Marcia's Blog

Why homebuyers must take charge of their own financial education

There were many lessons learned during the foreclosure fiasco.

There were many lessons learned during the foreclosure fiasco. Unfortunately, one lesson that was lost was the need for homebuyers to be prepared and informed in order to succeed as homeowners.

It’s a shame that few lenders, Realtors and even governments appear to really be sold on the need for educating homebuyers. Many in the mortgage industry are focused exclusively on numbers – the number of loans closed, the number of applications in the pipeline, and the amount of money made as a result of a deal. 

With the real estate market on the upswing, everybody is in a rush to make money.  That’s why smart consumers must be in a rush to protect themselves.

Why financial education matters

One of the biggest regrets I hear homeowners say is that they didn’t know more about the homebuying process when they were purchasing their homes. Many people say they would not have agreed to their current mortgage terms if they had known better. Some consumers who lost their homes during the foreclosure crisis did so because they agreed to take out loans that they could not afford. Had these consumers been educated about the homebuying process before they started looking for a home, they would have recognized a bad deal for what it was, and they could have avoided taking out a bad loan. Homebuyers who understand the homebuying process can also take steps so they have a higher credit score and can qualify for a lower interest rate, which could save them thousands of dollars over the lifetime of their loan.

Not only is education important before you buy a home, but it is crucial to help you to stay in your home.  If you are a homeowner, do you have money put aside for unexpected home repairs? If you get laid off, would you be able to pay your mortgage? Do you know what to do if you don’t have money to pay your mortgage? Could you be saving money and building more wealth by refinancing to a lower interest rate? If you understand how to improve your credit and manage your money, you not only will qualify for the best mortgage terms, but you will know how to recognize bad information when you see it, and you can protect yourself from unscrupulous people in the mortgage industry.

How to take charge of your financial education

So how can you make sure that you are an informed consumer and that you are empowered to be a successful homeowner?
---You can take a class on money management, homebuying basics and other financial topics.
---You can read books and magazines that offer money advice and teach about financial topics.
---You can meet with a financial counselor at a HUD-approved counseling agency to discuss your personal financial challenges and create a plan to ensure your financial success.
---You can start a money club where you and your friends support each other in making wise financial choices.

The key to success is information. You have the power to create a successful homebuying experience.

Do you feel confident in your knowledge about credit and money?