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Making educated decisions is first step toward successful home ownership

-Editor's note: This is the second in a series of articles put together by the Park Rapids H.O.M.E. (Home Ownership Made Easy) group outlining the steps in buying a home. The articles will appear in the Park Rapids Enterprise over the next severa...

-Editor's note: This is the second in a series of articles put together by the Park Rapids H.O.M.E. (Home Ownership Made Easy) group outlining the steps in buying a home. The articles will appear in the Park Rapids Enterprise over the next several weeks.

Last week we provided a general description of the seven steps toward successful home ownership.

This week we will discuss the first step - making an educated decision about whether or not home ownership is right for you.

It's not for everyone

Owning a home is not for everyone. Many households are renters by choice because they enjoy the flexibility that renting offers. Some people don't want to change their spending habits in order to make monthly payments on a home. Others are not ready to take on the responsibilities of maintaining their own property. For those people renting a home is a great option.

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For many people, however, home ownership is a high priority. Owning a home of your own is often referred to as "the American Dream."

Enroll in home buyer class

The first step toward successful home ownership is to make an educated decision on if, and when, it makes sense to purchase a home.

The dream can quickly turn to a nightmare for those who purchase a home without appreciating the advantages and disadvantages as well as the benefits and responsibilities.

If you dream of owning your own home, it can become a reality if you set realistic goals, get sound advice, plan carefully and clearly understand the responsibilities. As with any new endeavor, the more you know, the better able you will be to reach your goals.

Enrolling in a home buyer education class is a good start for any first-time homebuyer trying to determine if they are ready for home ownership.

The home buying process is complex, and education will provide you with the tools and knowledge to successfully navigate the process and make a wise investment in what probably will be the largest and most important purchase you will ever make.

Selecting the best program

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The key is finding a quality education program that will provide unbiased coverage of such topics as:

-Knowing your financial situation

-Credit and credit issues

-The types of home ownership

-The key members of your home buying team

-The role of the lender

-Understanding the loan closing process

-Your legal rights and responsibilities as a home owner

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Home Stretch is a Minnesota pre-purchase education program designed to take the mystery out of the home-buying process and prepare first-time homebuyers to make the important choices related to homeownership. It also covers all of the topics listed above.

In addition, some mortgage lenders require borrowers to complete an approved homebuyer education course in order to qualify for affordable mortgage loans.

Home Stretch has been approved by many mortgage investors to meet this requirement.

Completing a Home Stretch class may also save you money on private mortgage insurance premiums if that is a requirement of your mortgage.

There will be a Home Stretch class from 6-9 p.m. Oct. 24 and 8:30 a.m. to 1:30 p.m. Oct. 25 at Northwoods Bank in Park Rapids. Registration information can be obtained from Melody at Hubbard County Housing and Redevelopment Authority.

Three additional classes will be held in 2009. The dates for those classes are Feb. 13-14, April 17-18 and Sept. 18-19.

By participating in home ownership education you will gather enough information to answer the following questions:

-Are you sure you want to buy a home?

-Is your income and employment considered stable (at least 2 years)?

-How much can you realistically afford to pay for housing?

-Do you have an established credit history or records of payment to previous landlords and utility companies?

-Do you pay your bills on time, or before the due date?

-Do you have enough money saved for a down payment, closing costs and cash reserves?

-Is your debt low enough not to limit your ability to qualify for a mortgage?

-Are you ready to care for and maintain a home?

Have you been prequalified by a lender, so that you know how much you can borrow based on your income and debt?

Have you looked into the benefits of numerous financing programs that are available to first-time home buyers and low and moderate income families?

If you answered "yes" to the majority of questions listed above, you are probably near-ready to buy a home and will need to spend less time working through the next step in the purchase process.

If you answered "no" to the majority of questions listed above, you probably need a longer time to get ready to buy and will need to spend more time working through the next step. Do not be discouraged! There are educational and counseling organizations that can help you overcome obstacles and achieve homeownership. It will take some time, energy and work, but in the end, you will be rewarded with a home of your own.

Next week we will focus on the importance of establishing and maintaining a good credit history.

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