Why You Should LOVE
Mortgage and Home Buying Education
During a recent face-to-face mortgage application with first-time home buyers, it soon became abundantly clear to me that ...
The couple simply had no clue.
As we talked together further, this also became obvious ...
Beyond the time we'd spent together in an earlier phone conversation (and subsequent follow-up email), they'd not given one moment of further thought or effort to their financing. Zero. Nadda. Zilch.
But this couple professed over and over that they "really wanted to buy a house". They said adamantly they "didn't want to rent any longer". But they'd done nothing to help make that happen. There'd been no planning or preparation performed on their part. They had arrived at our appointment together with little of the paperwork I'd requested from them.
This isn't the first time this has happened with clients. But it was perhaps one of the most blatant.
What am I missing? With so much riding on the line and their full participation required to reach their goals, these homebuyers needed to exhibit some measure of inquisitiveness and interest in their financing process. Yet, they didn't. Not even about the basics ... the "nuts and bolts" of financing a home.
Now as it turns out, this particular couple will utilize a mortgage program that requires a "Homeownership Education Certificate" (Fannie Mae HomeReady Facts) be completed prior to the closing of their loan. I personally believe that's a blessing in disguise for them ... and would be for other Borrower(s) as well.
This couple's hand is being forced to do the "best" thing in their own interest. They'll have to learn the all-important "nuts and bolts" of financing in order to earn their required Certificate. "Nuts and bolts" everyone should know prior to securing financing and becoming a homeowner.
What are some of those important "nuts and bolts" I refer to? It's important for all hopeful home buyers and borrowers to know and understand about:
- Credit - Credit Scores - Credit Repair
- Money Management
- Home Affordability
- How to Choose a Real Estate Agent
- What to Include in an Offer to Buy
- Mortgage Process - Application, Processing, Closing
- Mortgage Principal and Interest
- Real Estate Taxes
- Homeowners Insurance (Flood Insurance)
- Owning a Home
- Home Inspections
- Protecting your Investment after the Closing of your Mortgage
- More ...
But what about those borrowers not facing mandatory instruction requirements? Those not having to earn a Homeownership Education Certificate? The need for education is still certainly there. But what opportunity exists?
It's a fact: Many Mortgage Originators are more than happy to spend time with their clients educating and informing them while preparing and pursuing their financing. It's what you do to best guide and assist your clients.
Some LO's (and agents) hold seminars for this very reason. I know this to be true, as this includes me. But even when and where home buying and financing seminars are available, consumers that could benefit often don't take advantage of the opportunity.
So what remedies exist to address this problem?
To answer that, I did some quick research regarding the educational opportunities that currently exist via the Mortgage Industry. It quickly became clear to me ... I'm not the only one with concerns regarding this topic.
In fact, Fannie Mae has been busy conducting research on the educational needs of home buyers ... and the availability and status of educational opportunities as they currently exist ... for some time now. (To learn more about what Fannie Mae has discovered, click HERE).
These are just some of Fannie Mae's findings:
- Homeownership Education is in dire need of a makeover
- Opportunities for education do exist, but they're typically offered to those already in the process of buying or financing
- Most consumers taking part in the study stated they had "little or no awareness" of pre-purchase education opportunities (beyond what was mandatory within certain mortgage programs)
- Consumers expressed a desire for Loan Officers to be more active in, and the primary "coordinator" of, their Homeownership Education
- "Emotional barriers" (such as stress, etc.) while in the process of seeking a mortgage, contribute to consumers avoiding educational opportunities. (Addressing educational needs prior to entering the process would relieve this.)
- Professionals and consumers alike suggested that classes be a requirement for all Mortgage Pre-Qualification
- The education needs to take place far earlier in the home buying/financing process than currently typical
- After taken, educational opportunities were viewed as beneficial
- Online and in-person options for education should be offered in order to meet all consumers' preferences and needs
- Whether taken online or in-person, homebuyers valued "personalized" instruction and the ability to interact with their educator
Because if we truly hope to educate, assist, and protect our home buying and financing clients on an industry-wide and individual professional basis, we must get more serious about educating them. The sooner the better.
Consumers, professionals, and industry will be better off as a result ...
* Looking for someone to answer your financing questions? Hoping to discover the financing options that exist for you? Contact me! I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:
Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the
greater Chicagoland region, including:
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena,
Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook,
Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County,
and elsewhere within IL & WI.
Your Referrals are Always Appreciated and Welcomed!