1. Choosing a Place to Live

2. HOUSING NEEDS Phsyical Needs – –Shelter –Safe place for posessions –Space for activities Emotional Needs – –Privacy –Opportunity for personal expression Social Needs – –Gather with family –Welcome guests –Feeling of belonging

3. Choosing a Location Choosing a Location http://www6.onboardnavigator.com/1.5/WebContent/OBWC_Report.aspx?&AID=386- b385f004f6c7&CD_SID=CO001&Frame=0&Width=650&AgentID=&AgentEmail=&SearchID=1&SubSearchID=2&REFS=1&RTID=12&RID=20221| ;20099|&PassBackValues= http://www6.onboardnavigator.com/1.5/WebContent/OBWC_Report.aspx?&AID=386- b385f004f6c7&CD_SID=CO001&Frame=0&Width=650&AgentID=&AgentEmail=&SearchID=1&SubSearchID=2&REFS=1&RTID=12&RID=20221| ;20099|&PassBackValues= Cities – in major cities – very expensive! But, there is much in the way of entertainment and opportunities. Suburban areas – access to a city without living in it-- residential regions surrounding the city. Generally, there is less in the way of diversity. Rural areas – small communities – less noise and pollution – easier access to outdoor pursuits. But, less in opportunities and entertainment.

4. Expenses and Options Factors that influence the cost: –Size of the home –Location, features –Age of home, market demand Determine what you can afford – Good rule – Spend no more than 28% of gross (even better if it’s net) pay on housing Don’t forget about: –Security deposits –Mortgage (down payment, closing costs) –Utilities, furniture, insurance, maintenance

5. Renting vs. Buying Pros – –Fixed expenses –Greater flexibility –More free time. –Lower insurance costs Cons – –More restriction –Financial drawbacks –Limited control Pros – –Stability –Greater freedom –Investment value –Tax advantages Cons – –Unexpected expenses –Maintenance –Reduced mobility

6. Renting Terms (1)Landlord – owner of the rental property (2)Tenant – renter, also known as lessee. (3)Lease- a legal document that spells out the conditions of you renting from the landlord. (5) Default- failure to do something required by the agreement. (6) Security deposit- money paid before you move it, usually equal to 1 month of rent. You get it back when you clean & move out. $60 charge to clean your oven, if not clean!

7. Beware, before you move in! Before you move in, you need the first month of rent and security deposit paid. If you sign ANY legal document when 18 years of age or older, you must follow it! So, get someone who understands the agreement to explain it to you. (4) Never “co-sign” ANY papers for someone, for if they default, YOU have to pay!

8. The Cost of Moving Rent for first month Rent for last month Security deposit Utilities deposit (hook- up fee) Cable / telephone deposit (activation fee) Moving Costs –Renting a truck –Hiring movers –Packing supplies

9. Roommates? Issues to Consider: Pros and Cons –Lifestyles –How to split expenses, who pays each expenses –How to divide chores –House rules –Legal obligation if someone moves out

10. What kind of structures can you buy?

11. Single family home- most privacy

12. Duplex, triplex, four-plex- Live in one unit, while renting out the other(s).

13. Townhouses/rowhouses Common facilities, lower costs by sharing, more fees

14. Lofts - few interior walls, high ceilings, often over businesses on ground floor

15. Apartments - may be one room efficiency apartments or larger ones. Condominiums are owned, not rented.

16. Premanufactured homes - built off- site and moved. Cheaper to build. Home has a title, while your land has a deed. http://www.youtube.com/watch?v=eq9DH2kZFKE&feature=related http://www.youtube.com/watch?v=eq9DH2kZFKE&feature=related

17. Steps in Buying a Home First determine price range, needs and wants. You can be pre-approved by a bank before you look. Identify areas you want to live. Look at safety, convenience, and type of neighborhoods You can get help from real estate agent. As the buyer you do not pay them. Begin the buying process: making an offer, the seller accept (may counter-offer) before accepting, prepare for closing. During the closing, be sure to have a lawyer there who will represent YOUR best interests!

18. HOW DO I KNOW IF I'M READY TO BUY A HOME? Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable? Do I have a good record of paying my bills? Do I have few outstanding long-term debts, like car payments? Do I have money saved for a down payment? Do I have the ability to pay a mortgage every month, plus additional costs (taxes, repairs, utilities, etc.)?

19. What should I look for when walking through a house? Is there enough room for both the present and the future? Are there enough bedrooms and bathrooms? Is the house structurally sound? Pay a good professional to do this inspection! Do the mechanical systems and appliances work? Is the yard big enough? Do you like the floor plan?

20. What should I look for when walking through a house, cont. Will your furniture fit in the space? Is there enough storage space? (Bring a tape measure) Does anything need to repaired or replaced? Will the seller repair or replace the items? Imagine the house in good weather and bad, and in each season. Will you be happy with it year-round?

21. Applying for a Mortgage Determine an estimated value of the house Obtain funds for a down payment Reduce debts or improve your credit score, if necessary.. The better your credit, the cheaper your mortgage will be! Compare fees, services, and mortgage rates for different lenders Prepare the mortgage application

22. There are two parts to your mortgage: The principal is the amount of money you borrow. The interest is the cost of borrowing this money. Each month, you pay a mortgage. The interest is paid first, and anything left goes to the principal. Question: Here is a $100,000 30 year mortgage on a home. The fixed monthly payment is $665. How much money goes for interest in first few years?

23. How much does interest cost you? After 1 month: (that’s one payment.) Total interest paid: $583 Total principal paid: $82 Balance due on the principal: $99,918 After five YEARS: (that’s 60 payments!) Total interest paid: $34,600 Total principal paid: $5,985 Balance due on the principal: $94,105

24. Types of Mortgages Conventional – equal payments, typically over 15, 20, or 30 years based on a fixed interest rate. FHA (Federal Housing Authority) and VA Balloon – fixed monthly payments for 3-5 years, and then a very large final payment Adjustable Rate Mortgage (ARM) – has an interest rate that increases or decreases during the life of the loan based on the changes in the market Interest-only mortgage Graduated payment mortgage