Knowledge is power, especially when it comes to an investment and responsibility as large and complex as homeownership. A recent study by the U.S. Department of Housing and Urban Development shows just how powerful knowledge can be.
The Pre-Purchase Counseling Outcome Study followed 573 individuals enrolled in HUD-funded counseling. Among other things, the study found that 35 percent of these attendees went on to purchase a home in the 18 months that followed, and only one of these purchasers had fallen more than 30 days behind on their mortgage payments.
In addition, the study found that the purchasers tended to have higher incomes, better credit scores and more in savings than non-purchasers. About two-thirds of purchasers were deemed "mortgage-ready" by the counseling agencies.
We've long believed in the power of homebuyer education, and require it on many of our loans for first-time buyers. A good course will help potential buyers determine whether they’re ready to buy a home; if they’re not, it will show them what they need to do to get ready. It will debate the pros and cons of homeownership; inform homebuyers about credit; instruct them on finding a safe, responsible loan; and discuss the steps in the homebuying process.
Buying a home is a huge commitment, so being informed and responsible about homeownership is essential. Quality homebuyer counseling helps buyers understand all that goes into purchasing a home, and forces them to make an honest assessment of their readiness of owning a home.