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The American Dream

The American Dream Homebuyer Education. The American Dream. Homebuyer Education. Budgeting to Buy. Cash Funds Required. Down payment Closing cost After closing expenses or maintenance. A Good Budget Includes. Family members Realistic goals Flexible goals Specific (written) goals.

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The American Dream

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  1. The American Dream Homebuyer Education The American Dream Homebuyer Education

  2. Budgeting to Buy

  3. Cash Funds Required • Down payment • Closing cost • After closing expenses or maintenance

  4. A Good Budget Includes • Family members • Realistic goals • Flexible goals • Specific (written) goals

  5. Goals • Balancing needs vs. wants • What can you afford? • Calculating your monthly debt ratio

  6. Shopping For Your Home • Pre-qualification vs. pre-approval • Qualifying ratios • Housing ratio = 28% of monthly income • Debt ratio = 36% of monthly income • Realtor can assist • Narrow down your choices

  7. Factors to Consider • Location • Price range • Commuting concerns • Neighborhood and community amenities • Type of house • Resale

  8. Selecting a Real Estate Agent • Seller’s Agent • Buyer’s Agent • Agent qualifications • Licensed • Professional and knowledgeable • Able to work on your schedule • Pick someone you’re comfortable with

  9. House Hunting Resources • Multiple Listing Source (MLS) and broker services • Newspaper ads • Real estate magazines • Driving around • Tax sales • Veterans administration (VA) and bank foreclosures • Estate auctions • Non profit housing agencies and foundations • Networking • Internet

  10. Negotiating the Deal • Earnest money • Financing • Selling your present house • Appraisal • Closing date • Closing costs

  11. Financing Your Loan

  12. Finding a Lender • Realtor • Builder/Developer • Friends and relatives

  13. Mortgage Products • Conventional loans • Private mortgage insurance • Government Financed/Insured • FHA • VA • RECD (previously Farmers Home) • State Housing Finance Agencies

  14. Types of Mortgages • Fixed rate • ARM (Adjustable Rate Mortgage) • Convertible

  15. Comparison Shopping • Down payment • Discount points • Interest rate

  16. Applying for the Loan • What you need to bring? • Face to face interview • Filling out the loan application • All that paperwork • Loan processing

  17. Factors Used in Evaluating Application • Stability of income • Adequacy of income • Sufficient money to close • Credit worthiness • Credit report

  18. Did I Get the Loan? • Loan approval • States the amount and terms of the loan • Sign and date • Loan disapproval • Poor credit rating • Insufficient funds • Insufficient income • Too much debt

  19. Closing Your Loan

  20. The Closing Table • Who- real estate agent, seller, buyer, loan closer • Where – title company • Never be intimidated by the closer • Read and sign all documents • Don’t sign any form you do not understand • Make sure you receive a copy of all documents you have signed

  21. Closing Costs • Appraisal • Attorney’s fees • Credit Report • Escrow/title company costs • Home inspection • Home warranty programs • Loan origination fees • Pest inspection

  22. Closing Costs • Recording fee • Survey • Title search and insurance • Pre-paid costs • Private Mortgage Insurance (PMI) • Homeowners insurance • Pre-paid mortgage interest • Property taxes

  23. Caring For Your Home

  24. Knowing Your Home • Consult the prior homeowner • Maintenance records • Learning the basics

  25. Benefits of Maintenance and Repair • Saves money • Equity • Pride in ownership • Added life to investment • Resale

  26. Money for Maintenance • Sure thing • Your home will need repairs/maintenance • Save 1% of purchase price; annually • Priority

  27. Saving Money-Energy Conservation- • Thermostat control • Insulate water heater • Lights • Attic insulation • Replacement • Water savings toilet • High efficiency furnaces • High efficiency water heaters

  28. Homeowners Insurance • Dwelling, interior • Inflation rider • Life/death insurance • Smoker vs. non-smoker

  29. Good Neighbor Policy • Maintain house, yard, walks • Noise control • Supervise children and pets • Participate in neighborhood associations and citizen groups

  30. The American Dream Homebuyer Education The American Dream Homebuyer Education

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