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FCS 226 Chapter 12 Home Ownership

FCS 226 Chapter 12 Home Ownership - HOMEOWNERSHIP...

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HOME OWNERSHIP
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THE AMERICAN DREAM Based on psychological urge to own a home Dream vs. Reality Past decades in America have proven home  ownership to profitable investment over other means  of investments During periods of high interest rates, and/or high  home prices it is unrealistic for most families to  purchase a home
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HOUSING COSTS First time buyers should not pay over 2  ½  times  their annual income Buyers should not pay more that 28% of their  monthly income towards housing needs  All debts including housing costs should not  exceed 36% of a buys gross monthly income What can buyers afford to pay Home ownership- more elusive than ever Most families have to be dual-income to make  enough money qualify for a home loan In the past, due to more lenient qualifications,  many consumers that qualified for a home loan  could not really afford to live in the homes they  qualified to buy
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HOUSING COSTS CONT… Reduce housing costs 1. Many buyers have been priced out of an ever  increasing housing market 2. As a result smaller homes are being built  because they are more affordable to the  average consumer 3. Another means of reducing housing costs is to  purchase a manufactured home
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FINANCING THE PURCHASE OF  A HOUSE Conventional (Conforming) Real Estate Loan: A Loan  obtained at a bank or other lending institution that  does not involve federal or state subsidies Jumbo Loan: ($729,000 or more in CA) A loan that  has mortgage amount exceeding the maximum  mortgage limits set by Fannie Mae and Freddie Mac. 
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