A HOME OF YOUR OWN GUIDE
National Home of Your Own Alliance
A HOME OF YOUR OWN GUIDE
The National Home of Your Own Alliance, established in 1993 at the University of New Hampshire's Institute on Disability, is a national technical assistance center and clearinghouse that focuses on homeownership and control for people with disabilities. The Alliance was created by a five-year cooperative agreement with the United States Department of Health and Human Services Administration on Developmental Disabilities. Twenty-three states receive ongoing support from the Alliance to develop pilot projects of homeownership.
A HOME OF YOUR OWN GUIDE
National Home of Your Own Alliance
Institute on Disability/University Affiliated Program University of New Hampshire 7 Leavitt Lane Durham, NH 03824-3522
TABLE OF CONTENTS
ACKNOWLEDGMENTS
i
PREFACE
ii
INTRODUCTION
iv
CHAPTER ONE: PREPARING FOR HOMEOWNERSHIP
1
Overview
3
Is Homeownership Right for You?
3
Advantages
3
Disadvantages
6
Chart of advantages and disadvantages of homeownership
8
What Will It Take for You to Buy a House?
9
Initial planning
9
Looking at current and future income and expenses
10
The cost of purchasing a home
11
What Types of Assistance Are Available?
15
Down payment and closing cost assistance
15
Renovation and rehabilitation assistance
15
Types of assistance that may be available
16
How Large a Mortgage Will You Qualify For?
17
Your income
17
Your expenses
17
Budget worksheet
17
Worksheet explanation
21
Examples of Joe's worksheets
23
Your credit record
26
How Can You Increase Your Borrowing Power?
28
Identifying need
29
Getting pre-qualified by a lender
29
Blending resources
29
Chart of resources Joe used to purchase his home
30
Trusts
31
Resources others have used
31
Alternative financing mortgages
33
Are You Ready for Homeownership?
36
Questions
36
Checklist
36
Summary
37
A Home of Your Own Guide
National Home of Your Own Alliance
CHAPTER TWO: PLANNING
39
Overview
41
A Person-Centered Approach
42
What is a person-centered approach?
42
Stage 1: Laying the Groundwork
43
Choosing a facilitator
43
Choosing a housing counselor/education provider
44
Deciding who will help
44
Creating personal profiles
44
Stage 2: Meeting With People Who Provide Assistance
50
The initial gathering
50
Subsequent meetings
50
Stage 3: Determining Your Wants and Needs
50
Creating a wish list
50
Stage 4: Turning Thoughts to Actions
57
Opportunities and obstacles
57
Action planning
58
Checklist
60
Summary
60
CHAPTER THREE: HITTING THE STREETS
61
Overview
63
Continuing on the Journey Toward Homeownership
63
Finding a Home
64
How a real estate sales professional can help
65
Comparison shopping
66
Negotiating the Purchase
69
Deciding how much to offer
69
Submitting the offer
71
Terms of the contract
72
The home inspection
73
Negotiating the Final Purchase Price
77
Accessibility issues
77
Reviewing the action plan
78
Checklist
78
Summary
79
A Home of Your Own Guide
National Home of Your Own Alliance
CHAPTER FOUR: OBTAINING A MORTGAGE
Overview Shopping for a loan
Understanding the language Applying for a Loan
The loan application The interview Loan processing Long-range planning Taking advantage of others' experiences Using your team members If your loan application is rejected Report suspected discrimination Have I used all my resources to find the right loan? Action plan Checklist Summary
CHAPTER FIVE: CLOSING
Overview Final review before setting the closing date
Pre-closing meeting Select a settlement agent Complete the title search Purchase title insurance Meet the conditions of the loan approval Obtain a property survey Obtain a termite certificate Establish an escrow account for long-term maintenance Secure probate approval Obtain accounting reports from representative payee Complete all state certifications Obtain commitment letters for funds and assistance services Document PITI reserves Review your long-term assistance plan Set the Closing Date Purchase property insurance Decide whether to have automatic payment for PITI Consider a homeowner's warranty Conduct a final house check Conduct a house tour with the seller Obtain a final estimate of closing costs HUD-1 Settlement Statement Allocation of closing costs Closing: The Big Day! What to expect at the meeting Who can I bring to the closing meeting? Explanation and signing of closing documents Recording the documents
81
83 83 84 87 88 88 90 93 94 95 95 96 97 97 98 98
99
101 101 102 102 102 103 103 103 104 104 104 104 105 105 105 105 106 106 107 107 107 108 109 109 112 114 114 114 114 116
A Home of Your Own Guide
National Home of Your Own Alliance
Getting the keys to your new home!
116
The media
117
Questions
117
Action plan
117
Checklist
118
Summary
118
CHAPTER SIX: LIFE AS A HOMEOWNER
119
Overview
121
A Homeowner at Last
122
Settling in
122
Defining roles for people providing assistance
125
Meeting Your Obligations as a Borrower
127
Understanding the terms of your loan
127
Transfer of servicing
128
Avoiding foreclosure
128
Maintaining Your Home
130
Seasonal inspection checklist
131
Keeping your energy bills at a minimum
131
Do-it-yourself repairs
131
Major repairs and home improvements
132
Household Budgeting
134
Creating a budget
134
Checklist
139
Summary
139
GLOSSARY
141
WORKSHEETS
151
ADDITIONAL RESOURCES
160
PHOTOGRAPHY COURTESY OF: National Home Of Your Own Alliance The Center for Universal Design Kelly Houk
All rights reserved
A Home of Your Own Guide
National Home of Your Own Alliance
ACKNOWLEDGEMENTS
This manual is dedicated to Ron Mace, the pioneers who have successfully purchased their own homes, and to the individuals who have assisted them. Ron Mace, an architect, industrial designer, and visionary, was responsible for the concept of Universal Design. Through their efforts, the dream of homeownership became a reality despite the challenges, attitudes, and financial barriers they faced. Without their vision, persistence, and belief in their dreams, A Home of Your Own Guide would not be possible.
Countless hours of writing, editing, and reviewing were devoted to this manual. We would like to thank the following people who worked tirelessly on its production: Jay Klein, the director of the National Home of Your Own Alliance, for his vision, foresight, and unwavering belief in justice and equality for all people. Jay's contributions of writing and editing are the very heart of this publication.
Kim Frederic-Klein, a consultant to the National Home of Your Own Alliance, who contributed to the writing and editing of this manual. Kim spent long hours late into the night, writing and re-writing sections of the guide. She never complained and never missed a deadline. We appreciate all of her efforts, which are reflected on every page.
Debra Nelson, the director of the Community Options project at the Institute on Disability, who spent hours carefully reviewing and editing this guide, and provided gentle advice and ongoing support.
The staff at the National Home of Your Own Alliance, specifically Dan Vachon, Margaret Caulk, Nancy Hoctor, Clare Sullivan, and Marcie Goldstein.
The creative talent of Kelly Houk enhances this guide. Kelly provided the artistic genius that is reflected in the design throughout the manual. We salute her patience, dedication, and flexibility during the production of this manual.
Last, but not least, our sincerest thanks to the consultants and experts who reviewed the first draft of the manual, including Debbie Berrey from Idaho, Jean Ann McLaughlin from Massachusetts, Edward Alley-Willard from Texas, Cathy Ficker-Terrill from Illinois, Judith Snow from Toronto, Canada, John O'Brien from Georgia, Karen Tamley from Illinois, and Diana Davis from Connecticut. Their insightful feedback and ongoing support were invaluable.
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A Home of Your Own Guide
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