Homeownership can be a rewarding milestone, and it’s one local experts say should not be taken lightly.

In the Twin Ports, there are several financial counseling services through Lutheran Social Service, One Roof Community Housing, and Community Action Duluth. Experts at these organizations said starting with your finances is the No. 1 step.

“Anyone can buy a home. That doesn’t mean everyone should,” said Ashley Hagelin.

She provides student loan, debt, homebuyer and foreclosure prevention counseling at LSS, and it all overlaps. Sometimes, the barrier to purchasing a home is student loan debt; or, during a talk about student loans, a client may discuss their goal of owning a home, she said.

A meeting with a financial adviser can help identify what to do right now to resolve credit issues.

“We want to be able to position them to bring that (credit) score up to be in a position to buy,” said Marjorie Klimek, LSS certified consumer credit counselor.

Fall is a good time for homebuyer education. If your goal is to purchase sooner than later, there’s time to figure out where you’re at and to resolve possible issues before the busy buying season in spring, said Jackie Kemp, education and counseling director at One Roof Community Housing.

One Roof is a nonprofit that provides free counseling, and Home Stretch workshops that run through the home-buying process in its entirety.

Amanda Peterson, One Roof homebuyer education and counselor coordinator, said she works with folks from all income levels. During a one-on-one, she will pull a mortgage score credit report. Then, there’s a review of bills, any collection activity, goals, savings and spending.

With financial services, it’s about giving tips to healthy homeownership, helping build a budget around owning a home, and setting money aside for repairs. When you’re renting, you’re not responsible for the hot water heater. If you own, that’s all on you, Hagelin said. So setting aside money beforehand for repairs makes for more options in the future.

As a practice step before buying a house, local experts recommended breaking down an affordable monthly mortgage payment and to start paying that to yourself. So, if your rent is $500 and you want a $900 mortgage, start saving $400 a month.

One Roof also offers reduced price homes through their Community Land Trust program.

In those transactions, the homeowner purchases the house, One Roof owns the land, which the homeowner leases for a fee. When they move, the land trust home is sold to another income-qualified buyer at a below-market price.

Counseling is open to anyone regardless of their interest in a One Roof program, Kemp said.

As a whole, money isn’t “something that’s commonly talked about in life. Nobody’s preparing anybody for mortgage approval, it’s not included in school,” Peterson said. Financial counseling helps build confidence, familiarizes clients with what to expect and offers tips to choosing a mortgage that works.

Peterson works with a lot of first-generation homebuyers, and she said it’s a “pretty big privilege to get to walk that journey with them.”

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Community Action Duluth is a HUD-certified agency for homeownership counseling and education. As a coach, Porsha Cline helps people every step of the way: saving, loan selection, finding a Realtor, closing. She also teaches Common Cents, a free class on money management and homebuyer education.

The classes show how to track spending, develop a habit of savings, understanding a credit profile and how that applies to a lender. Debt can be a barrier as well as a credit score that’s less than 640, said Karen St. George, director of programs at CAD.

People liken buying a home to buying a car, Cline said. When they see what goes into it, they can feel overwhelmed.

The process is a lot easier than it seems, but: “Homeownership is the largest purchase that you will ever make in your lifetime, so it’s not something to be taken lightly. It’s a serious decision, and in our current economy … it isn’t always the right choice. They need to know that if they want to do that, there is a path forward.”

The steps to buying a house start with a class, she said. Through that you earn the certificate needed to purchase through certain programs. You’ll be able to determine how much you can afford on a home and create a plan before visiting a lender or a Realtor.

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Duluth's housing market is fast-paced and challenging, said Doug Kman, Realtor with Coldwell Banker East West Realty and president of Lake Superior Area Realtors.

Sellers are in multiple offer situations, buyers are left with low inventory and a competitive atmosphere. Terms such as inspections, seller paid closing costs, repairs, are just as important as price, he said by email.

In approaching a first home, buyers should consider the resale potential. Kman said good questions to consider are: Will the home serve your needs long-term? Are prices in the location your purchasing rising, steady, falling? Is there potential and space for improvements to the property that will assist with future resale value and expediency?

A Realtor’s job is to represent clients, and he suggested interviewing and selecting the professionals you will work with as far as an agent or home lender.

There are many looking for their first home and many downsizing who are looking at the same price point, said Tim Fischer. The home mortgage originator at U.S. Bank helps advise current or future homeowners on the purchase or refinance of a home.

“Having a pre-approved letter can be a game-changer,” he said by email.

A common misconception Fischer sees is regarding employment history. “Many believe they need a minimum of two years on the job after any career move, yet in many cases, future homebuyers can be eligible without much of, if any, waiting period,” he said.

Also, it used to be the case, but buyers no longer need a 20% down payment. There are programs that allow for 3-3.5%, some even 0% down.

Other falsities are that some people think they make too much to qualify for some programs, or that if they’re denied by a mortgage lender, that’ll always be the case.

“Demystifying the credit process is really empowering for folks, and more often than not, people don’t know what’s on their credit report, and they often think it’s worse than it is,” Peterson said.

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When you’re ready to start house hunting, prioritize your wants, needs, life goals and family planning. Discuss if you’re buying with someone, so you’re on the same page, and be realistic about what’s feasible within your budget. Avoid spending your maximum pre-approval amount. It leaves wiggle room and more space to save money.

Kemp encouraged working face-to-face with local professionals, lenders, insurance agencies, “especially for first-time homebuyers.” There’s the benefit of them knowing our programs and our geographical region. There’s a lot of misinformation out there, so find qualified people and don’t be afraid to ask questions, Peterson said.

There’s significantly more education readily available now then there has been in the past, added Klimek. After she bought her house, they found backwards insulation, which took years to address. So, she encouraged getting a home inspection. Sometimes, issues take a long time to rise to the surface, but when they do, don’t cut corners in home improvements, Hagelin said.

Other tips were to work with a Realtor because they have a good sense of a reasonable purchase price. An appraisal is a buyer expense whether you buy the home or not.

It takes time and some elements are within your control like working on your credit and doubling savings, Peterson said. Some of it is out of your control, so it’s important to do what you can ahead of time — and don’t get discouraged.

Homeownership is the American dream, and it comes with responsibility, Fischer said.

Steps to buying a home

  • Start with finances, check credit score, homebuyer education, budgets and savings to see what you can afford
  • Select a lender and a loan
  • Get preapproved
  • Find a Realtor, search homes
  • Make an offer, negotiate
  • Get the home inspected
  • Get an appraisal
  • Complete final mortgage application
  • Schedule closing



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