the american dream are you financially prepared to buy a home? do you understand lending criteria?...
TRANSCRIPT
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TheAmerican Dream
Are you financially prepared to buy a home?Do you understand lending criteria?What should you know prior to closing?
PRESENTED BY GREENPATH
Jane DoeCertified Consumer Credit Counselor
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How Much Can You Afford?
Annual Income X 2.5
The smallest mortgage possible
How Much Can You Afford?
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How Much Can You Afford?
Annual Income X 2.5
The smallest mortgage possible
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Spending Guidelines
35%
25%15%
15%10%
Housing Living ExpensesTransportationDebtSavings
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Cash Funds Required
• Down Payment• Earnest Money Deposit• Closing / Settlement Costs• Post-Purchase Reserve Funds• And…
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What are some costs of homeownership
that people typically forget?
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• Homeowner’s Insurance• Property Taxes• Commuting Costs• Home maintenance• Utilities• Furniture
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Do you know the difference between a
front-end and back-end ratio?
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Debt Ratios
• Front End Ratio• Back End Ratio
Turn to page 5 in your workbook for an example of ratios.
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What’s the difference between a dream
and a goal?
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SpecificMeasurableAttainableRealisticTimely
S M A R TGoal Setting
Take a moment to fill out some goals of your own!
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Develop Your Budget
This chart is also on page 4 of your workbook.
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Visit www.greenpath.com/university/resources for free budgeting worksheets
Resources
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Do you know the difference between
pre-qualification and pre-approval?
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Getting Ready to Shop
Turn to page 6 in your workbook.
• Pre-Qualification• Pre-Approval
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Needs vs. Wants
What are your top 3 needs in a
home?Turn to page 7 in your workbook and fill in the blanks.
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Negotiating the Deal
• New Home Inspection• Selling Your Present House• Appraisal• Closing Costs
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Shopping for Your Loan
Conventional
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Shopping for Your Loan
Government Financed / Insured
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Mortgage Specifics
Fixed Rate
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Mortgage Specifics
ARMHybrid / Convertible
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Mortgage Specifics
EscrowPMI
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Comparing Lenders
• Down Payment• Discount Points• APR
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Do you know the criteria lenders use to determine eligibility
for loans?
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Evaluation Criteria
• Stability of Income• Adequacy of Income• Sufficient Money to Close• Creditworthiness
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Closing TipsReview HUD-1
View House
Be CourageousRead
Ask Questions
Turn to page 13 in your workbook to see the documents received at closing.
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Don’t Forget
Consult with the Prior Owner
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Don’t ForgetReview the Home Inspection Report
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Don’t Forget
Save for Maintenance
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Don’t Forget
Get Sufficient Homeowner’s Insurance
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Don’t Forget
Be a Good Neighbor
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Questions?
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GET IN TOUCHCONTACT US
We’d love to chat more!GreenPath is a not for profit consumer credit counseling agency and HUD approved housing counseling agency with offices around the country.
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