What is Homebuyer Education, and Why Do You Need It?

Homebuyer education, also called housing or pre-purchase counseling, helps homebuyers prepare for the process of purchasing a home and the challenges of being a new homeowner. Some loan programs, like the Maryland Mortgage Program (MMP), require homebuyer education courses.

Recently, the Maryland Mortgage Program has made updates to their homebuyer education requirements to simplify and standardize the process. Effective for MMP reservations dated on or after October 1, 2018, the following will be implemented:

  • Homebuyer education may be taken online or in person, individually or with a group, as long as the class has been approved by HUD, Fannie Mae or Freddie Mac.
  • For Baltimore City and Baltimore County, the above flexibility will apply, but the homebuyer education must be completed prior to signing the sales contract.

The homebuying process is complex and if you are a first-time homebuyer (someone who has never owned a home, or has not owned a primary residence in the last 3 years) it can be a little confusing. This is why homebuyer education courses are so important. They help new homebuyers understand the process and what to anticipate as a homeowner. Below are some of the topics you can expect to learn about during your pre-purchase counseling.

  • Process of purchasing a home- You will be given an overview of the entire homebuying process, from application to closing, exploring each step more in-depth.
  • Budgeting- Buying a home will be one of the biggest purchases you will make, so knowing how to afford your mortgage and budget for extra expenses will be covered.
  • Shopping for a mortgage- Different types of home loans will be reviewed and what you will need for pre-approval. Your credit score, and ways to raise and improve it, will also be covered as a topic since this can help determine which type of mortgage and rate you qualify for.
  • How to maintain a home- Upkeep and regular maintenance of your home lowers the risk of major problems down the road; it is essential to know how to maintain your home and the budget you should keep for maintenance.

Even if you aren’t a first-time homebuyer, taking a homebuyer education course can be beneficial, since the mortgage industry is always changing and new programs are emerging. Additional one-on-one homebuyer counseling is available, and it is sometimes required, depending on the state/county you are purchasing in or loan program you are using. It’s better to have more information than not enough, especially when it comes to buying a home. Please reach out to any one of our loan officers if you have questions.

Buying a Home in a Gig Economy

A gig economy refers to a workplace in which temporary or flexible jobs are the norm, such as freelance or contract work, as opposed to permanent, full-time jobs.  There is no fixed salary, so income may be irregular and sometimes it may not even be documented.  Future income is also unpredictable while working freelance or contract jobs.  This may lead to some complexity if you are trying to obtain a mortgage, but it’s still possible.

So how do you get a mortgage when you don’t have a standard, full-time job?

First thing’s first; it’s time to get organized.  Start by getting your paperwork together.  You will need to provide copies of signed federal tax returns from the last two years and a year-to-date profit and loss statement.  You will also need a list of your debts (monthly payments such as car loans, credit card debt and/or student loans) and assets (checking and savings accounts, stocks, bonds and other securities).  Two years’ worth of documented income will also be reviewed.  Additional paperwork will also be required; the loan officer will keep you in the loop of what is needed.

Keep adding to your down payment.  Having a larger down payment will lower your loan-to-value ratio, or LTV.  The LTV is the relationship between the amount of the mortgage loan and the value of the property. The lower this ratio is (the larger amount you put for a down payment), the less risk you are as a borrower to repay your loan.

Pay down your debt.  Work to eliminate all of your debt, or get your balance as close to zero as possible.  Having a lower amount of debt will lower your debt-to-income ratio, or DTI.  Your DTI measures your ability to manage monthly payments and repay debts.  The lower your DTI is, the less risk you are as a borrower to repay your loan.  Repaying all of your debts, on time, is also a key factor in keeping your credit score high and healthy, which is important when obtaining a home loan.

Contact one of our loan officers to see how to get the ball rolling.  Having an informational conversation will educate you on what to expect during the home buying process and what type of paperwork will be required.  Having this initial conversation does not require you to apply for a mortgage, but it will give you the insight needed when you are ready to purchase a home.

How to Win in a Competitive Market

It’s a seller’s market in the mortgage world these days. That means there are more buyers looking to purchase homes than there are homes for sale, giving way to some strong competition. Properties may be going off of the market more quickly since there is higher interest, and they may be selling for more than the asking price. So how are you supposed to beat out the competition? Take these tips into consideration the next time you find yourself in a seller’s market.

Be proactive.

Homes may go off the market lightning fast in a seller’s market, so be ready to act fast. Research houses in your preferred neighborhood a few months before you are ready to buy to get a feel for the market. This will help you determine what the typical price range is and how quickly homes are sold. When you are ready to purchase and have found a home, if possible, try and schedule a tour before the weekend open house. This will give you an advantage over other buyers to put in an offer before they even see the house.

Get pre-approved.

When buying in a competitive market, you should always be as prepared as possible. First, start by getting pre-approved. Getting pre-approved shows the seller you are serious and ready to buy. Having your finances in order indicates you have the means to purchase the house and won’t need to back out of the contract for financial reasons. Your pre-approval letter will show how much you can afford and what type of mortgage is best for you.

Make a strong offer.

Bringing your strongest offer to the table may save time by eliminating a negotiation period or bidding war. A seller may not want to deal with the hassles of negotiating, so if you present a solid offer, it may have a better chance of being accepted right away. Also, bringing your strongest offer will save you time, and probably money, by taking you out of a bidding war. Presenting an offer that is much lower than the asking price could deter the seller and they will take your offer right off the table. If you have done your due diligence, you will know the best offer to make.

Get personal.

Writing an additional letter to the seller, along with your offer letter, may help you stand out against other buyers. If you plan on making the house your forever home, write a formal letter to the seller explaining how you envision your family in the home. Maybe you see yourself cooking breakfast for your family every morning in the kitchen, or describe how you can see your kids playing in the backyard on sunny days. Adding a personal touch to your offer may give you an advantage over your competition.

It’s a tough market out there right now, but with the right mindset and game plan, you will be enjoying your new house in no time!

If you are ready to get started, contact one of our loan officers.

What Happens at Closing

You’ve made it to the final step in the home buying process, closing. After all of the settlement documents have been signed and funds distributed, ownership of the property will transfer and the house is finally yours! Here’s what you can expect in the days leading up to your closing.

Prior to Closing

At least 3 days prior to closing, you will receive your initial closing disclosure (CD). This document shows your closing costs, terms of the loan and how much money you need to bring to closing. Review this document carefully to make sure all the fees are correct. If you have questions or fees do not look correct, don’t be afraid to reach out to your loan officer. You should already have the date and time for settlement, but it won’t hurt to confirm with your settlement agent. If you are taking time off of work, give yourself at least a couple of hours for settlement. Your settlement agent should have also discussed wiring closing funds to them.

Closing Day

What to Bring
If you have wired your money to the title company, bring the proof of wire transfer and also your checkbook in case there are any last minute changes to the CD. Be sure to bring your ID, driver’s license or passport.

Who Attends
There are a few people who may attend closing. Your real estate agent and title insurance company/settlement agent will be there to guide you through closing and make sure everything runs smoothly. Your loan officer may attend if he or she is able. Sometimes the seller and their agent will attend, but often times the seller will sign their documents prior or at a different location, which is totally fine!

Signing Documents
Your hand is going to get a workout today! There are many different documents to sign at closing. Make sure your name shows the correct spelling and the property address is correct on all docs. If there are any mistakes, let your settlement agent know so they can be corrected. A few of the most important documents you are going to sign are the CD, deed, deed of trust (DOT) and note. The CD shows your closing costs, terms and cash to close. The deed transfers ownership of the property from the seller to you. The deed of trust (mortgage) pledges the property as security for repayment of the note. The note is a promise to repay your mortgage and it has the amount owed, interest rate, dates due and length of repayment. Your closing package may consist of 30-40+ documents.

Getting the Key
Once all of the documents have been reviewed and signed, you get the keys and the house is yours. Time to start enjoying your new home!

Breaking Down Homeownership Programs

Buying a home is a big, if not the biggest, purchase you are going to make. You may have heard there are a lot of costs when it comes to buying, and hearing the word “down payment” may strike a small sense of panic, but it doesn’t have to! There are many programs offered to help home buyers afford their dream house.

State Housing Finance Agencies offer state specific programs to residents who need help purchasing a home. These programs can be in the form of a loan or grant, and assist with closing costs, down payment, and even student debt relief.

A few of our most popular homeownership programs are geared for home buyers looking to purchase in the state of Maryland and Washington DC. Take a look below to see just a few options that are available.

DC Open Doors– DC Open Doors is a program offered by the DC Housing Finance Agency (DCHFA) and provides borrowers with options to purchase in the District of Columbia. Qualified first time homebuyers and repeat buyers are eligible for the program. DC Open Doors provides:

  • Down payment assistance loans (DPAL) available to qualified borrowers in the full amount of your required minimum down payment, requiring less up-front money out of your pocket.
  • DPAL is a 0% interest rate, 5-year forgivable loan, meaning you only have to repay the loan if you sell, refinance or no longer occupy the property within the first 5 years.

DC Home Purchase Assistance Program (HPAP) – Available to first time homebuyers providing assistance with down payment and closing costs. HPAP provides:

  • Down payment assistance up to $80,000 based on household income.
  • Closing costs assistance for 4% of the home purchase price or $4,000 (whichever is less).

Maryland Mortgage Program (MMP) – The Maryland Mortgage Program is offered by the Maryland Department of Housing and Community Development and provides borrowers with program options to purchase in the state of Maryland. The 3 main loan program types available through MMP are:

  • Grant Assist: Provides up-front financing to assist borrowers with down payment and closing costs. Grants do not need to be repaid.
    • Special Assistance Grant Program: Grant of $1,500 or $2,500 (depending on the Area Median Income). May be combined with other MMP conventional loans.
    • Flex 4% Grant: Grant of 4% of the first mortgage. May not be combined with other MMP programs.
  • Loan Assist: Provides up-front financing to assist borrowers with down payment and closing costs.
    • 1st Time Advantage 3% Assistance: No-interest second loan equaling 3% of the first mortgage. No payments are due on the second loan until the first mortgage is paid off, refinanced or transferred.
    • SmartBuy 2.0: Helps qualifying homebuyers pay off student debt during the purchase of their home.
  • Rate Assist: Provides low interest rate options for homebuyers which lowers the monthly payments.
    • Maryland Preferred Rate: Offered on 30-year, fixed rate loans. Cannot be combined with closing cost or down payment assistance.

There are also a number of other state specific agencies, such as Virginia Housing Development Authority (VHDA), Rhode Island Housing (RIH), and MassHousing, to name a few. It’s always a good idea to know all of your options, and which one is best before you take the plunge. All of our loan officers have a wealth of knowledge on each of these programs and will be able to provide you with additional information. Be sure to contact one of them today to find your best option!


*Conditions and guidelines vary depending on the agency

When to Consider a Renovation Loan

Sometimes you find a great house, but it needs a little bit of TLC. That is where a renovation loan comes in to the picture. A renovation loan, or 203(k), makes the process easier by allowing you to combine your renovation costs into your mortgage, helping you fund your home improvements. That means one loan and one closing, and a lot less stress on you!

There are a few different types of renovation loans offered that help fund minor repairs to major rehabilitation. Take a look at the overview below and decide which one will help you complete your dream home.

Standard 203(k) Mortgage Program: Use this program if you are looking to do large scale renovations, remodeling and repairs, and when a 203(k) consultant is required.

  • No maximum repair cost amount, minimum $5,000 in eligible improvements required.
  • Renovating/Remodeling: converting a 1-family structure to a 2-4 family structure, alterations such as repair or replacement of structural damage, constructing a garage, creating accessibility for persons with disabilities.
  • Repairs: fixing HVAC systems, decks, patios, porches, well and/or septic systems.
  • Energy conservation improvements: adding insulation, replacing windows and doors, install energy efficient lighting.
  • Landscaping.
  • May not be used for luxury items that do not become a permanent part of the property: swimming pools and hot tubs, bath houses, outdoor fireplaces, gazebos.
  • Minimum down payment of 3.5% for purchases, 2.25% for rate/term refinances.
  • Owner-occupied property only.

Limited 203k Mortgage Program: This program may only be used for minor remodeling and non-structural repairs. A 203(k) consultant is not required, but may be used for the project.

  • Maximum repair cost $35,000.
  • Improve house function and modernization: installing a new refrigerator, cooktop, oven, dishwasher, and/or washer/dryer, installing smoke detectors.
  • Connecting to public water and sewage systems.
  • Installing or repairing fences, walkways, and driveways, repairing old or damaged siding, gutters and downspouts.
  • May not be used for luxury items that do not become a permanent part of the property: swimming pools and hot tubs, bath houses, outdoor fireplaces, gazebos.
  • Repairs and improvements are completed in 6 months or less.
  • Minimum down payment of 3.5% for purchases, 2.25% for rate/term refinances.
  • Owner-occupied property only.

Fannie Mae HomeStyle® Renovation Mortgage: There are no required improvements or restrictions on the types of renovations allowed.

  • No minimum dollar amount required for improvements, however, a HUD-approved consultant must be used when repairs and renovations exceed $15,000.
  • May be used to complete final work on a newly built home when the home is at least 90% complete, remaining improvements must be related to completing non-structural items such as installation of buyer-selected items (flooring, cabinets, kitchen appliances, fixtures, and trim, etc.).
  • May not be used for complete tear-down and reconstruction.
  • May be used to construct outdoor buildings and structures such as swimming pools, garages, recreation rooms and accessory units.
  • Repairs and improvements are completed in 6 months or less.
  • Minimum down payment is dependent upon transaction type (3-25% required).


Already own your home but need to make some updates and repairs? We also offer renovation loans for refinances.


Contact a First Home Loan Officer in your area to discuss which option best fits your needs.



HomeStyle® is a registered trademark of Fannie Mae.

New Maryland Mortgage Program – 1st Time Advantage

The Maryland Mortgage Program (MMP) is offered by the Maryland Department of Housing and Community Development and provides borrowers with program options to purchase in the State of Maryland.  Currently, the MMP offers 30-year, fixed-interest rate mortgages while making down payment and closing cost assistance available to eligible homebuyers.  These assistance options make purchasing a home more affordable either in the form of a grant, or as a deferred, no-interest loan.

As of May 3, 2018, the MMP announced a new program – MMP 1st Time Advantage – that provides the lowest Maryland Mortgage Program interest rate to Maryland first-time homebuyers.  Additional features and requirements of this program are:

  • Down payment and closing cost assistance not available from MMP but assistance funds from external sources are allowed
  • Cannot be combined with other MMP products (including Partner Match, Homefront, HomeCredit or Refinance products)
  • Available to first-time homebuyers only (unless purchasing in targeted area or an honorably discharged veteran)
  • Homebuyer education required
  • Standard MMP eligibility applies

To learn more about the advantages of this program and other MMP programs, or how to get started, contact one of our Maryland licensed Loan Officers.

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