1. The Homebuyer’s Guide
Chapter 1
Owning a Home

2. Just a few questions…. What kind of a home does my family need?
What kind of a home does my family want?
Should I rent or would I be better off buying?
What kinds of space do I need for family activities?
How much money is available for me to pay for housing?
Is this the best time for me to buy? p.3
The Homebuyer’s Guide

3. Advantages of Homeownership
Your Home as an Investment
Tax Advantages
Equity
Control over your environment
Stability
Locking in Housing Costs
Equity =
What You OWN

4. Disadvantages of Homeownership
Homeowners need to understand terms of their ‘deal’ to determine if changes need to be made across the life of the loan.
No guarantees of increased net worth
Maintenance and repairs
Decreased mobility
Risk of Foreclosure

5. Steps in the Homebuying Process
Prepare for home ownership
Determine how much you can afford to spend
Get your loan preapproved
Decide what kind of home you want and need
Shop for a home

6. Steps in the Home-buying Process
Make an offer
Get a professional home inspection
Apply for a mortgage loan
Get insurance and have additional inspections
Close the loan

7. Your Home-buying Team Real Estate Agent Lender Attorney Escrow Officer
Title Insurance Officer
Housing Inspector
Appraiser
Surveyor
Insurance Agent
Housing Counselor

8. What Does a House Payment Include?
Principal
Interest
Taxes
Insurance
And, possibly, Private Mortage Insurance, or “PMI”

9. Prequalification A confirmed prequalification is not
Calculations using housing affordability ratios:
How much money the lender will loan you
What price home you can afford
How much down payment you need
How much your monthly payments will be
A confirmed prequalification is not
A guarantee that you will obtain a loan.

10. What Other Costs Should You Expect?
Upfront Costs
Down payment
Closing costs
Escrows
Reserves
Moving costs
Ongoing Costs
Mortgage payment
Utilities
Maintenance and repairs

11. Readiness Quiz I would enjoy working around a house and yard OR
I would rather not spend my spare time tending to a house and yard.
Going into debt to buy a home is something I can handle OR
The thought of being in long-term debt bothers me.
I want to stay in one place and be a part of a community OR
I can’t be limited to one location for a long time.
p. 7

12. Summary
Consider of the pros and cons of ownership to determine if now is the right time for you to purchase a home.
Begin listing the key steps and professionals involved in the homebuying process
Estimate your mortgage payment and all other costs to determine the real monthly cost of homeownership to your family.
Ask questions to understand how lenders determine creditworthiness and affordability.

13. Where to from here? Order copies of your credit report
Chart income and expenses for your household for three to six months to begin building a budget with new housing expenses…..mortgage, insurance, taxes.