These courses for first-time homebuyers save you money and help you buy a home sooner
Home buyers up to 23 years old (blue) and 24 to 38 years old (green) not trust :
Source: Freddie Mac
A recent poll by Freddie Mac showed that first-time homebuyers (as well as budding young homebuyers) have a lot of questions about how to buy a home.
Up to 65% of those surveyed feel they are unfamiliar with things like the mortgage process, loan types, or interest rates, information that can save you thousands of dollars when buying a home. House.
Taking a first-time homebuyers course can help.
Plus, homebuyer courses can give you access to loans with lower down payments and flexible credit and income rules.
In other words, these courses can make buying a home easier and less expensive. Explore your options here.
Find Homeownership Programs (Sep 16, 2021)
Course for first-time homebuyers and their benefits
Taking a first-time home buyer’s course doesn’t just give you textbook knowledge. It can also help you qualify for more affordable loan programs.
Loan programs that require training for home buyers are generally intended for first-time home buyers. As such, they have special concessions to help those who have bigger obstacles to overcome, such as lack of savings or declining income.
The benefits of these first-time home buying programs can include:
- Less down payment required (3%)
- Qualify with lower income or lower credit
- Use a roommate or rental income to qualify for the loan
- Get help with closing costs from your lender
- Use 100% of gift funds to pay closing costs
So how can you find one of these first-time buyers programs?
In fact, they are offered by Fannie Mae and Freddie Mac – the two mortgage giants that back the loans of most mortgage companies.
- Freddie Mac HomeReady Possible (required class for first time buyers) – 3% down payment, roommate’s rent counts towards your income, your down payment can be 100% gift fund, can qualify without a credit score, no need to be a first time buyer
- Loan Freddie Mac Home One (required class for first-time buyers) – Down payment of 3%, at least one borrower must be a first-time buyer, can buy with co-borrower income, no income limit
- Fannie Mae HomeReady (required class for at least one borrower on request) – 3% down payment, tenant or boarder income can be counted, down payment can be 100% gift fund, can qualify without a credit score
Check your eligibility for a low down payment (Sep 16, 2021)
If you want to use a loan program that requires training for home buyers, you probably won’t have to put in much effort. The courses already mentioned, and many others, are available free of charge and online.
>> Note: To take Fannie Mae’s Framework course for free, you must access it through one of the specific links on Fannie Mae’s website. Otherwise, you will be billed a non-refundable fee of $ 75.
Some other education courses for home buyers are taught in classrooms and charge a tuition fee.
Regardless of the format, taking one of these courses is probably worth your time.
“And research shows that those who participate in homeownership education have a greater ability to find the information they need about the process. This helps them find housing within their budget and with appropriate financing options. “
What is taught in a first-time homebuyer class?
To give an example, Freddie Mac recently launched a new homeownership education course. This free online course is called CreditSmart Homebuyer U. And that’s great for first-time buyers.
The Freddie Mac course offers 12 educational modules. Each highlights a major concept you will need to understand when buying a home. These include:
- Get a mortgage
- Credit and its impact on mortgages
- The home buying process
- Smart money management
- Make mortgage payments
- Home ownership and equity
Modules are offered in English or Spanish. They make difficult concepts easy to understand with bullet points and visuals. And they include key definitions and tips in user-friendly language.
Mele says he’s impressed with Freddie Mac’s CreditSmart Homebuyer U program.
“It aims to simplify the process so that buyers not only have the right information, but can also know how to apply it,” says Mele.
“Future buyers, for example, don’t know how to use lower down payment options. And many are unclear as to how these options can reduce the time it takes to save for a down payment.
>> Related: Low down payment for 2021
“Courses like this, coupled with working with an agent, will help provide buyers with a complete framework to build on and maintain the credit necessary for homeownership.”
The risks of skipping lessons
Those who ignore education for first-time homebuyers are missing out on some of the unique loan types described above. They may find it more difficult to qualify for a loan or to find the necessary funds – which will be higher, with non-specialized loan programs.
Plus, experts say, your home buying journey might not be as smooth.
“It could lead to a potentially stressful home buying and owning experience,” warns Mele.
“And that could translate into increased debt and lower credit scores. Additionally, they may have a higher probability of default.
To support this point, the study by Freddie Mac showed that nearly one in four people of home buying age (24-38) felt “not at all confident” about how to avoid foreclosure.
Lack of education about homeownership “can also prevent you from moving from renting to owning,” says Bruce ailion, Real estate agent and lawyer.
>> Related: The cost of renting versus homeownership
Buying a home is not as difficult or expensive as many people think. But to get started, you need the right information in your toolbox. A category of home buyers gives you that power.
Find Homeownership Programs (Sep 16, 2021)
What the Experts Say About Home Buyer Education
Laurent Yun is Chief Economist for the National Association of Realtors. He supports the first-time home buyer class of Freddie Mac and the like.
“Educating the public about the benefits and, more importantly, the responsibility of homeownership is good everywhere. It is good for the lenders by reducing the default rates. And it’s good for consumers so they can make smarter financial decisions, ”Yun explains.
To be more successful, buyers need to know what to expect. That’s what Ailion believes.
“Understanding the buying process, financing process and ownership responsibilities is essential,” notes Ailion.
“There are hundreds of thousands of tenants who want to buy. But they don’t understand what is involved or how to achieve that goal. CreditSmart offers consumers an effective way to start this journey.
Leslie Shull is an Assistant Professor of Real Estate at Sacramento City College.
“I’m a fan of any educational model for borrowers or buyers that involves credit and budgeting. And the fact that the course is multilingual is huge. They make it accessible to a larger audience, ”she says.
Buying a home is easier than you think
Buying a home can seem expensive and difficult to understand. But if you take it step by step, it’s totally doable.
A class of first-time home buyers can help a lot. It will give you the know-how you need to find the right loan for an affordable mortgage payment.
And if you take the right course, you could even save on your down payment and closing costs. Shop around and ask your lender what the options are for first-time home buyers to find the best one.
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