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CCCC Prepurchase Class
 

CCCC Prepurchase Class

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Curriculum for 8-hour Homeownership Class

Curriculum for 8-hour Homeownership Class

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    CCCC Prepurchase Class  CCCC Prepurchase Class Presentation Transcript

    • Are You Ready To Buy A Home?
    • Presentation developed from NeighborWorks “Realizing the American Dream” curriculum.
      2
    • Agenda
      • Is owning a home right for you?
      • How to buy a home
      • Your homeownership team
      • Mortgage payments and other costs
      • How much can you afford?
      • Qualifying ratios
      3
    • Advantages of Homeownership
      4
      • Stable housing costs
      • Tax benefits
      • Equity
      • Control of your environment
      • Stability
    • Disadvantages of Homeownership
      5
      • Monthly costs
      • No guarantees
      • Maintenance and repairs
      • Decreased mobility
      • Fewer features included
    • Steps in the Home Buying Process
      Attend homeownership education class
      Determine how much you can afford
      Meet with lender for pre-approval
      Determine wants and needs in a home
      Shop for a home
      6
    • Steps in the Home Buying Process
      Make an offer
      Arrange for a professional home inspection
      Apply for mortgage loan
      Obtain homeowners insurance
      Close the loan
      7
    • Your Homebuying Team
      8
      • Homeownership Counselor
      • Real Estate Agent
      • Lender
      • Attorney
      • Home Inspector
      • Appraiser
      • Surveyor
      • Homeowners Insurance Agent
    • The Mortgage Payment
      9
    • 10
      Cost of Buying a Home
      Down payment
      Closing costs
      Escrows
      Reserves
      Moving costs
      Mortgage payment
      Utilities
      Maintenance and repairs
    • Credit Reporting Agencies
      Experian www.experian.com
      (800) 831-5614
      TransUnion www.transunion.com
      (800) 888-4213
      Equifax www.equifax.com
      (800) 685-1111
      11
    • Qualifying Ratios
      38% for housing plus all other long-term debt
      12
    • Prequalification
      13
      • Financial Calculations
      • How much money the lender will lend you
      • What price home you can afford
      • How much down payment you need
      • How much your monthly payments will be
      This is not a guarantee
    • Questions?
      14
    • Managing Your Money
    • Agenda
      16
      • Getting started
      • Planning how to spend your money
      • Developing and making a spending plan to meet your goals
      • The importance of saving
      • Utilizing other resources
    • Why a spending plan?
      Prepare for large expenses
      Encourage savings
      Prepare for surprise expenses
      Identify spending patterns
      Accomplish goals
      17
    • 18
      Establishing A Spending Plan
      Determine your monthly net income
      Calculate your monthly expenses
      Subtract your regular expenses from your income
    • 19
      Keep Track Of Spending
      Save all receipts
      Record in a daily expense journal
    • Setting Household Goals
      20
      • Discuss household goals
      • Be specific and realistic
      • Prioritize household goals in order of importance
      • Agree on primary goals
      • Figure out how much it will cost to reach your goals
    • Wants
      Needs
      21
      Wants vs. Needs
      __________________________________________________________________________________________________________________________________________________________________________
      __________________________________________________________________________________________________________________________________________________________________________
    • Different Types of Expenses
      22
      Fixed expenses
      Periodic fixed expenses
      Flexible expenses
      Indebtedness expenses
    • Trimming Expenses
      23
      • Clip coupons
      • Use a list when grocery shopping
      • Make cost comparisons fun
      • Get competing quotes for large purchases
      • Agree on personal money each household member
      • Eat at home
      • Take lunches to work
      • Shop in resale stores
      • Trade services with friends
      • Find fun activities that are free
    • 24
      Money-management tips
      Plan according to current income
      Plan ahead for six months
      Include spending money for all
      Keep record keeping simple
      Set money aside for maintenance & reserves
      Pay yourself first - 10% of take-home pay is a goal, but lesser amounts are okay to start
      Get consensus from entire household
    • Reviewing the Plan
      25
      • Is the spending plan working?
      • Are all household members able to follow it?
      • Which costs always seem to be over the planned amount?
      • Are we getting closer to reaching our goals?
    • Making Money Management Easier
      26
      • Decide who pays bills
      • Know when bills are due
      • Use utilities’ level billing payments
      • Open a checking account
      • Open a savings account
      • Consider selling a car or raising insurance deductibles
      • Check your interest rates
      • Stick to the plan
    • 27
      Controlling day-to-day spending
      Carry written reminders of your goals
      Carry as little cash as possible
      Pay with cash, check or debit card
      Avoid using credit cards, other than to establish or maintain good credit
      Buy only what you need
    • Importance of Savings
      28
      Try to save 10% of your income on a monthly basis!
    • Types of Savings Accounts
      29
      • Regular savings account
      • Club account
      • Certificate of deposit (CD)
      • Money market account
      • Matched savings account (IDA)
      • Online savings accounts
    • 30
      Money-management tips
      Pay yourself first
      Arrange for direct deposit of funds to your savings account
      Save change at end of day
      Bank your surprises
    • Getting Help
      • NeighborWorks® organizations
      • Cambridge Credit Counseling
      • HUD
      • Counseling Agencies
      31
    • 32
      Make the Most ofDelinquency Counseling
      Be honest
      Be cooperative about gathering information
      Be willing to make sacrifices and changes
    • Questions?
      33
    • UnderstandingCredit
    • Agenda
      • Your credit rating
      • Credit reporting agencies and credit reports
      • What is a credit score?
      • Improving your credit record
      • Lack of credit history
      • Managing debts
      • Identity theft
      • Know your rights
      35
    • Your Credit Rating
      36
      • How much you have borrowed
      • From whom you borrowed
      • How well you have repaid your debts
      • How you are handling current debts
      • How much of your available credit you are already using
    • Importance of Good Credit
      Lower interest rate
      Employment
      Lease property
      Establish utility services
      Obtain insurance (not in MA)
      37
    • Credit Reporting Agencies
      Experian www.experian.com
      (800) 831-5614
      TransUnion www.transunion.com
      (800) 888-4213
      Equifax www.equifax.com
      (800) 685-1111
      38
    • Ordering your Credit Reports
      • Online: www.annualcreditreport.com
      • Telephone: 877-322-8228
      • Mail: Annual Credit Report Request Service
      P.O. Box 105281
      Atlanta, GA 30348-5281
      Your must download form from www.ftc.gov/credit
      39
      Information courtesy of Cambridge Credit Counseling not part of the original Neighborworks presentation
    • Types of Credit Reports
      Consumer credit report
      In-file credit report
      Residential mortgage credit report
      40
    • Check Your Credit Reports
      41
      Information courtesy of Cambridge Credit Counseling not part of the original Neighborworks presentation
    • Reviewing Your Credit Report
      Identifying information
      Credit information
      Public record information
      Inquiries
      42
    • Use and Responsibility
      Payment Arrangement
      Individual
      • Joint
      • Authorized user
      Installment
      • Revolving
      • Open 30-day
      Types of Accounts
      43
    • Various FICO Model Names
      • Credit reporting agencies own proprietary formulas.
      • Equifax: Beacon Score
      • Experian: Experian/Fair Isaac Risk Model Score
      • TransUnion: Empirica Score
      44
    • Fico Scores
      780 & up: A+ Credit
      720 – 779: A Credit
      675 – 719: A- Credit
      620 – 674: B Credit
      560 – 619: C Credit
      500 – 559: C- Credit
      499 & below: D Credit
      45
      Information courtesy of Cambridge Credit Counseling not part of the original Neighborworks presentation
    • 46
      Credit Karma
      Free service that allows you to view, and monitor, your Credit Score.
      Information courtesy of Cambridge Credit Counseling not part of the original Neighborworks presentation
    • What Makes Up Your FICO Score?
      47
    • Ideas to improve your credit standing
      Maximizing Your Credit
      48
    • Tips for Improving Your Credit Score
      • Correct any inaccurate information
      • Pay your bills on time
      • Minimize outstanding debt
      • Open new accounts only if needed
      • Manage credit accounts responsibly
      49
    • Correcting Errors and Omissions
      • Follow the instructions provided
      • Explain the problem in a brief letter
      • Contact the creditor directly if the credit reporting agency does not verify the error
      • Write a consumer statement if the issue remains unresolved
      50
    • Common Credit Problems
      Pattern of late payments on current debts
      Bankruptcies
      Judgments or liens
      Past-due or collection accounts
      Charge-offs
      Foreclosures or repossessions
      51
    • How Long Does Information Remain?
      Negative information 7 years
      Bankruptcies 10 years
      Judgments 7 years
      Student loans 7 years (can be indefinite)
      Inquiries 2 years
      Generally, the period runs from the date of the last transaction.
      Unless satisfied, these items could remain on your profile indefinitely.
      52
    • Solving Credit Problems
      Prepare a realistic spending plan
      Seek professional help
      Pay past-due accounts
      53
    • Credit Counseling
      • NeighborWorks® organizations
      • Cambridge Credit Counseling
      54
    • Danger Signals of Quick Credit Fixes
      • Asking for payment before credit repair services are provided
      • Advising you to dispute all negative information
      • Over-promising quick results
      • Helping you get a new identity
      55
    • Non-traditional Credit
      Rent payments
      Gas, electric and other utility payments
      Child care or child support payments
      Any other large, recurring expense
      56
    • Establishing Credit
      Always pay bills on time
      Open checking and savings accounts
      Apply for a loan using savings as collateral
      Apply for a limited-use or secured credit card
      Apply for a loan with a co-signer
      57
    • Managing Your Debts
      • Be honest about your debts
      • Add up what you owe to all creditors
      • Consult with a professional to diagnose your money problems
      • Decide how many credit cards you really need
      • Pay off or pay down debts
      • Make or revise a family spending plan
      • Pay cash for everything you buy
      • Give each member of household “mad” money, when possible, within your budget
      58
    • Managing Your Debts
      Establish or maintain a savings plan
      Automate bill paying to be on time and arrange due dates strategically
      Give up luxuries temporarily
      Look to the future
      59
    • Pizza Cost
      Paying the minimum payments cost’s you MUCH more.
      $10 vs. $41.50
      60
    • Opt Out to Avoid Debt
      Opt-Out Number
      888-567-8688
      61
    • Reducing Your Risk of Identity Theft
      • Only provide your Social Security number as needed
      • Be cautious with personal information
      • Shred documents
      • Keep mail safe
      • Store personal information in a safe place
      • Don’t carry extra credit cards or paperwork
      • Create unique passwords and PINS for accounts
      • Pay attention to billing cycles
      • Order credit reports at least once a year
      62
    • If You’re a Victim
      Contact Credit Reporting Agency fraud departments
      Contact all creditors involved
      File a police report
      Contact the FTC
      Keep records of contacts
      63
    • Know Your Rights
      • Prevent discrimination by companies that give credit
      • Require credit companies to give reasons for denials
      • Require credit companies to answer consumers’ questions
      64
    • Equal Credit Opportunity Act
      Prevents lender discrimination on the basis of race, color, religion, national origin, sex, age, marital status or source of income
      Requires disclosures of reason for denial within 30 days
      65
    • Truth in Lending Act
      • Requires lenders to provide complete and accurate information about credit costs and terms
      • Requires companies to send monthly billing statements showing balance, billing cycle, rate, payments and other information
      66
    • Fair Credit Billing Act
      • Provides a 60-day right to question any item on your credit card bill
      • Requires creditors to begin research within 30 days
      • Requires creditors to supply an answer within 90 days
      • Allows you to skip payments on disputed items until you hear back from the creditor
      67
    • Fair Credit Reporting Act
      Protects your right to know what is in your credit report and your ability to fix mistakes
      68
    • Fair Debt Collection Practices Act
      • Prevents collection agency employees from:
      • failing to identify themselves
      • calling your home before 8 a.m. or after 9 p.m.
      • contacting you after being told in writing to stop
      • harassing, oppressing or abusing you
      • falsely implying that you have committed a crime
      • telling others that you owe money
      • contacting you at work after being told that is not acceptable
      69
    • Questions?
      70
    • Obtaining a Mortgage Loan
    • Agenda
      • Mortgage loan basics
      • Who can get a mortgage loan?
      • Affordability and you
      • How much will a lender lend to you?
      • Shopping for the right lender and product
      • Strategies for finding the right lender and loan product
      • Working with a lender
      • Steps the lender may take to approve your loan
      • Your rights as a loan customer
      72
    • What is a Mortgage?
      73
      • Promissory Note
      • Mortgage or Deed of Trust
      • Collateral
      • Secured Loan
    • The Mortgage Payment
      74
    • Steps In Obtaining A Mortgage
      75
    • 4 C’s of Credit
      76
    • Capital
      77
      Down Payment
      Loan Fees
      Closing Costs
      • Escrow Impounds
      • Reserves
      • Moving Expenses
    • Capacity
      78
      • Current income
      • Income history and future earning potential
      • Amount owed
      • Installment accounts
      • Revolving charge accounts
      • Other monthly payments
    • Credit History
      79
      • Are bills paid on time?
      • Current liability
      • Past history
      • No credit history
    • 80
      Collateral
      Is the house worth
      what you are paying for it?
    • Housing Ratio
      Debt-to-Income Ratio
      Maximum % of gross monthly income that can be used for a monthly mortgage payment
      Maximum % of gross monthly income that can be used for the house payment plus all other debts
      81
      Ratios
    • Qualifying Ratios
      38% for housing plus all other long-term debt
      82
    • Obtaining Preapproval
      Obtain pre-approval before searching for house
      Guarantees that the lender will lend a fixed amount within a set time period
      May require a fee
      83
    • Who makes mortgage loans?
      Banks, Savings Associations, Credit Unions
      Non-profit organizations
      State or local housing financing agencies
      USDA Rural Development (RHS)
      Sellers
      Mortgage Brokers
      84
    • Loan Categories
      85
    • Conforming conventional loans
      Conform to Fannie Mae/Freddie Mac guidelines
      Available in many types of loans
      86
    • Subprime loans
      For those with credit problems
      Higher interest rates
      Risk-based financing
      87
    • Loan Price Cost Comparison(for same loan)
    • 89
      Predatory Lending
      High-pressure sales tactics and steering
      High interest rates and fees
      Balloon payments and negative amortization
      Prepayment penalties
      “Flipping”
      Deceptive practices and fraud
    • 90
      Government loans
      FHA insured loans
      VA guaranteed loans
      Rural Housing Services guaranteed loans
      State or local financing insured loans
    • Special Loan Programs
      • Fannie Mae and Freddie Mac affordable lending products
      • Local bank programs
      • State and local housing finance agency bond programs
      • Non-profit programs
      91
    • Types Of Loans
      92
      • Fixed-rate mortgages
      • Adjustable-rate mortgages
      • Interest-only or balloon mortgages
      • Graduated-payment mortgages
      • Bi-weekly mortgages
      • Incentive-rate-reduction mortgages
      • Shared-equity mortgages
    • Key Mortgage Terminology
      93
      • Loan-to-value
      • Down payment
      • Loan term
      • Interest rate
      • Annual percentage rate
      • Points
      • Mortgage insurance
      • Escrow account
      • Loan fees
      • Prepayment
      • Rate lock-in
      • Amortization
    • 94
      Next Steps
      • Loan application fee
      • Credit report fee
      • Appraisal fee
      • Loan origination fee
      • Document preparation fee
      • Broker fee
    • Shopping For A Loan
      95
      • Get referral from homeownership counselor or Realtor®
      • Check with current financial institution
      • Get referrals from friends and family
      • Shop online
      • Check local or state financing programs
    • Comparing Loan Programs
      96
      • Mortgage loan amount and type of loan
      • Down payment
      • Term of mortgage
      • Interest rate and APR
      • Monthly payments
      • Other costs and fees
      • Any prepayment penalty
    • Applying for the Loan
      97
      • Discuss details of loan terms
      • Complete and sign written application form
      • Provide copies of required documents
      • Sign permission letters for verifications
      • Sign authorization for credit report and pay fee
      • Pay for application fee and appraisal
    • Loan application documents
      Application (Form 1003)
      Truth in Lending Statement
      Good Faith Estimate
      98
    • Processing
      Underwriting
      99
      Steps to Approval
    • 100
      Legal Reasons For Rejection
      High debt
      Insufficient funds
      Low appraisal
      Poor credit rating
    • Standard Loan Conditions
      101
      • Mortgage insurance
      • Hazard and possibly flood insurance
      • Clear title report and lender’s title insurance
      • Clean termite inspection and certification
      • Survey
      • Other inspections common in area
    • Other Conditions
      102
      • Property condition contingencies
      • Documentation contingencies
      • Other requirements
      • sale of another property you own
      • pay off debt
      • resolve legal problems
    • 103
      Closing Costs
      Loan fees
      Interim interest
      Insurance premiums
      Escrow account deposits
    • Your Rights as a Loan Customer
      104
      • Equal Credit Opportunity Act
      • Fair Housing Act
      • Enforcement Agencies
    • Questions?
      105
    • Shopping for a Home
    • Agenda
      107
      • Steps in the home-buying process
      • Your home-buying team
      • Finding the right neighborhood
      • Types of homes and ownership
      • Finding your dream house
      • House hunting
      • Buying your home
      • Purchase and sale agreements
      • Escrow accounts
      • Closing
    • Steps in the Home Buying Process
      Attend homeownership education class
      Determine how much you can afford
      Meet with lender for pre-approval
      Determine wants and needs in a home
      Shop for a home
      108
    • Steps in the Home Buying Process
      Make an offer
      Arrange for a professional home inspection
      Apply for mortgage loan
      Obtain homeowners insurance
      Close the loan
      109
    • Your Homebuying Team
      110
      • Homeownership Counselor
      • Real Estate Agent
      • Lender
      • Attorney
      • Home Inspector
      • Appraiser
      • Surveyor
      • Homeowners Insurance Agent
    • Housing Counselor
      Works for non-profit organization, credit counseling service or housing agency
      Provides objective information and unbiased recommendations
      Own It, Keep It!
      • 111
      • 112
      Real Estate Agent
      Real estate broker
      Real estate agent
      Realtor®
      Realtist®
      Own It, Keep It!
    • Who Do Agents Work For?
      113
      • Listing agent
      • Buyer’s agent
      • Dual agent
      • Agents are paid through the transaction
    • Buyer’s Agent’s Job
      114
      • Helps determine your wants and needs
      • Provides neighborhood information
      • Helps you get pre-qualified
      • Researches comparable homes available in price range
      • Provides copies of listing sheets
      • Shows you properties for sale
      • Prepares purchase offer (in most states)
      • Negotiates with seller
      • Provides names of lenders
      • Refers you to other professionals needed
    • Finding an Agent
      Ask friends and relatives for recommendations
      Research online web sites
      Call your local Association of Realtors
      Interview more than one agent
      Check out the agent’s professional record
      115
    • 116
      Buying A Home Without An Agent
      FSBO (For Sale By Owner)
      Hire an attorney
      Order an independent appraisal
      • 117
      Lender
      Recommends best type of loan
      Pre-approval strengthens offer to purchase
      Lender’s primary concern is for loan to be repaid
      Own It, Keep It!
    • Who Can Conduct Settlement or Closing
      Attorney
      Escrow company
      Title insurance company
      Real estate broker
      Closing process varies by state
      118
    • The Real Estate Attorney
      May do any of the following:
      Write real estate contract
      Search title
      Conduct closings
      Settle disputes
      Review contracts
      Own It, Keep It!
      • 119
      • 120
      Escrow Officer/Closing or Settlement Agent
      Neutral party not representing either buyer or seller
      May keep original purchase contract, other documents and earnest money deposit
      Makes sure all people involved in sale do their job
      Prepares deed and HUD-1 Settlement Statement
      Fee usually split between buyer and seller
      Own It, Keep It!
    • 121
      Title Insurance Agent
      Researches chain of title ownership
      Lists liens that use the house as security
      Shows easements or unusable land areas
      Verifies amount of taxes and if paid
      Includes any deed or zoning restrictions
      Ensures that any condo or homeowners association dues are paid
    • Structural
      Mechanical
      • Foundation
      • Roof
      • Doors
      • Windows
      • Ceilings
      • Walls
      • Floors
      • Plumbing
      • Electrical systems
      • Heating
      • Air conditioning
      • Insulation
      • Ventilation
      • Septic systems
      122
      Items Checked In A Home Inspection
    • 123
      Appraiser
      Hired by the lender
      Determines fair market value
      Conforms to Uniform
      Standards of Professional
      Appraisal Practice (USPAP)
      May require survey for correct legal description
    • 124
      Surveyor
      Measures property and land
      Lender may require
      Part of the title search
    • 125
      Insurance Agent
      Homeowners policy covers hazard and liability
      Flood insurance required in FEMA-designated areas
    • Shopping for a Neighborhood
      126
      Visit at different times of the day
      Check out local schools
      Check with local police for crime statistics
      Visit with neighbors
    • Different Types of Homes
      Detached single-family
      Duplex, triplex, four-plex
      Planned unit development (PUD)
      Townhouse or row house
      Condominium or Cooperative
      Manufactured Home
      127
    • 128
      Things to Consider
      Current and future size of household
      Living needs and interests
      Proximity to work, schools, shopping, recreation
      How “green” do I want my home?
    • Exploring on Your Own
      Research on Internet
      Drive through selected neighborhoods
      Check real estate section and TV channel
      Check real estate shopping guides
      Visit open houses
      Visit new home projects
      129
    • Other Exploration Tips
      130
      • Check out foreclosed homes
      • Attend auctions (always sold “as is”)
      • Attend tax and foreclosure sales
      • Contact non-profit organizations
      • Ask friends and relatives who are moving
      • Look at For Sale By Owner homes
    • Evaluating Your Dream Home
      131
      • Inspect the house carefully
      • Estimate maintenance and repair expenses
      • Check out the neighborhood
      • Visit schools, daycare centers
      • Make the rush hour drive to and from work
      • Observe other homes on the same street
    • Fair market value
      Prices of comparable or similar homes for sale and sold
      Features your home has that others do not
      Relative price per square foot of your home
      132
    • The Offer Includes
      133
      • Price being offered
      • Amount of earnest money
      • Legal names of buyers and sellers
      • Address and legal description of house
      • Provision for home inspection
      • Proposed closing date
      • Financing to be obtained
      • List of items the seller is leaving
      • All contingencies
      • Breakdown of fees and who pays them
      • Time limit for seller acceptance (maybe)
    • Typical Contingencies
      134
      • Financing
      • Appraisal
      • Clear title
      • Satisfactory home and other inspections
      • Sale of existing home
    • Seller can…
      Buyer can…
      • Accept
      • Reject
      • Counteroffer
      • Accept
      • Reject
      • Counteroffer
      135
      Negotiation
    • From Contract Acceptance to Closing
      136
    • Types of Insurance Required
      137
      • Hazard or homeowners insurance
      • Flood or special hazard insurance
      • Mortgage insurance
      • Title insurance
      • Mortgage life insurance
      • Home warranty policy
    • Homeowners Insurance
      138
      • Property protection
      • Coverage A: The home
      • Coverage B: Detached structure
      • Coverage C: Contents (personal property)
      • Coverage D: Additional living expenses
      • Replacement Cost
      • Liability Protection
      • F.A.I.R. plans in states where coverage denied
    • 139
      Cost Of Insurance: External Factors
      Type of construction and fire protection
      Type of contents
      Size and condition of the house
      Proximity of fire hydrant and station
      Your credit score
    • 140
      Cost of Insurance: Your Influence
      Type of policy
      Size of deductible
      Optional coverage
      Discounts
      The company you choose
    • Preparing For Closing
      141
      • Do final walk-through inspection
      • Get copy of the HUD-1 settlement statement
      • Obtain cashier’s check for amount due
      • Be sure homeowners insurance policy is in
      • Call the utility companies
    • Closing Documents
      142
      • Final Truth in Lending statement
      • Final Good Faith Estimate
      • HUD-1 settlement statement
      • Mortgage note
      • Mortgage (or Deed of Trust)
      • Necessary affidavits
      • Deed
      • Title insurance policy
      • Title abstract
      • Survey of property
      • Termite inspection report
      • Escrow analysis
    • 143
      Closing Costs
      Settlement charges
      Charges associated with loan
      Pre-paids required by lender
      Title search and title insurance fees
      Government recording and transfer fees
      Notary, survey and other miscellaneous fees
    • Questions?
      144
    • Protecting your Investment
    • Agenda
      • Getting to know your home
      • Assuring home safety
      • Saving energy and money
      • Preventive maintenance and minor repairs
      • Remodeling and major repairs
      • Investing in your neighborhood
      • Asset building
      • Keeping records
      • Taxes and insurance
      • Protecting your equity
      • Prepaying your mortgage
      • Coping with hardship
      146
    • Why protect your home
      147
      • Three-way Investment
      • 1) shelter for your household
      • 2) life and heart for your community
      • 3) possible financial asset for your future
    • Things you need to know
      148
      • Main cutoff valves for water and gas
      • Main electrical switch
      • Marked fuse or circuit breakers
      • Hot water heater thermostat
    • Questions For The Seller
      149
      • Main cutoff valves for water and gas
      • Main electrical switch
      • Marked fuse or circuit breakers
      • Hot water heater thermostat
      • Is there extra (matching) paint available?
      • Who is the fuel oil supplier?
      • How to use energy-efficient systems
      • What seasonal maintenance has been done?
      • Who has worked on the house?
      • How much do the utilities and services cost?
    • Creating A Healthy Environment
      150
      • Eliminate smoking from home
      • Check smoke and carbon monoxide alarms
      • Avoid accumulation of moisture and chemical pollutants indoors
      • Vacuum at least weekly and reduce clutter
      • Increase air flow in the home
      • Reduce use of pesticides
      • Do not run car in attached garage
    • More Ways To Create A Healthy Environment
      151
      Do not heat home with unvented heater
      Address water leaks ASAP
      Use cleaners and pesticides in well-ventilated area
      Look for natural alternatives to household products
      Keep food and trash in sealed containers
    • 152
      First Priorities
      Post emergency numbers
      Have a fire safety inspection
      Install smoke and carbon monoxide alarms
      Place fire extinguishers on each floor
      Plan fire escape route
      Stock first-aid kit (out of children’s reach)
    • 153
      Keep safe and secure
      Change all locks on doors & windows
      Lock doors and windows when you go out
      Trim shrubs that hide windows and doors
      Install outside lighting
      Put up “beware of dog” sign
      Stop mail and newspaper when you go away
    • Energy-saving Tips
      154
      • Add attic insulation
      • Change to low-flow faucets, shower heads and toilets
      • Service furnace and change filter regularly
      • Caulk around doors and windows
      • Install storm windows and doors
      • Adjust the thermostat to the season
      • Set water heater low and cover with blanket
      • Install attic fans or vents
      • Buy energy-efficient appliances with Energy Star® logo
      • Install ceiling fans
      • Monitor your heating and cooling systems
      • Dress appropriately for the season
    • 155
      The cost of replacement
      High-efficiency forced air furnace: $2,500 - $5,000
      50-gallon electric hot water heater: $400 - $600
      Roof for an average, 3-bedroom ranch house: $10,000 - $15,000
    • Do-it-yourself repairs
      156
      • Resources:
      • Books
      • Videos
      • Classes
      • Community Center
      • Lowe’s, Home Depot
    • 157
      Basic tools
      Screwdrivers
      Claw hammer
      Pliers
      Adjustable wrench
      Hand saw
      Assorted nails, screws, etc.
      Tape measure
      Flashlight with batteries
      Putty knife
      Utility knife
      Caulking gun
      Plunger
      Handheld power drill
      Carpenter’s level
      Ladders
      Sandpaper
    • Most Common Problems
      158
      • Clogged toilet, sink, tub or shower
      • Running toilet
      • Tripped circuit breaker
      • Tripped GFCI outlet
      • Malfunctioning heating/cooling system
    • Questions to Ask Before You Remodel or Repair
      Do you need to hire a contractor?
      Will the job add value to your house?
      How much can you afford to spend?
      159
    • Improvements That Usually Add Value
      160
      • Adding another bathroom
      • Modernizing a kitchen
      • Creating more closet and storage space
      • Building a garage
      • Adding a deck, patio, screened porch and skylights (if they’re common in your area)
    • 161
      Planning Your Project
      Think about the finished product
      Consider your budget
      Make sketches
      Do research on local permits and codes
      Think about timing and weather
    • Working With Contractors
      162
      • Decide which type of contractor you need
      • Interview at least three contractors
      • Get references
      • Visit at least one completed job
      • Ask how long the contractor has been in business and check for licensure
      • Check out the contractor’s reputation
      • Check the contractor’s insurance
      • Ask about guarantees
      • Get firm, line item bids
      • Get contract specifics
    • Managing Your Contractor
      163
      • Control costs by controlling changes
      • Agree on payment schedule up front
      • Don’t make the final payment until the job is done
      • Specify responsibility for permits
      • Ask for lien waivers on larger jobs
    • Know your community
      Meet your neighbors
      Read community newspapers
      Contact Welcome Wagon
      Visit city or town hall
      Join a service or professional club
      Volunteer for special events
      Attend neighborhood association meetings
      164
    • 165
      The Financial Aspects Of Protecting Your Investment
    • 166
      Keeping Records
      Design a system for filing records in fire-safe box
      Collect important papers from the sale, making copies if kept in the home
      Keep off-site copies of homeowners insurance policy, service contracts, owner’s manuals, warranties, and model numbers
      Take photos of home’s exterior and interior
      Make list of documents in file
    • 167
      Income Tax Deductions
      Mortgage interest
      Mortgage insurance (years ‘08, ‘09, ‘10)
      Points
      Moving expenses (sometimes)
      Property taxes
      Capital Gains exemption on sale of home
    • Filing a Homeowners Insurance Claim
      168
      • Report burglaries to police
      • Re-read your insurance policy
      • Call your agent immediately
      • Photograph damage before making temporary repairs
      • Provide data to your insurance company
      • Keep receipts for additional living expenses
      • Get a claim identification number
    • When There’s Equity…
      169
      • There are Options
      • Refinance your home
      • Get a home equity loan
      • Get a reverse mortgage
    • Reasons for Refinancing Your Home
      170
      • Save money by lowering your interest rate
      • Convert to another type of mortgage
      • Build up equity faster
      • Convert some equity to cash
      • Hope for Homeowners as refinancing option
    • 171
      Warning: You Pay a Price With a Predatory Lender
      High-pressure sales tactics and steering
      High interest rates and fees
      Balloon payments and negative amortization
      “Packing” and padding costs and fees
    • Protect Yourself from Predatory Lenders
      172
      • Shop around
      • Don’t sign incomplete documents or anything you do not understand
      • Work with a homeownership or credit counselor
      • Use your right to cancel (three-day right of rescission for refinance)
    • What to Do If You…
      173
      • Cannot meet your financial responsibility
      • Are in danger of foreclosure
      COMMUNICATE WITH YOUR LENDER AS SOON AS TROUBLE STARTS!!
      Call national foreclosure prevention hotline:
      888-995-HOPE
    • Workout Programs
      Payment plan
      Forbearance
      Loan modification
      Partial claim
      Own It, Keep It!
      • 174
      • 175
      Moving On
      Pre-foreclosure sale
      Deed-in-lieu of foreclosure
      Short sale
      Own It, Keep It!
    • Delinquency Counseling
      There’s Help for You
      • Non-profit agency that helped you buy
      • HUD: (800) CALL FHA or hud@custhelp.com
      • Your mortgage insurance company
      • Cambridge Credit Counseling (800) 757-1788
      • Local VA office for a VA loan
    • Your Best Resource
      For more information, contact:
      NeighborWorks® America
      1325 G St., NW, Suite 800
      Washington, DC 20005
      Call 202.220.2300 or 800.438.5547 or
      visit www.nw.org
    • Questions?
      178