One Small Step
December 3, 2018
When most people think about becoming a homeowner, all they see is that final picture: Keys in hand, closing the freshly-painted front door behind them.
But there is a lot of work that goes into becoming a homeowner. One of the most important first steps is to become informed about the mortgaging process. Another is learning how to manage your money. At CHWC, community members are able to complete these important first steps for free.
On Thursday, November 15, at 6 pm, community members gathered in a conference room at CHWC’s office looking for one thing: answers to their money management questions. They were able to sign up for the free Financial Management Class via CHWC’s homeownership portal. The workshop is designed to prepare attendees to meet mortgage pre-approval requirements, but every participant brings different goals and experiences to the class. Denise Baker, CHWC’s Homeownership Manager, and Sean Wright, a loan mortgage officer with MegaStar Financial, cover a variety of topics: why it’s important to work with a realtor, how to start a savings account on a tight budget, how to handle insurmountable late payments, and how to build credit.
Both presenters also take time to explain their potential role in the participants’ journeys to homeownership and provide personal examples—Denise shares her experiences with applying for a mortgage on her own home, and Sean tells a story about how someone close to him was affected by bad credit. In the opening minutes of the session, Denise asks, “How many of you already have home financing?”
No hands go up. Then she asks, “What is your goal?”
One woman raises her hand: “I want to purchase a home.”
Other participants nod in agreement. Denise then asks if anyone knows what their credit scores are. Two participants nod. From here, they start a discussion about the details of a mortgage and the various loan products. Is a 20 percent down payment required? How do you find the best lender?
Sean suggests participants interview loan officers at the outset of working with them. “Make sure your loan officer is an adviser,” he warns, “and not just a salesperson.”
Throughout the session, Denise repeatedly emphasizes how personal responsibility and working toward a personally defined goal is necessary to financial management. “Find something that works for you,” she advises. “You have to determine […] what it is that you could do differently that could save you some money.”
Sean encourages participants not to make a down payment without having a “pad” of extra funds left over. “The last thing you want to do,” he cautions, “is be ecstatic that you’ve purchased this brand new home, and next thing you know, something happens and you need that $1,000.”
After the financial management workshop, every participant’s financial path will look different. Some clients will need to work towards building their credit over a period of time (it takes at least six months for consistent payments to correct an ailing credit score). Denise will work with clients on everything from researching lenders that fit clients’ needs to referring clients out to credit-building agencies. Once they’ve built credit and stockpiled enough in savings and assets, clients may eventually enroll in the Homebuyer Education Course, which will lead them through the first steps of gaining approval for a mortgage.
“A 30-year commitment is serious,” Denise advised participants at the end of the class. “So you want to make sure that you have everything in place.”
Homeownership can be a daunting set of calculations. This short animated video breaks it down for you.
Looking to start your own homeownership journey? CHWC is here to help. One small step you can take is to sign up for CHWC’s free Financial Management Class. We’ll help you answer your questions as you start what can seem like an overwhelming process. We have classes every month, alternating in English and Spanish.