Educating home buyers
Sunday, March 16, 2008Special to The T&D
As recent real-estate woes and home foreclosures create anxiety for many prospective homeowners, Claflin University is taking a proactive approach to ensure that at-risk home buyers make educated choices when purchasing a home.
The Claflin University Community Development Corp. has implemented a six-week Homebuyer Education and Counseling Program designed to assist potential low- to moderate-income home buyers purchase and maintain a home. The course includes sessions on housing and debt ratios, budgeting and savings, credit counseling and a graduation.
"The sessions held during the fall semester were very successful," said Marian Thompson Geter, executive director of CUCDC. "There were 36 participants who completed the October 2007 session and 26 completed the December 2007 session. Participants received a ce.jpgicate of completion. They are eligible to apply for closing costs and down payment assistance toward the purchase of a home. The first session of 2008 will begin soon and we are anticipating continued success."
The real estate market nationwide has been on a decline, adversely affecting home buyers and Realtors alike. In recent years, many lenders offered subprime loans to entice people into buying a home. As these rates come to an end and mortgages reset to their actual interest rate, foreclosures have reached record numbers. According to realtytimes.com, a source for real estate news and advice, the housing market last year "can only be described as the toughest year for American housing markets in decades."
The Homebuyer Counseling Program at Claflin has a four-step curriculum aimed at extensively educating potential home buyers so they may avoid real estate pitfalls. That curriculum includes establishing initial contact with participants, credit counseling, budgeting and saving counseling and information in housing and debt ratios. During the initial contact phase, families complete an application and meet with a counselor to discuss their needs. Together with the counselor, the family develops an action plan to home ownership including credit counseling, debt reduction/counseling, budget and saving counseling, prequalification for Homebuyer Education, insurance banking services and income and employment related counseling.
During the credit counseling phase, each family receives credit report counseling and is taught how to work toward establishing a good credit history to be presented to a lending institution.
"Families also become aware of the importance of a good work history for employment stability and a good payment history," Geter said. "Other services in this step include assistance with contacting creditors, assistance with the designing of a program to correct collections and judgments and assistance with a plan to avoid similar problems in the future."
In the budgeting and savings phase, potential home buyers learn how to prepare a monthly cash-flow budget. They ide.jpgy sources of income and monthly/periodic expenditures and compare actual expenditure to the monthly budget. Participants also learn how to prepare income and expense budgets and balance sheet projections, and how to track the actuals and compare them with the projections. Ways to improve savings habits and results are also demonstrated
Finally, housing and debt ratios are explained.
"Families are assisted in ide.jpgying "how much home" the family can afford using current and future ratios, by ide.jpgying financing sources and major home buying decisions. Persons who successfully complete the Home Buyer Counseling Program will be offered direct assistance in buying a home," Geter said.
Past presenters for Homebuyer Education sessions include representatives from Primerica Financial Services of Columbia, Consumer Credit Counseling Service of Columbia, South Carolina State Housing Finance and Development Authority and South Carolina Bank and Trust.
"Claflin University is passionate about its community involvement," President Henry N. Tisdale said. "Our students are actively engaged in community service, having logged more than 15,000 hours last semester alone. We are on the President's Higher Education Community Service Honor Roll, recognizing institutions of higher learning that support exemplary student community service and service-learning programs. The work the CUCDC is doing with potential homebuyers is commensurate with our overall character."
The next Homebuyer Education sessions will begin Thursday, April 10, from 6 p.m. to 9 p.m. Participants for each session are preselected. For more information on future sessions, call the Claflin University Community Development Corporation at 803-535-5093.
