Studying Homebuying to Enhance GED Skills
Spring 1998
by Sarah Emilio
Head Start Summer Institute,
Community Action Program, Haverhill, MA
Homebuying and GED Studies
In our class, we used the homebuying curriculum published by the Fannie Mae Foundation not only as a guide to homeownership but as a component of the GED mathematics, reading & comprehension curricula.
As an introduction to homebuying, I asked the students to think about what their dream house would look like and to describe it in their journals. Next, for homework over the long weekend, I asked the students to read Opening the Door to a Home of Your Own and summarize what they had read in their journals for discussion on Monday. I told them not to worry if they did not understand everything in the readings. The class was simply to review and summarize the materials for the following Thursday when Jim Wilde from the Merrimack Valley Housing Partnership would clarify many of the technical terms they encountered in their reading.
On Monday, we asked how many students had stopped at the convenience store along the way to school that morning. Amazingly, 80% of the students had visited the convenience store and had spent an average of $4.50. Next, the group analyzed the cost of stopping at the convenience store daily over an eight-week period of time. The class was astonished by the thought that they would spent $180 each during the duration of the program! Having realized the amount of money that would be wasted by buying coffee or muffins on the way to school, the group brainstormed how to save money. Everyone quickly realized that if they had bought the items at the grocery market and packed a lunch daily, the cost over an eight-week period would drop by 80%.
This exercise sparked a conversation about our spending habits and how we might curb them but still maintain a fulfilling quality of life. As an exercise, the students were asked to create a spreadsheet of daily expenses for the next week. Each time they had spent any amount of money (including penny candy! -- each penny adds up!), they were to write the amount spent and the item bought on the spreadsheet. The group would reconvene in a week's time to discuss what was bought and how one might cut back on expenses.
Getting Down to Homebuying
Jim Wilde presented the Project Genesis Homebuyer's Training, a very informative three-hour training. The group was able to inundate Jim with many questions that they had about homebuying. The following is a list of the topics discussed during the training.
1. The People You'll Work With
2. Steps to Purchasing a Home
3. What Do You Want to Own
4. Sources of Information For Doing Your Homework
5. Down Payment Assistance Programs (the class really liked to hear about this segment of the training).
6. How Much Assistance Can You Get? How to Apply
7. Make An Offer
8. Purchase & Sale Agreement
9. There Are Many Types of Lenders
10. There Are Many types of Mortgages
11. Closing Costs
12. Other Expenses to be Paid in Advance: Pre-Paids
13. Monthly Payment for 360 Months
Students received a beautiful packet of information, including "A Guide to Homeownership" that everyone was encouraged to read, but not required because we still had much to cover in the homebuying curriculum. We used the worksheets contained in the back of the book as a way to organize our budget.
Asking the Right Questions
The Right Question Project (RQP) is an organization that focuses on developing educational strategies to help people get involved in issues that concern them. Specifically, the program prepares people to more effectively advocate for themselves and participate in decision-making processes that affect them and heir families. Gloria Lopez of the Right Question Project of Cambridge gave a self-empowerment/advocacy presentation to our group. The students worked together to name information they need, formulate questions, reflect on the knowledge they have and need to gain, and design advocacy and accountability plans. The following are the steps they took to become more active participants in the issues that affect their lives:
1. What do I/we need to be aware of?
2. What do I/we need to pay attention to?
3. What information do I/we need to gather?
4. What do I/we need to monitor?
5. What can I/we do to take action?
With this RQP presentation fresh in their minds, the class was well prepared to ask pertinent questions on material presented by the following speaker on credit, mortgages and lending.
Homebuying from the Lender's Chair
As a follow-up and a review of Jim Wilde's presentation, Marie Lee from Family Bank gave an overview of home buying from the lender's point of view on the following Wednesday. Included in the presentation was the following:
Credit
1. Alternative
2. Unsecured
3. Credit Scoring
4. Rebuilding Credit
Following the presentation, the group filled out and mailed a request for a Consumer Credit Report so as to make sure that what is reported is accurate.
Savings
1. Checking
2. Savings
3. CD's
4. Mutual Funds
5. IRA's and 401-K's
Marie was quite impressed with the students' clear and focused questions. After the presentation, the class was given the booklet, Choosing the Mortgage that's Right for You and again was encouraged to read the contents in their spare time.