1. Home Buying Seminar

2. What is credit? Why do you need good credit?  Improves your ability to ◦ Get a job ◦ Borrow ◦ Secure lower rates ◦ Purchase a home ◦ Rent ◦ Get lower rates 2 2

3. No credit history? Blemished history?  Open a small credit line  Apply for a fully secured loan  Get a co-signer 3 3

4.  Shop around for credit  Ask if account is reported to a credit bureau  Make payments on time  Read the credit agreement before signing  Balance should be lower than 50% of available credit 4 4

5.  Review credit report once a year  Treat credit cards like cash  Set up a budget and stick to it 5 5

6.  Account payment information  Delinquencies, charge-offs, liens, judgments, bankruptcy  Severity of delinquency  Amounts past due  Recent past due accounts  Number of past due accounts  Number of accounts paid as agreed 6 6

7.  Number of accounts with recently reported balances  Average balance across all trade lines  Relationship between total balances and total credit limits on revolving trade lines 7 7

8.  When accounts were established  When specific credit accounts were established  How long accounts have been used 8 8

9.  Number of recently opened accounts  Number of recent credit inquiries  Length of time between account openings, by type account  Length of time between credit inquiry(ies) 9 9

10.  Number of account types ◦ Credit cards ◦ Retail accounts ◦ Installment loans ◦ Mortgage ◦ Consumer finance accounts 10

11. Payment history:  Pay your bills on time  Get current and stay current  If you are having trouble, contact your creditors or a credit counselor Be aware – collections, even if paid, stay on your report for 7 years 11

12. Outstanding debt:  Keep balances low  Payoff debt - don't balance transfer  Don’t close unused credit cards to raise your score  Don’t open new cards to increase your available credit 12

13. Credit history:  Don’t open new accounts rapidly  Keep the card you’ve had the longest time 13

14. Inquiries and new account openings:  Rate shop for a loan within a 30 day period  Re-establish your credit history if you have had problems  Check your own credit report and scores at least once a year 14

15. Types of credit in use:  Open new credit accounts only as needed  Have credit cards, but manage them responsibly 15

16.  Annualcreditreport.com 877-322-8228  Experian Consumer Relations 701 Experian Parkway/ POB 2002 Allen, TX. 75013-0036 888-397-3742 www.experian.com  Equifax Consumer Relations P O Box 105496 Atlanta, GA. 30348 888-532-0179 www.equifax.com 16

17.  TransUnion Consumer Relations P O Box 2000 Chester, PA 19022 800-888-4213 www.transunion.com  Federal Trade Commission www.ftc.com 202-326-3761 17

18.  Are you sure you want to buy a house?  Do you have steady income and steady employment?  Do you anticipate remaining in the same location for the next several years?  Have you created a budget so you know how much you can realistically afford to pay for housing? 18

19.  Do you have established credit?  Can you build a non-traditional credit history with records of payments to landlords and utility companies?  Do you have enough money saved up for a down payment and closing costs?  Have you “pre-qualified” yourself? 19

20.  Have you been pre-qualified by a lender, real estate professional, or counselor to determine how much you can borrow based on existing income and debt?  Is your existing debt low enough to qualify for a mortgage? 20

21.  Have you looked into the benefits and requirements of mortgages available to home buyers of your income level? 21

22.  Place of your own  Feeling of permanence  Financial incentives ◦ Insurance bundling ◦ Equity? 22

23.  Build equity — your wealth will increase as you gain more home equity  Gain tax advantages — mortgage interest is tax deductible as per IRS code  Stabilize your payments — monthly payments are relatively steady if your loan has a fixed interest rate, while your landlord can increase the rent  Have a secure place for your family to live — a home provides a permanent place where your family can live and grow, and you can decorate or expand a house the way you like to create your dream home  Gain a sense of community — homeowners often are more involved in the well-being of their communities; many homeowners work together for better schools and less crime 23

24.  Maintenance costs — it takes work and money to keep a home in good condition  Ties up your cash — selling the house may not be possible during the first few years of ownership; moving is more difficult and complicated and you may not have as much flexibility in choosing a new job location  Can fluctuate in value — there is no guarantee that your home will increase in value; it could decrease in value  Obligates your finances — when you buy a home, you are obligated to a set monthly payment 24

25. 25 11 Tips On Being A Smart Home Purchaser 1. Attend a homeownership education course 2. Interview agents and ask for and check references before you select one 3. Get information about the prices of other homes in the neighborhood 4. Hire a properly qualified and licensed home inspector 25

26. 5. Shop for a lender and compare costs 6. Do NOT let anyone persuade you to make a false statement on your loan application. Lying on a mortgage application is fraud and may result in criminal penalties. 7. Do NOT let anyone convince you to borrow more money than you know you can afford to repay. 26

27. 8. Never sign a blank document or a document containing blanks 9. Read everything carefully and ask questions. Do not sign anything that you don't understand. 10. Be suspicious when the cost of a home improvement goes up if you don't accept the contractor's financing. 11. Be honest about your intention to occupy the house. 27

28.  Ruth López NMLS # 639376 Karla Patiño NMLS # 495186  Sr. Mortgage Loan Officer Mortgage Loan Officer  12020 Rojas 6610 Continental  El Paso, TX 79936 El Paso TX 79925  915-926-2587 915-926-2257  915-926-2630 Fax 915-926-2630 Fax  relopez@tfcu.coop kpatino@tfcu.coop relopez@tfcu.coopkpatino@tfcu.coop 28