1. Credit History Credit Scoring Lenders Require a Three bureau merged Report – Experian, Trans Union, Equifax Alternative Credit – Rental History Credit Standards

2. Understanding Credit Credit Scores –Under 585=Low –585-700= Normal –700 & up =High Credit History Collections / Judgments / Inquiries Correcting Reporting Errors Know Your Rights

3. Maximizing Affordability Debt Reconstruction –Auto Loans: Reduce Rate and/or extend them –Consolidate Credit Card Debt Student Loans –Extend them up to 25 years Explore Financing options –Fixed Rate vs. Adjustable Rate Mortgages (ARM) Consider other Income Sources

4. Ratios and Your Qualifications Ratios are guidelines Lenders use in determining what you can qualify for Ratios vary based on Loan Programs Front Ratio – Your Total house payment divided by your gross monthly income – usually 28% - 38% Back Ratio – Your Total house payment and revolving or installment debt divided by your gross monthly income – usually no more than 38% - 45% *Installment debt with less than 10 months remaining until they are paid off DON’T COUNT!! Example --

5. PITI (Your Total Monthly Payment) “P” stands for “Principal” – the portion of your payment that goes to reducing the loan balance “I” stands for “Interest” – that portion of your payment that is interest “T” stands for “Taxes” – 1/12 th of your annual property tax (prepaid) payment goes into your reserve account so the lender can pay your property taxes when they are due. “I” stands for “Insurance” – 1/12 th of your annual insurance (prepaid) bill goes into your reserve account so the lender can pay your hazard insurance when it is due “MI” stands for “Mortgage Insurance” – Required by law if you finance more than 80% of the value of your home. Protects the lender if you default.