Home Ownership - Living the American Dream

Stephen Hales gave a fantastic presentation and answered all of our questions.
I have some "Home Buyers Guides" for those who could not attend.
Here is a summary of things he went over.


1. Do you know your credit score (FICO)? (Between 500 and 850)

• If your credit score is less than 720 it will cost you more to purchase a home.
• Helpful ways to increase you credit score, read this article.
• Hold onto old credit card accounts if you have a history of prompt payments.
• FICO is a type of credit score that most banks look at so you need to take interest in it.

2. Loans and amortization schedules

• There are a lot of different mortgages out there and you need to figure out what is right for you.
  
• 30 Year fixed loans, 80/20 loans, interest only loans. If none of these make sense to you , join the club.
  
• Simply, if this is your first home purchase, use an agent so they can explain everything and help you avoid the bad ideas and rookie mistakes.

3. Why buy (or why buy now)?

• If you intend to own less than a few years, DON'T BUY!!!
• Real Estate is a nice tax shelter.
• Pride of Ownership (hang up those pictures without landlord approval).
• Let roommates help pay the mortgage.

4. How can a Realtor help me?

• Expertise of the area and the process. (Knowledge of schools, neighborhoods, planned developments).
• Someone to hold our hand through the process:
• Explain contracts
• Negotiate on your behalf
• Assist in home inspection process
  
• Help sift through inventory to find good deals
• The seller has someone looking out for their interests, you should too!!!
• You've never done this before and may not know what your rights are.

5. Helpful links:
www.bankrate.com
(This will help to watch interest rates.)

www.fool.com
(Great articles and help in figuring this all out.)

www.jeacle.ie/mortgage
Mortgage calculator.
(Visually understanding principle versus interest)


6. Interesting side notes:

• Stephen notices more women than men having enough money and saving sense to purchase homes. (Come on men. You can do it!)
  
• Right now is a poor time to look at buying a condo. The market is heading down and a lot of new condos are scheduled to be built.
• Recent articles show DC prices going down from now into 2008. But nobody ever perfectly predicts where the bottom is.
  

7. Questions that Stephen can help you answer:

• Appraisals vs. Assessments
• Do I need a home inspection?
• What are home warranties, and why should I consider buying one?
• What is title insurance?
• What is the difference between a lender pre-qualification letter and lender pre-approval letter?
• What are polybutylene pipes and why should I care?
• Do I have to pay out of pocket for a buyer agent to represent me?
• What happens at settlement (i.e. when I sign over my life)?
• How much should I expect for closing costs?
• What is earnest money?
• Should I pay down my mortgage early?
• What are the tax benefits of owning a home?