What to Know About Credit Counseling Before Buying a Home

What to Know About Credit Counseling Before Buying a Home

Shopping for a home loan in Florida with credit which is not ideal? One of the many steps which may be worth taking before applying for a loan is to sit down with a credit counselor to discuss your situation. Following are some things you should know about working with a credit counselor to improve your borrower risk profile.

1. Credit counseling may be free—or not.

You might assume that credit counseling services are always free because they are offered through nonprofit organizations. This is not always the case, however. Some organizations charge quite bit of money for their services, and may do so without transparency.

That means you should do your research on any credit counselor before jumping in. You should also request a written quote if there will be fees of any kind.

2. Some organizations take an individualized approach. Others do not.

Just as there is significant variation in pricing from credit counselors, their services can also vary quite a bit. The best counselors will treat you as an individual, working with you to come up with a customized solution to your problems. Others, however, attempt to funnel all consumers who seek out their services into debt management plans.

3. Look for free education.

The more individualized the services of a credit counselor are, the more likely it is that they will offer you educational resources and programs. Ideally, they should be completely free.

Education in budgeting and debt management could take the form of classes, one-on-one counseling, or online and offline resources. Quality counselors provide this education to all their customers, not just those on debt management plans.

4. Sometimes, debt management plans are suitable.

For many borrowers, debt management plans can be very helpful. They can range significantly in terms of quality, so you must investigate any debt management plan thoroughly before you commit to it.

In some cases, credit counselors are able to negotiate for reduced interest or even no interest on certain debts. They may also be able to help you get around certain late fees. It also might be possible to have your accounts “re-aged.”

With the right debt management plan and/or budgeting advice, you may be able to improve both your credit score and debt-to-income ratio rapidly. You also might have less difficulty building up your cash reserves. All of these can help you when applying for a mortgage.

5. We can offer you credit guidance as well.

Working with a credit counselor is not your only option for seeking out advice regarding your financial situation when applying for a home loan in Jacksonville or elsewhere in Florida.

When you schedule a consultation with Carbon Capital, we can also provide you with education and guidance on your credit situation. Further, we can connect you with loans through government-insured programs such as the FHA mortgage program which are suitable for customers without perfect credit. Get started today by calling us at (904) 513-8000.

Andrew Saltman

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