Realizing the American Dream - PowerPoint PPT Presentation
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Title:
Realizing the American Dream
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Title: PowerPoint Presentation Author: martha Last modified by: Administrator Created Date: 10/7/2003 5:24:13 PM Document presentation format: On-screen Show – PowerPoint PPT presentation
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Title: Realizing the American Dream
1
Realizing the American Dream
- Are You Ready
- to Buy a Home?
2
Agenda
- Is owning a home right for you
- How you buy a home
- Your homeownership team
- Mortgage payment and other costs
- How much you can afford
- Qualifying ratios
3
Advantages of Homeownership
- Stable housing costs
- Tax benefits
- Equity
- Control over your environment
- Stability
4
Disadvantages of Homeownership
- Monthly costs
- No guarantees
- Maintenance and repairs
- Decreased mobility
- Fewer features included
5
Steps in the Homebuying 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 (Contd)
- Make an offer
- Have professional home inspection
- Apply for mortgage loan
- Obtain homeowners insurance
- Close the loan
7
Your Homebuying Team
- Homeownership Counselor
- Real Estate Agent
- Lender
- Attorney or Escrow Agent
- Title Insurance Agent
- Home Inspector
- Appraiser
- Surveyor
- Homeowners Insurance Agent
8
The Mortgage Payment
- Principal
- Interest
- Taxes
- Insurance
9
Costs of Buying a Home
- Upfront Costs
- Down payment
- Closing costs
- Escrows
- Reserves
- Moving costs
- Ongoing Costs
- Mortgage payment
- Utilities
- Maintenance and repairs
10
The 4 Cs of Credit
- Capital
- Capacity
- Credit History
- Collateral
11
Ordering a Credit Report
- Experian www.experian.com
- (800) 831-5614
- TransUnion www.transunion.com
- (800) 888-4213
- Equifax www.equifax.com
- (800) 685-1111
12
How Much Can You Afford?
510 of monthly income
36,000 (3,000/mo.)
90,000 108,000
Income
Debts
2.5 3 times
Home Price
13
Qualifying Ratios
Housing 33
Debts 5
Other Expenses 62 Expenses 62
38 for housing plus all other long-term debt
62
33
5
14
Prequalification
- 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
15
Summary
- Pros and cons of ownership
- Key steps and professionals involved in the
homebuying process - Mortgage payment and other costs
- How lenders determine creditworthiness and
affordability
16
Next Steps
- Sign up for education or counseling
- Order copies of your credit report
