Realizing the American Dream Protecting Your Investment

Agenda Getting to know your home Assuring home safety Saving energy and money Preventive maintenance and minor repairs Remodeling and major repairs Investing in your neighborhood

Agenda (Cont’d) Asset building Keeping records Taxes and insurance Protecting your equity Prepaying your mortgage Coping with hardship

Why Protect Your Home Three-way Investment 1) shelter for your household 2) life and heart for your community 3) financial asset for your future

Things You Need to Know Main cutoff valves for water and gas Main electrical switch Marked fuse or circuit breakers Hot water heater thermostat

Questions for the Seller What is the history of the home? Are there wiring diagrams or blueprints? Are any appliances or repairs under warranty? When is trash day? Who picks it up? Who provides water and sewer? What other services are available?

More Questions Who is the fuel oil supplier? How to use energy-efficient systems What seasonal maintenance has been done? Who has worked on the house? How much do the utilities and services cost? Is there extra (matching) paint available?

Building a Healthy Environment Eliminate smoking from home Check smoke and carbon monoxide alarms Avoid accumulation of moisture and chemical pollutants indoors Vacuum weekly and reduce clutter Increase air flow in the home Reduce use of pesticides Do not run car in attached garage

More Ways to Healthy Environment Do not heat home with unvented heater Address water leaks ASAP Use cleaners and pesticides in well-ventilated area Look for natural alternatives to household products Keep food and trash in sealed containers

First Priorities on Move-In Post emergency numbers Have a fire safety inspection Install smoke and carbon monoxide alarms Place fire extinguishers on each floor Plan fire escape route Stock first-aid kit (out of children’s reach)

Keep Safe and Secure! Change all locks on doors & windows 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 and newspaper when you go away

Energy-Saving Tips Turn lights off when you leave a room Don’t let water run during chores Plan meals to cook more than one item at a time Don’t use appliances during the heat of the day Close windows when the heat or AC is on Close the refrigerator door completely Dress appropriately for the season Adjust the thermostat to the season

Energy-Savings Tips for the Home Add attic insulation Change to low-flow faucets, shower heads and toilets Service furnace and change filter regularly Caulk around doors and windows Install storm windows and doors

More Energy-Savings Tips Set water heater low and cover with blanket Install attic fans or vents Buy energy-efficient appliances with Energy Star® logo Install ceiling fans Monitor your heating and cooling systems

The Cost of Replacement High-efficiency forced air furnace $2,500 - $5, gallon electric hot water heater $400 - $600 Roof for an average, 3-bedroom ranch house $10,000 - $15,000

Do-it-Yourself Repairs Resources: – Books – Videos – Classes Community Center Lowe’s, Home Depot

Basic Tools Screwdrivers Claw hammer Pliers Adjustable wrench Hand saw Assorted nails, screws, etc.

More Basic Tools Tape measure Flashlight with batteries Putty knife Utility knife Caulking gun

Still More Basic Tools Plunger Handheld power drill Carpenter’s level Ladders Sandpaper

Most Common Problems Clogged toilet, sink, tub or shower Running toilet Tripped circuit breaker Tripped GFCI outlet Malfunctioning heating/cooling system

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?

Adding Value with Improvements $80,000 $100,000 $20,000 Your home’s valueHighest priced homes Money for improvements

Improvements that Usually Add Value Adding another bathroom Modernizing a kitchen Creating more closet and storage space Building a garage Adding a deck, patio, screened porch and skylights (if they’re common in your area)

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

Working with Contractors Decide which type of contractor you need Interview at least three contractors Get references Visit at least one completed job Ask how long the contractor has been in business

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

Managing Your Contractor Control costs by controlling changes Agree on payment up front Don’t make the final payment until the job is done Specify responsibility for permits Get a lien waiver on larger jobs

Know Your Community Meet your neighbors Read community newspapers Contact Welcome Wagon Visit city or town hall Join a service or professional club Volunteer for special events Attend neighborhood association meetings

Asset Building Manage your money Mortgage payments Utilities Maintenance & repairs Reserves Develop a savings plan Beware of the credit trap

Keeping Records Design a system for filing records in fire-safe box Collect important papers from the sale, making copies if kept in the home Keep copies of homeowners insurance policy, service contracts, owner’s manuals, warranties, and model numbers Take photos of home’s exterior and interior Make list of documents in file

Income Tax Deductions Mortgage interest Mortgage insurance (years ‘08, ‘09, ‘10) Points Moving expenses (sometimes) Property taxes Capital Gains exemption on sale of home

Filing a Homeowners Insurance Claim Report burglaries to police Call your 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

Other Insurance Mortgage Insurance (required by lender with less than 20% down payment) Life insurance Term insurance Whole life insurance

When There’s Equity, There are Options  Refinance your home  Get a home equity loan  Get a reverse mortgage

Common Reasons for Refinancing Your Home Save money by lowering your interest rate Convert to another type of mortgage Build up equity faster Convert some equity to cash Hope for Homeowners as refinancing option

Warning: You Pay a Price With a Predatory Lender High-pressure sales tactics and steering High interest rates and fees Balloon payments and negative amortization “Packing” and padding costs and fees

Predatory Lending Practices Flipping Locking in borrowers Equity stripping Deceptive practices and fraud

Protect Yourself from Predatory Lenders Shop around Don’t sign incomplete documents or anything you do not understand Work with a homeownership or credit counselor Use your right to cancel (three-day right of rescission for refinance)

What to Do If … Cannot meet your financial responsibility Are in danger of foreclosure COMMUNICATE WITH YOUR LENDER AS SOON AS TROUBLE STARTS!! Call national foreclosure prevention hotline: HOPE

Loan Workout Programs Payment plan Forbearance Loan modification Partial claim

Moving On Pre-foreclosure sale Deed in lieu of foreclosure

Delinquency Counseling: There’s Help for You Nonprofit agency that helped you buy HUD: (800) CALL FHA or Your mortgage insurance company National foreclosure prevention hotline: HOPE Local VA office for a VA loan

Make the Most of Delinquency Counseling Be honest Be cooperative about gathering information Be willing to make sacrifices and changes

Summary How to keep your home and family safe How to save money by conserving energy The importance of preventive maintenance Asset building with timely payments and value-adding improvements

Summary (Cont’d) The importance of becoming involved in your community When it makes sense to consider refinancing How to cope when disaster strikes

Your Best Resource For more information, contact: NeighborWorks® America 1325 G St., NW, Suite 800 Washington, DC Call or or visit