Pre-Purchase Homebuyer Education: First Steps

Pre-purchase homebuyer education helps you get to closingBuying a home is a one of the most serious and important financial decisions most consumers make in a lifetime. Your home is your family’s haven , as well as being the biggest asset in your portfolio. A good purchase can set you up for financial success, while the wrong mortgage can put your credit and your financial future at risk. It’s important to have a thorough understanding of the process to help you make the right choices ? especially for first time homebuyers! This helps avoid problems and minimizes stress.

If you’re getting ready to purchase a new home and you have questions, our HUD-approved housing counselors can provide the information you need to make informed decisions as you move forward. Call Consolidated Credit at 1-800-435-2261 to speak with a HUD-certified housing counselor for free.

Getting Ready to Buy a Home

If you’re thinking of buying a home, you should start by thinking about your situation. Purchasing a home before you are ready can put your financial future at risk. You can seriously damage your credit, face foreclosure and even end up in bankruptcy if you buy more home than you can afford.

Being able to answer the following questions will make the process easier as you start to look for your new home:

After you answer these questions, you can make a “To Do” list and start doing casual research. Talk to friends and family, drive through neighborhoods, and look in the “Homes” section of the newspaper.

Is it the Right Time for You to Buy a Home?

This question involves taking a careful assessment of your financially stability.

To help find out if you’re ready to buy, ask yourself the following questions:

If you can answer “yes” to these questions, you are probably ready to buy a home.

How Much Can You Afford to Pay for a Monthly Mortgage Payment?

When you buy a home, the lender considers your debt-to-income ratio, which is a comparison of your income versus housing expenses and other non-housing obligations. Mortgage lenders always calculate your debt-to-income ratio based on gross (pre-tax) income. Non-housing expenses include long-term debts, such as car or student loan payments, alimony or child support, as well as open lines of credit, such as your credit cards.

According to the FHA, your monthly mortgage payments should not exceed more than 29% of your gross income. In the world of mortgage lending, your mortgage payment combined with non-housing obligations should not exceed more than 41% of your income, although we recommend for consumers to keep their debt-to-income ratio below 36%. It’s important to note that your lender will also consider the cash you have available for a down payment and closing costs, as well as your credit history when determining your maximum loan amount.

Determine Your Housing Needs before You Start Your Search

Your home should fit way you live, with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities. For example, while you may be able to afford a 6-bedroom house, if you only have three people in your family do you really need three extra rooms of space? Or will your family get much use out of a pool? If not, buying a home with a pool is going to be a big unnecessary expense.

Every household has different needs when it comes to a home, so you should really think about what you want before you start to look. Put together a list of needs and wants in your new home, prioritizing the “want” list so you know the hierarchy of what you want to look for. Anything on the “need” list should be considered a deal-breaker if a home you’re considering doesn’t have that feature.

Selecting the Right Real Estate Agent

It’s not necessary to work with a real estate agent when you buy a home, but it can make the process a lot easier – especially if you are a first time homebuyer. If you prefer to work with an agent, start by asking family and friends if they can recommend someone that they’ve worked with before. If you can’t find agents that way, look online through independent third party review websites and social media sites. Compile a list of several agents based on what you find and talk to each before you choose the agent you want to use.

You want an agent who listens well and understands your needs, and whose judgment you trust. The ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

All Consolidated Credit counselors are certified personal financial counselors (CFC) We've helped 5 million people get out of debt! Call us today and see what we can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

The National Industry Standards for Homeownership Education and Counseling are a set of guidelines for quality homeownership and counseling services. Industry professionals who adopt these standards can be trusted to provide consistent, high quality advice.
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Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

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Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Consolidated Credit is proud to be an ANAB accredited member. Accreditation by a recognized and respected body such as ANAB ensures the impartiality and competence of our company. To see what we can do for you, give us a call.

U.S. Department of Housing and Urban Development - HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Consolidated Credit is proud to be a member of HUD and also part of the Hope Now Alliance.

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