Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 5, 1993 TAG: 9302050218
SECTION: CURRENT PAGE: NRV-1 EDITION: NEW RIVER VALLEY
SOURCE: BECKY HEPLER STAFF WRITER
DATELINE: CHRISTIANSBURG LENGTH: Long
HOW TO BUY A HOME
When you hear the word "points," do you think of a sports event or betting rather than a real estate loan?Do you know how to calculate a debt ratio?
Do you think buying a home involves more mumbo-jumbo than a voodoo ceremony?
If even one of those statements is true for you, consider the Home Buyer's Program, being offered by Virginia Mountain Housing Inc. and NationsBank.
It's a series of seminars on how to buy a house, designed to help low and moderate-income families buy a home.
The seminars will be held on three successive Tuesday nights, starting this Tuesday, 7-9:15 p.m., at St. Paul's United Methodist Church in Christiansburg.
Even though the seminars are aimed at people with low to moderate incomes, they're open to all. The sessions will cover the entire home-buying experience, explaining all the terms, processes and people involved. Everyone who finishes the seminar will be awarded a certificate that can save significant amounts on a home mortgage loan from NationsBank.
"I think a lot of people are intimidated by the home-buying process because they don't know what's involved," said Cynthia Maxwell, program manager of Virginia Mountain Housing's single-family residences unit.
"They think they can't afford it; they think they won't qualify. Even if they might get a loan, they don't always understand budgeting and then they lose their home. This seminar is trying to deal with that."
Rus Wadia, community investment coordinator at NationsBank, said the program is the bank's way of educating consumers about bank products and services and a way to reach the low- and moderate-income communities that might not seek out these services.
The first seminar will look at renting vs. buying and deciding who should buy. It will detail the steps of buying a home.
It also will introduce all the people involved in the process - the real estate agent, the lender, the housing finance agency, the inspector, the appraiser, the lawyer, the mortgage insurer, the loan servicer and the mortgage investor - and explain what they do.
Participants will study what counts in deciding who qualifies for a loan. "There will be a homework assignment," said Maxwell. "They will have to determine, after looking at their own circumstances, if they qualify for a loan and how much."
The second seminar will look at what is in a mortgage payment and at the various costs associated with buying a home, such as down payments and closing costs. The participants will examine how to make a loan application.
At this seminar, Kathy Smith of the Roanoke Credit Marketing and Management Association's Radford office will talk about credit reports. Each participant will receive a free credit report.
This seminar will touch on how to shop for a home and how to check out the major systems of a house to be sure it is worth buying.
The final seminar will go into the closing process, owner responsibility and maintenance, and budgeting to avoid foreclosure.
The certificate essentially allows the participant to buy a house with a personal investment of 5 percent of its cost. The bank will waive certain fees and qualifications and will help arrange unsecured loans for the portions of the down payment and closing costs not covered by the 5 percent.
Even though the people finishing the course are investing less than most home buyers, Wadia said, bank officials are willing to make loans for them. "An educated customer is a much better risk," he said.
The bank has done these programs by itself, but has found them to be more successful when working in partnership with community groups and housing organizations, Wadia said. The bank works with TAP Housing in Roanoke, People Inc. in Abingdon and Virginia Mountain Housing Inc. in the New River Valley.
Virginia Mountain Housing has two successful loan programs that get low- and moderate-income people into homes, often new ones. Maxwell said it is possible for many people to qualify even when they thought they could not.
Pam Gatlin of the Blacksburg NationsBank said this is the second year for the Community Home Buying program. Last year's seminar had about 20 graduates, and Gatlin said a majority of them were acting on their certificates and preparing to buy a home.
One who did was Betsy Webb of Blacksburg. She had bought a home before, a town house, and was ready for a single-family residence. Her real estate agent suggested the class and she went, with great results.
"Buying a home is never easy, even if you have done it before," she said. "Everything they said was informative and really helpful. I would suggest it to anybody, even if you are only thinking about buying a home later. It's a great deal."
In addition to the Community Home Buying Program, the bank also offers a banking basics course, on how to get and manage a checking and savings account and how to qualify for and maintain credit; and a course on small-business loans for potential entrepreneurs.
"The focus for these classes is not sales but education," said Wadia. "That's what makes them so valuable to the community."