Realizing the American Dream
ProtectingYourInvestment
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
• Keeping records
• Taxes and insurance
• Protecting your equity
• Prepaying your mortgage
• Coping with hardship
Why Protect Your Home
• Three-way Investment1) shelter for your household
2) life and heart for your community
3) financial asset for your future
Things You Need to Know
• Main cutoff valves for water and gas• Main electrical switch• Marked fuse or circuit breakers• Hot water heater thermostat
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?
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?
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
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
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)
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
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
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
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
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
Do-it-Yourself Repairs
Resources:
– Books
– Videos
– Classes• Community Center
• Lowe’s, Home Depot
Basic Tools
• Screwdrivers
• Claw hammer
• Pliers
• Adjustable wrench
• Hand saw
• Assorted nails, screws, etc.
More Basic Tools
• Tape measure
• Flashlight with batteries
• Putty knife
• Utility knife
• Caulking gun
Still More Basic Tools
• Plunger
• Handheld power drill
• Carpenter’s level
• Ladders
• Sandpaper
Most Common Problems
• Clogged toilet, sink, tub or shower• Running toilet• Tripped circuit breaker• Tripped GFCI outlet• Malfunctioning heating/cooling system
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?
Adding Value with Improvements
$80,000 $100,000
$20,000
Your home’s value
Highest priced homes
Money for improvements
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)
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
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
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
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
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
Asset Building
• Manage your money• Mortgage payments• Utilities• Maintenance & repairs• Reserves
• Develop a savings plan• Beware of the credit trap
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
Income Tax Deductions
• Mortgage interest
• Mortgage insurance (years ‘08, ‘09, ‘10)
• Points
• Moving expenses (sometimes)
• Property taxes
• Capital Gains exemption on sale of home
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
Other Insurance
• Mortgage Insurance (required by lender with less
than 20% down payment)
• Life insurance
• Term insurance
• Whole life insurance
When There’s Equity, There are Options
Refinance your home
Get a home equity loan
Get a reverse mortgage
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
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
Predatory Lending Practices
• Flipping
• Locking in borrowers
• Equity stripping
• Deceptive practices and fraud
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)
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
Loan Workout Programs
• Payment plan
• Forbearance
• Loan modification
• Partial claim
Moving On
• Pre-foreclosure sale
• Deed in lieu of foreclosure
Delinquency Counseling:There’s Help for You
• Nonprofit agency that helped you buy
• HUD: (800) CALL FHA or [email protected]
• Your mortgage insurance company
• National foreclosure prevention hotline: 1-888-995-HOPE
• Local VA office for a VA loan
Make the Most ofDelinquency Counseling
• Be honest
• Be cooperative about gathering
information
• Be willing to make sacrifices and changes
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
Summary (Cont’d)
• The importance of becoming involved in your community
• When it makes sense to consider refinancing
• How to cope when disaster strikes
Your Best Resource
For more information, contact:NeighborWorks® America1325 G St., NW, Suite 800
Washington, DC 20005
Call 202.220.2300 or 800.438.5547 orvisit www.nw.org