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Financial Coaching: What to Expect from the Homeownership Program

Financial Coaching: What to Expect from the Homeownership Program

homeownership program, financial coachingBuying a house is a big deal, especially when it comes to financing it. What is your credit score? What does your debt-to-income ratio look like? Do you have enough money saved for additional costs?

We know there is a lot to juggle when buying your first home, and you may have more questions than answers right now. We're here to help. Our Homeownership Program provides financial coaching to best prepare you for the expenses ahead. Here are some our most frequently asked questions.

How Many Times Do I Have to Meet with My Financial Coach?

Our financial coaching program is designed to get you mortgage ready in one year or less. Your Financial Empowerment Coach will help you develop a plan towards mortgage readiness and help keep you on track with that goal.

What Topics Will We Discuss?

One of Habitat for Humanity's financial coaches will meet one-on-one with you to review the Habitat Homeownership process, paths to becoming a homeowner, your income, and how close you are to mortgage readiness.

The goal is a credit score of 620 or above to move into the home-buying process successfully. If you're not already there, we'll help you get there!

Your debt-to-income ratio is your monthly debt payments divided by your gross monthly income. We require you have a ratio of 18% or lower when you begin financial coaching. That number should be between 13% and 15% when you're done with the program. It is possible for it to be lower than 13%, but it cannot be more than 15% in order to qualify as mortgage ready.

Homebuyers must have $6,300 in savings to be considered Mortgage Ready — $3,000 is for closing costs, $1,500 will cover the first year of homeowner's insurance, and $1,800 is a common amount to hold onto in case of emergencies.

 

  Before Financial Coaching After Financial Coaching
Debt-to-Income Ratio 18% or lower 13% – 15%
Closing Costs  -- $3,000
Homeowners Insurance  -- $1,500
Emergency Fund  -- $1,800

 

If your numbers do not match what is considered to be mortgage ready, your coach will work with you to develop a plan to move you toward mortgage readiness.

How Does Financial Coaching Help Me Buy a House?

Our goal is to prepare you for success in your home buying experience. All of these steps – including our one-on-one conversations regarding credit score, debt-to-income ratio, and savings – help to lay the groundwork for purchasing your first home.

How is Financial Coaching Different from Homebuyer Education Training?

Financial coaching focuses on preparing people to buy and finance a home. Our Homebuyer Education Training is focused on topics like home repair, public safety, neighborhood and community, and other things that will help you be a successful homeowner.

If you have any other questions, feel free to visit the Twin Cities Habitat for Humanity Homeownership Program page or call us at 612-540-5660. We're always happy to help.

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