Housing
- April 21, 2021
- By: P.T. Phan
HOUSING
Financial health is a way of life and a right for all. Please give us a call, we are here for support.
Having a safe and secure place to live is important to every household, and takes on a new meaning for those facing financial hardship.
Changes to a family’s financial stability might involve temporary layoffs or unexpected reductions in family income, especially in this time of unprecedented economic impacts from the pandemic.
For many people experiencing challenges when making monthly rent payments, it can reduce stress to understand how to manage their overall financial situation and how to avoid eviction.
Knowing your options is key. If you are concerned about falling behind on monthly mortgage or rent payments, fully understanding your options and figuring out careful next steps, can make all the difference.
According to U.S. Census data, as federal, state, and local COVID-related protections expire, an estimated 30–40 million people could be at risk of eviction in the next several months.
Meeting the Need
With a grant from Wells Fargo Foundation, GreenPath was able to deliver timely counseling to meet the needs of renters and homeowners affected by the COVID-19 pandemic. The counseling services were delivered so families could repair their entire financial situation and stay in their homes.
Rental counseling helped many families and individuals across the country stay housed in this time of crisis.
Shared here are three success stories. Each story illustrates how knowing the options can help people move through the challenges.
Success Story 1: When Crisis Hits
An Illinois resident was faced with an unexpected reduction in her household income. She already lived on a social security income due to a medical disability, which was supplemented by her fiancé’s income. When coronavirus hit, his income was cut in half. She worried that the strain of paying rent would put her in danger of losing her home. Every day bills and expenses impacted her ability to keep current with medical bills. Add $10,000 of unsecured debt payments, and she decided to call GreenPath for help.
GreenPath assessed her situation and offered expert budgeting assistance with a customized action plan. Carefully following the plan has helped reduce credit card payments and interest rates, allowing more cash for essentials needs such as rent, utilities and food. The couple is managing through the reduced income, meeting rental payments, and is more optimistic in their outlook. Now, they have a plan to pay off credit card debt years earlier than they would prior to engaging with GreenPath.
IS PAYING RENT A CHALLENGE?
If you are having trouble paying your rent, our guide offers six steps that you can take to help you create a plan.
Success Story 2: Double Whammy
Add a pandemic to a shaky financial situation due to 2017’s Hurricane Harvey and you have this Texas client’s challenges. Living paycheck to paycheck – in the process of being evicted from his home due to foreclosure; then COVID hit and he lost his job. While he remained in the home, with no income since March 2020, he felt hopeless and worried about being homeless.
He contacted GreenPath. Counselors immediately stepped in to explore how he could get help with the eviction, providing a full review of his financial situation, budget and goals. The GreenPath team discussed specific plans and next steps to keep him in the foreclosed home, and also built out steps to find affordable rental options to create stability for him in the short and long term.
His level of optimism is much higher now. GreenPath is helping to develop a spending plan, options to return to bringing in monthly income, and managing housing payments to keep a roof over his head. Regardless of the size of your issue, GreenPath can handle any situation large or small.
Success Story 3: A Family and a Financial Challenge
A married couple from Nebraska had a full plate when the pandemic crisis hit. Expecting their first child, they both lost their jobs in the early weeks of the pandemic. Quick to find temporary jobs, but at a reduced income, the couple started to use savings, and eventually credit cards for essential purchases. The financial uncertainty caused anxiety, especially in meeting housing payments. So, they called GreenPath.
GreenPath took a careful look at the couple’s consumer debt and created a plan to reduce interest payments to offset income loss, while keeping housing expenses the top priority. Action steps to start rebuilding their savings, even in the face of income loss, helped them reduce stress as they prepared for the arrival of their baby.
The couple realized the benefit of having trained counselors actively working with them to address their entire financial situation, including balancing housing costs with credit card debt and unanticipated hardships. They were able to achieve housing stability and more peace of mind about their future. Now, they stand on a more firm foundation – even in a time of crisis – which is critical to a growing family.
The Power of a Plan
Families looking for housing support and ways to get back on track, have solid, effective options.
GreenPath’s professional, caring Financial Wellness Experts specialize in working through complex financial situations and can assist you, regardless of where you are today. They will help you create a personalized plan and achieve your short- or long-term goals.
If you are concerned about your housing and financial situation, start a conversation with a GreenPath Financial Expert or Housing Counselor.
Sometimes life can take unexpected turns… and things can go in surprising directions when it comes to household finances.
That was the case for Victoria and Jeff.
Several unexpected financial situations were throwing off the couple’s budget, leading them to lean heavily on their credit cards, as well as to miss a few mortgage payments.
That wasn’t the only wrinkle. There were also unexpected changes in monthly income, and other unplanned bills to figure out.
When an official-looking pre-foreclosure notification letter arrived in the mail from their mortgage servicer, the road was beginning to get even bumpier then they had anticipated.
As Victoria and Jeff explain in the video, they had an opportunity.
These unexpected challenges put them on a path to reduce their financial stress – which would not only help them resolve their immediate needs but help them improve overall health and well-being.
YOU’RE NOT ALONE
GreenPath’s certified housing counselors are here to help. Our foreclosure prevention services are free. We can talk to your lender to explore options and even help you apply for specific programs.
What to Do After Receiving Foreclosure Notification
Outlined here are three key steps this young family took after the pre-foreclosure notification arrived.
- Take action: When life’s circumstances get heavy, it can be tempting to avoid taking action to help address the situation. Victoria and Jeff did take some needed time to regroup after receiving the pre-notification letter but then took action by getting informed, understanding what the process of foreclosure would entail, and researching resources to help them manage through. As Victoria notes in the video, they educated themselves on the process and found GreenPath’s national nonprofit resources.
- Team with a trusted resource: As Victoria and Jeff describe, trying to prevent home foreclosure was less stressful when teaming with a trusted resource. When they connected with GreenPath, a caring counselor discussed programs and options that would help them avoid foreclosure, and address other issues like the high credit card balances. GreenPath worked together with the couple to facilitate effective communication with the mortgage loan servicer to explore loan modification options. The couple notes that their counselor was friendly, approachable, and non-judgmental about their debt, and helped them structure a debt management plan to repay debt on a schedule that was realistic for them.
- Take steps to repair credit history: Through the ordeal, Victoria and Jeff learned first-hand about the importance of maintaining a good credit score. As they experienced, a few missteps in their credit history impacted both their scores, creating issues with everything from their purchasing power to a lender’s willingness to work with them on refinancing their car. The good news is that they teamed with GreenPath to better manage their outstanding debt, and took the needed steps to pay off $45,000 in credit card debt in just three years after signing up for a debt management plan. By working through the plan, the couple better managed their monthly expenses, while building back up their credit score.
Sharing the Lessons
Victoria and Jeff are kind to share their story. Falling behind on mortgage payments can happen for many reasons, from job losses and rising interest rates to overwhelming debt loads to name a few.
As they note in the video, the key for this couple was to understand options to get back on track.
If any parts of their story sounds familiar to you, let’s start a conversation.
A free foreclosure prevention counseling session will put you in contact with a trained and knowledgeable counselor who will review your circumstances, identify available options, and help you develop a comprehensive action plan in order to resolve your specific situation.
It’s been about six months since the onset of the pandemic. For homeowners experiencing reductions in income or financial hardship, the CARES Act provided welcome relief when it was first introduced in the early days of the COVID-19 crisis.
Nearly 4 million Americans chose to set up a forbearance to pause payments on their mortgages.
Homeowners with federally backed mortgages could ask their servicers for a forbearance, without documenting financial hardship, and delay their mortgage payments for up to 180 days, with another 180-day extension available upon request when the first forbearance period ends.
These relief programs made it possible for many people to stay in their homes while dealing with the financial impacts of the pandemic crisis.
As we all manage through the changes that have come with the Pandemic, from social distancing to at-home school sessions, many homeowners are now asking “What’s next?” as mortgage forbearance relief options hit deadlines.
MY MORTGAGE FORBEARANCE ENDED. WHAT’S NEXT?
Learn from an online course to understand the options you may have available to you. Get suggestions for next steps that are most aligned with your goals.
Figuring Out Next Steps after Mortgage Forbearance
Figuring out the next steps can help you feel more confident in understanding your options and what to expect.
For those who started their forbearance earlier in the pandemic, the temporary pause on payments might be coming to an end. However, it could be possible to extend the forbearance or consider other approaches.
With lawmakers continuing to debate relief options, many people face financial pressure and are having trouble understanding their next steps.
When looking at the options available to keep your home (or leave your home) it’s easy to get confused. There are a lot of industry terms to take in, assess, and then decide what’s in your best interest. It’s normal to feel stressed in considering what you want.
Successfully Moving on After Forbearance
People frequently enter a forbearance due to a temporary setback. Those who successfully prepare for the end of forbearance look to understand the options available and what makes the most sense for their situation.
Each person has a different financial situation and yet many of us with mortgages are now reaching the end of a forbearance. Many of us may want to keep our homes and consider those options. Others of us may find relief in considering options to leave both the responsibility to pay the mortgage and the home.
We’re Here for You
A good first step is to work through this self-directed learning course.
You might also find it helpful to reach out directly to the Homeowner’s HOPE™ Hotline: 888-995-HOPE(4673). Our counselors have helped thousands of people in similar circumstances identify and weigh their options, and we can help you, too.
Caring counselors help people figure out the post-forbearance process, develop a budget that works for their specific circumstances, intervene with loan servicers to identify available loan modification options, and then create a plan to move forward after forbearance.
As real estate markets re-open across the country, current historically-low mortgage rates may make it seem like the perfect time to be a first time homebuyer.
For many, owning a home is a big part of the American Dream. There’s a sense of pride and accomplishment in ownership. It can give you greater freedom and privacy, while also adding to your financial security.
However, purchasing a home is also a substantial responsibility and commitment—not to mention one of the largest (if not the largest) purchases you’ll make in your life.
If you are a first time homebuyer, be sure not to spend more than you can afford by overlooking the “true” cost of homeownership.
When budgeting for your first home, here are seven often overlooked costs that can have a big impact on your bottom line:
1. Property Taxes
When shopping for a new home, pay attention to the property taxes! Property taxes not only vary wildly state-to-state, but also within the same city.
It’s also important to note that property taxes can go up substantially when a home gets re-appraised and it is found that the home’s value has gone up. So, if you’re buying a home that hasn’t been re-appraised in quite some time and the current owner made some substantial upgrades, it’s important to note that the historical numbers you are seeing will likely go up after you purchase the home.
2. Closing Costs
Buyers are often so focused on the purchase price of their home and the initial down-payment, it can be all too easy for closing costs to get overlooked. Due at the time the buyer closes on the home, these fees include things like mortgage taxes, lender application fees, attorney’s fees, title insurance, and appraisal fees, that typically range from 2-5% of your home’s purchase price.
So, for a $250,000 home, you should expect to pay anywhere between $5,000 to $12,500 in addition to your mortgage payment. Make sure you factor these costs into your budget when deciding what you can afford.
3. Private Mortgage Insurance (PMI)
If your down payment is less than 20% of the home’s price, you usually are required by the lender to take out a private mortgage insurance policy until you have accrued 20% equity in your home. This policy protects the lender in case you default on the loan.
PMI typically amounts to .5% – 1% of the entire loan amount on an annual basis—which could add up to several thousand extra dollars a year.
4. Homeowner’s Insurance
Many first time homebuyers often under-estimate the cost of homeowner’s insurance. According to insurance.com, the national average annual homeowner’s insurance payment is currently $1,244. However, if you live in a state such as Florida where storms drive up premiums, you could pay as much as $3,951 for the same amount of coverage.
Want to learn more about homeowners insurance?
Find out what is generally covered and what isn’t.
5. Utility Costs
If you’re used to apartment living, it’s important to note that the utility costs for a home with a single-family footing the bill will be significantly higher. You’ll want to consider electric, gas, water, sewer, cable, telephone and internet.
When shopping for a new home, it can be a good idea to ask the current homeowner what their monthly utilities typically run so that you can get a realistic expectation of what you should expect to pay.
6. Moving Costs
Although it’s a one-time cost, a same-city move averages $1,000, and can go up from there depending on the size of your house and distance, so make sure you factor it in.
7. Home Maintenance and Repairs
Even if you buy a home that’s move-in ready, it’s important to have a “rainy day” fund ready for when the AC goes bad or you finally need a new roof. Depending on your house’s age, homeowners should plan to save 1 to 4% of your home’s value each year to be able to cover repair and maintenance expenses that will come up.
Home buying might seem like a complicated process, but with the right planning, budgeting and preparation, it can be incredibly rewarding.
If you are a first time homebuyer, speak with a housing expert
Our certified housing counselors can prepare you with the knowledge and tools you’ll need to make the best decisions.
Counselors can provide you with valuable information and resources to help make your purchase a valuable part of your long-term financial health and wellness, including:
- Helping you to understand what you can afford and creating a spending plan
- Creating a plan to improve your credit score
- Presenting options for down-payment assistance and affordable loan programs