contractor for major repairs<br />Have an emergency maintenance fund<br />39<br />
  47. 47. Enjoy Your New Home!<br />Thanks for attending!<br />
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