Achieving Homeownership Getting Started… Home Buying Workshop

1. Achieving HomeownershipGetting Started…Home Buying Workshop Presented by Gayle Michelle & Gina Lomori

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

3. Making the Decision Advantages of Homeownership? • A Place of your own • Financial incentives • Equity • Stable housing costs • Increased value • Tax benefits

4. Making the Decision Possible Drawbacks of Homeownership? • Additional costs • Property taxes, homeowner’s insurance, utilities, and upkeep expenses • Decreased mobility • Possibility of foreclosure • Repairs and maintenance

5. 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

6. 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 Making the Decision Costs to be Paid

7. 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

8. 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

9. 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 Understanding Credit Obtaining Your Credit Report & FICO Score

10. 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

11. 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

12. Understanding Credit What if You Don’t 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

13. 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

14. 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 The Home Buying Process

15. 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

16. 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

17. Websites • www.bestSDrealty.com • www.SDrealtyguide.com Contact Us • Toll Free: 800-699-3864 Fannie Mae Representatives: Name: Phone: E-mail: Gayle Michelle: 858-922-9608 gayle@GayleMichelle.com Gina Lomori: 619-665-5870 gina@devotedrealtors.com