Owning your own home long has been considered part of the American dream, because homeownership represents security, prosperity and peace of mind. Now, in the wake of the housing bubble bust, some potential buyers wonder if buying a home is the smart thing to do. And for those who very much want to purchase a home, new lending requirements are tougher than ever.
If today's housing woes have taught us anything, it's that purchasing a home requires fundamental consumer knowledge.
Thanks to Literacy Volunteers of the Lowcountry, residents now have a way to receive the important information they need to responsibly purchase, maintain and service the mortgage on a home. At the initiative of Joan Mustard, the local nonprofit organization has brought back a popular class called "Homebuyer/Financial Education." This course was offered through the Lowcountry Community Development Corporation, which closed in 2008. More than 1,750 people graduated from 75 homeowner education classes presented by the agency starting in 2000.
Nancy Williams, executive director of Literacy Volunteers of the Lowcountry, said financial and homebuyer education goes hand in hand with her organization's goal of helping people realize their life goals through education and literacy.
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Mustard was working as a volunteer tutor at Literacy Volunteers of the Lowcountry when she proposed offering the homebuying/financial literacy program there.
"I had been receiving calls and inquiries from Realtors, bankers, and people interested in taking the class, but the course didn't have a home (after the Lowcountry Community Development Corporation closed)," she said.
After Mustard and Williams worked out the details, the organization's board of directors voted to add the class as a pilot program.
Mustard, a certified homebuyer educator and housing counselor, teaches the 20 hour course. In July, 13 people graduated from the organization's first homebuyer class.
Graduate Ruben DeJesus closed on a house in Hidden Lakes in Bluffton this month, and his family is enjoying their new home. His mortgage required the homebuyer class certificate of completion.
Thanks to the class, "I was knowledgeable about the homebuying process and I knew what to expect," DeJesus said.
Mustard's class begins with a pre-test that would challenge even current homeowners with terms such as equity, lien, and origination fee. Throughout the class, students use the FDIC's Money Smart Curriculum as well as games that teach skills and practice exercises. Instruction is provided on budgeting, credit management, the home-buying process and the responsibilities of homeownership.
Upon completion of the program, some graduates, meeting certain income eligibility requirements, may qualify for gap funding from the South Carolina Housing Trust Fund and other special down payment assistance programs (Currently, funding is not available through these programs, but funds may be available in the future, Mustard said). Some mortgage programs require the purchaser to complete a homebuyer class by a certified homebuyer educator.
Each class is sponsored by a bank and allows students the opportunity to meet other experts involved in the home-buying process, such as attorneys and Realtors. This helps the students "decrease their fear factor," Mustard said.
Bank of America helped sponsor the first class.
"The class is very informative and covers all the basics first such as check writing and balancing your checkbook; then it later goes into the homebuying process," said Dan Canaham, mortgage loan specialist at the Bluffton branch. "Regardless of what lender or mortgage specialist they use, (the class) helps prepare homebuyers to know what to expect and what types of questions to ask."
Mustard agrees, saying "an ounce of prevention" is crucial in today's housing market. The goal of the class is to educate and empower homebuyers, so they enter into homeownership better prepared.