Not long ago, I met a couple in the process of buying their first home, a home that they would be able to share with four grandchildren in their care. They beamed as they described their new home as a place where each of their grandchildren would have his or her own bedroom and chattered about how the children would finally have a spot to pedal bikes and ramble through the sprinkler. They were visibly (and justifiably) proud.

As they shared their excitement with the group of other prospective homeowners in my company, their tone became reflective. It turns out that this couple had been renting the same house, a house with a basement prone to flooding and with poorly insulated walls, for more than 25 years. I can't say that I know or understand all the obstacles they faced on their path to homeownership, but through the course of their story, I learned at least two things that had played a role in keeping them renters. First, they had always assumed that homeownership was out of their reach. Second, they feared that they wouldn't be able to understand the home-buying process and this left them feeling stuck.

I've mentioned this before, but I believe a homebuyer education course is the answer to both of these hurdles. A course will outline what you need to know about homeownership, help you become budget- and credit-ready and familiarize you with those terms that you must absolutely understand. For example, you'll learn the difference between pre-qualification and pre-approval. The first involves a quick and relatively simple exchange with a loan officer.

To get pre-qualified, you answer a few questions from the loan officer about your income and debts. In return, you receive a calculation that can give you an idea of what a lender is willing to lend you. A pre-qualification can help ensure that you're looking for homes in the appropriate price range and can signal to a seller that you are serious about buying a home. It's important to keep in mind, however, that a pre-qualification from a loan officer is just an estimate and in no way a guarantee of the amount you can expect to borrow.

A credit approval, on the other hand, is when you complete an application to the lender, your credit is checked and all the information is verified. Your application is then submitted to an underwriter, who will ultimately decide whether you are approved for a loan. (Remember that a loan officer cannot approve loans, so herein is an important distinction between pre-qualification and pre-approval.) A pre-approval often can help you negotiate a better price with a seller and can give you an important advantage if a seller receives multiple offers on a property. A pre-approval isn't a loan guarantee, though, because your loan will still be subject to an acceptable appraisal.

Weaving through a tangle of terms is only one factor that often intimidates would-be homeowners. Too often, people believe that credit issues and the lack of a down payment will make homeownership out of the question for them. This simply isn't true. Thankfully, a homebuyer education class and down payment assistance programs can help make the dream of homeownership a reality. Consumer Credit Counseling Service offers a homebuyer program free on a monthly basis. For more information about classes, call 348-4550 or 1-800-568-6615.

Carey Denman is a writer and editor with Consumer Credit Counseling Service of the Black Hills and a part-time instructor of English. Contact her at 348-4550 or info@cccsbh.com.