Fulfilling the American dream of homeownership remains a strong aspiration for many people. With our network, NeighborWorks America supports this dream by providing a suite of services that create safe, sustainable pathways to homeownership. Homebuyer education and counseling give consumers the tools to make sound choices. And working with a housing counselor approved by the U.S. Department of Housing and Urban Development helps people understand the purchasing process.
A non-profit housing counselor can help guide people through what can seem a daunting, confusing process. They provide support in helping to improve a buyer’s credit score and get them on the right path towards homeownership. Consumers need to shop for a mortgage that best suits their needs. First-time homebuyers often don’t realize that they have choices and resources available to them, and doing their research can help them choose wisely. The price of failing to do so can have a huge impact. The average borrower could save $1,500 over the life of the loan by obtaining an extra rate quote when applying for a mortgage, according to a new report from Freddie Mac.
Additionally, housing counselors can help consumers increase their awareness about closing costs and down payment assistance programs. The fifth annual national homeownership survey from NeighborWorks America found that approximately 73 percent of all consumers say they are not aware of, or are unsure about, down payment assistance programs for middle-income homebuyers in their communities.
Research has shown that pre-purchase counseling helps reduce mortgage default. According to an independent evaluation of the NeighborWorks pre-purchase housing counseling programs by researchers Neil Mayer and Associates and Ken Temkin using Experian data, borrowers receiving NeighborWorks counseling were one-third less likely to fall 90 or more days behind on their mortgages in the first two years. These reductions in delinquencies were the same for first-time and repeat buyers.
The research demonstrates a significant return on investment for prospective homebuyers who receive pre-purchase counseling and education from NeighborWorks. In terms of avoiding the costs related to delinquency and foreclosure — and the impact of those costs on families, their communities and servicers — the benefits of NeighborWorks America are clear.
Karen Hoskins, Acting Vice President of National Homeownership Programs and lending, NeighborWorks America