Home Buying The Buyer The buyer Things you

Home Buying The Buyer

The buyer ► Things you need § More money than you think § A loan plan § A realtor § A home you would like to purchase

More money than you think The home purchase is more expensive than the cost of the house. ► There are “Closing Fees” that include, but are not limited to: ► § § § § ► Title transfer fees Escrow fees Points Inspections Value assessments Taxes Title search fees Etc We will spend time on these later

The Loan Plan § There a multitude of loan plans out there ►A fixed Mortgage § A set APR for a set amount of time ► Ie. 6% loan for 30 years § Generally higher percentage, but does not fluctuate § Generally you will need a down payment of 20% ►An Adjustable Rate Mortgage (ARM loan) § A set APR for 5 years and then it fluctuates with the economy. ► Generally a slightly lower APR than the Fixed rate, but can go much higher in time ► Down payments are still great.

The Loan Plan cont. ► Freedom loans (popular in 2002 -2007) § Pay what you want. ►If you choose not to pay the minimum due, the difference is tacked on to the loan. ►Balloon payments may be due. ►This can lead to long term issues with payment as the loan gets larger each month ►These can be made with no down payment ►Some attribute these with the housing crisis ►These are Sub-Prime mortgage

Homework ► Tonight § Call or talk to an owner of a home. ►Interview them with these questions § Is your home a fixed rate, adjustable rate or other type of mortgage § What is the current APR of your home loan? § Has the APR changed before? § Did you make a down payment on you loan?