ALABAMA,: ~ COOPERATIVE~

Exteni1on SYSTEM

Recommended for use in Alabama by Fred Waddell, Extension Family Resource Management Specialist, Associate Professor, Human Development and Family Studies, Auburn University.

For morn Information, call your county loxtension office. Look in your telephone directory under your county's name to find the number.

Issued in furthemnce of Cooperative Extension work in agriculture and home economics, Acts of May 0 and June 30, 1914, and otller related acts, in cooperation with the U.S. Department of Agriculture. The Alabama Coopemtive Extension System (Alabama A&M University ancl Auburn University) offers educational programs, ma­terials, and equal opportunity employment to all people without regarrJ to race, color, national origin, religion, sex, age, veteran status, or disability.

Scripto #03007, 10.5M27, Now Sop 1997, HE-750

"1\, Printed on recycled paper ':f (20% post-consumer content by weight).

1olllL tlOf'\& is pwb9bl'/ -the, 6•GGE.ST

(-ahd be$+)

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~O - -be-.fore- yov bvy-- <Ef} .b 'OS~ )'ourself -the-se. qves-t-iov-5:

l~ it-the. ~Gitt

"'ollS& .for uE

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t-\o~ b~.9 a OO\<l/fl

Pf>.VflltEt'l" ca"' we­tn~e?

The general rule of thumb is to limit the total monthly payment for principal , interest, taxes, and insurance to 28% of gross monthly income.

Right neighborhood? Size lot? Size house? Layout OK? Taxes and insurance reasonable? Any special assessments?

Paying MORE down means paying LESS interest. BUT -- you' ll need some of your savings for moving, fur­nishings, emergencies, etc.

"~I) ... yov'l I ptobabl'f fltJ~ wi+h a

l'A<)fl.TGl'GE. ( V"'O.St farn;lies 00).

i ©1972 Channing L Bete co .. Inc All rights reserved • Printed in USA Price List A T 0 reorder call (BOO) 628· 7733 or write Channing L Be.le Co • Inc • 200 Stale Rd., Soulh Oee~ield, MA 01373 and ask for item number 1991 Edition 0308/J-l-85

If yotJ W'ant -+o b"y or bvild

It's &ASY if you --

l!f' 6110051. the. right house. at the. right price.

I!)' 8"DGE.T your income to

m-a~ payments prompt¥.

0 C.OfJV~NTro~AL-0 FH,o. 0 61

vi-a-an E>tP~ll.tE.JIJCED. lle.spot1s1s,.E1

L.E.fJ01NG INSTtTUTIOIJ,

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su-r ... """'"' if :t.

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If yolJ ha"e.. -ct

COl''1E.flf'•OflM- LONI or a"

ftl~~ .. *1e. lender v-1111 Velp you

arrange. a procedure for

paying off your loan.

l.f 'fOIJ h'aV'e, 'cl G• a.o~ ... I. l.N1--en you pay off Jn cash -­

your hab1hty ends.

lo. BUT -- 1f *1e. purchaser A95Ufll'fS

your loan, *'en you must get

*1e. VA and lender to O~ your

release from habihty.

o*'e.rw1se, if payments are

not made by the purchaser,

you are still hable to *1e. VA.

Cltf.elt. wrrtt ,. .. , VA oP- YOUfl.

&.E.110&.fl. FoP- ADV•C.£!

I+' s -a i..o~rJ m-aJe, on real est-a+~ -a"'d t\..e.. P~'{ is pled3e-d '<If>

SE.evP.rf'f .f°"" -t\.e, lo'<ln . J

[J

. .. -ancJ 6of2.lt0~£1Z..

~ 0'.) PllOM•SE.5 ~- . .

6~

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1

0 Pay local -fp..'f.€.,S -ancJ ASSE.SSME'..rJ"fS

:l 0 llup pyope.r+y l~Sul2E.O "<lnd in 6000 ~e,pp.rf2-.

€) 6e.+ le.r-Je/s OIL before C.t"P..f')C:11rJ6

or ADD11"6 -to property.

3

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.-:•· , • • 1 - , • . .i.. .• - , 411 _ • I... - ~ ·

Mortgage made by private lending institution at its OWN RISK with your property as security.

e GI (or VP.) t,Op.r.J

x

~ ~

11 1111/11111

For veterans who have served on active duty more than 180 days. (Vietnam era veterans -- 8/4/64 to 5/7/75 -- eligible after 90 days of active duty.)

Mortgage obtained from private lender but partially guaranteed by V.A.

The Federal Housing Admini­stration INSURES LOAN for LENDER -- but borrower must pay mortgage insurance premium.

If YOU UVE. '"' A 11-UAAL. ~' mort9a9e money rray be avartable though ti-'€ Farmers Home ,AdmrnLStratlon (Fmf-\A). cl-eel<- ti-'€ !M-irte Pages of yovr prone boo!<., under 11 LJ.S. Government-- Dept. of ,Agrrculrure."

Pay taxes, property, insurance premiums promptly, If they are not already included with your mortgage payments.

Remember ·· your goal is to control your debts.

- __ Don't overburden your ~ ~ budget with unnecessary ~ ~() luxuries.

~-~ ----..

If you have financial troubles, such as illness or unemployment, talk things over frankly with your mortgage holder, who can probably help you.

"advise your vY1ov+-~09e. holde.v a+- once.. '/our payrnen+s c-an be Yedvced OI"

po.s+poned. fore.c..losure is pro~ibii-ed by I-aw un+il -H·wee rnontl-is -after '{ow disc,~-av3e..-.

13

6 TIP& for prote.c.tin9 your

AP40UflT fol OW SPE.et J\&.. OF 1-GPf" ll-£PA10 f£ptfu~

0 PP'# Pfl.Ol'lPT't-Y 1. "OPEN-END" loans

You may be penalized for allow reborrowing for

@@ late payments and could UPTO ··in monthly improvements, etc.

lose your home and your 95% payments 2. A "PREPAYMENT"

credit standing if you of for up to provision allows the

! ?-'~ fall behind (in your APPRAISED 30 years. borrower to pay off

payments). VALUE Includes the principal early

or principal, and save interest.

selling price interest,

3. Traditional fixed-property (whichever insurance, interest-rate loans,

is lower) real estate adjustable-rate mort-taxes. gages (ARMs) and

0 6'1'1 UF£ lflS'1Pl'tlc£ a variety of other types are included.

You should have enough

8~ insurance to cover your 1. The loan may be paid

·~~- mortgage debt In case off or reduced at any

( something should hap- ··in monthly time without penalty. pen to you (some lenders payments

2. The VA appraises the require this). UP TO for up to FULL 30 years. house or plans (for a

VALUE Includes small fee).

of principal, 3. The VA offers an PROPERTY interest, inspection service

0 f'\ILl'E. fl.U~llS property for the house.

insurance, real estate 4. A special provision

67~r taxes. may be used if the

Small jobs become big borrower is called

ones if you ignore them. back to active duty.

A well-kept home is

f P worth more. FHA Insures % of ·· in monthly

appraised payments value·· for up to

1. The borrower can up to 97% 30 years. of $25,000 Includes repay at any time

plus 95% of principal, to save on interest.

balance (up Interest, 2. The borrower must

~ If ... you1re, .... ec.alled +o Jv-ry in ; property

to a limit insurance, pay an appraisal fee. based on the real estate

~ '.J fhe ,illl..11"1'-r&.'i .SUbfleE. cost of liv- taxes,

~~ 'dnd COn't 'dffovJ yo°' 0 I

ing where mortgage

the house insurance_

Is located). • \ooV\ pa'(Vl"le-V\1-.s .••

l'7- 5

b

STE.f'I.

'/ou si9t'\ -a P"rc.~-ase.

COflTPIAC.T vvi+h seller:

eoftr~ StfOUl.O e,ovf.fl-...

0 e e 0 0 0

Pf&.1c.E. ~~OU,.,.,. Of ~14 f1f'll'l'IC-•lllG t'L.~"' f)p."f E. !'rope.4'-t-y +o be c:le.livereJ COP'\Pc..61'10..- ~e1'P.ILO VII~ IS tz."Po...S.&1£ .for .,.,l-.-a+­

. . . 'oefore. yoo Wlove. ii'\

... -af+e.r yov l'V\OVe. iW"

S•e.tl . . . ......... . .. . . .

"6EP lfl l"'•flO . ••

Contract usually requires CASH DEPOSIT. (Get signed refund agreement in case bui Ider or seller doesn't complete his part, or in case you fa i I to get mortgage.)

Have your attorney check contract BEFORE you SIGN.

~D£12.. MAY f2€Qu112C. SOME- Of2.. Al.t.. OF 11-IE6£ 11'"E,M~ at ilie tirne. of ilie cJo.sing

eoti"E.fl'l'•Ofl~ 1-0HI I. Fire insurance policy. (Lender named

payee in case of loss. )

2.. Preliminary title evidence or title policy binder.

3. Copy of location survey .

4. Original executed bond or note.

S.. Original executed mortgage.

6. Current tax bill (and letter from you authorizing tax collector to forward future bills to lender, if desired.

?. Executed copy of closing statement.

8· Special escrow agreement.

ftll' &.O~tl Same -as c.orwet.+ional loan plus :

I. Original FHA commitment and copy .

~- Additional executed copy of bond or note, certified.

3. Additional executed copy of mortgage, certified.

4. Additional executed copy of closing statement.

6'. Escrow to cover at I east one month's FHA insurance premium .

6. Any other papers required on FHA commitment.

61~ .. S'OrAe -as C.Onve.n+ional loan plv.s :

•• ~-

VA certificate of commitment.

Additional executed copy of bond or note.

Additional executed copy of closing statement.

3.

4.

s. VA certificate of loan disbursement, in duplicate, executed by veteran & I ender.

Any other papers required on VA commitment.

II

-YtlE. C&051flG of -f'l,e_. loat"

M-t-ei-deJ ~ '(OtJ

youP. l-~"'1£P­S£a.1..E1L

S£a.1..Elt!S L./4W'IE,.P.. l-~rJOf,12-.

I"'§ t ~hat ~appen,!;?

~ '/OU pay any balance of down payment.

llJ l-£t'PEJ2- gives you statement covering full

amount of loan and closing costs, including:

10

p.. Ji.PPP-IA•~li-L. FU &. "T'1'Tt-S. ~P.'3-C.H fE.E. e.. t-e..(;AI,. FE.£ O. Polf'IT CHA!l<DE. fop. t.op.tJ(...,hereappk;:ible)

E,. FHP. 1,.aSu~f'ICE: (for FH#' \oan&)

"rplie.a+icm ihd .. Je6 ... 1. 1.-oep..-r1otJ -a,..d OE.SCJl.f P"f•ON

of prope-Y+y

'2.. rJ,_tAE. of .selle,r1

bui1Jer1 re..~I

e~-ate. a.9ent-

3. PP..•C.e.. of propex+y

4. lf"OE.61"f.PtJE.6S (if any) a~·;r,"st propeYty

S. f P..r'\ 11,.'/ .~f:lTP..'flJS

6. 1tJfoll/J\p..,.1otJ .-abwl- e.mploy~er>t or-cl pe..rsoY1~l fi"a~ces

?. c~rr flf.fE'.~.

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HPfl.OV14&, of. lo-an

A.f+er -appraisi~_s p..-oper+y

'and -an-aly~i"'..9 '/0\J'r CYePi+i ~PE.tz-

(if he. or 5he. -approves) ~ii\ 5end 'fOIJ o

''U1TQl.OF C.01"11"1T,_£ttr''

ou+linin,g tenns of mor+90,9e and -au*'orii.ir'\.9 'JOU

-ro !!!JO ahe.-ad and -arran,ge puYch-a5e.

Oo )p

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-J1T&.8. SU.PUI +o e.s+abli~h legal ov-Jne.rsh;p -fre.e. .fvom claims b'i ~ex.s

'Or'ld -a

U'flO S.,P.,,£1 -to de+e.rvnine.. e'J'.-act po~i+ion ~ -the prope..-ty -- -are

reqvived by mo.st l~ndev-s.