A homebuyer education course is the first step to understanding the financial process for first-time homebuyers. Homebuying education, although not required, can be beneficial in a number of ways, especially if you’re a self-reliant buyer.
What Will You Learn
To take one example, Fannie Mae‘s homebuyer course covers the following modules::
- How to become a homeowner, including the advantages and disadvantages, cost and steps
- How to better manage your money
- How to properly understand your credit
- What you need to know about mortgage loans, including mortgage types and how to qualify and shop for a mortgage
- How to select a mortgage
- What the real estate basics are
- How to find your perfect home
- How to effectively close a loan
- What life will be like as a homeowner
Any homebuyer education course should be administered by a third-party company (not your lender), and it should meet the requirements of the U.S. Department of Housing and Urban Development’s (HUD) Housing Counseling Program. This means you’re likely to receive accurate and helpful information throughout the financing process.
What Are the Benefits
The most obvious benefit of taking an education course is gaining a deeper knowledge in particular aspects of the homebuying process, including how to select a mortgage, how to spot predatory lenders and how to ensure you’re budgeting for your mortgage correctly. A lesser known benefit is that homebuyers may receive monetary incentives for completing an education course. Here’s a glimpse into some benefits you might earn:
- Eligibility for down-payment assistance programs
- Grants of up to $25,000
- Closing-cost assistance
- Mortgage loan forgiveness
- Below-market annual percentage rate (APR) on your mortgages
For example, the state of Georgia offers the Georgia Dream Homeownership Program. This program offers a reduced-rate mortgage and down-payment assistance for first-time homebuyers. To be eligible for this deal, the buyer will need to enroll in an education course. Look to your state housing authority’s website for a full breakdown of the programs offered and the perks a homebuyer education course may give you.
How Long Does a Course Typically Last?
You can pick from two types of education courses: online and in-person. Framework is an online course that takes roughly four hours to complete. In-person classes, which vary based on location, typically last six to eight hours.
What Does It Cost to Enroll in a Homebuyer Education Course?
A fee is usually associated with any homebuyer course. The Framework course costs a one-time fee of $75, whereas the homebuyer programs offered through the state of Colorado cost $99. Each program varies in cost, so be sure to ask about fees up front, and don’t be afraid to shop around. Make sure as well that your program is HUD-approved.
Financing your home will be the most important decision you make during the homebuying process. It’s important to learn as much as you can about the process, so you continue to make informed decisions and benefit from the monetary rewards until the end of your homebuying adventure.
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