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You may be ready to stop paying rent, but are you quite ready to buy a home? The road to buying a home can be a steep learning curve, from understanding how mortgages work to creating a budget to cover your housing costs. That’s where a home buyer education course can help. Many state home buyer assistance programs and some mortgage lenders require borrowers to take a home buyer education course, especially if you’re a first-time home buyer.
What is a Home Buyer Education Course?
Home buyer education courses are online or in-person classes you can take to gain a better understanding of the things that go into finding, financing, and owning a home. In many cases, home buyer education courses aren’t optional. Your mortgage lender may require you to complete the course, or you may need to take the course to qualify for down payment assistance or other home financing programs run by your State Housing Authority (HFA).
“The class covers the homebuying process, what borrowers need to look for to get approved for a mortgage, the benefits of homeownership, and the challenges of homeownership versus mortgage and loan terms,” says Will Hendrix Griffin, senior vice president of affordable lending for PNC Bank in the Chicago area.
In some cases, courses are offered as pass/fail classes, and buyers typically receive a certificate upon completion, Hendrix-Griffin said. Other courses, such as the homebuyer education classes offered by Take Charge America, a Phoenix-based nonprofit credit counseling agency, have a grading system.
“In our courses, participants carefully review the material and periodically test their knowledge with a series of quizzes,” says Jeremy Wine, former manager of professional counseling services and partnerships for the organization, which offers courses to buyers in all 50 states. “Participants who receive a combined score of 70 percent or above pass our course and receive a certificate of completion.”
What will you learn in your home buyer education classes?
Our first-time homebuyer classes are designed to help you learn about the entire process of buying and owning a home and help you prepare for that decision.
Learn about the different steps in the home buying process. Here’s how:
- See if you’re ready to buy a home
- Save for a down payment and manage your finances
- Check your credit score to see if it’s good enough for you to get a mortgage and improve your score if necessary
- Decide on a budget for buying real estate
- Find programs to help you buy your first home or other home purchases.
- Compare different types of mortgages and lenders
- Choose the right lender
- Know what closing is like
- Living in and maintaining a new home
However, every home buyer education class is different and depends on the organization offering it, the breadth of content covered, and whether you attend a class in person or online.
“The best courses are in-person classes that allow for substantial interaction in class and with the instructor,” says Tony Julianelle, CEO of Atlas Real Estate in Denver. “Ideally, the class should include time to work through different scenarios, such as creating a household budget and how you would pay for major repairs if they were needed.”
Why you should take a first-time home buyer education course
Buying a home is a big step, and the process can seem overwhelming. As you start to think about buying a home, you’re likely to have many questions, like what’s the difference between a fixed-rate mortgage and an adjustable-rate mortgage?
First-time home buyer education courses can be extremely helpful in answering these questions and teaching you the ins and outs of applying for a home purchase and mortgage. Additionally, courses such as these may be essential to getting a more affordable mortgage:
Taking advantage of these offers (part of the First Time Buyer Loan Program) can help you save money on your mortgage and lower the overall cost of homeownership.
How to Find Home Buyer Education Courses
The U.S. Department of Housing and Urban Development has a list of approved homeownership courses, so that’s a good place to start. You can also talk to your real estate agent for help. If you plan to apply for state-sponsored assistance, check your state housing authority website for a list of approved lenders and ask your loan officer for help finding an approved course.
When comparing the options, you will find that there are two main types of programs.
- on demand: Our online homeowner classes allow you to access source materials and take the tests you need at your convenience, while providing the same quality of information as our in-person classes.
- local: Many real estate agents and lenders offer certification classes for first-time buyers. That said, if you want to qualify for a grant or loan, you’ll need to make sure the class meets the lender’s requirements.
