UWG’s Center for Economic Educational and Financial Literacy continues weekly events titled “Financial Wellness Wednesdays,” which serve to direct and help ensure financial wellbeing for all UWG students choosing to attend the workshops.
This past Wednesday, in conjunction with Regions Bank and the University of Tennessee at Chattanooga, Gary W. Collins College of Business the Center held a free webinar directed toward students titled, Road to Homeownership.
The webinar was hosted by Angela Aaron, Financial Wellness Educator of Regions Bank Next Step Program. Aaron’s is based with Regions Bank in the Little Rock, Arkansas area. With over twenty years of experience in mortgage banking, Aaron outlined a pathway toward the Road to Homeownership.
“It is important to know the mortgage process as well as the pros and cons of owning a home,” said Aaron. “Home ownership can be a very rewarding experience if the buyer is properly prepared. The buyer needs to know what is expected of the prospective homeowner.”
Attendees were educated on what a mortgage is and what is included in a monthly mortgage payment. If the purchase is a cash payment, there is no monthly mortgage payment. If not, the mortgage payment will include the principal, the interest, taxes and any homeowner insurance costs.
“If the down payment is less than 20% Private Mortgage Insurance (PMI) will be included in monthly mortgage payments,” said Aaron.
Attendees were advised to be mindful of the area or county they decide to make a purchase.
“Advising taxes could be a big mortgage issue depending on where the home is purchased,” said Aaron. “Homeowners are now the landlord as well and any repairs needing to be made become the responsibility of the homeowner.
“The homeowner becomes the maintenance person and stresses the need for all homeowners to have an emergency fund because things do pop up,” continued Aaron. “Whether a home is purchased brand new or not things do happen, and ready cash will be needed to address any unforeseen issues.”
Perspective homeowners are advised to have a money management tool in place to help with budgeting and basic money management skills. Credit scores are also an important tool when looking into homeownership and should be checked at least once a year.
It is equally important to check credit reports before initiating prospective homeownership. Credit reports should be examined at least twice a year to ensure that there is nothing reported that could impair the road to homeownership as well as ensuring that your credit report is accurate.
“Some creditors do indeed make mistakes,” said Aaron.
Perspective homeowners must also explore what type of mortgage product is the right product to choose. The choices are the Fixed Rate Mortgage (FRM) or the Adjustable-Rate Mortgage (ARM). Fixed Rate Mortgage ensures the mortgage payment will remain the same for the life of the loan, not so much the ARM, this rate can either go up or down several times during the life of the loan. The mortgage loan originator can go over available options and help the buyer decide which mortgage choice is the best option.
Aaron discussed definitions of some common mortgage terminologies such as Pre-Qualification, Pre-Approval, and Final Order. Pre-Qualification is the lender’s estimate of how much you may be eligible to borrow. Pre-Qualification does not guarantee a loan will be granted. Pre-Approval means the lender has evaluated the buyers’ credit worthiness and has made a commitment to extend a loan up to a specified amount.
Final Order approval occurs when the property has been appraised, all documentation is in the hands of the lender and all contingencies have been met.
For additional information perspective buyers are empowered to visit: