Achieving Homeownership Getting Started Home Buying Workshop

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Achieving HomeownershipGetting StartedHome
Buying Workshop
SAMPLE ONLY ALL CONTENT IN THIS PRESENTATON CAN
BE CUSTOMIZED FOR THE REALTORS NEEDS. THIS IS
INTENDED AS A STARTING POINT FOR DEVELOPING A
HOME BUYER EDUCATION PRESENTATION.
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Achieving Homeownership

• At the end of this module you will understand
• Factors to consider when evaluating your
  readiness for homeownership
• How to obtain your credit report
• How to correct your errors that may be
  on the credit report
• The homeownership process
• How to obtain additional information

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Making the Decision

• Advantages of Homeownership?
• A Place of your own
• Financial incentives
• Equity
• Stable housing costs
• Increased value
• Tax benefits

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Making the Decision

• Possible Drawbacks of Homeownership?
• Additional costs
• Property taxes, homeowners insurance, utilities,
  and upkeep expenses
• Decreased mobility
• Possibility of foreclosure
• Repairs and maintenance

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Making the Decision

• Qualifying for a Mortgage
• Have you?
• maintained a steady job history and income?
• paid your bills on time?
• established a credit record?
• saved money for a down payment?
• limited your outstanding debt?

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Making the Decision
Costs to be Paid

• Upfront Costs
• Down payment
• Closing costs
• Escrow and prepaids
• Settling-in costs
• Appraisal
• Credit report
• Loan approval fees
• Inspections

• Ongoing Costs
• Monthly mortgage payment PITI
• Principal, interest, taxes and insurance
• Utilities and maintenance costs

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Making the Decision

• Factors the Lender will Consider
• Capital
• Money available for upfront costs
• Capacity
• Pay monthly mortgage payment and other bills
• Income
• Employment history
• Credit History
• Past credit, credit report and credit scores
• Collateral
• Appraised value for condition of the house you
  are buying

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Making the Decision

• How Much House Can You Afford?
• Pre-qualification
• Estimated amount of money the lender will let you
  borrow
• Price of the house you should shop for
• Based on estimated loan amount
• How much down payment you will need
• Amount of your monthly payments

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Understanding Credit
Obtaining Your Credit Report FICO Score

• EXPERIAN
• P.O. Box 2002
• Allen, TX 75013
• 1-888-397-3742
• www.experian.com
• TRANSUNION
• Consumer Disclosure Center
• P.O.Box 1000
• Chester, PA 19022
• 1-800-916-8800
• www.transunion.com

• EQUIFAX
• P.O. Box 740241
• Atlanta, GA 30374
• 1-800-685-1111
• www.equifax.com

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Understanding Credit

• Improving Your Credit Score
• Correct inaccurate information
• Pay bills on time
• Reduce outstanding debt
• Apply for and open new credit accounts only as
  needed
• Use credit cards responsibly
• Re-establish credit if you have had problems
• Deferring interest on purchases may lower your
  score
• Checking credit reports frequently may lower your
  score

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Understanding Credit

• Correcting Any Errors on Your Credit Report
• Follow any instructions on how to correct errors
• Call the credit reporting agency
• Send information needed to correct the error
• Explain the problem in a brief letter
• Contact the creditor directly
• Write a consumer statement to tell your
  side of the story

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Understanding Credit

• What if You Dont Have Credit?
• Nontraditional credit report may be needed if you
• do not use banks or credit cards
• have insufficient number of credit references to
  develop traditional credit report
• Generally prepared by credit bureau or lender
• Borrower must provide a list of
• credit sources for all regular, periodic payments
• Borrower must produce
• receipts, copies of canceled checks or money
  orders, and copies of paid bills

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Understanding Credit

• Nontraditional Credit Report
• Need to provide
• Housing-related payments
• rent, utilities, phone and cable television
• Insurance-related payments
• excluding payroll deductions
• including coverage for medical, automobile and
  life
• Payments to merchants and health and child-care
  providers
• tuition and loans obtained

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The Home Buying Process

• Consult a Professional
• Select a REALTOR?
• Prepare for homeownership
• Evaluate pros and cons
• Learn about the process
• Homebuyer education
• Individual counseling
• Determine how much you can
  afford
• Prepare a realistic budget
• Apply for a mortgage
• Get loan pre-approval
• Apply before you shop for a home
• Shop for best terms/rate
• Complete application

• Decide on type of house you want and need
• Affordability
• Size
• Lifestyle
• Make an offer
• Purchase contract
• Earnest money
• Get a home inspection
• Buy insurance and get
• additional inspections
• Title insurance
• Close the loan
• Sign closing documents
• Seller receives check
• Buyer receives keys

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Homeownership Process

• Where to Go to Apply for a Loan
• Mortgage companies
• Banks
• Credit Unions
• Nonprofit Community Development and
  Housing Organizations
• Local, state and federal programs

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Resources

• More Information
• Down payment assistance programs
• Local counseling agencies
• Fannie Mae Foundation
• Opening the Door To A Home Of Your Own
• Knowing and Understanding Your Credit
• Websites
• www.fanniemae.com/homepath
• www.fanniemaefoundation.org