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How Credit Affects You
Preparing for Home Ownership
Steps for Buying a Home
Life as a Homeowner






 
Module 3
Preparing for Home Ownership
Key Points Summary
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Additional Resources
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The following key points were discussed in Preparing for Home Ownership:

  1. There are many personal and financial benefits of home ownership. You should be sure that you are ready to take on the financial and maintenance responsibilities involved with owning a home before you make a purchase.

  2. There are numerous counseling, down payment and closing cost assistance programs available to you through city, county and state programs, as well as non-profit housing organizations.

  3. There are four key components to paying a home loan: Principal, Interest, Taxes, and Insurance. Together these are often referred to as PITI.

  4. There are many different types of loan features and loan products, and some of them can be very complex. Work with your home loan consultant to ask questions and find the product that is best suited to your financial situation.

  5. A good way to compare different home loan products is to check the Annual Percentage Rate (APR). The APR includes all of the interest, points and other fees that the lender charges and generally should not be more than .05% higher than the stated interest rate.

  6. It is extremely beneficial for a potential homeowner to obtain pre-approval prior to submitting an offer to purchase a home.

  7. A non-prime loan may be appropriate for someone with higher qualifying ratios or a lack of documentation but who would like to purchase a home and begin to establish a good credit history.

  8. Higher interest rates and exorbitant fees are typical characteristics of a predatory lender, especially if the borrower should have been able to qualify for a regular prime loan at market interest rates and normal lender fees.
Next Step
Now that you have reviewed the Key Points Summary test your homeowner knowledge with our Quick Quiz.

When you are finished, continue to Steps for Buying a Home for a walk-through of the home-buying process.
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