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Realizing the American Dream

Realizing the American Dream. Protecting Your Investment. Agenda. Getting to know your home Assuring home safety Saving energy and money Preventive maintenance and minor repairs Remodeling and major repairs Investing in your neighborhood . Agenda (Cont’d) . Asset building

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Realizing the American Dream

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  1. Realizing the American Dream Protecting Your Investment

  2. Agenda • Getting to know your home • Assuring home safety • Saving energy and money • Preventive maintenance and minor repairs • Remodeling and major repairs • Investing in your neighborhood

  3. Agenda (Cont’d) • Asset building • Keeping records • Taxes and insurance • Protecting your equity • Prepaying your mortgage • Coping with hardship

  4. Why Protect Your Home • Three-way Investment 1) shelter for your household 2) life and heart for your community 3) financial asset for your future

  5. Things You Need to Know • Main cutoff valves for water and gas • Main electrical switch • Marked fuse or circuit breakers • Hot water heater thermostat

  6. Questions for the Seller • What is the history of the home? • Are there wiring diagrams or blueprints? • Are any appliances or repairs under warranty? • When is trash day? Who picks it up? • Who provides water and sewer? • What other services are available?

  7. More Questions • Who is the fuel oil supplier? • How to use energy-efficient systems • What seasonal maintenance has been done? • Who has worked on the house? • How much do the utilities and services cost? • Is there extra (matching) paint available?

  8. Building a Healthy Environment • Eliminate smoking from home • Check smoke and carbon monoxide alarms • Avoid accumulation of moisture and chemical pollutants indoors • Vacuum weekly and reduce clutter • Increase air flow in the home • Reduce use of pesticides • Do not run car in attached garage

  9. More Ways to Healthy Environment • Do not heat home with unvented heater • Address water leaks ASAP • Use cleaners and pesticides in well-ventilated area • Look for natural alternatives to household products • Keep food and trash in sealed containers

  10. First Priorities on Move-In • Post emergency numbers • Have a fire safety inspection • Install smoke and carbon monoxide alarms • Place fire extinguishers on each floor • Plan fire escape route • Stock first-aid kit (out of children’s reach)

  11. Keep Safe and Secure! • Change all locks on doors & windows • Lock doors and windows when you go out • Trim shrubs that hide windows and doors • Install outside lighting • Put up “beware of dog” sign • Stop mail and newspaper when you go away

  12. Energy-Saving Tips • Turn lights off when you leave a room • Don’t let water run during chores • Plan meals to cook more than one item at a time • Don’t use appliances during the heat of the day • Close windows when the heat or AC is on • Close the refrigerator door completely • Dress appropriately for the season • Adjust the thermostat to the season

  13. Energy-Savings Tips for the Home • Add attic insulation • Change to low-flow faucets, shower heads and toilets • Service furnace and change filter regularly • Caulk around doors and windows • Install storm windows and doors

  14. More Energy-Savings Tips • Set water heater low and cover with blanket • Install attic fans or vents • Buy energy-efficient appliances with Energy Star® logo • Install ceiling fans • Monitor your heating and cooling systems

  15. The Cost of Replacement • High-efficiency forced air furnace $2,500 - $5,000 • 50-gallon electric hot water heater $400 - $600 • Roof for an average, 3-bedroom ranch house $10,000 - $15,000

  16. Do-it-Yourself Repairs Resources: • Books • Videos • Classes • Community Center • Lowe’s, Home Depot

  17. Basic Tools • Screwdrivers • Claw hammer • Pliers • Adjustable wrench • Hand saw • Assorted nails, screws, etc.

  18. More Basic Tools • Tape measure • Flashlight with batteries • Putty knife • Utility knife • Caulking gun

  19. Still More Basic Tools • Plunger • Handheld power drill • Carpenter’s level • Ladders • Sandpaper

  20. Most Common Problems • Clogged toilet, sink, tub or shower • Running toilet • Tripped circuit breaker • Tripped GFCI outlet • Malfunctioning heating/cooling system

  21. Questions to Ask Before You Remodel or Repair • Do you need to hire a contractor? • Will the job add value to your house? • How much can you afford to spend?

  22. Adding Value with Improvements $80,000 $100,000 Your home’s value Highest priced homes $20,000 Money for improvements

  23. Improvements that Usually Add Value • Adding another bathroom • Modernizing a kitchen • Creating more closet and storage space • Building a garage • Adding a deck, patio, screened porch and skylights (if they’re common in your area)

  24. Planning Your Project • Think about the finished product • Consider your budget • Make sketches • Do research on local permits and codes • Think about timing and weather

  25. Working with Contractors • Decide which type of contractor you need • Interview at least three contractors • Get references • Visit at least one completed job • Ask how long the contractor has been in business

  26. More to Know About Contractors • Check out the contractor’s reputation • Check the contractor’s insurance • Ask about guarantees • Get firm, line item bids • Get contract specifics

  27. Managing Your Contractor • Control costs by controlling changes • Agree on payment up front • Don’t make the final payment until the job is done • Specify responsibility for permits • Get a lien waiver on larger jobs

  28. Know Your Community • Meet your neighbors • Read community newspapers • Contact Welcome Wagon • Visit city or town hall • Join a service or professional club • Volunteer for special events • Attend neighborhood association meetings

  29. Asset Building • Manage your money • Mortgage payments • Utilities • Maintenance & repairs • Reserves • Develop a savings plan • Beware of the credit trap

  30. Keeping Records • Design a system for filing records in fire-safe box • Collect important papers from the sale, making copies if kept in the home • Keep copies of homeowners insurance policy, service contracts, owner’s manuals, warranties, and model numbers • Take photos of home’s exterior and interior • Make list of documents in file

  31. Income Tax Deductions • Mortgage interest • Mortgage insurance (years ‘08, ‘09, ‘10) • Points • Moving expenses (sometimes) • Property taxes • Capital Gains exemption on sale of home

  32. Filing a Homeowners Insurance Claim • Report burglaries to police • Call your agent immediately • Make temporary repairs • Provide data to your insurance company • Keep receipts for additional living expenses • Re-read your insurance policy • Get a claim identification number

  33. Other Insurance • Mortgage Insurance (required by lender with less than 20% down payment) • Life insurance • Term insurance • Whole life insurance

  34. When There’s Equity, There are Options • Refinance your home • Get a home equity loan • Get a reverse mortgage

  35. Common Reasons for Refinancing Your Home • Save money by lowering your interest rate • Convert to another type of mortgage • Build up equity faster • Convert some equity to cash • Hope for Homeowners as refinancing option

  36. Warning: You Pay a Price With a Predatory Lender • High-pressure sales tactics and steering • High interest rates and fees • Balloon payments and negative amortization • “Packing” and padding costs and fees

  37. Predatory Lending Practices • Flipping • Locking in borrowers • Equity stripping • Deceptive practices and fraud

  38. Protect Yourself from Predatory Lenders • Shop around • Don’t sign incomplete documents or anything you do not understand • Work with a homeownership or credit counselor • Use your right to cancel (three-day right of rescission for refinance)

  39. What to Do If … • Cannot meet your financial responsibility • Are in danger of foreclosure COMMUNICATE WITH YOUR LENDER AS SOON AS TROUBLE STARTS!! Call national foreclosure prevention hotline: 888-995-HOPE

  40. Loan Workout Programs • Payment plan • Forbearance • Loan modification • Partial claim

  41. Moving On • Pre-foreclosure sale • Deed in lieu of foreclosure

  42. Delinquency Counseling:There’s Help for You • Nonprofit agency that helped you buy • HUD: (800) CALL FHA or hud@custhelp.com • Your mortgage insurance company • National foreclosure prevention hotline: 1-888-995-HOPE • Local VA office for a VA loan

  43. Make the Most ofDelinquency Counseling • Be honest • Be cooperative about gathering information • Be willing to make sacrifices and changes

  44. Summary • How to keep your home and family safe • How to save money by conserving energy • The importance of preventive maintenance • Asset building with timely payments and value-adding improvements

  45. Summary (Cont’d) • The importance of becoming involved in your community • When it makes sense to consider refinancing • How to cope when disaster strikes

  46. Your Best Resource For more information, contact: NeighborWorks® America 1325 G St., NW, Suite 800 Washington, DC 20005 Call 202.220.2300 or 800.438.5547 or visit www.nw.org

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