Home-buying statistics are looking up. A recent survey suggests that the dream of owning a home is still thriving, with 25 percent of people who currently do not own a home declaring that they plan to purchase a home in the next 10 years.
62% of Americans say they own their primary residence, with 56% saying they plan to continue to do so, according to Gallup. Overall, 81% of Americans currently owning or renting a home say they will continue to, or are looking to own a home in the next 10 years.
With the prospect of new homeownership comes the responsibility of becoming educated on the buying process. Studies have shown that participating in homebuyer counseling and education has a strong effect in boosting participants’ credit scores and savings levels. With increased purchasing power, homebuyers’ borrowing power increased $7,017 and $4,515 in two of the nonprofits researched in this particular study.
In these home-buying educational courses, customers will cover overarching aspects of becoming and remaining a homeowner. Not every course is the same, but most cover the principles.
Budgeting to buy
Budget is a common word, but it is necessary to stress in the world of homeownership. In these courses, participants may be taught the importance of a budget, and how to effectively break it down for their needs. They may also include lessons and tips on how to save for a down payment as well as how to buy without a down payment. Budget preparation is a key element in buying a home.
Credit scores and mortgage loans
Going hand-in-hand with budgeting, learning how to gain and maintain creditworthiness and manage debt is a crucial part of preparing to own a home. A buyer should be fully aware of the financial responsibility he or she is getting into, as well as the benefits and punishments that go along with credit and debt. Participants may be instructed on how to find safe and affordable financing options and the importance of getting pre-qualified.
Participants will also learn about the mortgage process from application to closing. With every step explained, prospective buyers will learn the actions, requirements and costs necessary for moving forward in the process.
Additionally, participants will also learn about the people who run the home-buying process, including real estate agents, lenders, appraisers, home inspectors, mortgage insurers and title companies.
Finding the right home and negotiating a purchase price
There are many ways to search for a home. The first thing homebuyers should do is plan their housing priorities. Knowing the needs of your home as well as other preferences you are looking for will greatly narrow the search and shave off a good amount of time. There should be elements homeowners are willing to compromise on, as well as elements that are definite must-haves. Homebuyer courses may help clarify these decisions, or direct participants to the best way to organize and prioritize these selections.
It is also beneficial to learn about the importance of an independent appraisal, as well as a reasonable contingency time in the contract for the appraisal to be completed and reviewed. It is important to get a realistic picture of the property value versus its listing price and/or proposed purchase price.
Prospective buyers may also learn how to negotiate a price for the home. There are specific steps in the negotiation process, and it is important that the buyer be informed of all situations.
Homeowner maintenance and expenses
There are many aspects of owning a home that may go unrecognized if you have never done it before. Homebuyer education courses may offer information on how to care for and maintain a home. This may include regular home tests, inspections, maintenance projects, and expenses for upkeep.
Homeowners may also be informed on the importance of having a home inspection before purchase, to be fully aware of the condition the house is in before committing to buy. Participants will learn physical and environmental concerns, as well as the life expectancy of elements within the house, such as roofs and appliances. Knowing this information beforehand can prevent problematic situations and expenses after the home is purchased.
For those interested in purchasing a home and would like a mentor by their side, pre-purchase counseling may provide a housing counselor who will help you prepare through personal counseling sessions. He or she will maintain a relationship with you throughout the process to assist you along the way.
It has been found that financial reasons are the foundation for choosing to buy or not to buy a home. By taking part in a homebuyer educational course, not only can potential new homeowners increase their borrowing power by thousands, but they will also gain a solid understanding of the home-buying process they will enter into and an understanding of the physical and financial responsibility of owning a home.