Most people know that it is a good idea to seek professional help when there is a problem. If you are in serious debt or have accounts in collections, there are professionals who can help you climb out of the hole. But, given my work in the banking industry, I was well aware that a housing counselor can assist you with much more, like budgeting, debt-management or general advice. Their assistance goes beyond addressing a crisis, they can help you prevent one. You can simply call a HUD-certified housing counselor or make an appointment to meet in-person at their office.
I have attended dozens of events with housing counselors over the years. As the idea of owning a home became more realistic, I felt like I needed a second opinion, aside from the lender and the countless mortgage calculators I had used on the internet (all of which gave me slightly different outcomes). I needed a real-life human being to tell me homeownership was possible. Truthfully, this was one of the several times throughout the process where I was expecting someone to tell me, "No, you can't buy a house," but she didn't. Over the hour that we sat together, I asked her tons of questions. Here are a few:
- What are the steps for buying a home?
- When should I do a pre-approval with a lender?
- Do pre-approvals expire?
- What do you recommend for a savings amount?
- How do student loans affect my credit?
- How does credit card debt affect my credit?
- What is a debt to income ratio and how do I calculate it? What is the appropriate range?
- How do I know if I am getting a good interest rate?
- Is my credit score different from what a loan officer will use to determine my eligibility?
- What are "points" when it comes to interest rates?
She walked me through creating a realistic budget, setting attainable goals and gave me advice on how to deal with my remaining debt. Together, we were able to decide that I could apply for a home loan, even though I was still paying my student loans off, but I would have to eliminate all other credit card debt before taking the plunge. She was also able to walk me through the homebuying process and particularly when buying a new construction.
It is important to write out several questions you want answered when you go to a housing counselor. You do not want to walk away until you feel more prepared to handle this decision. What professional advice have you sought during the homebuying process? Did you just rely on your agent or did you look for second opinions?
