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