1. Housing Options

2. Types of Dwellings Single Family Detached Duplex Row Houses
a dwelling with no shared wall, designed to be used by one household
Duplex
A building that contains two separate living spaces
Row Houses
Houses built in a row and attached at the side walls

3. Types of Dwellings Townhouse Apartment
Dwellings of two or more stories attached at side walls to other units in a multiple-family complex
Apartment
Rental units located in a variety of settings from older homes to high-rise buildings

4. Types of Ownership Condominiums Cooperative
Individual ownership of a unit and shared ownership of common areas such as hallways and exterior grounds
Cooperative
Ownership of shares in a corporation that owns and entire property (like a timeshare)

5. Buying a Home

6. Understanding Home Financing
Very few people can pay for a house outright
Most home buyer take our a mortgage
Mortgage is a long-term home loan where the home is the collateral

7. Cost of Buying a Home
Down Payment: part of the purchase price that is paid up front - 5% to 20%
Closing Costs: various fees that must be paid by the buyer or the seller at the time the purchase is finalized

8. Cost of Buying a Home Monthly Loan Payment: Other Continuing Costs
At first, each of the monthly mortgage payment goes to pay for the interest on the loan
Only a small amount goes to pay down on the principal (original amount borrowed)
With each payment, the portion paid toward the principal increases.
Other Continuing Costs
Property Taxes - based on the value of the home
Insurance - Lenders usually will not issue a mortgage without proof of home insurance
Association Fees - up keep of common areas

9. What Can You Afford How much a person can afford to pay for a home
Income
Savings
Debt
General Rule: Principal, interests, property taxes and insurance should NOT exceed 29% of gross income (income before taxes)
If a buyer as too little savings or too much other debt then a lender may not approve a loan as high as 29%

10. Prequalified Buyer Buy presents info
Income, assets and debt
Lender calculated how large a loan is LIKELY to be approved
No legal obligation - just a general letter of willingness to loan a certain amount to a person

11. Types of Mortgages
Fixed Rate Mortgage: Interest rate and monthly payment amount remain the same for the life of the loan. (Also known as a “conventional loan”)
May pay higher rate but cost will NOT change
Adjustable Rate Mortgage (ARM): Interest rate changes to reflect changes in the economy.
Initial rate is usually lower than that for a fixed rate mortgage. But the owner doesn’t know whether their monthly payment will increase.
Gradual Rate Mortgage: Payments start low and increase in the later years of the loan

12. Special Loans
FHA Loans: Federal Housing Administration insures loans to low and moderate income families who might not otherwise qualify for a mortgage
VA Loan: Dept. of Veteran Affairs insures loans to people who served in the armed services
Loans for Rural Home Buyers: Loan through the Dept. of Agriculture’s Rural Housing Service
1st Time Buyer Program: loans for 1st buyers with lower interests rate

13. Comparing Mortgage Terms
Compare various loan options at different institutions (banks, credit unions, etc)
Comparing the interest rates of different loans
Since mortgages are long term, even a fraction of a percentage point can save thousands of dollars over the years

14. Comparing Mortgage Terms
Length of the Loan Term
15 to 30 years
15 Year: Lower interest rate but higher monthly payments
30 Year: Higher interest rate but lower monthly payments
30 year mortgages can be paid off sooner by making additional payments towards the principal
Points: one-time finance charges paid at the beginning of the loan.
Each point in 1% of the loan amount

15. Finding a Home
Classified Ads: newspaper have sections devoted to homes
Open Houses: walk through a house that is for sale and ask questions about it
Internet: Real estate companies have their own websites

16. Finding a Home
Working with an agent: agents have access to a multiple listing service (MLS)
Agents usually don’t charge a fee to work with them
Agents receive a commission from the seller usually based on the value of the house.

17. Completing the Purchase
Buyer makes an offer
Usually less than asking price
Seller usually counters the offer
Once a price is agreed upon, the buyer makes a deposit
If the buyer backs out, the seller may keep the deposit
If the buyer continues, then the it is applied towards the down payment

18. Completing the Purchase
Contingency: Conditions to be met in order forte sale to occur (ability to obtain financing, inspections for termites, asbestos, etc)
Once the buyer and seller sign the contract, it is legally binding

19. Obtaining a Loan
Once the loan application is completed, it can take weeks for it to be approved
Interest rate is locked in and cannot change before the deal is completed.
Even if the prevailing interest rate moves up or down

20. Closing the Deal
A meeting of the seller, buyer and agents at which the property sale become final
Ahead of time the buyer…
Receives written statement itemizing the down payment and closing costs
Obtains a cashier’s check and brings it to the closing meeting
After the legal documents are signed and money is exchanged, the buyer is finally the owner of the home!

21. Home Maintenance

22. Benefits of Maintaining Your Home
Clean/pleasant environment for visitors
Healthy and safe
Especially in kitchen and bathrooms
Reduce wear and tear
Increase the value of your home

23. Daily Cleaning
“Clean as you go.”
Examples
Dishes
Floors
Laundry
etc

24. Long Term Maintenance Change furnace filter Clean oven Clean drapes
Paint – esp. outside
Pest inspection
Clean drains and gutters

25. Safety Water heater under 120 degrees Cautious around heat
Pot handles turned away
Oven mitts
Guards around fireplace
Child safety items
5. Electrical
Frayed wires
Appliances away from water
6. Fire escape items
7. Dryer lint

26. Energy Efficiency Programmable therostat Insulated attic
Weather stipping
Flourescent lights
Full loads in washers
Unplug battery chargers
Fix leaky faucets