Pay-It-Forward VA Homebuyer's Guide

Pay-It-Forward VA Homebuyer's Guide

VA Loans & Homeownership

YOUR GUIDE TO BUYING A HOME

TABLE OF CONTENTS

WHY CHOOSE PAY-IT-FORWARD FOR YOUR VA LOAN? GETTING READY TO BUY A HOME

02 04

BUYING YOUR HOME

11 18

GETTING YOUR MORTGAGE

CLOSING YOUR LOAN

22 26

BEING A SUCCESSFUL HOMEOWNER

Company NMLS 227262

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or e! So you've decided to take the leap and purchase a home. Congratulations! You've come to the right place to prepare yourself for what lies ahead. Buying a home can be as exciting as it is overwhelming, but the more information you have, the better o you'll be. Our Homebuyer Education Program will help you enter into the home-buying process with your eyes wide open.

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Our Home Loan Experts have a very streamlined process that makes the experience an enjoyable one for clients. We do our very best to take as much stress out of your move as possible! We believe better informed service members can make more confident decisions for their families, which is why we take on an education first approach. That is why we are providing this book to walk you through the VA home loan process so you can take advantage of your military home loan benefits! The VA Home Loan was created in 1944 by the United States government to help returning service members purchase homes without needing a down payment. Since 1944, over 24 million veterans and active duty military members have used a VA loan to purchase or refinance a home for their families. Why Choose Pay-It-Forward for Your VA Loan?

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Active duty, veterans, those who have served more than 6 years in the National Guard or Reserves, and surviving spouses of a deceased veterans are eligible to take advantage of Pay-It-Forward for your VA loan. Other benefits of the VA loan include: • 100% Financing* • Very low rates • No mortgage insurance • Origination/processing fee is only $295 • Can be used to buy, build, refinance, or renovate! • Relaxed credit standards; no monthly cash reserves required • Seller contributions allowed up to 4%

Veteran and military homebuyers have access to one of the most unique and powerful loan programs ever created.

Ready to get started?

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*Unless the purchase price is more than the reasonable value of property or to meet the 25% VA Guaranty

Getting Ready to Buy a Home

You're ready to make the big step. But before you start collecting paint chips and fabric swatches, you need to collect your thoughts around more practical matters, particularly money matters. Purchasing a home at a price

Review Your Credit

Develop a Budget

Prequalify for a Mortgage

Review Your Credit One of the first steps in readying yourself to buy your home is to examine and evaluate your credit standing. What is credit? Credit permits you to obtain something now for little or no money out of your pocket, and pay for it over a specific period of time.

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There are two types of credit:

Open-end credit is extended on an ongoing basis, but usually with a limit on how much you may borrow. It is often referred to as revolving credit because as you repay the balance due, credit up to a specified limit is then available to you again to use at anytime in the future. Credit cards, such as VISA® and MasterCard®, are the most common form of open-end credit.

Closed-end credit is extended on a one-time, limited basis, such as a car loan or a personal loan. Although you

each and every time you want another loan.

How do you get credit? Credit is most frequently extended by department stores, finance companies, oil companies, credit unions, commercial banks and credit card companies. Those who extend credit are called creditors. For credit to be extended to you, a creditor looks at two things: You as a credit risk. review various factors such as income, length of employment, how long you've lived at one residence, previous credit history, amount of outstanding debts, stability of your checking and savings accounts, number of dependents, etc., in order to determine, to a certain degree, whether you will repay the amount borrowed over a certain period of time. The collateral you are purchasing. If you fail to make payments on collateral purchased with credit, it's easier for a creditor to repossess items like furniture and appliances than to foreclose on a home. Therefore, credit may be extended to even those with a questionable ability to pay when it comes to purchases like refrigerators and entertainment systems. When a home has been posted as collateral for a loan, the foreclosure process can be costly and time consuming.

The lender assumes a greater amount of risk at a lower interest rate. Therefore, the lender is going to evaluate you and your credit history more carefully when you're trying to buy a house.

Unfortunately, this is where some people learn their first real credit lesson - when credit is extremly important - because they are stunned and surprised when they are denied, based on their credit history. How to establish a good credit history Establishing a good credit history is actually pretty simple:

Open a checking and savings account. Maintain your checking account by keeping enough money in it to cover all outstanding checks. Make regular deposits in your savings account to establish a history of savings.

Apply for credit gradually. Once your checking and savings accounts are in good working order and if you believe your budget can handle the financial load, apply for credit through retail stores or a major bank.

Don't apply for more credit than you can manage. A credit card establishes you with credit as soon as your application has been approved.

Make regular payments for the products or services you purchase with credit. Every time you make a payment as agreed to by a creditor, you are building a favorable credit history.

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How to protect your good credit standing Failure to repay credit extended as agreed is where most people get in trouble.

It doesn't matter that the credit card balance is only $5, or that the payment is only one day late, or that you pay the late fee. Failure to pay on time will put a black mark on your credit history that can last for a year or more.

Minimum payments are another trouble spot. Making the minimum payment is acceptable, but it does very little to reduce your outstanding debt. Meanwhile, interest and annual fees can significantly add up over time.

current income and expenses, you should still concentrate on establishing good credit, but continue making

at the end of the month. Larger purchases should be evaluated based on need, and a payment schedule must

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What's on a credit report? The credit report just provides information. It's up to the creditor to determine whether you are a good or bad

you. The credit report typically includes four types of information:

Identifying Information

Public Record Information

Credit Information

Inquiries

Almost as important as what is in your credit report is what isn't: no information about your race, religious preference, medical history, personal lifestyle, personal background, political preference or criminal record. How can I view or fix errors on my credit report? To obtain a copy of your credit report, contact any of the three major credit-reporting agencies. Each agency compiles its own report, so you may want to obtain copies from all three agencies. To correct any errors on your credit report, you may contact the credit provider and explain the error. If the creditor concurs that an error has occurred, the credit provider must report and correct the error to the credit-reporting agency. There is also an online dispute form on each of the credit reporting agencies' websites. After you fill out the form, the agency will investigate your claim and contact the creditor in question on your behalf. If the creditor agrees that an error has occurred, the credit reporting agency will then fix the report.

Experian www.experian.com TransUnion LLC www.transunion.com Equifax www.equifax.com

How can I repair bad credit? It may take some time, but bad credit can be fixed. For personal support visit: payitforwardcreditrepair.com or join our support group on facebook at: facebook.com/groups/PIFCR/

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Develop a Budget You Can Live With A budget is a plan that lays out your income and expenses as precisely as possible. Budgets and spending plans are critical to using credit wisely and meeting financial goals, such as saving up for your down payment or making a monthly mortgage payment. A budget can help you uncover your spending patterns and discover places where you can save. This section will help you learn how to create a successful budget. Adjust your attitude Most budget attempts fail due to the "you must cut expenses 'til it hurts" mentality. When establishing a budget, it's easy to look at your expenses (like utilities, food, transportation, clothing and entertainment) and start slashing.

Adhering to such a budget would certainly amount to enormous savings, but what would it do to your quality of life? You need a budget that will help you guide your spending so that you can enjoy your life!

A practical, well thought out household budget is a powerful way to improve your standard of living. Unless you are in dire financial trouble, there is no reason for budgeting to be a painful experience.

A good budget helps you:

Understand how your money is being spent Increase your savings Prevent or reduce impulse spending

Identify your expenses One of the most challenging aspects of budgeting is not cutting expenses, but rather identifying them.

The best place to begin is to keep a detailed record of all income and expenses, right down to the change you used for the vending machine. Once you see where your money is spent on a daily basis, a snapshot of your monthly expenditures comes into focus. At this point, the hard work is done.

To be a successful homeowner, it's important to set aside funds in your monthly budget for home maintenance. It costs money to own a home, and you will continually incur a variety of expenses. Budgeting for these

home.

It will also help you establish a plan to address day-to-day maintenance as well as create a plan for financing major improvements and allocating funds to meet emergency maintenance needs.

It will take some thought and time to develop your budget. You may have to do some research, make some calls, and ask some questions to get the job done. If you do your homework right, you'll have something many homebuyers lack—a clear picture of the price of being a successful homeowner. 08

Make simple, logical changes Once you have a picture of where your money is going, it's usually clear to see where changes can be made. You'll find that you don't have to make big changes that sap the enjoyment out of life. Simple, logical changes in your spending habits can have a meaningful impact on your lifestyle.

Perhaps you'll decide to discontinue the cable TV service, or you'll bring your lunch to work more often. You

add up to significant savings.

A good budget:

Need not be complicated Is flexible, not rigid Requires little time Works for you, not against you

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Tips for Successful Budgeting Talk with other members of your family. Consider each person's needs and wants so all family members feel they are a part of the plan. If everybody realizes the rewards, they may work harder to make the budget succeed, and be less inclined to overspend.

Be specific. If goals are vague, objectives may never be met and you and other household members may have

Be prepared to compromise. If, for example, one person wants to pay cash for things and the other person prefers to buy on credit, they will need to discuss the pros and cons of both methods and decide on a middle ground each can accept. A plan cannot succeed unless there is a financial partnership.

Set realistic goals and objectives. Setting the bar too high may lead to frustrations that could cause you to abandon your plan.

Exercise will power. Try not to overspend - opportunities to do so will occur daily. Each family member needs to encourage the others to stick to the plan.

Be flexible. Your plan will require adjustments to keep up with your changing lifestyle and financial situation. Don't make a budget that is so rigid that each new development requires an entirely new plan.

Develop a good record-keeping system. You'll need to keep a record of what you spend. This will show how well you are following the plan and will allow you to adjust your spending to meet your goals.

Pre-Qualify for a Mortgage What is “prequalifying?”

taking into account your income, debt and savings. Current interest rates are also considered.

Prequalifying can determine:

the amount of your mortgage) Budgeting goals you need to set and achieve

Who can help me prequalify? A Pay-It-Forward mortgage banker can help you prequalify. Prequalifying is not a commitment on your part to work with a particular lender or real estate agent, and it does not guarantee you a loan on the lender's part. That all happens during the actual loan application process.

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Buying Your Home

your home purchase.

You've analyzed your credit situation and ironed out any issues. You've created a budget that you can live with that anticipates your home purchase.

If all of the above are true, you're ready to buy a home!

What to look for in a home

How real estate agents can help

What to do before

How to make an

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What to Look for in a Home

Once you're ready to start looking for a home, think carefully about what you're looking for. You may want to consider:

Sales Price

Schools

Neighborhood

Shopping

Distance to work

You'll also want to consider specific elements of the house itself. Are the electrical systems, plumbing and

How Real Estate Agents Can Help

Real estate agents can be helpful because they know the local real estate market.

Most agents belong to multiple listing services that publish directories of all properties listed for sale in a particular market.

The real estate agent will consult the multiple listing directory for you and determine which properties are available that meet your specifications. He or she can forward these listings to your e-mail address, then arrange to show you the properties you are interested in.

Another advantage of working with a real estate agent familiar with the area you would like to live in is that he or she will usually have information about such things as school systems, tax rates, water and sewer charges,

Why you should consider working with a Savvy Pay-it-Forward Agent. Our partnership with Pay-it-Forward Inc. has taken the think work out of finding a top VA real estate professional. Your local PCS Pay-it-Forward Ambassador has been personally vetted and exclusively selected as the single point of contact for military families in your area. Our Ambassadors are 100% military spouses and veterans and who have personally experienced the trials and tribulations of military life. Our Ambassadors are as apart of their participation in the program. Working with a PCS Pay-it-Forward Ambassador will ensure you are working with a top real estate professional who specializes in the VA Home Loan and has a proven track record of success with military families in your area. The Agent’s Role Usually, it's best to choose one real estate agent - provided that you're comfortable with that person - and work with that person until you find the home you would like to buy. Real estate agents usually specialize in particular areas. You may want to find someone who knows the area that you are most interested in to assist you in your home search.

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Typically, sellers will "list" their home with an agent and agree to pay a commission if the house is sold within a

by advertising it and having open houses.

A real estate agent will help you find a home, but understand that the agent usually represents or works for the seller. Therefore, the agent has certain obligations to the seller and will relay any information that you provide. There are buyer's agents who work directly for the buyer, and may be paid by the buyer, but the majority of real estate agents work for the seller.

Real estate agents generally work on commission. Their fee is based on the purchase price and is paid by the seller. If another real estate agent finds the buyer, the two will share the commission.

Look at a wide range of homes before making a decision to buy. It is rare (and not well-advised) for a buyer to look at a single home, fall in love with it and purchase it immediately.

As a homebuyer, it's especially important not to buy too quickly just because you have waited a long time and are eager to own a home. If you've found one or more neighborhoods that you like, look at enough homes there to get a feel for real estate values, or prices.

Then, once you've narrowed down the choices, do your homework. Research factors like:

Taxes School System Cost of Utilities

you own the home

markets, you may have to act quickly if there aren't many homes for sale in the area but there are a lot of buyers. Still, think about your purchase carefully. You are making a big investment. It is important to make an informed decision so that you will be happy with the home you've chosen.

Once you've found the home you want and have checked up on taxes, the school system and the cost of

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make mistakes, omit or include items that would put you at a disadvantage relative to other buyers or trap yourself into an agreement that is not in your best interest.

over carefully. Have either the real estate agent or an attorney thoroughly explain every item on the form to

How badly you want the house How many other buyers are interested How motivated you think the seller is

How much work might need to be done on the house How the property compares with other similar properties

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Contingencies Contingencies are conditions that must be satisfied or you will not be required to go through with the purchase

Without this contingency, you could risk losing your earnest money (or worse) if you cannot get a mortgage loan.

Other common contingencies include:

Getting a satisfactory home inspection within a specified period of time Obtaining a termite inspection Obtaining satisfactory well and septic tests Requiring evidence that the property meets building and safety code requirements

attorney)

Home Inspections A home inspection should not be confused with a property appraisal. An appraisal is an estimate of value that is prepared by a professional appraiser. A home inspection is an examination of a property to determine the condition of the structural and mechanical systems. This inspection should be completed by a professional home inspector.

Although home inspections are optional, it's recommended that you include a home inspection contingency in

seller is willing to correct.

In fact, you may want to have the inspection completed before you apply for your loan. That way, you will uncover any problems with the home before you spend money or time on securing financing.

Usually, it is your responsibility as the buyer to pay for an independent home inspection. Generally, a professional home inspection only takes two to three hours, and it gives you valuable information on the home's structural condition and mechanical systems.

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Finding a qualified home inspector It's important that your home inspection be done by a qualified professional who has training and experience in a field such as engineering, architecture or construction. To find a qualified home inspector, ask your loan

If you are unable to find a home inspector through a reliable recommendation, you may wish to look for someone who is a member of the American Society of Home Inspectors. The ASHI standards of practice require that inspectors judge the condition of a number of structural and mechanical components of a home and give a written report to the buyer.

Examples include:

Central heating and air conditioning systems Interior electrical and plumbing systems Interior walls, ceilings, floors and stairs Visible insulation Ventilation systems Foundations, basement, attic and roof Exterior wall coverings, flashing and trim, gutters and downspout Windows and doors Surface grading and drainage

You should insist that each of these items be covered in a detailed report that you get to keep. It is highly recommended that you go with the home inspector when he or she conducts the inspection. This will give you the chance to ask questions about any of the conditions that may exist in the home and get an estimate of the cost for repairing these items. It will also give you the chance to ask questions about home maintenance. Getting an attorney Depending on your situation, other contingencies may be appropriate. This is another reason why it's a good

Make sure when you are deciding upon the contingencies that you are adequately protected, but at the same

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Earnest money

money." It's given to the real estate agent to be held in an escrow account as a show of good faith on your part

If the sale goes through, the amount of earnest money you put down will be deducted from the amount you

contingencies is not satisfied, your earnest money should be returned.

For example, the seller may counter with a higher sale price. Or, they may change or delete some of your contingencies. Or, the seller may exclude a piece of personal property that you wanted included in the sale, such as appliances.

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Getting Your Mortgage

is getting your mortgage.

Your Rights as a Homebuyer

The Mortgage Process

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Your Rights as a Homebuyer The Fair Housing Act protects your rights as a homebuyer. As you shop for a mortgage and move through the mortgage process, no one may take any of the following actions based on sex/gender, national origin, religion, race or color, familial status or disability:

Refuse to make a mortgage loan Refuse to provide information regarding loans

one-time fee from the lender and equals 1% of the loan) or other fees. Discriminate in appraising property Refuse to purchase a loan

Predatory mortgage lending typically includes excessive or unnecessary loan fees. It often targets emerging-market communities including minorities, lower-income families, and people with nontraditional, weak or blemished credit records. This practice drains wealth from families and communities, destroys the benefits of homeownership and often leads to foreclosure. Ask us about our fair housing and anti-predatory lending policies. If you feel your rights have been violated, contact:

451 7th St., SW | Washington, DC 20410-2000 Phone: 1-800-669-9777 | Fax: (202) 708-1425 | TTY 1-800-927-9275 For details about the Fair Housing Act, go to www.hud.gov

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The Mortgage Process

Asset verifications. Credit reports. Insurance applications. Many homebuyers wonder where the loan process begins - and where it ends.

To help make the process easy to understand, we've laid out the basic steps involved in purchasing a home. The time frame will vary depending on geographic location, the loan, you and your lending institution. Application You've decided on a Pay-It-Forward VA loan, and now you're ready to complete a loan application with the

this information. Even so, bring the documents with you again when you go back to apply for your mortgage.

you provide. They may ask you for additional information.

Shortly after you apply for your loan, you will receive these documents:

Loan Estimate (LE) The Loan Estimate is our best estimate of your closing costs. It shows an estimate of the amount of any fees Pay-It-Forward may charge to process or close your loan, such as title insurance and recording fees. It also provides a summary of how your loan will be repaid and itemizes the costs associated with applying for a loan. The Loan Estimate indicates the finance charge, annual percentage rate (APR), number of payments you will make, amount of each payment and due date, late payment charges that may apply and total amount you will pay in principal and finance charges over the life of the loan.

The information in the Loan Estimate Comparison section will help you to compare the cost of

kind of loan.

Commitment Letter

make you a loan. It includes all of the specifics of the loan as well as any conditions that must be met prior to or at the closing, and information on the loan amount, term, origination fee and interest rate.

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Ordering documents for the loan file

Property appraisal The property appraisal is ordered to estimate the property's market value. The maximum loan amount the lender will provide will be based on the lower of the purchase price or appraised value. Credit report If you do not have traditional forms of credit, you will need to provide other evidence of your ability and willingness to repay debts, such as money order receipts or cancelled checks from the payment of rent and utility bills. Underwriting A loan file with all required information is created and passed on to an underwriter. The underwriter makes sure all loan requirements are met. Sometimes an underwriter needs additional information to make a decision. Two typical scenarios that may be presented to you are:

Information is needed before the loan is approved. It is critical that you provide the additional information as quickly as possible in this situation.

The underwriter approves the loan "with conditions." That means you will need to provide additional information at closing before the loan can become final. Preclosing Once the loan is approved:

Title insurance is ordered Approval contingencies are met The closing is scheduled

Closing Once the closing is scheduled, the borrower orders homeowners insurance, which covers for damages or losses caused by things like theft, fire, vandalism or wind. Because your property is the security for your mortgage loan, we want to be sure the value of the home is protected in case it is damaged or destroyed. Contact your insurance agent to secure an insurance binder.

At the closing, the borrower obtains his or her loan proceeds and presents a certified check to cover the balance of the down payment and the closing costs. The loan closes. The borrower moves into the new home.

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Your home has been inspected. All contingencies have been met. Your mortgage has been approved. All your ducks are in a row. Closing Your Loan

Who is involved at closing?

What to bring to closing

How to prepare for closing

During closing

After closing

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Who is involved at closing?

of the title insurance company.

money from the sale is properly distributed.

You may also have your own attorney attend the closing. Sometimes, the sellers will be present, along with any real estate agents involved in the sale.

It is common for buyers and sellers to complete their paperwork in separate rooms and never see each other on the day of closing.

What to bring to closing

As the buyer, you should bring the following documents to the closing:

Certified or Cashier's Check for your down payment and closing costs. You can find out the exact amount you will need by contacting us a day or two before the closing.

Binder for Homeowners Insurance and Paid Receipt. Before going through with the closing,

insurance and your paid receipt for the first-year's premium that proves you have adequate homeowners insurance for the home you are buying. They will not issue the mortgage loan without it.

How to prepare for closing Three days prior to your scheduled closing date you will receive the Closing Disclosure. The Closing Disclosure provides the final loan terms and closing cost details; carefully review this document to be sure the details are

Review all of your closing documents with your attorney to be sure there are no errors or problems before the closing begins. These documents will include:

The Mortgage , a separate document that you sign at closing, pledges your home as security for the loan. In some states, buyer(s) sign a Deed of Trust rather than a mortgage, but both documents serve the same purpose. The Mortgage Note , your promise to repay your loan. It indicates the terms and conditions of your loan and how it will be repaid (the amount of your monthly mortgage payment for principal and interest, when it is due, the length of the mortgage, etc.).

The Closing Disclosure provides details on the final loan terms and itemizes the costs associated with the loan.

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During Closing

for homeowners insurance, he or she will explain each closing document and ask you to sign each of them.

hesitate to ask.

you to sign them. Then, he or she will move on to the Closing Disclosure (CD). Beginning on the back of the form - where each of the costs being paid by the sellers and the buyers is itemized - you will find a breakdown of the costs, including:

All the buyers' and sellers' closing costs. A summary of both parties' transactions by showing how funds are transferred among the buyer, seller, lender and any other parties involved in the sale. The net amount due from the buyers and the net amount that will be paid to the sellers. Commissions to real estate agents involved in the sale. Any lender charges made in connection with the loan, such as points and other fees. Items that we may require to be paid in advance, such as interest due from the date of the closing until the first mortgage payment. Amounts deposited in escrow to cover insurance and property taxes. Title charges for the title search required by us and title insurance policies for Pay-It-Forward Home Loans and the buyer.

Charges to cover recording the mortgage and deed at the county courthouse. Tax service fee to cover the ender's cost of researching the tax rate for the property.

column summarizes the buyer's transaction and the right side summarizes the seller's. The price of the home is listed at the top of both columns.

Amounts are added or subtracted in both columns to arrive at the net amounts due from the buyer and due to

the down payment and closing costs. When all of the buyer's documents have been explained and signed, the

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the legal descriptions on each document match exactly:

The Deed The Deed is the legal document that transfers ownership of the property from seller to buyer.

will take care of recording the deed with the Registrar of Deeds in the county in which the property is located. Commitment for the Title Insurance When you buy a home, in most cases you will be required to obtain title insurance. This protects your legal ownership of the property you buy. Prior to issuing the insurance, the title company will conduct a thorough search of public records to determine exceptions to

company informs you of any outstanding liens so you can require the seller to satisfy them before you close.

Prior to closing, the title company will issue a commitment for title insurance. This is not the actual policy, but it guarantees the policy will be issued if conditions specified in the commitment are met. In almost all real estate transactions, separate title policies will be purchased for the lender and buyer. As the buyer, you would typically purchase the lender's policy, which covers only the amount of the loan. The buyer's policy which insures you, the buyer - is for the full sales price and it is often paid by the seller.

The final activity at closing involves the distribution of the money generated by the sale. It's the closing agent's responsibility to present checks to:

The sellers The sellers' lender, if there is an existing mortgage on the property The real estate agents involved in the sale Any others who may be indicated on the Closing Disclosure

After Closing After you have signed all the necessary documents and paid your closing costs and down payment, the closing is finished. Your possession date the day you can move into your new home - is stated in the purchase agreement. If your possession date is the same day as your closing, before you leave the closing, you will receive the keys to your new home! If your possession date is other than the closing date, arrangements will be made to secure the keys on the possession date.

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Being a Successful Homeowner

You're in! You've got new keys - house keys!

Becoming a homeowner is exciting, but it's a lot of responsibility and hard work.

Maintaining your home

Prioritizing improvements

DIY or call in a professional

Insuring your home

Establishing a reserve

Getting help for financial trouble

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Maintaining Your Home When you sign your mortgage at closing, you pledge your home as security for your loan. You have a responsibility to make sure your property keeps its value as collateral for your loan. And, you'll want to maintain your home so it remains a good investment for you. Every homeowner will eventually be faced with expenses for unexpected repairs and routine maintenance. You'll need to learn about your home's mechanical systems and construction (and what it will cost to maintain them) so you can budget for their upkeep. Repairs that occur after you sign the closing documents are generally not the previous homeowners' responsibility.

In addition to the cost of future maintenance, there may be some initial expenses that you may not have thought about, such as:

Lawn and garden equipment Snow removal equipment

Pest control Power tools Appliances Trash cans Charges for sewer, water and/or trash collection

Finally, there are likely to be projects that you will want to take on to improve your new home. All of these expenses - in addition to your new mortgage payment - require you to budget and save faithfully. Continuing to fill out your Monthly Spending Planner will help you plan and save for home improvements and repairs.

Prioritizing Improvements

improvements, like installing new wallpaper or carpeting, because these changes are the most visible.

But part of the responsibility of owning a home is prioritizing your projects and considering the improvements that are likely to increase your home's value, or decrease your expenses.

purchase new carpeting for the living room. You'll need to anticipate and budget for serious issues that may arise, like a leaking roof or a dying water heater, that will be more important than cosmetic improvements.

The best way to anticipate problems is to inspect your home regularly and perform certain routine maintenance tasks. Refer to the Home Maintenance Checklist for the items you should inspect. It also identifies some specific maintenance tasks that should be performed and how often you should do them. If you have the skills to do some or all of this work yourself, you will still need to budget for any tools or materials that you will need. If you're not especially handy, you can use this checklist to predict the work that will need to be done so that you can also budget enough to hire someone to do it.

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Do It Yourself or Call in a Professional?

public school adult education classes, local technical colleges, university extension programs or nonprofit organizations.

There probably will be instances where you will need to employ a carpenter, plumber, electrician, appliance repairman or heating/cooling contractor. Ask family, friends and neighbors for references. Interview three or four contractors from each trade. Compare experience, prices, policies, personality and availability. While price will certainly be a consideration, it should not be the sole factor for selecting a contractor.

Insuring Your Home

As a requirement of your mortgage loan, you obtained homeowners insurance.

In some cases, lenders will escrow money from your mortgage payment each month to cover the annual renewal of your homeowners insurance premium. However, if your lender does not set aside money to renew your homeowners insurance, you will have to budget and save for it on your own.

You'll want to occasionally review your coverage levels to make sure your home is adequately protected.

Establishing a Rainy Day Reserve

Once you own a home, you have an investment to protect. After all, you've put money down and you have made your mortgage payments each month. The best way to protect that investment is to continue to budget and save. Experts suggest that you build a reserve of three to six months' living expenses. You can't save this much money overnight, but you should make it your goal to establish such a reserve as soon as possible once you own a home. It is very important to continue to keep a budget once you own a home. Keep using the Monthly Spending Planner, especially if there is a change in your financial situation. Monitor your monthly bills and use credit cards wisely.

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Getting Help for Financial Trouble

is wait until you are so far behind on all your payments that your creditors resort to collection agencies.

By contacting your creditors right away, you may be able to make lower payments temporarily, until you get back on your feet. You can also contact a professional financial counselor or a credit- and budget-counseling agency if you need help developing a budget/debt reduction plan. If you are unable to make your monthly mortgage payment, the best thing you can do is to contact your lender. Many lenders will work with borrowers who have a good payment history to arrange a temporarily reduced payment plan until they get back on their feet.

Thank you for taking the time to learn the steps to becoming a homeowner. Please reach out to us if you have any questions

about starting your homeownership journey. We thank you for serving our country.

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in partnership with

DAS Acquisition, LLC dba USA Mortgage NMLS #227262. Not a commitment to lend. Additional terms and conditions apply. Licensed Lending Area: AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, NE, NH, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WA, WV and WI. AZ License Number: 942577. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, Regulated by the CO Division of Real Estate, Georgia Residential Mortgage Licensee #33479, MA #ML227262, OH #RM.850291.000, Licensed under the Oregon Consumer Finance Act, OR License #ML-5723, 2150 S. Central Expressway Suite 310, McKinney, TX 75070 and WA #CL-227262. Headquarters: 12140 Woodcrest Executive Drive, Suite 150, St. Louis, Missouri 63141, Toll Free: (888) 250-6522. For licensing information, go to: www.nmlsconsumeraccess.org.