Homebuyer education for all first time homebuyers

Mortgage and Lending with CNN Mortgage

Homebuyers that take an eight hour HUD approved Homebuyer Education class have a better chance of successful homeownership and lower default rates.  These classes are not mandated by FHA, but are filling up fast as buyers seek to use the many down payment assistance (DPA) programs available to communities for the purchase of distressed properties.  Those of us in the housing industry take for granted the knowledge we impart to our clients as they are making their first purchase.  How different the last three years would have been had all first timers attended an 8-hour homebuyer education class on responsible homeownership. 

You don't have to be getting a DPA, grant, or bond program to participate in homebuyer education.  Hud-approved counselors can prepare anyone for the home buying process.  The homebuyer education class covers:

•·         Explanation of housing "terminology" which improves buyer confidence

•·         Evaluation of potential buyer's income, credit, debt, and available cash  

•·         Understand what you can afford to buy

•·         Budgeting for home purchase

•·         Educates the potential homebuyer on each step in the buying process

•·         Maintaining good credit and resolving any existing credit issues

•·         How to avoid predatory lenders

•·         Title, escrow and the closing process

•·         Homeowner's insurance

•·         Home inspections

•·         Home maintenance tips

•·         Locating a suitable property and negotiating a real estate contract

    • Selecting a Realtor
    • Selecting a Lender

Homebuyers who complete pre-purchase counseling better understand the responsibilities of owning a home, and the consequences of delinquent payments.  If problems arise, they are more likely to contact the lender to establish a workable payment plan, and less likely to default on the mortgage.

Homebuyer education can be done prior to shopping for a home as clients who don't meet qualifications learn what they need to do, avoiding the financial and emotional disappointment of being declined.

Homebuyer Education classes are easy to find and provided by Hud-approved Homebuyer Education Agencies in your town, usually free of charge or a nominal fee.


Interest Rates Monday June 29th

Best Conforming Conventional 30Yr Fixed  5.625%

Best Conforming Conventional 15Yr Fixed  5.125%

Best Conforming Conventional 5/1 ARM 4.750%

Best Conforming Conventional 5/1 IO ARM 4.875%

Best Jumbo 5/1 Arm  5.625%

Best Jumbo 30Yr Fixed 6.625%

FHA 30Yr Fixed 5.500%

Best FHA 5/1 ARM 4.750%

* Above Conventional rate quotes are as of  6/29/09 on a Conventional $165,000 loan amount, primary residence at 80% loan to value, with a 720 FICO score.  APR includes $1,200 in lender fees and 980 in title charges (title charges may vary).  FHA Quote assumes a $125,000 loan amount and a 680 FICO score, and a 96.5% LTV. Jumbo quote assumes a 75% LTV and 680 FICO score.   Documentation of income and assets required.  No origination or discount points.


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