NEIGHBORHOOD FINANCE CORPORATION Homebuyer Education L earning the ins and outs of homeownership can be tough, you may not know where to begin. Homebuyer education can be a key component when it comes to deciding if you’re ready. Not all lenders or loan programs require firsttime homebuyers to take a course, but some may require you to attend a class for program eligibility. Lenders encourage first-time homebuyers to complete a homebuyer education course as early in their home search as possible. If you miss out on the education course, you may lose the opportunity to gain perspective on new or unique loan programs that could educate you on making the change from renting to owning. Here are a few topics that are discussed in a first-time homebuyers’ class: · Whether you’re ready for homeownership · Budgeting and money management · Assessing your creditworthiness · Programs that can help you buy your first home · Comparing different types of mortgages The focus of homebuyer education classes is to prepare you for buying a home. Certain aspects of the course will focus on how much money you need for a down payment, how much you can afford, and the costs of home maintenance. Homebuyer education can also help non-first-time homebuyers, such as individuals that have bounced back from financial hardship and are ready to buy again. This will help these individuals to freshen up on new skills, tips, and the overall home-buying process. Neighborhood Finance Corporation (NFC) encourages all first-time homebuyers to complete a homebuyer education class prior to looking for a home or signing a purchase agreement. In fact, if the education course is completed prior to signing the purchase agreement with an NFC Advantage Loan, NFC will provide a $75 credit to the homebuyer at closing. There are a variety of options for taking a homebuyer education class, including both in-person and virtual opportunities. Community organizations that are HUDapproved, such as HOME Inc. in Des Moines, can offer in-person classes or may have a virtual option. HomeView™ is Fannie Mae’s online homebuyer education class that you complete on your own and is available in six languages. Now the big question is, what is this going to cost? The cost varies with the different agencies that offer the classes. Some start at $75 and some are completely free. Talk with your first mortgage lender to see if they have any additional requirements. The United States Department of Housing and Urban Development (HUD) has a list of HUD Approved Counseling Agencies on their website [http://www.hud.gov/ offices/hsg/sfh/hcc/hcs.cfm]. Check online to find one near you! Homebuyer Education VS Housing Counseling You may have heard the term, housing counseling, which is different from homebuyer education because housing counseling is unique to an individual’s financial situation. Housing counseling is usually a time to meet one on one to establish an action plan to fulfill a dream of homeownership. The action plan may include: creating and following a household budget, improving a credit score, or other goals specific to your household. Housing counseling is often suggested for those who are ineligible for a loan, are in need of the one-on-one assistance, or are required by a lender because of possible low credit scores and/or lack of savings or down payment. Research has shown that homebuyer education can provide timely and powerful support for people as they weigh their options and make decisions about homeownership. Buying a home is one of the largest purchases someone can make. For new homebuyers, it is crucial that they are prepared as much as possible. Homebuyer education not only prepares you to make a decision about whether you are ready to purchase a home, but it also prepares you for what happens next. Buying a home is a huge decision, but you don’t have to go into it blind. If you decide that you’re not ready after taking a course, that’s fine! Although you will want to check with the agency to see how long the certificate is good for since some programs or lenders will have an expiration date on their certificates. In the meantime, start to make goals for you and your household to work on to set yourself up for success as a future homeowner. 23
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