See how groups are working together to turn renters into homeowners – and why …
Mary Taylor, Bank of America, teaches prospective homeowners how to arrange their finances so they’ll qualify for a loan.
Story and photo by David F. Ashton
One way to improve a neighborhood is to turn renters into homeowners, says Amie Diffenauer, of the Lents Homeownership Initiative in the Lents neighborhood.
To this end, the organization has developed a coalition of governmental and commercial interests to increase home ownership. Banks, mortgage companies, utilities, and a church are showing families how they can start putting their lodging budget into owning a home, instead of just paying rent.
On May 20, the group put on a successful “Home Buying Fair” that introduced attendees to lenders, real estate brokers, and governmental agencies.
Good credit a key to homeownership
But, part of their ongoing effort is to provide free classes that teach people more about consumer credit, so they can obtain a favorable mortgage.
In one class we audited, Bank of America’s Mary Taylor shared the “Four Cs of Credit”.
“The first ‘C‘ is for capital,” Taylor began. “What can you bring to the deal? You need to plan for a down payment, closing fees, closing costs, escrow impounds, and moving expenses.”
The next “C” stands for capacity, she continued. “Lenders look at your current income, income history, and future earning potential. They also look at your debts — like installment accounts, revolving charge accounts, and other monthly payments.”
Moving to the third “C“, the banker stressed the importance of having good credit. “It means, in a nutshell, that you have a history of paying your bills as agreed — regularly, and on time.”
The last “C” stands for collateral. “The lender looks at what they can use to reduce their liability in case a borrower doesn’t pay. The larger a down payment the homebuyer makes, the more collateral they give the lender, making them feel more secure — and potentially reducing your loan costs and interest rates.”
Learn how to become a home buyer!
You can learn more by contacting the Lents Homeownership Initiative by calling Amie Diffenauer at (503) 788-8052 x105.
© 2006 David F. Ashton ~ East PDX News
click here to subscribe
