November 29th, 2019 9:05 AM by Jackie A. Graves, President
It’s fun to browse
home listings online or watch shows like House Hunters. But if you’re not a
homeowner, you might be feeling lost as to how to get started acquiring your
piece of the American dream.
Beyond the TV shows,
which rarely discuss the many nuances of committing to spending multiple
hundred thousand dollars for a place to live, there’s a ton of conflicting
information floating around about purchasing a home. Family and friends are
often happy to share their experiences, but I would hazard a guess that the
people who are most willing to provide advice are the people who haven’t
actually completed a home purchase recently. A lot can change in the real
estate market in just a few years, and while you love Aunt Kathy, you’d
probably love another perspective.
That’s where a
homebuyer education course can prove valuable. I know, not everyone is jumping
at the chance to sit in a classroom after a long day of going about your duties
as an adult. But it’s a chance to get unbiased information about what you can
expect from the home-buying process, and your chance to finally figure out once
and for all what escrow is.
Plus, these courses
are often a prerequisite for participating in first-time homebuyer programs
that can make homeownership more financially feasible.
Before you enroll,
here’s what you need to know. Just think: You could prepare to buy a home and be able to
dominate your couch commentary during your next HGTV marathon.
To find a local
agency that provides homebuyer education classes, visit the U.S. Department of
Housing and Urban Development’s directory of approved housing
counseling agencies. You can get results for your state and narrow down the list by
inputting your city or ZIP code on the results page. Beyond homebuyer education
classes, you’ll be able to see which agencies offer other housing resources
like pre-purchase counseling.
Another place to
look for local workshops is the National Industry Standards for Homeownership Education and
Counseling. The agencies listed in its directory comply with HUD
requirements and have also adopted a set of baseline standards for this type of
counseling and education.
Attending a class
that’s certified by HUD is essential because it’s often required for buyer
assistance programs like down payment assistance or preferred mortgage rates.
You’ll need to provide documentation that you successfully completed a class,
like a certificate. Some programs require you to have attended such a class
within the past one or two years.
You can also find
classes online. One Lifehacker reader recommended
Framework, an online course that meets HUD guidelines. An online course may
work better for you if your schedule is packed or you prefer to work at your
Whether you attend
in person or online, you can expect a course to take anywhere between four and
eight hours. If you’re taking a course online, you may be required to complete
the curriculum within a certain timeframe, like 30 days.
The cost of a course can vary depending on who’s hosting it. In general,
expect to pay at least $75. But feel free to shop around among the options in
your area and online. For instance, one online course offered through the Northeast
Michigan Community Service Agency allows you to sign up online for $99, but
offers a discount to people who contact them before doing so.
If you plan on buying a home with a partner, you may both need to attend
a homebuyer education course. Check with your local housing organizations about
their requirements for couples attending courses and if each person must pay
the full course cost.
Don’t feel pressured to attend the first course you come across in your
search. You can comparison shop to find a class that’s a fit for you in terms
of timing, cost, and curriculum.
Here’s a summary of the topics you can expect to learn about, as outlined
by the National Industry Standards for Homeownership and Counseling:
This stuff may be boring as heck on paper, but it’ll take away some of the instant anxiety you might feel when you hear terms like “mortgage points” and “PMI.”
It also gives you an advantage when you have conversations with professionals like real estate agents or lenders. The more knowledge you gain before starting to look for a home, the more confident you’ll be to walk away from someone who’s too pushy or otherwise gives you the willies.
It’s up to you to decide what to do when you complete a homebuyer
education course. You may jump right into competing the requirements to apply
for first-time homebuyer programs in your area, or you might decide to hold off
on your home-buying plans. You could come away from a class realizing you don’t
want to own a home at all. Either way, you’ll be armed with the information to
help you decide. And you will definitely know what “escrow” is.
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