Yes You Can Own Your Own Home

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Slide 1:

1 Visions Elite Property Management and Real Estate Robyn Smith, COO Visions Elite Real Estate Certified Distressed Property Expert

Homeownership Myths:

© 2010 Freddie Mac 2 Homeownership Myths It’s a bad time to buy a home. If I buy a home, I’m afraid I’ll end up in foreclosure. I need almost perfect credit to buy a home, but I can’t do anything to improve my credit rating. I can’t get a mortgage if I’ve changed jobs several times in the last few years, or if I’m self-employed. Homeownership is too expensive. I need to make a large down payment, as much as 20 percent or more, to get a mortgage. The mortgage process is too complicated and risky, especially with all of the offers I am receiving in the mail.

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© 2010 Freddie Mac 3 MYTH # 1 It’s a bad time to buy a home. If I buy a home, I’m afraid I’ll end up in foreclosure.

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© 2010 Freddie Mac 4 For working families with stable income and good credit, this is a time of opportunity. TRUTH THE

Let’s Get the Facts on Myth #1:

© 2010 Freddie Mac 5 Let’s Get the Facts on Myth # 1 For qualified homebuyers, now is a good time to consider homeownership. Mortgage rates for fixed-rate mortgages are at near historic lows, creating stable payments and long-term savings for today’s homebuyers. House prices have also fallen, and there is a great deal of housing supply on the market. The combination of these factors generally results in greater affordability. While you can't always solve for unexpected changes in your life (job loss, divorce, illness), good planning and preparation, in addition to responsible use of credit can decrease the likelihood of foreclosure.

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© 2010 Freddie Mac 6 MYTH # 2 I need almost perfect credit to buy a home, but I can’t do anything to improve my credit rating.

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© 2010 Freddie Mac 7 TRUTH THE It is true that getting a mortgage today requires a stronger credit history than in past years. You do not need perfect credit, but the higher your score, the more options you have when looking for a mortgage. Your credit score will affect your mortgage loan approval and interest rate. If you have a handle on your finances, it’s possible to take measures to improve your credit.

Let’s Get the Facts on Myth #2:

© 2010 Freddie Mac 8 Let’s Get the Facts on Myth # 2 Your credit history is one of the primary factors a lender uses to determine if you are a qualified borrower. A lender is not expecting you to have perfect credit, but you will need a good credit history that demonstrates you will repay your loan obligation. The good news is that you can improve your credit over time. Follow these tips and you’re on your way: Always pay your bills on time. Pay at least the minimum amount required. Review your credit report and correct any errors you may find. Keep your debt-to-income ratio below 20 percent (excluding housing costs). Don’t max out on your credit cards.

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© 2010 Freddie Mac 9 MYTH # 3 I can’t get a mortgage if I’ve changed jobs several times in the last few years or if I’m self-employed.

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© 2010 Freddie Mac 10 TRUTH THE Not true. You can change jobs several times or be self-employed and still get a mortgage loan to buy a home. The important thing is to show that you’ve had a stable income and good credit.

Let’s Get the Facts on Myth #3:

© 2010 Freddie Mac 11 Let’s Get the Facts on Myth # 3 Most lenders would like to see you working for two years in the same field with steady or increasing income. The more stable your income, the more stable your ability to repay your debt, reducing the risk for the lender that you’ll go into default. If you have not worked at your current job for at least two years, or if you have multiple jobs, you will need to provide information on all jobs going back until you have a two-year history. If you’re self-employed and don’t have a steady income to prove to lenders your ability to make the necessary payments, be prepared to provide proof of your income.

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© 2010 Freddie Mac 12 MYTH # 4 Homeownership is too expensive. People have to make a large down payment, as much as 20 percent or more, to get a mortgage.

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© 2010 Freddie Mac 13 There are many expenses to consider when buying a home including your down payment, closing costs, property taxes, maintenance costs, etc. A 20 percent down payment is not the golden rule, even in today’s environment. Generally you should expect to make about a 5 or 10 percent down payment. (Note that you may be required to pay mortgage insurance if you make a down payment of less than 20 percent.) TRUTH THE

Let’s Get the Facts on Myth #4:

© 2010 Freddie Mac 14 Let’s Get the Facts on Myth # 4 M any factors come in to play in determining the amount of down payment that will be required, depending upon your individual situation: The value of the property The amount you are financing Your credit rating Your debt-to-income ratio To supplement whatever down payment you have, ask about potential sources of down payment or closing cost assistance, especially if you’re a first-time homebuyer. Owning a home has both personal and financial advantages: Tax benefits Stable payments with a fixed-rate mortgage Potential for appreciation

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© 2010 Freddie Mac 15 MYTH # 5 The mortgage process is too complicated and risky, especially with all of the offers I am receiving in the mail.

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© 2010 Freddie Mac 16 With the right resources and information, the process of buying a home and obtaining a mortgage can be easier to understand. Seek an experienced housing counseling professional, loan officer, or real estate agent to walk you through your options. TRUTH THE

Let’s Get the Facts on Myth #5:

© 2010 Freddie Mac 17 Let’s Get the Facts on Myth # 5 Follow these steps as you begin the process of buying a home: Start by determining how much you can afford, based upon your spending plan and comfort level. Talk to a loan officer, who will review your income, expenses, and savings to help you determine the type and amount of mortgage loan you qualify for. Seek assistance from a credible housing or credit counselor to obtain information on how to establish or improve your credit history.

Let’s Get the Facts on Myth #5 (continued):

© 2010 Freddie Mac 18 Let’s Get the Facts on Myth # 5 (continued) Follow these helpful tips to protect yourself against organizations that don’t have your best interest in mind: Say no to easy money. Ask about additional fees. Understand the total package. Shop around. Find out about prepayment penalties. Work with HUD-approved credit counselors. Make sure documents are correct and complete. Make sure all promises and terms are in writing. If you’re not sure, don’t sign!

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© 2010 Freddie Mac 19 Homeownership could be closer than you think! Meet with a mortgage lender or real estate professional. Start a Savings Program. Sacrifice now for your future home goals! Consider Credit Counseling Call me for a telephone appointment to get started! 240-882-4683

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