to the Website and wrote a story from my heart telling what we had went through to get our home.” The Papillions were just one of 1,000 candidates who wrote compelling essays about their home buying experiences and the importance of homeownership to their families. And because they had already made the necessary sacrifices to curb their spending, repair their credit, and save up a down payment, they made it all the way to the final round along with seven other contestants and ultimately won the $10,000 grand prize. (See sidebar for more information on the runners-up in the contest.) In addition to the gift toward their down payment, the Papillions received other prizes, including a $250 gift card from Lowe’s Home Improvement and a two-year subscription to BE.
“They really embody many of the messages we want to send about home buying to the African American audience,” says Edmond. “We wanted to send the messages that it’s never too early to buy a home, you want to start young, and it’s a great way to build a foundation for wealth building for future generations.”
The Papillions are already reaping the benefits of homeownership. Previously, they were renting a two-bedroom apartment for $750 a month. They weren’t focused on managing their money properly, and they had allowed their credit scores to drop considerably. By making the commitment to homeownership, they’ve ended wasteful spending and improved their credit scores, which will help them obtain lower interest rates on credit in the future.
James and Kimberly also benefit from their $10,000 prize winnings. Before they won the contest, they were going to enter into a 100% financed deal and an 80/20 combination loan. The combination loan would have allowed them to avoid having to pay private mortgage insurance by financing the mortgage in two parts — one loan for 80% of the value of the home and another loan for the remaining 20%. But using the $10,000 prize as a down payment caused the purchase price of the home to drop from $150,900 to $140,900, therefore eliminating the need for the 80/20 combination loan.
“I changed the loan program from a 100% to a 90% loan,” says Winchester. “The interest rate on one loan at 90% LTV was lower than the combined blended rate they were getting on the 80/20 combination loan, therefore enabling them to have a lower monthly payment. By reducing the loan amount, they are saving about $92 more per month, and overall about $35,380 in interest over the terms of the loan.”
The Papillions now pay $1,048 a month, and they will be building equity with each mortgage payment. As things improve in the Gulf region, the value of their home should increase.
Perhaps the biggest benefit for the Papillions is knowing that the building they live in is theirs. It’s a feeling that cannot be duplicated. “Owning our first home is just the beginning,” says Kimberly. “We also want to invest our money and save more.”
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Both James and Kimberly say