This presentation on buying a Home is presented to you by DFW Metro Housing

1. This presentation on buying a Home is presented to you by DFW Metro Housing Presented by Colin Rosenthal TEL 214-704-4005 FAX 214-666-3227 colin@dfwmetrohousing.com http://wwwdfwmetrohousing.com

2. What does it take to own your own home? • 1) Mortgage payment • 2) Utilities • 3) Buy a lawn mower? • 4) How about the leaking Tap or broken stove? • Please remember when calculating what you can afford per month that there are many hidden items that will come up when owning a home. These items never came up or were paid by your landlord when you were renting.

3. Never over extend your self • Most of the recent foreclosures happened because people over extended them selves when buying their home. • EG You paid $800 a month in rent and now have to pay $1000 a month in your mortgage and have a hot water heater that went out this month and had to finance it at $100 a month for the next year?

4. Always leave yourself something in reserve for an emergency • When planning your budget always think of an emergency and leave about a $100 or more to take care of items like the hot water heater or A/C. I always ask for a home owners warranty when presenting a contract but there is still a $65 deductible to pay • Now say Hi to ASHA and her children

5. Asha and her children

7. Asha Smith and her 2 children Tyler and Faith Needed a home • Once Asha had decided in March of 2008 that she was going to get her own home there was no stopping her. • She persevered and overcame every obstacle and on January 8th this year she moved into her Brand new home with the help of AHAP and TCHP

8. Only $890 a month for a Brand new home • Asha’s Home was appraised at $120000 and TCHP and AHAP together gave her $20000 towards the purchase of this new home. The $20000 was used to pay for the Down payment, Closing costs and the balance went to equity in the home. Her mortgage was for $92000 and her payment is $890 a month. All she had to invest was $1000 and be there to answer any questions that came during the processing of her loan and that came from AHAP.

9. What did it take • Team work • Every time she was asked for something no matter how small, she was on the ball and got it to them pronto. This is the only way you are going to get into your own home is with TEAM WORK

10. Chapter OneClosing Costs those horrible words • The biggest nightmare for any prospective seller or buyer are the 2 words “ Closing Costs” • But in any real Estate transaction these are words you will always hear….Now to begin • Let us for simple calculating reasons let us say that we have found you a lovely home priced at $100000. Youwould like to submit a contract but need to know what you expenses are going to be and what you can afford. • There are from both sides (Buyer and Seller) expenses which are called closing cost associated with this contract that are going to cost both the buyer and seller lots of money.

11. Sellers Closing Costs • The Home is priced at $100000 • The seller will have to pay the following: • Listing agent and buyers agent commissions normally about 6% or $6000 • Title policy and property taxes year to date, plus title and legal fee normally these costs amount to about 3% or $3000 • This mean that the sellers closing costs are about $9000.

12. The Actual Buyers closing costs • The Actual buyers closing costs are as follows: • Loan setup fees, prepaid Insurance and Taxes on the home. Pre-paid FHA insurance as well as other hidden title items. These expenses normally add up to about 6% or in this case $6000 on our $100000 home we are purchasing.

13. Types of Mortgage • Before we get deeper into buyers closing costs let us discuss the kinds of mortgages available. • 1) FHA (This is what we will be using to get you your home) • 2) Conventional • 3) VA • 4) USDA

14. Buyers closing cont. • Down payment of Between 3.5 and 5% of the price of the home with an FHA Loan. In this case 3.5% or $3500. • Therefore you the buyer will need to have a total of $9500 ($6000 plus $3500) in the bank to be able to purchase THIS HOME FOR $100000. • $$$$$$$$$$$$$$$$$$$$$$$$$$

15. Buyer Closing Costs page 4 • Now we have a total of about $9500 we will need to buy the home including the down payment • The best type of mortgage loan to get today in this current market is an FHA 201B FHA loan which depending on you earning capacity and credit score requires a minimum of 3.5% down payment

16. The Problem • Very few people have $9500 ready and waiting to buy a home and this is where our knowledge and experience help you get a home of your own: • There are various different methods of overcoming this problem but this is where our team work begins.

17. The Texas First time Home buyer • How can we eliminate or at least help you with your Down payment and continue to help you get into your home with only $1000 investment? • Through Government Grant Programs • Example: TDHCD Grant program. • Arlington Home Assistance Program.

18. Programs Cont. • The Fort Worth Home buying assistance program which offers up to $8500 in down payment and closing assistance all over Fort Worth and $14500 in a designated area of Fort Worth. • Starting about April 15th 2009 the Neighborhood Stabilization Program (NSP)

19. NSPNeighborhood Stabilization Program • The NSP plan varies by City but you can get anywhere from $10000 to $45000 in assistance on purchasing a Foreclosed Home in designated area all over the Metro-plex. At present the plans have already been developed for Arlington and Fort Worth and are still being developed for Garland, Mesquite, depressed parts of Dallas, Dallas and Tarrant Counties

20. http://www.dfwmetrohousing.com • Go to my web-site for more Information

22. Neighborhood Stabilization Program

25. The Arlington Home buyers assistance Program AHAP • AHAP Provides first time home owners up to a Maximum of $7500 per household for use in down payment assistance or closing costs • Households who buy in designated area or with disabled members can receive up to $10000 • Or if you purchase a new home built by TCHP you can get a $20000 grant like Asha Smith did

26. Forgiven after 5 years • You must stay in the home for 5 to 15 years or repay the assistance at 0% interest • You must be pre-qualified for a loan through a certified Lender (Chris Cook) • You must attend an 8 hour home ownership class through a HUD agency Like AHAP or TCHP and get a certificate. • First Time Buyer: You Cannot have owned a home in the past 3 years (In the NSP you just cannot own a home at the time of the closing period)

27. Qualifications • The qualification required vary from city to city but are all basically the same • Minimum investment of at least $1000 • Half of the required Down payment under the NSP • Income guidelines as per chart

28. USDA • Eligible North Texas Cities • As of July 20, 2008 • This list is not all inclusive of the eligible areas in North Texas. It only covers the major towns serviced by Area 3. For specific eligible areas, check our eligibility website: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do or contact the local Rural Development Office. You can find all Texas USDA Rural Development offices at www.rurdev.usda.gov. • County Serviced By Cities • Archer Decatur Cities include Archer City, Windthorst, Holiday and Lakeside City • Baylor Decatur No ineligible areas in the County. Cities include Seymour • Clay Decatur No ineligible areas in the county. Cities Henrietta, Byers, Petrolia and Bellevue. • Collin McKinney Cities include Princeton, Farmersville, Nevada, Lavon, Prosper, Celina, Anna, Melissa, Westminster, Blue Ridge, Wylie • Cooke McKinney No ineligible areas in the county. Cities include Muenster, Callisburg, Valley View, Lindsay, Gainesville. • Cottle Decatur No ineligible areas in the county. Cities include Narcisso and Paducah. • Dallas McKinney Eligible cities include Seagoville and Combine • Denton McKinney Cities include Aubrey, Corinth, Little Elm, Justin, Roanoke, Krum, Highland Village, Lake Dallas, Ponder, Sanger, Pilot Point • Foard Decatur No ineligible areas in the county. Cities include Crowell and Thalia • Fannin McKinney No ineligible areas in the county • Grayson McKinney The entire county except the city limits of Sherman and Denison is eligible to include Van Alystine, Gunter, Whitewright, Tioga, Whitesboro, Pottsboro • Hardeman Decatur No ineligible areas in the county. Cities include Chillicothe and Quanah. • Hunt McKinney Cities include Quinlan, West Tawakoni, Celeste, Commerce, Campbell, Lone Oak, Caddo Mills • Jack Decatur No ineligible areas in the county. Cities include Bryson, Jacksboro, Antelope, Postoak. • Kaufman McKinney Combine, Cottonwood, Crandall, Forney, Kaufman, Oak Grove, Oak Ridge, Talty, Mabank, Kemp, Grays Prarie, Rosser, outside the city limits of Terrell • Montague Decatur No ineligible areas in the county. Cities include Montague, Nocona, Bowie, St Jo, Forestburg. • Palo Pinto McKinney No ineligible areas in the county. Cities include Mineral Wells, Graford, Strawn, Santo, New Salem, Palo Pinto, Gordon, Mingus • Parker McKinney Cities includes, Aledo, Springtown, Willow Park, Sanctuary • Rockwall McKinney The entire county east of Lake Ray Hubbard is eligible, Rockwall, Royse City, Fate, Heath • Tarrant McKinney Cities include Avondale, Azle, Blue Mound, Briar, Center Point, Crowley, Haslet, Lakeview, Oak Grove, Pelican Bay, Saginaw, Wheatland • Wichita Decatur Cities of Wichita Falls and Burkburnett are not eligible. Cities include Electra, Iowa Park, Lakeside City, Kamay • Wilbarger Decatur No ineligible areas in the county. Cities include Vernon. • Wise Decatur Cities include Bridgeport, Decatur, Alvord, Aurora, Chico, Rhome, Boyd • Young Decatur Cities include Graham, Olney, Newcastle, Jean, Loving

29. What is required of you? • Depending on your Income • Not have owned a home in 3 years • Must be pre-qualified through Chris as a lending partner in the program • Once you have filled in your application we will work on getting you qualified and do all the paperwork for you with your help of course.

30. Each and Everyone • Everybody is different so we will have to work with each of you depending on where you want to live and what your individual circumstances are

31. HUD Homes • AHAP makes it very difficult to work with HUD homes unless they are in perfect condition

32. Chapter 3 Looking for your dream home • We are ready to look for your home • All you have to do is provide me with your E-mail address and I will set you up even if you don’t qualify yet. This way you will have an idea of what the market is like. I will set up your search criteria from the following information:

33. Advantages and disadvantages to buying a brand new home Advantages: Energy Star…Save on utilities and clean air New home warranty 1 year on cosmetics, 2 on appliances and 10 on structure No-body has lived in your home before Disadvantages: It takes many years to gain equity EG: You pay $140000 and the other home 1 year old in that sub-division are selling for $120000 or less… You have to wait until the neighborhood is established

34. Look for this sticker on the Electric Box

35. Want to receive listings? • Name…………………………………. • E-mail address……………………… • Phone Number………………………. • What can you afford to pay monthly including taxes and insurance • $1000 a month will give you $100000 on a 30 year loan • Where would you like to live? • City……………………Zip………………………

36. You can also go directly to my web-site • You can also view basic listings directly from my Web-site as well as fill in a mortgage application • Please go to: • http://www.dfwmetrohousing.com • Look for view MLS listings on the bottom of the home page

37. Receive listings page 2 • How older home would you like?........... • How Big …………………..Square feet • Now tell me something about the house you would like? • How many bedrooms?....................... • How many bathrooms?..................... • How many garages?......................... • Please be realistic in your search and remember to keep your monthly payment to what you can afford

38. How read a listing • Double click the picture to see all the pictures (The listing below has 4 pictures) • Double click the address to see the map of where the home is. • At this point we will look at a listing and go through it point by point

45. We have your home • Now we have found a few homes that you like and are ready to submit a contract on the one you like the most. • The reason I say a few homes is because we will always be asking the seller for concessions and often they will not negotiate or counter so we have to find a few nice home that you will like.

46. Chapter 4 Contracts • The Four Family Contract is an 8 page contract that we will go through page by page. • The Third party Financing Addendum is a 2 page form that we will go though • If a home is older than 1980, we will also have to include a lead based addendum • I always have you sign a get a home inspection form • If the home belongs to a home owners association that this form must also be signed • Finally there is always a sellers disclosure to be signed unless the home is a foreclosure

47. Contracts Page 1 • At the top under paragraph 1 Parties • First the sellers name below that the buyers name • Paragraph 2 • Next down the legal address of the home and also its physical address • Paragraph 3 • Next the down payment and the amount to be financed with the total selling price below that • Paragraph 4 • The financing arrangements • Paragraph 5 • The earnest money and the title company • Paragraph 6A • We always ask the seller to pay Title policy

50. Page 2 and 3 • Paragraph 6C • Who is supplying the survey • Paragraph 6E section 2 • Does the home belong to a home owners association • Paragraph 7 B Page 3 of contract • Sellers disclosure …Always required except when a foreclosure • Paragraph 7 E We also always ask for a 7 days inspection contingency. This is the period you have if a problem is found with the home to cancel the contract if the seller will not repair the defect