Home Buyer Education Programs

Buying or renting? The age-old question! Making that important decision is challenging in the best of times. Yet when the country is recovering from an economic downturn, people can lack confidence and be more uncertain about the right choice.

Does Buying A Home Make Financial Sense?

According to a recent National Association of Realtors survey, 85% of home buyers between June 2009 and July 2010 believed that they were making a sound financial decision. Almost 50% of the buyers and sellers in the survey considered their home to be a better investment than stocks. Nearly one third of the group believed their home to be an investment ranking at least on par with stocks. The findings were similar among all categories of buyers (first-time buyers or existing home owners, couples or individuals, male or female).

Will Home Ownership Be A 'Get Rich Quick' Investment?

In earlier decades, many buyers viewed home ownership in that light. That perception is changing in the current market. The median expected length that today's home owners will stay in a residence is 10 years. Generally, repeat buyers plan to remain in the same residence for 15 years. Of course, these long-time home owners can still turn a profit further down the road.

Should I Rent Or Should I Buy A Home?

There is no simple answer to this question. Reaching a final decision means that individuals have to examine their own situation from every angle. They must consider their goals, circumstances, and even one's personality.

Certain people prefer to be renters. They do not want to take on the responsibility of home ownership. If there is a problem as a renter, they can call the landlord. Renters without signed leases are able to move at a moment's notice. Some people enjoy that sense of freedom.

Yet other renters (especially with families) long for home ownership. Renters must have certain specifics in place if they are planning to buy a home. They should have a down payment and closing costs.

Potential home buyers will need to qualify for a mortgage. As well, they must be able to afford the cost of buying a home. Home ownership costs include more than the purchase price. Homeowners must be able to pay the monthly mortgage costs, property taxes and insurance, as well as maintenance costs.

Making The Final Decision

People have to examine their personal circumstances before they decide to rent a residence or buy a home. They must consider the pros and cons of each option. There is help out there to assist individuals with this process. It is possible to find classes in different locations that are focused on exploring the "buy or not to buy decision."

Various real estate professionals have written e-courses or organized classes about renting versus home buying. In addition, there are similar programs created and run by groups or businesses with no vested interest in trying to sell homes. People can get expert help to guide them in making the right decision.

Should you buy or keep renting?

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Holiday tidings – home mortgage rates are holding their own. Last week, there was a spike but - according to Freddie Mac – hardly any change this week on fixed-rate mortgages. Based on the weekly survey of mortgage rates, we are in a period of stabilization – a positive sign for the economy.

Home mortgage interest rates had been declining in past months because of economic uncertainty. Yet earlier this month, there was a change. Home mortgage interest rates have increased recently and last week's mortgage rates took a jump. Stabilization, however, is the reality for the week ending November 24.

Home Mortgage Rates

Rates on 30-year fixed-rate mortgages averaged 4.4% on November 24. That rate is just a slight increase over last week's rate; 4.39% was the rate for the previous week. Freddie Mac mortgage rates have increased for the past four consecutive weeks. The rate averaged 4.78% in 2009.

Fifteen-year fixed-rate mortgages averaged 3.77% this week - compared to 3.76% in the previous week and 4.20% last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.45% this week - up from 3.4% in the preceding week. The ARM averaged 4.18% in 2009.

Obtaining Rates

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.8 point. The 15-year fixed-rate mortgage required an average 0.7 point and both ARMs required an average 0.6 point. A point is 1% of the mortgage amount charged by the bank as a prepaid mortgage interest.

Freddie Mac

Frank Nothaft, vice president and chief economist at Freddie Mac, released promising news on varied fronts on Wednesday. He noted an improvement in home owner balance sheets as well as a decrease in mortgage delinquency rates in the third quarter of 2010. Actually, there has been an overall decrease in delinquency rates. They have fallen to 9.13% - the lowest rate since the first quarter of 2009. Freddie Mac's chief economist also mentioned other encouraging signs for the economy."Growth in gross domestic product in the third quarter was revised up from the initial estimate to an annualized rate of 2.5%, as stronger consumer spending and exports supported the revision," says Frank Nothaft, vice president and chief economist at Freddie Mac.

Home Mortgage Interest Rates Stabilize This Week

Wells Fargo

Wells Fargo also showed stabilization after a volatile couple of weeks. Mortgage rates have been moving around but the movement has been limited to only a certain level. Check out more specifics about Wells Fargo and mortgage rates. It will be easier to make more long term projections if mortgage rates remain stable so that we can determine effectively the overall scope. Industry experts believe that home values will not stabilize completely until the end of 2011 or middle of 2012.

Housing Market

Looking ahead to 2011, some industry leaders say that potential home buyers and homeowners wanting to refinance should experience favorable conditions in the coming months. Analysis seems to suggest that rates will stay below 5% - at least until mid-2011. Home buyers are expected to be lured back into the housing market with low mortgage rates, affordable house prices, and improving employment figures.

Housing Forecast for 2011

What Is Your Prediction For The Housing Market In 2011?

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The Federal First-Time Home Buyers' Tax Credit has expired but there is still help out there for first-timers. No doubt, the federal tax credit had encouraged people to become home owners and increased home sales. When this assistance ended, sales fell flat and first-time home buyers turned to other sources of help including 'angel investors' (family and friends). Yet there are still 'official' programs in place for first-time home buyers – at least on the municipal level.

Visalia, California

The City of Visalia, CA, is in the habit of helping home buyers. The city has offered assistance for home renovation as well as help with housing for lower-income, working families. Now Visalia is throwing its support (and funding) behind first-time homebuyers. The details of this latest program were spelled out in a recent city report.

"First-time homebuyers or those who have not owned a home in the last three years may be eligible to receive as much as $20,000 to help purchase a brand-new home with a maximum purchase price of $200,000," stated a City Of Visalia report released on November 19, 2010.

Workshops are planned for December 11 allowing Visalia residents to learn more about the program. The city is being supportive of their first-time homebuyers but, ultimately, there is a hope that the initiative will have a positive effect on Visalia's economy. The city expects that first-time home buyer assistance will encourage building in already-approved subdivisions. The program is expected to inspire first-timers and inject energy into the local housing market.

Visalia, builders to aid homebuyers with $20k stimulus program

Cambridge, Massachusetts

The Cambridge Financial Assistance Program offers a grant to potential first-time home buyers. This program helps with their down payment and closing costs. The home must be the buyer's primary residence. As well, the buyer must agree to restrictions limiting the sale of the property. Buyers must have been lived in Cambridge for at least one year.

Applicants must reveal their gross family income, amount of monthly debt, savings for a down payment, and the estimated purchase price of the property. A financial assistance program also allows eligible first-time homebuyers to “buydown” the purchase price of a home. Applications are available through the Cambridge Community Development Office.

Taunton, Massachusetts

The city of Taunton, MA, assists eligible home buyers with down payments (half of 5% down payment cost) and closing costs (up to $10,000). Eligibility is tied to income guidelines set forth by HUD (Housing and Urban Development Department). Applicants must have proof of income and debt. In addition, they must attend pre-purchase and post-purchase home buyer training courses. Applicants must be planning to reside at the property.

First-Time Home Buyer Grants in Massachusetts

Minneapolis, Minnesota

Minneapolis, MN, offers various first-time home buyer programs. The Minneapolis Advantage Program (MAP) offers a $10,000, zero-percent interest loan that is forgiven over five years. The Home Ownership Works (HOW) program gives first-time home buyers an opportunity to move into recently remodeled homes. Check out other programs for first-time home buyers in Minneapolis.

Nationwide

There are excellent programs available across the country for first-time home buyers. The guidelines may vary slightly according to the municipality. Generally, the programs are available to first-time buyers or those who have not owned a home within three years.

Most municipal programs are available on a first-come, first-served basis. The best advice for first-time home buyers is to check into these initiatives at the earliest possible date. Funds can run out for municipal programs. When cities reissue funds for a program, they may change its rates and parameters.

Have You Received Help Through A First-Time Home Buyers' Program?

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Did last month's 'foreclosure freeze' cool down or heat up the real estate market? Just over a month ago, most US states agreed to a freeze on foreclosures in response to suspected flawed practices by lenders. Apparently, certain lending officials were 'robo-signing' foreclosure documents. They were signing off on foreclosures without reading the information. The moratorium got mixed reviews from icy stares to warm welcomes.

Out in the Cold

Of course, some US home owners were left out of the loop altogether when it came to the foreclosure freeze. In early October, Bank of America, JP Morgan Chase, and Ally Financial (parent of GMAC Mortgage) said that they would suspend foreclosures to investigate 'robo-signing' – but not in every state. For example, Texas foreclosures were not on the list for review.

Uncertain Future

When these major lenders announced their intentions, they included 'judicial foreclosure' states. Texas has 'judicial foreclosures' (foreclosures carried out by the state) and non-judicial foreclosures. Therefore, Texas was not part of the voluntary suspension.

As a result, many Texas home owners were uncertain about the entire process. They were advised to contact their lenders but flawed foreclosures did not have to be frozen in this state. Robert Gleason, Director of Governmental Affairs, commented on the uncertainty that faced Texas home owners.

"Many homeowners will have to wait until next year to be able to see if this pause on foreclosures affected their home values, but in the current market, it is a possibility," says Robert Gleason, Director of Governmental Affairs.

Foreclosure freeze could chill local market

Hot Market

If a home owner was involved in a conventional sale (not a foreclosure or short sale), the freeze might have freed up more possibilities. Keep in mind that foreclosures had been responsible for up to 30% of all sales in certain areas. With foreclosed properties off the market, conventional sales faced less competition.

Foreclosure sales in Tampa Bay, Florida, fell 9.3% in October. In an interesting but not surprising twist, conventional sales experienced an identical (9.3%) increase. Tampa Bay figures were repeated in varying degrees across the country.

The foreclosure freeze heated up conventional sales. Yet the moratorium did not change everything in the home seller's favor. House prices did not increase to benefit home sellers. Actually, prices for conventional sales were 2.2% lower than in October 2009.

Analysis: foreclosure freeze helped home sellers.

Cold Comfort

As well, a few home sellers ran into additional problems with the foreclosure freeze. They sold their home with the hopes of moving in elsewhere. In specific cases, their new house was tied up in the moratorium. Home sellers could make quick sales during the freeze. Moving in, however, took longer than expected in the aftermath of the 'robo-signing' fiasco.

Cooling Down

In addition, the foreclosure freeze had a downside on various levels. The longer a home just sits there, the less value it has, and the more detrimental effect on home values in the neighborhood. Besides decreasing prices, the freeze cooled more than one person's enthusiasm for the market.

Potential home buyers entered up in a quandary. Some buyers have been caught 'in the process' of buying for more than a year. Home buyers have discovered that it is not always easy to buy a home. Especially in the autumn chill caused by the foreclosure freeze!

Foreclosure halt affecting Berks' listings

How Has The Foreclosure Freeze Affected You?

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Home sellers must get potential buyers to check out their house. Sellers have to be ready for this process. They must prepare their home and themselves for the sale.

Selling a home requires you to detach yourself emotionally from your house. The sale has to be set up to be attractive to home buyers. No monetary value may match your sentimental attachment to a home.

Yet selling a home must be less about sentiment and more about practical concerns. Home sellers need to address various issues including everything from staging a home to budgeting for selling expenses. A home sellers' checklist can help you prepare to sell your home.

Home Sellers' Checklist

Educate Yourself About The Process

Arm yourself with the tools to get the most from the sale of your home – the best price and the most satisfaction. Free home selling seminars are cropping up across the US, Canada, and elsewhere. Home sellers should take advantage of seminars and similar resources such as e-courses, books, and articles from reputable industry sources.

As well, be open to the advice of your real estate agent and trusted family and friends who have gone though the process. By performing 'due diligence' (researching the situation from all angles), home sellers put themselves in the best position to sell their home.

Free Home Seller Seminar

Organize The Information

A ton of resources exists out there for home sellers. Stick to reputable, well-known, and trusted sources for accurate information. Sellers can collect mounds of research. They need to organize the data. Using folders to file the information according to category will simplify the process.

Store collected research and names of contacts as well as appointment dates in an efficient filing system. In addition, include documents such as household warranties and copies of property tax records and utility receipts. Obviously, you will also need to have easy access to your property deed.

Make Time In Your Calendar

Selling a home takes extra effort and time. Meetings and preparation are inevitable during the process. Plan ahead and arrange free time in your schedule. Sellers must set aside space in their calendar to devote to the selling process. If home owners try to sell their house and still hold down their regular schedule, they will end up stressed and not in the best frame of mind to sell a home.

Budget For Extra Expenses

Of course, home sellers have to budget for the costs of closing a sale. Yet they also have to consider the cost of repairs (major or minor) to improve the saleability of a home. Home sellers must also budget for staging their home.

Staging A Home

Staging your home involves presenting a home so that potential buyers can see themselves living in the space. Staging a home can include removing clutter, making everything sparkle, and adding welcoming touches or even a refreshing neutral shade to your wall. If you figure that staging is not worth the effort, think again. According to a recent survey by The International Association of Home Staging Professionals®, staged homes spend 83% less time on the market than non-staged homes.

Staging a House to Sell provides Big Returns

What Would You Include On A Home Sellers' Checklist?

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The word 'foreclosure' strikes enough fear into people's minds without adding 'flawed' into the mix. Yet the nation is now facing the issue of "flawed foreclosures." What a mess!

Flawed Mess

Most of us have been faced with the issue of messy paperwork in our offices from time to time. This latest fiasco makes it evident, however, that even banks let their paperwork get out of hand. A scary thought – considering how much trust we are required to put in our financial institutions.

"Robo-Signing"

Vermont was one of the latest US states to become part of the joint investigation into the banks' use of flawed disclosure documents. The banks are been accused of "robo-signing" foreclosure documents. Supposedly, many recent foreclosures might have been based on false affidavits. A person signed the documents confirming that they had knowledge of the situation. The claim is that many officials had no knowledge of the circumstances regarding specific foreclosures.

Vermont joins other states in foreclosure investigation

Checking Signatures

Suspected incidents of flawed foreclosures have cropped up across the country. This flawed process comes as a surprise to everyone who trusted the system. One would think that all documents were double checked during a foreclosure. One would also expect officials to know the score when they sign their name to a document. Unfortunately, the whole process has to be rechecked because there seems to be monumental mistakes.

Foreclosure Moratorium

Despite the flaws that have come to light, the Obama administration does not want to issue a national moratorium on foreclosures. Their reasoning is that it might backfire and cause a decline in housing prices. Yet industry experts disagree and think that it might restore confidence in the market.

"...If you buy a foreclosed home, you would have confidence there would be no title fights down the road and someone else couldn’t make a claim to the house you are living in,..." says housing expert, Dean Baker."

Of course, a few banks, including GMAC’s Ally Bank, JPMorgan Chase, and Bank of America have issued their own moratorium on foreclosures. If you take comfort in that fact, don't let it make you feel too relaxed about the system. Obviously, banks are looking out for their own interests. If they were certain that they have no flawed foreclosures, the banks would proceed with normal business.

Most likely, they are not 100% sure about their practices. Did we double check these figures? Did our officials know the score? Inefficiency within a bank is cause for concern at the best of times. When you consider how tied up people's lives are in foreclosures, these flaws take on nightmarish proportions.

What You Need to Know About Flawed Foreclosures

Home Owner Response

Home owners are now left wondering if they have clear titles to their home – and they have to find the answers. Many people do not even know the details of their title insurance policy. Home owners need to know what is covered by that policy. A good real estate lawyer can be well worth the investment if it helps you to figure out this flawed process.

An Honest Mistake

Different sources have classified the flawed foreclosures as everything from technical mistakes to deliberate actions. We can expect the banks to favor the 'technical mistake' angle. U.S. Rep. Alan Grayson thinks that the 'mistake' was a deliberate action. Grayson has called for a criminal investigation.

"These banks are still claiming that the massive fraud they have perpetrated amounts to nothing more than a series of technical mistakes," says Grayson. "This is absurd. This is deliberate, systemic fraud, and it is a crime."

Grayson calls for criminal foreclosure probe

Do You Think That Flawed Foreclosures Were Honest Mistakes?

Today's home buyers are facing a different marketplace than home purchasers in past decades. Even if we look at home buyers during previous economic downturns, today's buyer is not living the same reality. Yet a glaring similarity exists between modern home buyers and purchasers in other decades (or even - centuries) in US history. Home buyers have a dream.

Home Buyer Education Programs

Another fairly common thread between home buyers of the past and present is the challenge of turning that dream into a reality. The path is not always as clear as the dream. In fact, more than one financial expert is convinced that many people do not understand the home buying process. A few US and Canadian organizations are addressing this issue with the introduction of Home Buyer Education Programs.

Realizing The American Dream

Beginning in October, Freedom Debt Management, a non-profit in Boca Raton, has partnered with Citi Group to begin a Home Buyer Education Program. This initiative will help South Florida first time buyers. The company hopes to help 100 families within the first year. Appropriately, the education program, consisting of two four-hour courses, is called, "Realizing The American Dream."

Existing Need

Some people may argue the value, or indeed, the need for such Home Buyer Education Programs. Yet online forums alone suggest that many first-time home buyers are not savvy about the process. Organizing these programs is not being condescending towards the first-time home buyer.

The simple truth is that if individuals never traveled a certain path, or doesn't know the way to get there, they cannot arrive at their destination – at least not in the most efficient manner. Yet some observers question how much first-time home buyers can learn in eight-hour sessions. If the program is well-organized and has valuable content, there is, however, no doubt that a home owner comes out with a better advantage.

The Program

The director of the Boca Raton program explains that their initiative enhances people's concept of saving and budgeting. In addition, the program focuses on possible credit traps, scams, and other threats to one's financial future. Class topics include mortgage affordability, understanding credit, getting a mortgage loan, shopping for a home, and keeping a home, as well as other related subjects.

"Strong financial skills can lead our residents to be able to buy homes, be prepared for financial emergencies, and be more comfortable in retirement, which leads to a stronger and healthier community. We are here to help our residents get their financial future in shape!” says Darish Still, Director of Counseling with Freedom.

Freedom Debt Management, Inc. offers homebuyer education program

Educating The Nation

Of course, Boca Raton is not the only city with a Home Buyer Education Program. The courses (or shorter but similar workshops) are in operation across the US in places such as Stockton and Norwalk. Canadian first time home buyers are also attending classes. Tarion Warranty Corporation offers online New Home Buyer Education Seminars online to help Ontario first-time home owners understand the warranty process and coverages with new homes.

Online education available for new home buyers 

Do You See Value In Home Buyer Education Programs?