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Know Housing Options

 Whether you are budgeting to rent an apartment or saving to buy your first home, housing is a major investment and the biggest piece of your financial puzzle. Do your homework by researching lenders and landlords to make the experience a positive one. Weigh the costs and benefits of buying versus renting and always work with a responsible lender. If a housing deal seems too good to be true, trust your instincts. In “hot” housing markets, scammers are everywhere.

If you are struggling to find affordable rental housing in your community, or if your financial situation has changed since you bought your home and making payments has become a challenge, help is available. Federal, state, and local agencies offer mortgage and rental assistance.

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    Key Terms

    Homeowner’s insurance: An elective combination of coverages for the risks of owning a home. This can include losses due to fire, burglary, vandalism, earthquake, and other perils.

    Landlord: A person who owns land, housing, or building space and rents it to a tenant.

    Lease: A lease is a contract that you sign to rent an apartment or house.

    Lender: An organization or person that lends money with the expectation that it will be repaid, generally with interest.

    Mortgage: Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.

    Principal: In the lending context, principal is the amount of money that you originally received from the creditor and agreed to pay back on the loan with interest. In the investment context, it is the amount of money you contribute with the expectation of receiving income.

    Property tax: Taxes on property, especially real estate, but also can be on boats, automobiles (often paid along with license fees), recreational vehicles, and business inventories.

    Security deposit: A security deposit is extra money you pay one time when you rent an apartment or house. A security deposit is not part of the rent you pay every month. The security deposit might be the same amount of money as one month of rent.