Dealing with owning a property can be confusing whether you are trying to buy a property, managing your existing mortgage, dealing with a foreclosure, etc. For this reason, laying out available tools and helpful options could really come in handy. Support from a HUD-approved housing counselor is one that can be particularly helpful for you. Most people, however, are unaware of how much a housing counselor can help them.
Understanding Housing Counselors
Housing counselors are individuals with advanced training who are approved and sponsored by the Department of Housing and Urban Development (HUD). These professional counselors can offer advice on preventing foreclosure, dealing with mortgage servicers, assisting with mortgage payments, and more. They can also help people understand their finances better. The cherry on top? They are accessible all over the country!
Services Provided by Counselors
Counselors that specialize in housing matters can support clients through a wide range of issues. These HUD-approved housing counselors often offer the following types of counseling:
- FHA Loan Counseling
- Pre-Purchase Counseling
- USDA Counseling
- VA Counseling
- Foreclosure Counseling
- Reverse Mortgage Counseling
FHA Loan Counseling
A traditional mortgage might not always be suitable for you. An option that might be more beneficial is a government-backed loan. The Federal Housing Administration (FHA) loan can be useful in this situation. Receiving housing counseling is a necessity for these loans. Homeowners can receive counseling to get a better grasp of their debt, finances, and other issues.
The process of buying a house is difficult. Dealing with it might be particularly stressful if it’s your first time buying a property, if you lack confidence in your financial situation, etc. Pre-purchase counseling is popular due to this reason. The process of purchasing a property is long and requires filling out many documents, choosing a lender, getting a mortgage with reasonable terms, and other steps. Counselors can give advice and information regarding this process, available support options, and other topics.
Guaranteed Rural Housing Program loans were created by the United States Department of Agriculture (USDA). To qualify for these loans, housing counseling might be necessary. Remember, it depends on the individual to determine whether or not someone actually needs this counseling!
The Veterans Affairs Department (VA) is aware of housing challenges, including homelessness, that veterans may face. Fortunately, the VA website shows a decreasing rate of veteran homelessness. Veterans who are still without housing, though, are the focus of housing counseling. Those who are interested in receiving housing counseling assistance can contact this line at 877-827-3702 for toll-free assistance.
In all possible ways, homeowners try to prevent foreclosure. Many people believe they will never experience it, yet that is untrue. Millions are at risk of foreclosure! Foreclosure counseling may be helpful for this reason. Housing counselors will offer assistance to homeowners in need so they can work to try and prevent foreclosure.
Reverse Mortgage Counseling
Seniors that qualify can receive the support of a reverse mortgage. A reverse mortgage allows qualifying seniors to make use of their home equity. People often choose this mortgage if they are trying to get additional support for their income in different ways. There are a variety of different types of reverse mortgages, some of which are government-backed.
In fact, the government only supports one reverse mortgage program, which is the Home Equity Conversion Mortgage (HECM). Individuals who are looking to receive HECM are advised to reach out to a housing counselor before receiving this mortgage. The reason why housing counselors are helpful in this situation is that they are skilled enough to provide you with knowledge about reverse mortgages, other options, criteria of eligibility, support, and other matters!
No Guarantees Can Be Made by Counselors
Keep in mind that a housing counselor can only offer guidance based on the details you submit. They can’t make any promises, especially if you might be facing foreclosure. To make sure all of your bases are covered in that situation, you should also get in touch with an attorney.
Always make sure you are only contacting counselors who have been approved by the HUD. You shouldn’t pick any random agency because you’ll be giving them access to a lot of critical personal information that you shouldn’t expose to any individual.
The Process of Housing Counseling
Every process has its own steps! There are three steps you can take to gain housing counseling and support:
- Find HUD-approved counselors first. Before choosing a counselor, be sure to do some research on them.
- Next, contact the counselor. You can get in touch with your HUD-approved housing counselor once you’ve chosen one.
- Lastly, give them details. To be able to help you, they will ask about your financial situation. You might have to present proof! They will then provide information and effective solutions after they have all the details.
Finding Housing Counselors
The HUD offers a variety of options for a person to get in touch with a housing counselor who is HUD approved. A person can:
- Look it up on the internet: People can use a map or a zip code to search for counselors on the department’s housing counseling home page.
- : You can get in touch with a couple different numbers. You can start by using the 800-569-4287 toll-free HUD housing counseling agency locator. You can also call the HOPE Hotline at (888) 995-HOPE as another option (4673).
- Try the Apple App Store: On Apple’s App Store, there is a program called the HUD Resource Locator. This app offers location and contact details for nearby HUD resources, such as housing counseling agencies!
It is essential to take the time to look for options, regardless of how you look them up. Although all HUD-approved counselors are reliable and legit, some have particular areas of specialty. A counselor who specializes in budgeting, for example, would not be as useful as one who focuses on reverse mortgages. Knowing more about the counselors you’ve selected is necessary for this reason.
What to Prepare For If You Contact a Housing Counselor
Beginning a point of contact with a housing counselor can be difficult, especially if you’ve never done it before. A housing counselor will likely ask you questions about your home loan, mortgage terms, and payment history. They’ll probably also ask for proof of your financial status. The housing counselor can better understand how to help you with your situation with the help of all these details.
Which Paperwork Should You Get Ready?
To fully help you, a housing counselor will need financial information from you. Make sure you keep the following paperwork on hand:
- Pay stubs and tax returns
- Statements from the bank
- A breakdown of monthly costs
- Have your last mortgage payment date and amount ready (depending on the type of housing counseling you want)
To help you in the process, a counselor will require a thorough understanding of your financial status. They won’t be able to help you and determine how much you can afford to pay without such information.
The Cost of Housing Counseling
Housing counselors are allowed by law to bill clients for their services at fair rates. The agency must, however, follow HUD requirements:
- Counselors are not allowed to add extra charges for services they consider unnecessary without first telling the client that it was not previously included in the budget.
- The fees must be fair compared to the service provided.
- If a person confirms that they are unable to pay the fee, the agency is required to offer counseling at no cost to that person.
Make sure you have all the paperwork required for a good session with the counselor before you meet with them.
There are many elements to housing counseling, which can raise many questions.
Do Housing Counseling Eligibility Requirements Exist?
There aren’t any eligibility or screening requirements, which is one of the best things about housing counseling. It is not only for those with limited pay or those who are in need of assistance. Housing counseling is valuable to all!
However, the only specific rule that housing counseling has includes not charging fees for foreclosure prevention counseling or homeless prevention counseling. Fees for additional services might not be required though because every agency is different.
Do People Benefit from Housing Counseling?
Yes! Numerous studies demonstrate the benefits of housing counseling:
- Individuals who get pre-purchase housing counseling are 42% less likely to experience foreclosure
- People who receive foreclosure prevention counseling have a 2.83 times higher chance of receiving a loan modification and a 70% higher chance of taking back control of their payments after facing foreclosure
- Individuals who receive financial literacy assistance experience an average $362 increase in their savings
Does Housing Counseling Have a Preparation Process?
Yes! It’s helpful to gather your papers and make a list of your questions. Write down whatever you need to learn about the topics you want to concentrate on specifically. Finding out why you need housing counseling might be helpful to begin with. It doesn’t matter if your goal is to just generally increase your financial literacy, try to prevent foreclosure, manage your mortgage better, or receive support when purchasing a home. Just be sure you are aware of your motives so that you may benefit fully from the counseling you receive.
How to Become More Financially Literate
A smart method to increase your financial literacy is through housing counseling. However, you might also benefit from developing your personal financial literacy. When it comes to financial literacy, individuals are least educated about issues related to financial risk, according to the TIAA Institute. Your situation can be greatly helped by raising your financial literacy! You can meet this objective in a few more ways besides housing counseling:
- Listen to Podcasts About Finances
- Register for Financial Newsletters
- Become More Educated About Your Finances
Listen to Podcasts About Finances
A great option for improving your financial literacy is by listening to podcasts about finances. Podcast speakers have a gift for delivering information in a way that listeners can understand easily.
Register for Financial Newsletters
If you enjoy reading, registering for a financial newsletter can be effective. You just need to choose the one you like out of the many information sources that are accessible.
Become More Educated About Your Finances
You should at the very least have a basic knowledge of money to properly understand your finances. Your monthly costs as well as your income are included. A proper budget can help you easily understand what you are making versus what you are spending each month.
People who want to increase their finances should take advantage of housing counseling. It has been proven that this support works to benefit individuals and is not just beneficial to those in need. There are several different sorts of housing counseling that might be helpful. To make the most of the assistance you receive, be sure to do considerable additional research on the housing counselor you are interested in. Prepare your documents and a list of questions about the topics you wish to concentrate on once you have chosen a counselor. Remember your reasons for looking for housing counseling as well. You might be surprised at how much this help can improve your situation!