Ebook 2018

5 Keys to Getting Your Own Home Keys FIRST TIME HOMEBUYER’S GUIDE

5 KEYS TO GETTING YOUR OWN HOME KEYS Table of Contents Meet You 3 Meet Future You 4 Introduction: Keys to Your First Future Home 5 Key #1: Don’t Let Words Decide for You 6 Key #2: Decide if Home Ownership is Right for You 7 Key #3: Take a First Time Homebuyer’s Class 11 Key #4: Find Someone You Can Trust 13 Key #5: Start 16 Your Questions Have Answers! 17 Read Aymie’s Story 18 12-Step Homebuyer’s Checklist 19 2

- now - 5 KEYS TO GETTING YOUR OWN HOME KEYS • Tired of wasting money on rent • Think you will never own a home • Don’t know who to trust • Wonder who can help • Don’t know where to start Meet You You have potential. You’re going places. You have dreams, and one of them is buying your first home. This dream can feel a bit impossible to achieve, though. The commitment of buying a home involves a lot of money, so there are a lot of questions and you know you’ll need a loan. To get a loan, you know you’ll need to know some things, but it’s hard to know where to start. Searching for information yourself can feel overwhelming. There’s so much, and it looks like it’s written in another language. Lots of lenders want to help you buy a house, but you know that’s because if you buy a house, it’s good for their company. You could use some advice, but you have to be sure it’s coming from someone who wants to help you make a good decision for you. It’s hard to know who to trust. It’s easy to give up before you even start. 3

- soon - 5 KEYS TO GETTING YOUR OWN HOME KEYS • Learned what to do • Found people to trust • Didn’t do it alone • Are holding the keys to your first home • Building equity and a vibrant future Meet Future You Now imagine yourself in the future. You’re holding the keys to your first home. It was a big purchase, but at the end of the day it belongs to you. Now your monthly payments will build your dreams instead of the dreams of someone else. You never have to worry that someone’s going to raise your rent again. Future you didn’t give up. You found someone you could trust who would walk through the process with you—someone who cared about your situation. You refused to let a process with a lot of steps get between you and your best life! You took the steps one at a time, walking with a trustworthy guide who helped you figure out what was right for your unique situation. Buying a house was a long journey, but you didn’t have to do it alone. 4

Keys to Your Future 5 KEYS TO GETTING YOUR OWN HOME KEYS “Intimidation isn’t known for making great decisions, and neither is lack of knowledge. This guide will empower you to take the steps you need to make a well-informed decision for yourself.” The process of buying a house can feel intimidating, especially if you have never done it before. But intimidation isn’t known for making great decisions, and neither is lack of knowledge. This guide will empower you to take the steps you need to make a well-informed decision for yourself. This guide will empower you with the necessary vocabulary to get you started and make the process more accessible and comfortable. Then it will help you think through a few pros and cons of buying a home to help you decide whether or not it’s right for you. You’ll find some questions to ask to help you figure out whether someone is helping you or just trying to sell something. 5

KEY #1 5 KEYS TO GETTING YOUR OWN HOME KEYS Don’t Let Words Decide for You Buying a home is a new process. Any time you learn something new, you gain essential knowledge. While buying a new home, learning important terminology empowers you.. Don’t let unfamiliar words make a decision for you. Learning a few new words can make the process much less intimidating, so it’s worth taking some time to learn the words that will make the path clearer. Below are important terms that will empower you in the process of buying a home: Amortization: The process of paying off a loan with regular payments over a fixed time period. Appraisal: An expert’s best estimate about how much a home is worth. Escrow Account: A special account set up by the lender to collect monthly payments for things like annual property taxes and homeowners insurance. Pre-Qualification: Often the first step, a lender looks at your financial situation and tells you how much of a loan they think you could qualify for. Pre-Approved: Often the next step, it’s pretty similar to pre-qualification, but usually requires a bit more documentation and verification. Loan Estimate: A document that shows how much the lender thinks settlement fees will be. Credit: An agreement between a borrower and a lender, you get something valuable now, and agree to pay for it later. Credit Score: A number between 300 and 850 that gives lenders an idea of how you have handled borrowed money in the past. Capital: Capital is savings. It can be in a few different forms, but there has to be a paper trail showing where it came from. Collateral: Other property you own. 6

5 KEYS TO GETTING YOUR OWN HOME KEYS KEY #2 Decide if Home Ownership is Right for You “You are the one who knows what’s important to you, so you should be in the driver’s seat of making this decision.” Owning a home is a great choice for many reasons, but sometimes people think through the options and find that they prefer renting. No matter what you decide, you want to be sure that you are the one deciding— not what you assume about the cost or the process. The following page contains a list of pros and cons that can help you think through whether or owning a home is right for you. 7

PROS OF RENTING 5 KEYS TO GETTING YOUR OWN HOME KEYS Your monthly costs may be lower than owning a home, especially if utilities are included in your rent. If something breaks, it’s someone else’s job to fix it. If you want to move, you’re free to go as soon as your lease is up. You avoid the risk that the value of the home you own will go down, leaving you owing more to the lender than your home is worth. CONS OF RENTING Renting comes with more freedom and less responsibility, but at the cost of security. You might have to move suddenly if your landlord raises the rent or sells the house you live in. You could also be evicted. You may not have privacy. When something breaks, you have to wait until fixing it fits in someone else’s schedule. When you make a rent payment, that money is gone. You don’t own anything for it. 8

PROS OF OWNING A HOME 5 KEYS TO GETTING YOUR OWN HOME KEYS When you make a payment, that money goes towards a home that you own. It’s a bit like a savings account that becomes more valuable the more money you put into it. It’s possible that your home will become more valuable over time, and could become worth more than what you owe. The housing market has risen steadily over time and the average house is worth more now than it was 10 years ago. You can take advantage of tax breaks for homeowners. You’re free to do maintenance and repairs on your home when it matters to you instead of waiting for someone else. If you choose a fixed-rate mortgage, your principal and interest payments will remain the same. You’ll always know what your payment will be, and no one can raise it. CONS OF OWNING A HOME The monthly payments are generally higher than renting. When something breaks, you have to make the repairs yourself or pay someone to do it. There are no guarantees that your house will increase in value. If you sell a house that has become worth less than what you owe, you will have to pay the lender the difference. If you want to move, you have to rent or sell your home first. If you don’t make your mortgage payment, you could lose your home and all the money you put into it—not to mention ruining your credit score. 9

5 KEYS TO GETTING YOUR OWN HOME KEYS DECIDING WHAT’S RIGHT FOR YOU While you’re the person who knows your situation the best, it can be helpful to talk it over with someone more familiar with the financial process. They can help you figure out what your payments might be and whether or not now is a good time for you. 10

5 KEYS TO GETTING YOUR OWN HOME KEYS KEY #3 Take a Class: First Time HomeBuyer’s Class Even the most caring, trusted advisor can never quite know you as well as you know you. One of the best things you can do is educate yourself so that you can have the privilege of making your own best decision—instead of forfeiting that right to someone else. Someone else may care a lot, but they can’t quite be you in the way you can! A good class will do several things for you. First, it will help you think through each step of the process without pressuring you to do something that’s not right for you. A good class will put you in the driver’s seat, empowering you to be at the wheel of your decisions. A First Time Homebuyer’s Class will also save you time. Quality research not only takes a lot of time, but a lot of effort. You could spend hours combing the internet to find the information, but in a well-designed class, someone has already put in that work for you. They’ve filtered out the spam-like inapplicable–or bad–information and are ready to give you exactly what you need in a sequence that is truly helpful for you. 11

Here are some of the things a good 5 KEYS TO GETTING YOUR OWN HOME KEYS First Time HomeBuyer’s class will teach you • How to determine how much you can afford to spend on housing, create a budget, and start saving. • How to work on your credit—and why it matters. • Tricks of the trade for shopping around for the best interest rates and mortgages. • How to work with a real estate professional, an attorney, and a home inspector to make sure you get a fair deal. • What kinds of contingencies you should include when you make an offer on a house. • Why you can’t skip the home inspection, even if you’re buying from someone you know. • The importance of getting your own attorney (Hint—the bank’s attorney works for the bank, no matter who is paying them!). • What signing your purchase and sale agreement should look like, and what comes next. • How to get approved for a mortgage. • Whether or not you qualify for down payment and closing cost assistance. • How to get homeowner’s or condo insurance. • Why you should do a final walk-through of your new home on the day of closing. A lot of the fear surrounding doing something new (like buying a home) comes from lack of knowledge. Don’t let things you could learn easily make the decision for you! Take a class to learn the basics of the First Time Homebuyer’s process. This way, you will be empowered to make your own decision. 12

KEY #4 5 KEYS TO GETTING YOUR OWN HOME KEYS Find Someone You Can Trust “When you’re looking for someone to help you make this decision, look for community resources and people that respect you.” No one can make the decision for you, but that doesn’t mean there aren’t people that care just as much about helping you discern what is best for you. Finding someone you can trust and that can walk this road with you is invaluable, unfortunately rare, yet very essential. Some of the best advice First Time Homebuyer’s can learn is to find someone who earns your trust, that will walk with you. You will need people to teach you about the process, mortgage lending and that knows how to navigate the ups and downs. When you’re looking for someone to help you make this decision, look for community resources and people that respect you. It can be tough to know who to trust, especially since you buying a home is always a good decision for the bank—even though it might not be a good one for you. Here are some questions that can help you determine whether or not the person you’re talking to is thinking about you or just themselves. 13

Questions to ask yourself 5 KEYS TO GETTING YOUR OWN HOME KEYS • Are they listening to you? Every situation is unique. To make the best decision, they’ll have to know what’s going on. To know what’s going on, they’ll have to listen patiently. They should be compassionate about the challenges you are facing in your life. • Are they an expert? In order to trust someone, we need to see that they care about us, but also that they know what they’re talking about. Taking a class and educating yourself will help you sort through who’s the real thing and who’s just trying to sell something. They should be confident in the powerful role they can play in helping you. • Are they presenting more than one option? You want someone who will take the time to walk you through the pros and cons of several options, instead of pushing something on you that doesn’t actually fit your situation. You want someone ethical. • Have they helped other people in your community? Trustworthy people leave a trail. If people in your area have had good experiences with them, you’re in good hands. • Do they treat you like a real person with real potential? Are they interested in helping you reach your goals? Are they optimistic? • Are they passionate about providing valuable knowledge? Finding someone the is passionate about teaching is like hitting a homerun. A trusted person or company who teaches you, gives you the keys to be in your own driver’s seat. Look for people who care about you, who are willing to listen to your needs and ethically help you and discern what is best for you. 14

“I honestly felt kind of lost. I knew buying a home was a 5 KEYS TO GETTING YOUR OWN HOME KEYS smart financial decision in the long run, but it seemed kind of scary to get started. That changed for me when I found someone who was in my neighborhood who was willing to sit down with me and walk me through the steps. Just having someone to answer my questions—who I could trust not to lead me astray—made all the difference!” Santiago F., Lynn, MA “One of my greatest joys is seeing a first time home buyer be given the keys to their first home. It is an incredible experience to sit with them in our first meeting, work together in the process and then celebrate with them on move-in day, something they never thought would be possible. Please believe me when we say here at CCU, it is possible. And we consider it a privilege to work together to make it a possibility for you.” Nick Sarantopoulos, President/CEO Community Credit Union 15

5 KEYS TO GETTING YOUR OWN HOME KEYS KEY #5 Start “Don’t let intimidation, the unknown, and fear be in the driver’s seat. Take control of your destiny.” A home is a place to connect with people you love. It protects you from the risks of rising rent. It can provide a sense of security and success. It can be an investment that grows in value over the years and lays the foundation for your best life! Home buying should be about empowering you, preparing you for a stronger future! Don’t let intimidation, the unknown, and fear be in the driver’s seat. Take control of your destiny. So many people who never thought it was possible now own their first home simply because they were willing to try! Are you ready to try? With the right help, you can do it. 16

Your questions have answers 5 KEYS TO GETTING YOUR OWN HOME KEYS While you are solidly on the road, you probably still have questions. That’s a good sign! We can help. Here are some ways we can help answer your questions: • You can sign up to receive information about a First Time Homebuyer’s mortgage made available to you. We’ll give you more details about what it means so you can evaluate if this is the right time, and know what to do next. • Take a First Time Homebuyer’s class! This is a great way to ask questions to a real, live person and build a relationship with someone who knows the process and will work to help you create your most vibrant life. • The CCU blog, Two Cents: A CCU Community Blog already has some great info for you—and more is on the way! Check back often to learn new things and equip yourself to take control of your own financial situation. • Here’s a checklist of the 12 steps it takes to buy a home. This will give you a better idea of where you are in the process, what’s next, and how long it might take. Knowing what should happen can protect you from people who are doing things that shouldn’t happen. 17

Here’s what it can look like 5 KEYS TO GETTING YOUR OWN HOME KEYS “That started to change when I ran across a checklist explaining the 12 steps to buying your first home. Learning something new made doing something new seem possible.” I’ve had a Pinterest board of my dream kitchen since I started working, but you can’t paint a kitchen someone else owns. Buying my own home felt like this idea that was great in theory, but was never going to happen for me. For me, a lot of what made it feel impossible was just not knowing where to start. It was like a game with rules I couldn’t figure out. That started to change when I ran across a checklist explaining the 12 steps to buying your first home. Learning something new made doing something new seem possible. I was nervous about signing up for the first time homebuyer’s class because I thought there might be a lot of high-pressure sales going on, but there wasn’t! I met Nick, who listened to my situation and then helped me think about whether or not home ownership was a good decision for me. I thought it was going to be super hard and that everyone was going to either tell me “no” or care about the bank more than me, but I was surprised to find people who took the time to see things from my perspective and made sure I was making a decision that was right for me. I followed the steps, and, long story short, here I am holding my own keys! Turning my dreams into reality. Aymie W., Somerville, MA 18

1ST TIME HOME BUYER'S 5 KEYS TO GETTING YOUR OWN HOME KEYS GUIDE Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Step 12 Congratulations! You are a home owner! 19

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