Home Buyer Counseling will address issues that may prevent or delay affordable mortgage financing, while offering specific steps to help the client achieve their goal of homeownership. The counseling also helps clients understand how to avoid potential problems that might jeopardize their ability to retain their home.
What to Expect
The session includes a complete review of the client’s current financial profile (including an analysis of the income, expenses, debt, and credit obligations). This review will cover the client’s current affordability for home ownership, and a personalized strategy for increasing savings for a down payment. Clients will see how credit plays a role in the home buying process and will learn how to bring their credit reports in sync with lender guidelines.
The Housing Specialist also reviews the debt-to-income requirements for various home buying programs, the types of loans and the pros and cons of each, and how to avoid predatory lending. The client can also expect to gain a familiarity with the terms and forms used in the mortgage industry.
HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.
How a HUD Certified Foreclosure Prevention Counselor Can Help You:
- Assess your mortgage situation
- Explain various workout options that may be available
- Provide budget counseling and develop a crisis budget to present to your lender
- Assist with submitting a request for a loan modification
- Facilitate with communication between you and your lender
- Help you understand your individual correspondence related to your mortgage
- Define mortgage terms and program guidelines
- Provide you with additional resources and referrals
Tips for Avoiding Foreclosure
Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?
- Don’t ignore the letters from your lender
- Contact your lender immediately
- Contact a HUD-approved housing counseling agency
- Toll FREE (800) 569-4287
- TTY (800) 877-8339
If you are unable to make your mortgage payment:
- Don’t ignore the problem.The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
- Contact your lender as soon as you realize that you have a problem. Lenders do not want your house. They have options to help borrowers through difficult financial times.
- Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
- Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
- Understand foreclosure prevention options. Valuable information about foreclosure prevention (also called loss mitigation) options can be found online.
- Contact a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) funds free or very low-cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender, if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
- Prioritize your spending. After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses–cable TV, memberships, entertainment–that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.
- Use your assets. Do you have assets–a second car, jewelry, a whole life insurance policy–that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
- Avoid foreclosure prevention companies. You don’t need to pay fees for foreclosure prevention help–use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.
- Don’t lose your house to foreclosure recovery scams! If any firm claims they can stop your foreclosure immediately and if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.
Rental counseling is offered to provide assistance in locating rental housing, help you understand lease agreements, inform about resources, and explain your rights as a tenant.
A counselor will help you find appropriate rental housing by:
- Review your credit history
- Review your rental history
- Explore subsidized and other housing options
- Advise about Security Deposit Assistance programs
If you become delinquent in your rent, a counselor will advise of your rights as a tenant. You will learn how to handle delinquency, understand the consequences of breaking a lease, eviction procedures, and be advised on possible legal remedies. You may also be advised about moving out of a rental property and having your security deposit returned.
Credit & Budget
There are a variety of credit and budget counseling programs for people looking to improve their own money management skills. Training is focused on providing practical, real world, education solutions that empower participants with the knowledge they need to make the right financial decisions.
Benefits of Financial Literacy Training
Credit and budget counseling has long-term benefits that directly impact our lives. Studies show that by receiving money management lessons people are more likely to save, invest, stay out of debt and have more money saved for retirement.
Besides the obvious benefits mentioned above, credit and budget counseling also impacts many other areas of our lives. As many are aware, money issues are the leading causes of: stress, relationship strain, unhealthy coping behaviors, divorce and reduces our productivity. All of which can affect our emotional state and impact those we care about most.
The subject of money is an emotional issue that reaches people on many different levels. Make sure the credit and budget counseling you chose is fun; it will help to sooth past financial regrets and keep you focused on your goals. A quality financial education program will help you understand the connection between your emotions and the decisions you make with your money.
Once you’ve successfully journeyed down the road of homeownership and found the home of the your dreams, post-purchase counseling is available to explain mortgage contracts, settlement documents, and more.
What To Expect
Post-purhase counseling is offered throughout Delaware to guide homeowners through the settlement process and empower them to make financially sound decisions.
- Budget and money management
- Mortgage refinancing
- Deal with home improvements
- Energy efficiency
- Recognize home equity scams