Opening the door to home ownership

Nancy Edmonds Hanson

Owning your own home can be a dream come true … or something of a nightmare. The monthly homebuyer education classes offered by the Lakes and Prairies Community Action Partnership can make all the difference.

“Knowledge is power,” observes Lynne Isaakson. “Information is the key to to your first home.”

Lynne, an economic empowerment advocate at the agency, has been deeply involved in the education program for the past nine years. “Even just deciding whether or not to move forward can be a complicated process. We want to help families and individuals consider everything that’s involved in ownership, decide whether it’s a realistic option, and then understand how the next steps work.”

Lynne and lead advocate Molly Christenson rely on an education program developed by the Minnesota Home Ownership Center, a statewide program affiliated with the U.S. Department of Housing and Urban Development. Its mission: to promote successful home ownership, with an emphasis on serving those facing the greatest barriers to achieving that dream, including lower incomes and race.

“We gear our advocacy to lower- to moderate-income households and individuals who think they can’t afford to buy a home,” says Molly, who also works with financial freedom classes on building or repairing credit, budgeting, asset-building and self-sufficiency. “

But their classes are for everyone, they emphasize, regardless of income or even the state they call home. The eight hours of instruction are offered in two evening blocks once every month, with the next scheduled for March 14 and 16 at the CAP/LP offices at 891 Belsly Boulevard.

Interest in buying a home of one’s own remains high among those whom Molly and Lynne work with. Today’s housing market may make the prospect more challenging, with a slim supply of entry-level homes – Molly defines them as $200,000 or less – and rising interest rates.

“Rents are going up, too,” Lynne says, “and people compare that to mortgage payments. But it’s not comparing apples to apples. When you rent, your landlord is responsible for repairs and other costs. As an owner, those costs are going to increase what you’ll pay, along with taxes, insurance, maintenance and the rest. You have to be aware of that and budget for the big picture.”

The CAP/LP classes introduce students to all the steps to become a home owner, starting with the advantages and disadvantages of ownership. Among the pluses: pride of ownership, possible appreciation in value, tax benefits and stable housing costs. But then there are the minuses, starting with expenses first timers may not have considered – not only making the payments themselves, but putting together a down payment and paying substantial closing costs. Too, homes take time to sell when you move on, and foreclosure looms if payments can’t be met.

Budgeting is a big focus, not only in the home-buyer classes, but also in the “financial fitness” courses that Molly also offers. The housing classes address the importance of credit scores and how to build or repair a credit rating. They also go into the basics of qualifying for a mortgage loans and the varieties that may be available.

Next up are explanations of real estate titles, the closing process and what to expect from the title company. Finally, students learn all about mortgage payments and their components of principal, interest and escrow accounts.

Guest speakers share their expertise in everything from pre-qualifying for a loan and choosing a real estate agent to the importance of home inspection prior to inking an offer.

“We will never say that you should, or should not, buy a home,” Molly says. “Hearing a banker tell you the maximum amount that you qualify for can be very tempting to new home buyers, but spending to that limit may not be affordable when all the other costs come into the picture.

“We are unbiased. We have no financial interest in your decision or in persuading you to spend more,” she emphasizes. “Our goal is to help prepare you to be your own best advocate.”

Lynne adds, “The time to take this class isn’t necessarily when you’re actively looking for a house right now. In fact, most of the people who come to our classes aren’t ready to run out there and buy something.

“This is all about learning what to expect … getting your ducks in a row. Then when you finally are ready to find that first home, you can jump on it.”

For more information and to register for upcoming homebuyer classes, go to Information on financial fitness classes is also available on the site. Or call Lynne at 218-512-1500.

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