Housing: Renting/Leasing

A lease is an agreement that outlines the obligations of the owner and the tenants of a house or apartment. It is a legally binding document that courts will generally uphold in legal proceedings, so it is important for you to know the exact terms of the lease agreement before you sign it. The lease should state every agreement that you believe exists between you and the landlord. Some things to look for in a lease:
***Clauses that allow the landlord to change the terms of the lease after it is signed

***Requirements/responsibilities of the tenants to do routine repairs such as lawn maintenance, cleaning or notification of repairs

***Restrictions that would prevent you from living normally or comfortably in the home

***Term of the lease and any important dates such as when the rent is due, or garbage pick up days

Anything that is not clearly understood or agreeable should be changed or removed. All landlord responsibilities should be clearly stated. Always get a copy of the signed lease to keep in your records. Any clause or terms in the agreement affects ALL parties who sign.
Tenants who lease or rent property are protected against discrimination by The Fair Housing Act. If you think your rights have been violated, you may write a letter or telephone the HUD office nearest you. You have one year after the alleged violation to file a complaint with HUD, but you should file as soon as possible.
Each state has its own tenant rights, laws and protections. For a state-by-state directory, visit www.hud.gov/local. You can also find public housing that is available at http://www.hud.gov/. The agency offers several housing assistance programs for tenants and landlords.
Tips for Renters
***The best way to win over a prospective landlord is to be prepared by bringing with you a completed rental application; written references from previous landlords, employers, friends and colleagues; and a current copy of your credit report.

***Carefully review all the important conditions of the lease before you sign.

***To avoid disputes or misunderstandings with your landlord, get everything in writing.

***Ask about your privacy rights before you sign the lease.

***Know your rights to live in a habitable rental unit-and don't give them up.

***Keep communication open with your landlord.

***Ask about your privacy rights before you sign the lease.

***Purchase renter's insurance to cover your valuables.

***Make sure the security deposit refund procedures are spelled out in your lease or rental agreement.

***Learn whether your building and neighborhood are safe, and what you can expect your landlord to do about it if they aren't.

***Know when to fight an eviction notice and when to move. Unless you have the law and provable facts on your side, fighting an eviction notice is usually shortsighted.
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Housing: Home Improvements and Repair

Home improvements and repairs can cost thousands of dollars and are the subject of frequent complaints.

When selecting a contractor:
***Get recommendations and references. Talk to friends, family and others who have used the contractor for similar work.

***Get at least three written estimates. Insist the contractors come to your home to evaluate what needs to be done. Be sure the estimates are based on the same work so that you can make meaningful comparisons.

***Check contractor complaint records. Your state or local consumer protection agency or Better Business Bureau can provide this information.

***Make sure the contractor meets licensing and registration requirements. Your state or local consumer protection agency can help you find out what these requirements are.

***Get the names of suppliers and ask if the contractor makes timely payments.

***Contact your local building inspection department to check for permit and inspection requirements. Be wary if the contractor asks you to get the permit—it could mean the firm is not licensed.

***Be sure your contractor is insured. They should have personal liability, property damage and worker’s compensation insurance for workers and subcontractors. Also check with your insurance company to find out if you are covered for any injury or damage that might occur.

***Insist on a written contract that states exactly what work will be done, the quality of materials that will be used, warranties, timetables, the names of any subcontractors, the total price of the job, and the schedule of payments.

***Try to limit your down payment. Some states have laws limiting the amount of down payment required.

***Understand your payment options. Compare the cost of getting your own loan versus contractor financing.

***Don’t make a final payment or sign a final release until you are satisfied with the work and know that subcontractors and suppliers have been paid. Some state laws allow unpaid subcontractors and suppliers to put a lien on your home for bills the contractor failed to pay.

***Pay by credit card when you can. You may have the right to withhold payment to the credit card company until problems are corrected.

Be especially cautious if the contractor:
***comes door-to-door or seeks you out;

***just happens to have material left over from a recent job;

***tells you the job will be a “demonstration;”

***offers you discounts for finding other customers;

***quotes a price that’s out of line with other estimates;

***pressures you for an immediate decision;

***offers an unusually long guarantee;

***can only be reached by leaving messages with an answering service;

***drives an unmarked van; • has out-of state license plates; or

***asks you to pay for the entire job up front.

With most home improvements, federal law gives you three business days to cancel without penalty. Of course you would be liable for any benefit already received. State laws may also provide some protection. See Your Rights: 3-Day Cooling-Off Rule. And remember—if you finance home improvements with a home equity loan and don’t make your payments, you could lose your home. See Home Equity Loans.
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Housing: Avoiding Foreclosure

If you miss your mortgage payments, foreclosure may occur. This is the legal means your lender can use to repossess your home. If you owe more than your property is worth, a deficiency judgment is pursued. Both foreclosures and deficiency judgments have a negative impact on your future credit. You should avoid foreclosure if at all possible.
Three steps can help:
1.Do not ignore the letters from your lender. If you're having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.
2.Stay in your home for now. You may not qualify for assistance if you abandon your property.
3.Contact a HUD-approved housing counseling agency. Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing counseling agency nearest you. These agencies are valuable resources. They frequently have information on services and programs offered by government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.
For more information, resources are available at the following agencies:
***The U.S. Department of Housing and Urban Development
***The Federal Trade Commission
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Housing: Refinancing and Reverse Mortgages

Mortgage Refinancing
Consider refinancing your mortgage if you can get a rate that is at least one percentage point lower than your existing mortgage rate and if you plan to keep the new mortgage for several years. When comparing mortgages, don't forget to include the extra fees you must pay for the new mortgage. You may be able to get some fees waived if you are able to refinance with your current mortgage holder.
Reverse Mortgages
A reverse mortgage is a home loan that you don't have to pay back for as long as you live in your home. The loan and interest is repaid only when you die, sell your home or permanently move away. Only homeowners who are at least 62 years old are eligible. These mortgages can help homeowners who are house-rich, but cash-poor stay in their homes and meet their financial needs.
There are three types of Reverse Mortgages: federally insured reverse mortgages, proprietary reverse mortgages and single-purpose reverse mortgages. As with any mortgage it is important to be a savvy consumer and shop for the best deal.
Check the directory for the following resources that provide comprehensive and reliable information:
***The Federal Trade Commission
***The Department of Housing and Human Development
***AARP
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Housing: Shopping for a Mortgage

Shopping around for a home loan or mortgage will help you to get the best financing deal. A mortgage, whether it's a home purchase, a refinancing, or a home equity loan, is a product, just like a car, so the price and terms may be negotiable. You'll want to compare all the costs involved in obtaining a mortgage.
Shopping, comparing, and negotiating may save you thousands of dollars.
Mortgage financing options are much more diverse than many borrowers think. There is a wide variety of mortgage products available including: fixed rate conventional mortgages, adjustable rate mortgages (ARM), FHA loans, VA loans, interest-only mortgages, jumbo mortgages, two-step mortgages, balloon mortgages, assumable mortgages, construction mortgages, no down payment mortgages and seller financing.
When shopping for a home mortgage:
***Research current interest rates. Check the real estate section of your local newspaper, use the Internet, or call at least six lenders for information.
***Check the rates for 30-year, 20-year and 15-year mortgages. You can save thousands of dollars in interest charges by getting the shortest-term mortgage you can afford.
***Ask for details on the same loan amount, loan term, and type of loan from multiple lenders so that you can compare the information. Be sure to get the Annual Percentage Rate (APR), which takes into account not only the interest rate but also points, broker fees, and other credit charges expressed as a yearly rate.
***Ask whether the rate is fixed or adjustable. The interest rate on adjustable rate mortgage loans (ARMs) can vary a great deal over the lifetime of the mortgage. An increase of several percentage points might raise payments by hundreds of dollars per month.
***If a loan has an adjustable rate, ask when and how the rate and loan payment could change.
***Find out how much down payment is required. Some lenders require 20 percent of the home's purchase price as a down payment. But many lenders now offer loans that require less. In these cases, you may be required to purchase private mortgage insurance (PMI) to protect the lender if you fall behind on payments.
***If PMI is required, ask what the total cost of the insurance will be. How much will the monthly mortgage payment be when the PMI premium is added and how long you will be required to carry PMI?
***Ask if you can pay off the loan early and if there is a penalty for doing so.
In addition, there is a long list of sources for mortgages loans: mortgage banks, mortgage brokers, banks, thrifts and credit unions, home builders, real estate agencies and Internet lenders.
Tips for working with lenders:
***Get recommendations: Ask friends and family members for suggestions, especially if they've recently obtained a loan.
***Check credentials: Mortgage bankers are regulated by either your state's department of banking or division of real estate. Check with the appropriate regulator to see if a lender is in good professional standing. Mortgage brokers may be state regulated or not. If not, check with the local chapter of the National Association of Mortgage Brokers or the Better Business Bureau to see if their record is clean.
***Do your homework: Learn about typical mortgages and ask questions when something looks amiss; a broker may be trying to pad closing costs or other fees at your expense.
***Take care online: There are plenty of attractive deals online, but first make sure you're dealing with a reliable broker or lender.
The Real Estate Settlement Procedures Act (RESPA) requires lenders to give you information on all closing costs and escrow account practices. Any business relationships between the lender and closing service providers or other parties to the transaction must also be disclosed. Many of the fees are negotiable. More information is available from the Federal Trade Commission, the Federal Reserve Board, and the Department of Housing and Urban Development.
Beware: Double Dipping
If you're working with a broker, the National Consumer Law Center recommends you demand to know how much the broker is making from the lender as well as from any fees you might be paying. It's best to get this information upfront and in writing. Avoid a broker who is double-dipping-getting a fat premium from the lender, as well as fees from you.
For more information on home buying and mortgages, visit Fannie Mae's web site at http://www.fanniemae.com/ or call 202-752-7000. The Mortgage Bankers Association also offers this website to help consumers when buying a home, http://www.homeloanlearningcenter.com/.
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Housing: Buying a Home

The U.S. Department of Housing and Urban Development funds housing counseling agencies throughout the country. These organizations can give you advice on buying a home, renting, defaults, foreclosures, credit issues and reverse mortgages.
To contact the agency nearest you, call 1-800-569-4287 or visit http://www.hud.gov/. Homeowners with problems that could result in default of their mortgage or foreclosure on their property are encouraged to contact a HUD-approved housing counseling agency immediately.
If, in your housing search, you believe you are being discriminated against on the basis of your race, color, nationality, religion, sex, familial status, or disability, contact HUD's Office of Fair Housing.
Buying a home is one of the most complex financial decisions you'll ever make.
***Real estate agents represent the seller not the buyer. Consider hiring an agent who works for you, not the seller.
***Get prices on other homes. Knowing the price of other homes in a neighborhood will help you avoid paying too much.
***Have the property inspected. Use a licensed home inspector to carefully inspect the property before agreeing to buy it.
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