COLUMBUS, Ohio -- Historically low mortgage rates and reasonable home prices make today's realty market seem like it should be a buyer's dream.
But the process can become a nightmare for potential buyers who are unprepared for the substantive decisions they must make before finalizing what could be the biggest investment of their lives.
That's where Ohio State University Extension's new Homebuyer's Guide comes in. The 65-page publication (Bulletin 946) walks would-be buyers through the home-buying process, from examining the pros and cons of homeownership, to learning about different types of mortgages, to reviewing the basics of home maintenance and options if circumstances change and it becomes difficult to make mortgage payments. The guide is available from OSU Extension offices statewide and from Extension's eStore at http://estore.osu-extension.org for $9.75 plus shipping, or $5 to download it as a PDF.
We designed the Homebuyer's Guide as a standalone publication that a person could just pick up and go with," said Nancy Stehulak, Extension educator in family and consumer sciences, and the guide's primary author. "It's easy to read, and you can go through it yourself. But it also can be used as part of a curriculum for homebuyer education programs." The guide complies with the National Industry Standards for Homeownership Education and Counseling.
Stehulak and Extension colleagues Lois Clark, Nancy Recker, Cora French Robinson, Kathy Michelich and Margaret Jenkins wrote the guide to assist both first-time buyers and anyone who wants to know more about their rights and responsibilities as a homebuyer. The goal is to make the home-buying process a success: Research shows that people who participate in pre-purchase education have a decreased risk of default or foreclosure.
"Buying a home today is very different than it was 10 years ago," said Stehulak, who has offered home-buying classes as part of her Extension duties for more than a decade. "For example, it's a bigger trick today to compare costs and fees from lenders and understand the total cost of different loans. In the Homebuyer's Guide, one of the worksheets helps a buyer compare loans from different institutions to figure out which one you want to live with for the next 30 years."
The publication also helps potential buyers understand amortization schedules, which have often puzzled homebuyers Stehulak has worked with over the years.
"Understanding how your loan evolves from the beginning, when you're paying mostly interest and very little principal, to the end, when you're paying mostly principal, will help you understand how much of the home you own over time -- how much equity you've built up," Stehulak said. "That's especially important for people who might be interested in home equity lines of credit. Often people don't understand what that can do to their equity, and what might happen if they lose a job."
The guide contains a "Do the Numbers" worksheet that helps readers figure out if they are carrying too much debt to take on a mortgage payment.
The publication also contains several case studies illustrating decisions people must make during the homebuying process. The case studies don't offer solutions, but assist readers in determining the elements that need to be considered for their own situation.
"People are always looking for the 'right' answer, but with homebuying, there is no right answer that works for everyone," Stehulak said.
The guide includes chapters on:
- Owning a Home, including advantages and disadvantages of homeownership.
- Money for Housing, including examining net worth and understanding your credit report.
- Finding a Home and Making an Offer, including prioritizing features you want in a home, finding a real estate agent and common contingency clauses.
- Selecting a Mortgage, including qualifying for a mortgage, shopping for a mortgage, and understanding loan terms and the loan process.
- Closing the Deal, including preparing for closing and costs associated with closing.
- Success as a Homeowner, including preventing mortgage delinquency and default and managing your property.
"One of the jobs of OSU Extension is to help Ohioans make wise financial decisions," Stehulak said. "We hope this Homebuyer's Guide goes a long way toward that goal for anyone who is thinking about buying a home."
To purchase the guide at OSU Extension's eStore, go to http://go.osu.edu/hbguide.