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Presented by:
Sis. Valerie B. Young, M.S.
SEMINAR OUTLINE
Having good credit should be important to everyone, it can help you to:
– Obtain a home mortgage
– Rent an apartment
– Finance a vehicle
– Obtain/Maintain employment
– Set up utility accounts
It is also important to maintain good credit. The following steps will ensure that your
credit rating remains positive:
– Making payments on time
– Not overextending yourself
– Paying what you owe
– Avoiding “impulse” purchases
– Reviewing your credit report regularly for inaccuracies
The Fair Credit Reporting Act requires each of the nationwide consumer reporting
companies to provide you with a free copy of your credit report, at your request, once
every 12 months. To order, visit annualcreditreport.com or call 1-877-322-8228.
You are also entitled to a free credit report if you have been denied credit due to
something on your credit report.
MAINTAINING GOOD CREDIT
Types of mortgages:
– Fixed rate mortgage
These loans have an interest rate that is fixed for the life
of the loan, and a monthly payment that stays the same.
– Adjustable rate mortgage (ARM)
ARM Loans offer the opportunity to take advantage of a
changing market. The interest rate on an ARM loan
varies periodically as interest rate conditions change.
Because the interest rate fluctuates, the initial rate on an
ARM is lower than a fixed rate mortgage.
INVESTING IN REAL ESTATE
– Balloon mortgage
With a balloon mortgage, borrowers get lower rates and payments for
a specific period, usually anywhere from 3 to 10 years. At that point,
the borrower must pay off the principal balance in a lump sum. Under
certain conditions, the mortgage can be converted to a fixed or
adjustable rate mortgage.
– Interest-only mortgage
A mortgage is “interest only” if the monthly mortgage payment does not
include any repayment of principal for some period, such as 5 years.
During that period, the loan balance remains unchanged. At the end of
that period, the payment is raised to the fully amortizing* level. In such
case, the new payment will be larger than it would have been if the loan
had been fully amortizing at the outset. The longer the interest only
period, the larger the new payment will be when the interest only period
ends.
– Subprime mortgage
These days, even individuals with less-than-stellar credit can
purchase a home – as long as they are willing to accept higher
interest rates, and agree to more difficult terms. Subprime
mortgages are usually one to six points over the prime rate.
Black Americans are 3.6 times as likely as non-minorities to
receive a subprime mortgage, and 4.1 times as likely as non-
minorities to receive a refinance loan through a subprime
lender. (Source: The Covenant)
A Home Equity Line of Credit is a form of revolving credit in which your home
serves as collateral, with a Home Equity Line of Credit, the individual:
– Receives an established credit limit with a variable interest rate that you can
access with checks and sometimes a credit card;
– The individual is given a set period of time, known as the draw period,
during which he/she can draw on their line of credit; and
– The lender may include the option to renew your credit line when the draw
period expires.
– You want to have money available for different reasons over a long period
of time
CAREFUL consideration should be taken with either option. If you fall behind in your
payments, you are putting your house at risk!
INVESTING IN REAL ESTATE
THANK YOU!!
…ABOUT THE PRESENTER