1. The Homebuyer’s Guide
Chapter 6
Success As a Homeowner

2. Home Equity = What You OWN!
The advantage of home ownership is, over time, owning your home clear and free. This means making payments every month. The value of your home equity is equal to the current value of your property less the amount still owed by your lender.

3. Common Reasons for Refinancing Your Home
To save money by lowering interest rate
Convert to another type of mortgage with better terms
If you want to modify the ownership because of marriage or divorce

4. What if I have trouble making my loan payments?
If you find you cannot make a mortgage payment, contact your lender. Talk with them about the problem
Prioritize your bills and pay your mortgage first.
Talk with a housing counselor to determine options.
Forbearance
Loan modification
Partial claim

5. When Contacting Your Lender
Provide your loan number
Note the name of the person you spoke with and note it on your calendar
Offer information about your current financial situation and provide your loan officer with a remedy you can live with.
Be ready to discuss options such as partial payment, forbearance or a loan modification.
Follow up the phone call with a letter stating what was discussed and confirmed in the call. Date the letter and keep a copy.

6. In Case of Difficult Mortgage Problems
A borrower is considered seriously delinquent after two missed payments. If 90 days pass without a payment, the foreclosure process can begin. A lender, can, however, begin the foreclosure process after the first missed payment.

7. In Case of Difficult Mortgage Problems
If it becomes apparent that you will not be able to make your mortgage payments, what options do you have?
First, consider talking with a housing counselor to determine your options.
Consider a short sale offered through a realtor.
Consider a Deed-in-Lieu of Foreclosure with your lender.
Do Not voluntarily give up the EQUITY of your home! P.52

8. Know Your Community Meet your neighbors Read community newspapers
Visit city or town hall
Join a service or professional club
Volunteer for special events
Attend neighborhood meetings
BULLET NEEDS ADJUSTING AND FONT LARGER

9. First Things First after Move In
Change all locks and add bolts to windows
Install smoke detectors
Buy a fire extinguisher for the kitchen
Post emergency numbers
Plan fire escape route and include the family
Introduce yourself to your neighbors

10. Safety First!
If your family asks about housewarming gifts that you might like, put these on their list!
Fire safety inspections
Safety ladders
First aid kit
Carbon monoxide detectors

11. Keep Safe and Secure! Lock doors and windows when you go out
Trim shrubs that hide windows and doors
Install outside lighting
Put up “beware of dog” sign
Stop mail when you go away

12. Find each of these and mark them clearly
Get to Know Your Home
Find each of these and mark them clearly
Main cutoff valves for water and gas
Main electrical switch
Fuses or circuit breakers
Hot water heater thermostat

13. Basic Tools Screwdrivers Putty knife Claw hammer Utility knife Pliers
Caulking gun
Crescent wrench
Plunger
Hand saw
Handheld power drill
Assorted nails, screws, etc.
Carpenter’s level
Tape measure
Ladders
Flashlight with batteries
Sandpaper

14. Improvements that Usually Add Value
Adding a second bathroom in a 3- or 4-bedroom house
Modernizing a kitchen
Creating more closet and storage space
Building a garage
Adding a deck, patio, screened porch or skylights

15. Questions to Ask Before You Remodel or Repair
Do you need to hire a contractor?
Will the job add value to your house?
How much can you afford to spend?

16. Planning Your Project Think about the finished product
Consider your budget
Make sketches
Do research on local permits and codes
Think about timing and weather

17. Financing Your Project
Home improvement loan
Refinancing your home to use some equity
Home equity loan
Do it yourself as you have some extra cash
Be thoughtful in your financing….you do not want to jepordize your home should a financial emergency develop!

18. Working with Contractors
Decide which type of contractor you need
Get references
Visit at least one completed job
Ask how long the contractor has been in business
Use the Rule of 3 in comparing and selecting a contractor

19. More to Know About Contractors
Check out the contractor’s reputation
Check the contractor’s insurance
Ask about guarantees
Get firm, line item bids
Get contract specifics

20. Managing Your Contractors
Control costs by controlling changes
Get terms of payment in writing as a bid
Don’t make the final payment until the job is completed
Specify responsibility for permits

21. Keep Financial Records Safe
Purchase a filing cabinet or fire-safe box
Design a system for filing records
Store important papers from the home sale
Keep a copy of your homeowners insurance policy
Keep service contracts and owner’s manuals
Keep a file for warranties and receipts
Make a list of serial numbers
Take photos of the home and its contents
Keep separate files for maintenance projects

22. Eligible Income Tax Deductions
Mortgage interest
Points
Moving expenses
Property taxes

23. Filing a Homeowners Insurance Claim
Report burglaries to police
Call your insurance agent immediately
Make temporary repairs
Provide data to your insurance company
Keep receipts for additional living expenses
Re-read your insurance policy
Get a claim identification number

24. Living Green
Reduce
Repair
Reuse
Recycle

25. Energy-Saving Tips for Your Home Add attic insulation
Service furnace and change filter regularly
Caulk around doors and windows
Install storm windows and doors
Set water heater low and put a blanket on it
Install attic fans or vents
Buy energy-efficient appliances
Install ceiling fans
Monitor your heating and cooling systems

26. Summary Increase the Equity in your Home through Mortgage Payments.
Consider the Possibility of Refinancing as the Market Changes.
Work with a Housing Counselor and your Lender if you are having trouble managing your Mortgage.
Maintain your home through monthly or yearly changes to take care of your investment!