RCG Companies "Buying Your Home"

The RCG Companies, LLC Real Estate Consulting Development Finance www.rcg-companies.com rcg@rcg-companies.com

 Instructor and student introductions.  Module overview. The RCG Comapnies, LLC 2

 Your name.  Your expectations, questions, and concerns about buying a home. The RCG Comapnies, LLC 3

Your Own Home:  Gives you information on the home buying process.  Describes mortgage options that you can use to buy your home. The RCG Comapnies, LLC 4

By the end of this course, you will be able to:  Describe the benefits and pitfalls of renting versus owning a home.  Identify the steps required to buy a home.  Identify questions to ask to determine your readiness to buy a home. The RCG Comapnies, LLC 5

 Identify basic terms used in a mortgage transaction.  Describe the advantages and disadvantages of different mortgage options. The RCG Comapnies, LLC 6

 90 minutes long  One 10-minute break The RCG Comapnies, LLC 7

 No property maintenance  One year (or less) rental contract  No property taxes or homeowner’s insurance The RCG Comapnies, LLC 8

 You can build equity in your Home and borrow against it.  A Home generally increases in value.  The Home is yours.  Your mortgage interest is tax deductible*.  You can pass your Home on to family members. The RCG Comapnies, LLC 9

Step 1 Determine if you are ready to buy a Home. Step 2: Determine how much mortgage you can afford. Step 3: Determine which mortgage option is best for you. The RCG Comapnies, LLC 10

Step 4: Qualify for a loan. Step 5: Go through settlement. The RCG Comapnies, LLC 11

 Individual Development Account (IDA)  Programs offered by cities or local government offices.  Financial institutions The RCG Comapnies, LLC 12

 Low down payments  Flexible underwriting standards  Longer payment terms  Requirement for homeowner education  Some restrictions The RCG Comapnies, LLC 13

 In an escrow account, along with the mortgage principal and interest.  Separately -  Quarterly or semi-annual property tax  Annual insurance premium The RCG Comapnies, LLC 14

 Capacity  Capital  Character  Collateral The RCG Comapnies, LLC 15

The pre-qualification process:  Lets you know how much mortgage you can afford.  Is informal, involving no paperwork.  Gives you a “ballpark” estimate. The RCG Comapnies, LLC 16

The pre-approval process:  Is a commitment from the lender to lend you money.  Lets you know how much money you can obtain.  Tells sellers you are prepared to buy a house. The RCG Comapnies, LLC 17

 Traditional mortgage  Interest-only mortgage  Biweekly payment mortgage The RCG Comapnies, LLC 18

 Check newspapers and the Internet for terms and rates.  Negotiate the best price you can get.  Let lenders compete for your business.  Get costs in writing. The RCG Comapnies, LLC 19

An estimate of the cost of settlement services that the lender should give you when you apply for the loan. The RCG Comapnies, LLC 20

You must:  Have a demonstrated ability to pay more toward housing expenses.  Show evidence of acceptable credit history or limited credit use.  Make a larger down payment.  Have cash reserves. The RCG Comapnies, LLC 21

Settlement occurs when the borrower meets with the seller and other representatives to sign the documents that will finalize the sale of the house and any mortgage financing.  Also called “closing.”  HUD-1 or HUD-1a Settlement Statement. The RCG Comapnies, LLC 22

 Home equity loans  Home equity lines of credit  Cash-out refinancing  Reverse mortgage The RCG Comapnies, LLC 23

The RCG Comapnies, LLC 24

RCG Companies "Buying Your Home"

by Christopher Garlin on May 20, 2009

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