Quick tips to get you on the path to homeownership

Owning a home is a great way to build an investment and see return on all the “rent” you’re already paying month to month. Right now, interest rates are STILL at an all-time low. If you’re mortgage ready, take advantage of this and get yourself a good deal!

1.   Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing costs. If you pay more than 30 percent of your gross monthly income to put a roof over your head, you are living ABOVE your means. The term “HOUSE POOR” will have real meaning.

Keep in mind: Owning a home is not like renting – you are the landlord. When it breaks, you fix it. EXPECT unexpected costs. When new appliances, roof repairs and plumbing problems pop up; these costs can drain your bank account.

2.   Go to a bank or lender to get pre-qualified. This initial step allows you to assess any goals or needs you may have regarding your mortgage with your lender. From here, you can learn about your various mortgage options and the type that might be best suited to your situation.

Keep in mind: Being pre-qualified is NOT the same as pre-approved. It is strongly advised that those seeking homeownership do not house hunt until they are pre-approved, which is much more extensive.

3.   Find a realtor once you are pre-approved and set on what you can afford. Meet with a few agents, to find one you feel confident with. An agent who is a member of the National Association of Realtors is a good sign as they adhere to a strict ethics code.

Keep in mind:  A good real estate agent can help guard against any pitfalls you may encounter during the process, so choose wisely.

4.   Know and understand the various mortgage products available to you. Factor in closing costs you can afford. This will help you choose the best mortgage program for you. As a first time homebuyer, options may be available to you, such as low interest programs and down payment assistance.

Keep in mind: If you plan to move within five to 10 years, an adjustable-rate mortgage (AMR) could be beneficial. However, if plans change and you stay in your home for longer, you may be stuck with payments you can’t afford.

5.   Try to hold off on big purchases or any decisions that could affect your credit once you’ve signed a contract and a closing date is set. Typically, lenders pull credit right before closing to make sure nothing has changed with your financial situation.

Keep in mind: If you feel over-stressed, lost, or uncomfortable with the homebuying process or any part of it, don’t be afraid to ask for help. The Homeownership Resource Center, a division of Family Services, Inc., not only offers help and guidance, but piece of mind.

To learn more about the workshops and individual appointments we provide with our licensed homebuyer coaches, contact us at 843.735.7862 or info@fsisc.org.

Written by: Revena Dawson, Home Purchase/Credit Advisor, & Sarah Cornwall, Marketing Rescources, at Family Services, Inc.

For the Love of $.19

Written by: Toby Smith

I had an experience this week that really brought home the message we preach to all clients-new, returning, and prospective; CHECK YOUR CREDIT REPORTS ON A REGULAR BASIS!

One of my New Year’s resolutions was to check my credit report four times a year, instead of two, and during the January check up, I was not happy to see that a problem I thought had been resolved with a local utility company was still showing on my report. I made a mental note to check it again, and to take further action, if necessary. Well, the fall check up arrived, and the problem was still not resolved so I put on my battle gear and called the company.

A pleasant representative, who verified my identity, pulled up the account, and while I couldn’t swear to it, I thought I heard her laugh before she said, “The balance is $.19 cents.”

SAY WHAT???? This has to be a joke! Either a very good one, or a really bad one, but this can’t be!

“Yes, ma’am,” the representative continued, “You did pay the account, but the cents were left off, so technically it’s not paid in full. Let me transfer you down to the credit folks,” she added rather quickly.

Lots of negative thoughts played pinball in my head and the “hold” music, some Kenny G. wannabe, was not making the situation any better. Then, another voice of authority came on the line.

“How can I help you?”

She didn’t say it, but I heard it in her voice – get to the point, no crying, and don’t waste my time!

I humbly explained my sad tale, and advised her of what I learned minutes before. She listened patiently, before dropping the hammer.

“Well, the information you have received is correct. You have two choices, wait for the information to fall off your report, or come down and pay it. We report to the credit bureaus on the 15th and the 30th.”

I went into argument mode, explaining that I had paid the balance off last year; the status should have changed. By now, I’m slightly raising my voice and ask, “Are you telling me that the status didn’t change because of 19 lousy cents? Is that what you’re saying?”

She didn’t even flinch.

“Yes, that’s correct. The bureaus do not recognize the cents, but we do, and that’s why this remains open. You can come down and pay it. We report to the bureaus…[blah, blah, blah]…and here’s your account number for future reference…[blah, blah, blah]…and we close at 5 pm. Have a nice day."

Click.

No chance of that!

Unbelievable!

So, I left work at 3:30 pm, drove 20 minutes, parked, and went inside to pay my $.19 cents. (See, it does pay to keep pennies!)

Aside from a good laugh, I would be grateful if you would take away the following:

1. Check your credit report more than twice a year. Once a quarter isn’t a bad idea, especially, if you are in serious “clean up the credit” mode.

2. Checking your own report presents no problem. However, shopping for credit generates inquiries. There are two types; hard – car dealerships, banks, credit unions and; soft – credit card promo offers, etc. Both can drop your score from three to five points a pop.

3. With respect to status, paying “as agreed” is always the goal. “Current was” means that you fell behind but brought the entry current. “Collection” indicates that you have stopped paying and “Charge off” means that the creditor wrote the item off as a lost cause. But rest assured, it will find a home on your credit report. Seeing the word “paid” in front of collection or charge off indicates that the item was addressed, which is generally a good thing for your numbers. Be careful about paying any and everything, though; some old items can get you into trouble.

4. The folks you do business with either report your monthly affairs to the credit bureau or they don’t. Hopefully they do, and it’s very important that everything goes to all three bureaus, Experian, TransUnion, and Equifax.

5. You might want to pay things down to the penny….

6. If you don’t check your credit report regularly, be prepared for the unexpected, nasty, surprises to pop up. Family Services, Inc. offers a popular class called Credit Cents, which, among other things, teaches participants how to read a tri-merge report (the three credit bureaus) report and encourages the development of a written action plan. For more information on Credit Cents call 735-7862 or visit the website at www.fsisc.org and click on Credit Improvement under Homeownership Resources or Consumer Credit Counseling.

Just a word of warning…if you come to a Credit Cents class, expect to hear this story again. If we ever meet, expect to hear about the day I had to pay $.19. My great-grandchildren–who are nowhere in sight–are going to get a letter about the benefits of checking credit reports regularly.

The receipt reads:
Prior Balance: 0.19
Payment: 0.19
New Balance 0

For the love of $.19…. smile

Choosing Homeownership

From: Military.com By: WellsFargo

Homeownership is about security, comfort, and fulfilling the American dream. The sense of community that comes with putting down roots in a place of your own, the security of owning the roof over your head, the opportunity for financial growth--all these accompany the choice to become a homeowner.

But buying a home is also the single largest investment most people ever make. Along with all the benefits of homeownership comes the responsibility to manage that investment wisely.


Benefits of homeownership

The rewards of owning your own home include many benefits unavailable to renters. Among other things, homeownership allows you to:

Start building wealth: Making a mortgage payment every month builds up your equity stake in your home, contributing to your long-term savings and helping you solidify your financial future.
Reduce your tax burden: The interest you pay on your mortgage is usually tax-deductible, which can lead to significant tax savings--especially in the early years of the mortgage term, when most of your monthly payments go toward interest. Make sure you consult your tax advisor about the deductibility of interest.

Build your credit history: Timely mortgage payments can contribute to a positive credit history.

Eliminate landlord hassles: You'll no longer have to fear non-renewed leases and rent increases.

Make the house your own: Aside from zoning rules, Homeowner's Association requirements, and local building codes, you'll be free to decorate, remodel, and renovate as you wish.


Responsibilities of homeownership

Before deciding to buy a home, consider the responsibilities that will accompany your purchase. You will most likely have to make some adjustments to account for the following:

Additional financial responsibility: Whether buying is more costly than renting depends on your individual circumstances. As a renter, some or all of your utilities may have been paid for, but now they will be solely your responsibility. You'll also be responsible for property taxes and homeowner's insurance in addition to your loan.

Maintenance and repairs: Maintaining your property will be up to you, not the landlord.

Less mobility: Unlike having a lease where you can move with minimal notice, moving when you own a home is more complicated since you're responsible for ensuring the mortgage gets paid.

Depreciation: Real estate often increases in value over time, but not always. Owning a home means facing the risk that its value will depreciate.

Beyond the financial benefits, the personal rewards of homeownership can be tremendous--as long as you prepare for the responsibilities that come along with it, and choose a home and a mortgage that are well-suited to your needs.

10 Reasons Why The Homeownership Resource Center is Such a Valuable Asset to the State

1. The Homeownership Resource Center (HRC), a division of Family Services Inc., is the lead agency in the nation for helping individuals and families foreclosures. Our success rate hovers between 66 and 70% -- that’s unmatched anywhere else in the nation.

2. The HRC’s Mortgage Default Clinic model has been recognized as a best practice by Neighborworks America.

3. The HRC regularly receives referrals from politicians at every level, including state representatives and senators, county officials, and members of the US Congressional delegation.

4. HRC counselors recognize foreclosure scams, and since the housing crisis started 2 years ago, it has helped hundreds avoid sending money to particular people or entities promising things that sounded too good to be true. Additionally, the HRC – working with the state’s Department of Consumer Affairs – has helped many homeowners recoup their dollars.

5. The HRC has a Critical Response Coordinator, who is especially adept at pulling homes back from the auction block – in many cases, with less than 24 hours notice.

6. The HRC has unique access to mortgage lenders, servicers and providers and utilizes special phone and fax numbers, and has the ability to email designated points of contacts. Homeowners, calling on their own, face the 800-customer service number. HRC counselors speak to the representatives who can make real-time decisions.

7. HRC counselors are licensed and certified by state and national agencies. Additionally, continuing education credits required quarterly. Our counselors go beyond the standard to target emerging trends.

8. All the HRC’s mortgage default counseling services are available statewide and to residents in North Carolina. (Bankruptcy and credit counseling are not available due to state licensing laws.)

9. As a HUD-certified agency, the HRC does not charge for mortgage default counseling.

10. While the HRC works efficiently and knowledgeably, compassion for people is its hallmark, and while hundreds, if not thousands, of homes have been saved, it celebrates that families will remain together; kids won’t have to change schools, and that seniors can enjoy their golden years in the homes that hold a lifetime memories.