ACCC explains what every consumer should consider before purchasing a home
Boston, MA – May 10, 2017
Buying a home can be a complicated and intimidating process, especially for first-time home buyers. With the right research and preparation, however, the process can be manageable and less stressful. Perhaps most important, home buyers should decide ahead of time what they can afford and prepare for a long-term financial commitment.
“Homeownership is one of the most important life investments a person can make,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “Buying a home requires a lot of time, research and financial planning. Fortunately there are a lot of resources consumers can access to make the process easier, such as pre-purchase home buyer education courses. These classes teach home buyers what to expect and help prepare them for this long-term commitment.”
According to the 2017 annual Profile of Home Buyers and Sellers, the largest share of home buyers (34 percent) are 36 years and younger (Millennials), followed by Generation X (28 percent), Younger Baby Boomers (16 percent) and Older Baby Boomers (14 percent). Forty-six percent of these buyers reported having an average of $25,000 in student loan debt, while only 27 percent of buyers 37 to 51 had student loan debt.
American Consumer Credit Counseling offers necessary advice for potential homebuyers:
- Check & improve credit – It is important to check your credit report with all three credit reporting agencies to ensure there is no erroneous information on individual credit reports. Consumers should focus on making their credit score as strong as possible. With a score of 760 or higher, consumers can qualify for the lowest interest rates. Anything below can still qualify, but the interest rates will be higher.
- Take a pre-purchase homebuyer education class – Homebuyer education classes save consumers time and stress. Offered both online and in person, these classes provide a thorough background of home buying advice and information, including different types of loans that may be available. Online courses, such as MassHousing and Framework offered by ACCC, are user friendly and self-paced. The MassHousing course fulfills the requirement for MassHousing loans as well as other home loans. For those outside of Massachusetts, Framework qualifies for most local and national products. Some programs also offer financial incentives for completing the course.
- Know your budget – Once you have decided to buy, take a look at your budget to see if there is anything you can live without or cut back on. It is important that consumers know their limits when it comes to purchasing a house. Be sure to factor in all the expenses that come with owning a home, such as property taxes, insurance, potential HOA fees, maintenance and other expenses. Consumers can assess their finances by using the How Much House Can I Afford calculator.
- Manage Debt – Pay down any outstanding debt including credit cards or current loans, such as a car loan. Paying down current debt can help prepare consumers for the financial responsibility they are about to endure with homeownership.
- Save – The more money consumers are able to put down towards their mortgage loan, the more attractive they are to lenders. If a consumer is able to put down more than 20 percent, they will not have to pay private mortgage insurance.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit https://www.consumercredit.com/debt-resources-tools/