Your Own Home The benefits and pitfalls of renting versus owning Renting Owning Mortgage 3 C’s Pre – Qualification Shop for a Loan Pre-Approval On-Approval

2 Renting  No property maintenance  You are only under contract for one year or less  You do not have the costs of taxes and insurance  You are able to move or transfer.  No Local Govt. Rates

3 Owning a Home  You can build equity  A home generally increases in value  The home is yours - security  Your mortgage interest is tax deductible  You can pass your home on to family members

4 Components of a Mortgage Payment  P = Principal  I = Interest  T = Taxes  I = Insurance  F = Fees

5 The Three Cs  Capacity - Ability to meet your payments  Capital - Savings and assets for collateral  Character - Credit history Repayments 25% of total income Deposit :- >10% of investment Deposit :- Savings in 12 months

6 Pre - Qualification  Meeting with Loans Officer at Bank or other institution  Informal, no paperwork, no obligation  Figure is not exact  Get idea of all costs

7 Shop for a Loan, NEGOTIATE! ♦How much mortgage you can afford ♦Check newspapers and Internet for terms and rates ♦Negotiate the best deal you can ♦Let lenders compete ♦Get the costs in writing

8 Pre-Approval  Commitment from the lender to lend you money based on income etc.  Tells you how much you can obtain and what you can afford to buy  Tells the seller you are serious – negotiate for best price.  Find best product (Be objective)  Sign contract subject to Finance

9 On Approval  Involve Solicitor  Sign documents at bank  Settle on Final price and inclusions  Sign contract with Real Estate Agent  Negotiate settlement date  Weigh up deal prior to Exit date.