Copyright America's Community Bankers Feb 2007| [Headnote] |
| As a service to their communities, many banks offer educational seminars for first-time home buyers. |
Buying a home is the most significant purchase most people will make in their lives, yet many do so with minimal understanding of how the process works. This sometimes causes them to make uninformed decisions that add expense and inconvenience. In an effort to help their customers navigate the home-buying waters more easily, many community banks now offer seminars to educate prospective home buyers.
Liberty Bank, Middletown, Conn., conducts free workshops all around the state, led by its community outreach and loan officers. Credit counselors also are on hand to answer questions about establishing or repairing credit; an attorney is present to explain the legal issues of homeownership.
Calvin Price, Liberty's vice president of community development, said participants are tutored in such topics as debt-to-income ratios, understanding credit, predatory lending, and the legal obligations of a mortgage. "Education is very important," he said. "Rarely do people make [any other] investment without understanding how that investment is being utilized and what it requires."
Liberty held 11 such seminars last year, according to Sue Murphy, vice president of corporate communications and community relations. In the course of four two-hour sessions, the seminars clarify the home-buying process not only for individuals ready to purchase a house, but also for individuals who might not be ready to buy for quite some time. "We try to help them figure out how to position themselves for the future," Murphy said.
"They may need to do some work on their credit. Most need to save some money."
HomeStreet Bank in Seattle designs its first-time home buyer classes to "help reduce the stress and confusion of buying a home." Taught by experienced professionals such as loan officers, home inspectors, insurance representatives, and real estate agents, the seminars provide in layman's language a comprehensive overview of the home-buying process.
"We also go to employer worksites and do brown-bag seminars so [prospective home buyers] can have access to lending professionals and ask questions in a safe environment," explained Leigh Bezezekoff, the programs senior outreach coordinator. "It's intimidating walking into a bank if you're not ready to buy, but you have questions."
Mortgage specialists from Third Federal Bank in Cleveland, conduct dozens of seminars a year for first-time home buyers. Bank spokesperson Cherie Skoczen says the most common questions participants have are about interest rates and closing costs. They also want to know whether they will be penalized if they pay the loan off early, and typically have a lot of questions about points. Skoczen said people want details about the servicing of their loan, too. "They're going to have it for 30 years," she said. "They want to know who they will be contacting all that time."
Among the issues instructors stress is the importance of preapproval, which participants may apply for at the end of the seminar. "So if they stay around," Skoczen said, "we can take their information and offer them pre-approval on the spot." The bank also gives each individual who completes the seminar a coupon for $100 or $250 (depending on the location) to be applied toward closing costs.
Certainly, that creates incentive to take out a mortgage with Third Federal, but Skoczen said that isn't the principal aim in offering the classes. "Our primary goal is for people to be educated when they buy a home so they don't get in over their heads," she said. "We want them to understand what they're doing. We want it to be easy for them."
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