Given the benefits of premarital, career, and retirement counseling, it’s no surprise that homeownership counseling offers similar benefits. It not only helps current homeowners manage their associated costs better, it has also helps first time buyers make better decisions about which home will be right for them.
In fact, studies, including one by the Federal Reserve Bank of Philadelphia, found access to home buying educational programs alone was sufficient to increase purchasers’ confidence levels. It also improved how they subsequently managed their finances. When combined with one-on-one home ownership counseling, the results were even more beneficial. Credit scores rose, total nonhousing-related debt balances declined, and the participants’ payment habits improved. Altering these behaviors positively affects a mortgage application and supports a successful home owning experience.
Benefits of Prepurchase Counseling
While prepurchase counseling appears to make a first time homebuyer more attractive to a lender and, therefore, a better prospect for you, it has other benefits as well.
Reveals additional financing options that may make ownership more affordable or even possible for those still accumulating assets.
Separates fact from fiction—especially around down payments.
Keeps the transaction on schedule for the agreed-upon settlement.
Relieves stress on buyers as they navigate an unfamiliar and potentially intimidating process.
What Happens in Counseling
When clients meet with a certified housing counselor, they receive advice regarding money management and how to budget for a home purchase. They also learn about planning for the ongoing expenses that accompany ownership, from maintenance to property taxes. Added insight is often gained into the factors they should weigh more heavily when selecting a home. In addition, financing options that make ownership affordable are examined. Lender practices, expectations regarding loan repayment, and tips for avoiding potential issues are also discussed to set up each counseling participant for future success.
Counseling to Build Relationships
While some loan programs require applicants to participate in prepurchase counseling through a HUD-certified counselor, homebuyers can access these services directly through local credit counseling agencies. Becoming familiar with the options in your area and sharing them with prospects and the early-stage buyers you meet at your open houses can be worth the effort. It helps ensure that when they are ready to proceed, these buyers may even return with pre-approval letters in hand.
When looking for agencies you feel confident referring clients to, it’s advisable to favor nonprofit credit counseling programs. They are more likely to provide services as unbiased advocates for a nominal fee. Their certified counselors will also remain resources throughout the purchase.
Homeownership counseling can be an important part of the overall buying process. Making home buyers aware of these resources not only helps demonstrate your commitment to their future success as homeowners, it has the added benefit of setting them up for a well-managed financial life.