Looking for help with your mortgage, buying a home, or a potential foreclosure? Homeownership can be difficult to achieve and maintain. That is why you may benefit from using the tools available to help you. There are plenty of options that you can consider! One that may be able to especially benefit you is the help from a HUD-approved housing counselor. However, many people don’t realize just how a housing counselor can improve their situation.

What is a Housing Counselor?

The Department of Housing and Urban Development (HUD) approves and sponsors housing counselors that have received special training. These certified counselors can help individuals get a better understanding of their finances, receive foreclosure prevention guidance, deal with their mortgage servicer, provide mortgage assistance, and more. To top it all off? They are available nationwide!

Types of Counseling Services

There are many different issues that housing counselors can help people with. Some common forms of counseling that these HUD-approved housing counselors provide include:

• Pre-Purchase Counseling
• FHA Loan Counseling
• VA Counseling
• USDA Counseling
• Reverse Mortgage Counseling
• Foreclosure Counseling

Pre-Purchase Counseling

The home-buying process isn’t easy. It can be especially scary to deal with if it’s your first time getting a home, if you don’t feel confident in your finances, etc. That is why pre-purchase counseling is popular! There is an extensive process that goes into buying a home that includes the application process, a lot of paperwork, choosing a lender, finding a mortgage with good terms, and more. Counselors can provide guidance and information about this process, assistance options, and more.

FHA Loan Counseling

Sometimes, a conventional mortgage may not be a good fit for you. Instead, you may benefit from a government-backed loan option. That is where the Federal Housing Administration (FHA) loan can help. A requirement of these loans includes receiving housing counseling. Counselors can help soon-to-be homeowners understand their debt, budget, and more. Once you have finished the mandatory counseling, then you can receive this type of loan (if eligible).

VA Counseling

The Department of Veterans Affairs (VA) understands that veterans deal with housing issues, especially homelessness. Luckily, the rate of homelessness among veterans has been decreasing, according to the VA website. However, there are still homeless veterans, which is where housing counseling comes into play. Housing counselors can provide the knowledge to ease some of the financial stress veterans may deal with. If you are a veteran that is interested in getting housing counseling assistance, you can call this number 877-827-3702 for toll-free help.

USDA Counseling

The United States Department of Agriculture (USDA) created Guaranteed Rural Housing Program loans. However, these loans may require housing counseling to be approved. It depends on the individual, so keep that in mind!

Reverse Mortgage Counseling

Eligible seniors can reap the benefits of a reverse mortgage. These mortgages provide seniors the opportunity to tap into the equity of their homes. Many people who choose to get this type of mortgage are usually looking to supplement their income in some way. Not all reverse mortgages are government-backed. There is only one government-backed reverse mortgage program, and that is the Home Equity Conversion Mortgage (HECM). Those that are interested in a HECM have to talk to a housing counselor before getting the mortgage. Counselors can provide in-depth information about reverse mortgages, alternatives, eligibility, assistance, and more.

Foreclosure Counseling

Homeowners look to avoid foreclosure at all costs. Many think that it can never happen to them, but that’s not true. Millions face foreclosure, that is why foreclosure counseling can be beneficial. Homeowners in need will get help from housing counselors to work on avoiding foreclosure altogether. If you find that you are struggling to handle your monthly payments, then get the help you need ASAP!

Counselors Can’t Make Guarantees

Remember, a housing counselor can only provide advice based on the information you give them. They cannot guarantee anything, especially if you’re going through potential foreclosure. In that case, you’ll also want to contact an attorney just to make sure all of your bases are covered.

As always, be sure you are only reaching out to HUD-approved counselors. You don’t want to choose a random agency because you’ll be providing these people with a lot of sensitive personal information that shouldn’t be shared with any random Joe.

How Does Housing Counseling Work?

There is a process with everything! If you want to get help from housing counseling, there are three steps that you can take:

• First, search for HUD-approved counselors. Make sure to research the counselor before deciding which one to go to!
• Second, get in touch with the counselor. Once you pick your HUD-approved housing counselor, you can get in contact with them.
• Third, provide information. They will ask you for information about your financial situation to help. You may need to provide documentation! Once they have all the details, they will provide information and potential solutions.

How to Find a Housing Counselor

HUD provides multiple ways for an individual to get in contact with a HUD-approved housing counselor. An individual can:

• Go Online: People can go to the department’s housing counseling home page and look for counselors on a map or by searching with a zip code.
• Over the Phone: There are a couple of different numbers that you can reach out to. First, you can try the toll-free HUD housing counseling agency locator at 800-569-4287. Another number that you can try is the HOPE Hotline at 888-995-HOPE (4673).
• Through the Apple App Store: There is an app called the HUD Resource Locator on Apple’s App Store. This app provides contact and location information for local HUD resources, including housing counseling agencies!

Regardless of how you search for options, it is just important that you take the time to look. Once you’ve finished your search and compiled a list of counselors, you want to research the options you chose. While all HUD-approved counselors are trustworthy and legit, some specialize in specific areas of expertise. For example, if you want to get a reverse mortgage, a counselor that specializes in budgeting may not be as helpful as one who specializes in reverse mortgages. That is why researching the counselors you have chosen is so important!

What to Expect if You Get in Touch with a Housing Counselor

It can be scary to start a point of contact with a housing counselor, especially if you’ve never done it before. You can expect a housing counselor to inquire about information regarding your home loan, mortgage terms, and payment history. They will also likely require documentation about your financial situation. All of these details help give the housing counselor a better idea of how to help your situation.

What Documents Should You Prepare?

The housing counselor is going to need financial information from you to truly help. Be sure you have the following documents handy just in case:

• Tax returns
• Pay stubs
• Bank statements
• List of monthly expenses
• If you’re looking for foreclosure advice, have the date and amount of your last mortgage payment available

The counselor will need a complete picture of your financial situation to guide you through the process. Without that information, they won’t know how they can help and what you can afford to pay.

Housing Counseling Fees

Housing counselors are permitted by law to charge people reasonable fees for their services. However, the agency must meet certain conditions set by the HUD:

• The counselors can’t charge hidden fees for services they deem extra without first notifying the client that it’s not included in the original quoted price.
• The fees must be proportionate to the services provided.
• If a person proves they’re unable to afford the fee, the agency must provide that person with counseling at no charge.

Before speaking to a counselor, you’ll want to make sure you have all of the documents necessary for a fruitful session with the professional.

Commonly Asked Questions

Housing counseling has a bunch of different components which can lead to a lot of questions.

Are There Eligibility Requirements for Housing Counseling?

One of the best aspects of housing counseling is the fact that there are no screening or eligibility requirements. It is not only for low-income people or those in financial need. Everyone can benefit from housing counseling! The only special guidelines that housing counseling has includes not charging fees for foreclosure prevention counseling or homeless prevention counseling. However, every agency is different, so fees for other services may not be charged either!

Does Housing Counseling Help People?

Yes! There is a bunch of data that shows just how effective housing counseling is:

• Foreclosure Prevention Counseling: Individuals that receive this type of counseling are 2.83 times more likely to get a loan modification, and 70% more likely to regain control of their payments after going into foreclosure.
• Pre-Purchase Housing Counseling: Individuals that receive this type of counseling are 42% less likely to face foreclosure.
• Financial Literacy Assistance: Individuals that receive this assistance improve their savings by $362 on average.

Are There Ways to Prepare for Housing Counseling?

Yes! While it is important to get your documentation together, you should also prepare some questions. Understand the areas you want to focus on specifically, and write down all of that information. You can also benefit from determining why you want housing counseling. Whether you want to just improve your overall financial literacy, try to avoid foreclosure, better handle your mortgage, get help when buying a home, etc., it doesn’t matter! Just make sure you understand your motivation so that you can get the most out of your counseling help.

How to Improve Your Financial Literacy

Housing counseling is a great way to improve your financial literacy. That is why plenty of individuals seek housing counseling. However, you may also benefit from gaining more financial knowledge on your own. According to the TIAA Institute, when it comes to financial literacy, people are least knowledgeable about topics related to financial risk. Improving your financial literacy can help your situation a lot! There are some other ways besides housing counseling that you can achieve this goal:

• Listen to Financial Podcasts
• Subscribe to Financial Newsletters
• Get a Better Understanding of Your Finances

Listen to Financial Podcasts

It can be hard to keep up with reading if that’s not your thing. Listening to financial podcasts can be a great alternative. People that speak on podcasts have a talent for delivering information in a way that viewers can easily digest.

Subscribe to Financial Newsletters

If you prefer reading, then you may better benefit from subscribing to a financial newsletter. There are plenty of sources of information that can work, you just need to find one you like!

Get a Better Understanding of Your Finances

To have a better understanding of your finances, you should have at least a bare minimum understanding of your money. This includes your monthly income and monthly expenses. When you understand what money you have coming into your account every month, compared to the amount you spend, you can get an idea of what extra money you have available to use elsewhere.

Overall

Housing counseling is a great opportunity for individuals who want to improve their finances. This assistance is not reserved for those in need and has been shown to effectively help recipients. There are plenty of types of housing counseling that can help! If you are interested in a housing counselor, you will need to research available options near you. Make sure to do additional, in-depth research on the choices you pick so that you know how you can make the most out of the help you get. Once you pick a counselor, you will need to prepare your documentation and a list of questions about what you want to focus on. Keep in mind your motivation for getting housing counseling as well. This assistance may be able to help your situation more than you realize!