Are you having a difficult time managing your mortgage? What about buying a home, or dealing with possible foreclosure? There is no doubt that owning a home can be a difficult goal to reach and even more difficult to maintain. This is why you might find certain tools useful that can help you out. There are many options to look through. One of these options would be a housing counselor that the HUD approves. Unfortunately, not many people know how much a housing counselor can help with their housing situation.
Who are Housing Counselors?
Housing counselors get specialized training and receive approval and sponsorship from the Department of Housing and Urban Development (HUD). These credible counselors are able to support people in many ways including:
- Knowing more about their financial situation
- Getting guidance on foreclosure prevention
- Managing the relationship with their mortgage servicer
- Offering support on mortgages
The best part about these housing counselors is that you can find them across the United States.
What are The Different Types of Services From Counselors?
There are many concerns that housing counselors can support individuals with. Some popular types of counseling that these housing counselors can offer include the following:
- Counseling on the Pre-Purchase Process
- FHA Loan Counseling
- Counseling on VA Loans and USDA Loans
- Reverse Mortgage Counseling
- Counseling on Foreclosure
Counseling on the Pre-Purchase Process
Buying a home is not always easy, especially if it is your first time buying a home, if you are insecure about your finances, and so on. This is why this type of counseling is super popular! Buying a home can be complicated. That would include the process of applying, the amount of paperwork, picking a lender, choosing the right mortgage, and so on. Housing counselors can offer information and guidance on the process, support opportunities, and more.
FHA Loan Counseling
There are some circumstances where a standard mortgage might not be suitable for you. Rather, you can find a government-backed loan more useful. This is where the Federal Housing Administration (FHA) loan comes into play. One of these loan requirements is getting housing counseling. Counselors can help future homeowners learn more about their debt, financial situation, and more. When you finish the obligated counseling, you can get this kind of loan, if you qualify.
Counseling on VA Loans and USDA Loans
The Department of Veterans Affairs (VA) is aware that veterans struggle with housing concerns, specifically homelessness. According to the VA website, the homelessness rate among veterans is lowering. Unfortunately, there are still veterans who are experiencing homelessness. That is why VA housing counseling is important! Housing counselors can offer information to support some of the financial struggles that veterans go through. Furthermore, as a veteran who wants to receive housing counseling, you should contact the number 877-827-3702 for toll-free assistance.
As for USDA loans, the United States Department of Agriculture (USDA) offers a loan program called the Guaranteed Rural Housing Program. Applicants might need to receive housing counseling to receive approval for these loans. This depends on the person, so just remember that!
Reverse Mortgage Counseling
A lot of qualifying elderly people can benefit from a reverse mortgage. These kinds of mortgages offer seniors the chance to access their home’s equity. A lot of people use this kind of mortgage as a way to add to their income. However, the federal government does not back all reverse mortgages. Currently, there is only one government-backed reverse mortgage, which is the Home Equity Conversion Mortgage (HECM). If you want to get a HECM, then you should contact a housing counselor before receiving this type of mortgage. Counselors can offer more information on reverse mortgages, alternative options, eligibility requirements, and other things.
Counseling on Foreclosure
Typically, homeowners do their best to prevent foreclosure no matter what. A lot of homeowners think that foreclosure will not happen to them, when that’s not necessarily the case! Homeowners who need assistance will receive support from housing counselors to prevent foreclosure. If you are facing an issue with managing your monthly payments, then you should get help as soon as possible.
Guarantees are Not Part of The Job
You should keep in mind that a housing counselor can only offer guidance on the information you present. They cannot make any guarantees, specifically if you are facing possible foreclosure. If that applies to you, then you should also reach out to an attorney to tick all your boxes.
Additionally, you should also contact HUD-approved counselors. You shouldn’t go to any agency because you will offer these counselors a lot of personal details that should not be public knowledge.
The Process of Housing Counseling
Everything has a process, including housing counseling. To get support from housing counselors, you should follow three steps:
- First, look for counselors that the HUD has approved. You should do your research on the specific counselor before you make a decision on which one you want.
- Second, contact the counselor you want to work with.
- Third, present information about your current situation. The housing counselor will ask questions about your finances. Also, you should expect the possibility of offering documents, too! When you give the counselor all of your personal details, they can help you with information and possible solutions to your housing issues.
Looking for a Housing Counselor
The HUD offers several ways for someone to reach out to these housing counselors. A person can:
- Find Them Online: The department’s housing counseling home page offers a way to search for counselors through a map or through a zip code.
- Make a Call: There are different phone numbers to call. You can try to call the toll-free HUD housing counseling agency locator at 800-569-4287. Also, you can call the HOPE Hotline at 888-995-HOPE (4673).
- Use the App Store: On Apple’s App Store, there is an app called the HUD Resource Locator. This app can offer contact information and locations for local HUD sources, which includes agencies for housing counseling.
No matter how you look for options, you should take the time to explore as many as you can. Once you are done looking and making a list of housing counselors, you should look into the list of those you chose. All HUD-approved counselors are reliable and certified, but some counselors have experience in specific areas. For instance, if you are interested in avoiding foreclosure, then you should consider a foreclosure counselor and not a pre-purchase counselor. This is also why exploring your options is important!
What Happens When You Contact A Housing Counselor?
It might be a little overwhelming at the start of a conversation with a housing counselor, especially if it’s your first time. Generally, the housing counselor will ask you questions about your housing loan, terms of your mortgage, and payment background. They will also need documents about your finances for you to present. All of this information will give the housing counselor a better picture of your current situation and how to help you!
Documents You Should Gather
The housing counselor will need financial details about you for them to actually help you. Make sure that you have documents like the ones below in case they ask for them:
- Tax returns
- Pay stubs and bank statements
- A list of the expenses you spend per month
- If you need advice on foreclosure, then you should present when and how much your last mortgage payment was with you
The housing counselor needs this kind of information to help you out. If they do not have this information, they won’t be able to offer you realistic assistance!
How Much Does It Cost to Get Help from Housing Counselors?
By law, housing counselors must ask for reasonable fees in exchange for their services. Furthermore, the agency should meet specific criteria that the HUD placed:
- Hidden fees for extra services are not allowed – the client must be notified of any additional costs that were not a part of the quote that they received.
- Each fee must equal the service they provide.
- If someone presents evidence that they cannot pay the fee, then the agency must offer them free housing counseling.
- Furthermore, before you contact a counselor, you should have all the necessary documents available for a user session.
There are a lot of aspects to housing counseling, which is why you might have a lot of questions.
Do I Need to Meet Eligibility Conditions to Get Housing Counseling?
An advantage to housing counseling is that you do not need to meet any eligibility or screening conditions. Housing counseling is not only available for those who have limited income or need financial relief. Anyone can receive housing counseling! There are only specific regulations that come with housing counseling. That would include offering free foreclosure prevention counseling or homeless prevention counseling. However, there are some agencies that offer free services for other aspects too!
Can Housing Counseling Actually Help?
Yes! There is a lot of data that prove the effectiveness of housing counseling, like:
- Counseling on Foreclosure Prevention: Those that received this kind of counseling are 2.83 times more likely to have their loan modified. Also, they are 70% more likely to manage their payments after facing foreclosure.
- Counseling on Pre-Purchase of a Home: Those that get this kind of counseling are 42% less likely to go through foreclosure.
- Assistance on Financial Literacy: Those that can get this kind of assistance can increase their savings by an average of $362.
Can Someone Prepare for Housing Counseling?
Definitely! You can gather the necessary documents and prepare questions for the housing counselor. Make sure you focus on the areas you need the most assistance in and write them down. Additionally, you can find it useful when you figure out why you need housing counseling. Maybe, you need help to work on your financial literacy, prevent foreclosure, manage your mortgage properly, buy a home, and so on. Regardless of why you should figure it out so that you can take the most advantage of the counseling session.
Does Your Financial Literacy Need Improving?
If you want to improve your financial literacy, then housing counseling is one way to do that! This is why a lot of people look for housing counseling, but that’s not the only way to improve your financial literacy. You can work on your financial literacy by yourself. According to the TIAA Institute, people generally don’t know about financial risk. Working on your financial literacy can significantly improve your financial situation! There are different ways, other than housing counseling, that can help you with your financial literacy like:
- Financial Podcasts and Financial Newsletters
- Learning More About Your Finances In-Depth
Financial Podcasts and Financial Newsletters
If reading isn’t your thing, then you should consider financial podcasts instead. There are people who talk on podcasts and manage to present information in a way that is easy to understand. However, if reading is your thing, then you can subscribe to financial newsletters. There are a lot of sources that can give you the information you want; you just need to look for the one you can easily understand.
Learning More About Your Finances In-Depth
If you want to know more about your finances, then you should at least have basic information about your money. That would include how much you earn and how much you spend every month. Once you know how much goes into your account and compare it to how much you spend each month, you will be able to know what extra money you have to use.
Housing counseling offers great support to those who are working on their finances. This support opportunity is not only for the needy and has been effective in helping many different people! There are many kinds of housing counseling options that offer support. If you want to contact a housing counselor, you should explore available options in your area. You should also do more research on those counselors you chose to make sure you get the right kind of help. When you choose a counselor, you should gather the documents you might need and make a list of questions on your main focus. Remember the reason why you want housing counseling, too. This kind of support could help you out in more ways than one!