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10 Commandments of Home Buying

September 10th, 2018

We just love this post from Matthew Amster-Burton of  Whether you're in the process of buying a home or you're already a homeowner, you'll want to read the 10 Commandments of Home Buying. 

We're especially crazy about #9 - "Be Prepared to Settle Down."  Many of our clients realize that they could pay less with a monthly mortgage payment, than they would if renting.  They fail to consider, though, that if they move only a couple years after their purchase, they won't have saved enough to counterbalance the expense of buying and selling! 

What rules or guidelines do you follow when it comes to homeownership?  Leave your tips in the comments below!  And to read Amster-Burton's other commandments, click here.

CCCS and the NFCC celebrate National Homeownership Month  

June is National Homeownership Month, and CCCS and the NFCC are using this month to call attention to the opportunities consumers have to achieve sustainable homeownership through access to professional housing counseling and homebuyer education. 

Over the last several years, HUD-approved housing counseling organizations have provided effective foreclosure prevention counseling to millions of struggling homeowners. Recent studies have demonstrated that struggling homeowners who receive housing counseling are 67 percent more likely to remain current on their mortgage after receiving a loan modification than are non-counseled borrowers. These studies demonstrate the important role that housing counseling agencies can play in assisting the nearly five million homeowners who are delinquent or in foreclosure. 

As the economy recovers and the housing market continues to improve, housing counseling can help first-time homebuyers understand the home buying process by enabling many homeowners to better manage the responsibilities of homeownership and avoid falling into default. Several studies released over the past year have shown that first-time homebuyers who receive pre-purchase housing counseling are 29 percent less likely to become seriously delinquent on their mortgage.

In addition to the recent research studies that show the effectiveness of housing counseling, many leaders in government are recognizing the important role that housing counseling serves in ensuring a healthy, stable housing market going forward. The Bipartisan Policy Center's Housing Commission noted in its recent report that "housing counseling can improve prospective borrowers' access to affordable, prudent mortgage loans, especially for families that otherwise might not qualify or who may experience other barriers to mainstream lending."

Sarah Gerecke, Deputy Assistant Secretary of HUD's Office of Housing Counseling, also recognizes the importance of housing counseling: "For those of us involved in HUD housing counseling programs, every month is Homeownership Month, as our focus on helping homeowners understand all of their housing options continues year-round," she said. "Working with partners on the ground, we can shape a housing market that is stronger and safer than before. In doing so, we continue to restore the dream of homeownership, creating a stronger middle-class and a stronger America."

"Whether you are considering homeownership for the first time or are a homeowner who wants to maintain or improve your financial footing, a HUD-approved housing counseling agency can help free of charge," said the U.S. Department of the Treasury's Acting Chief of Homeownership Preservation Mark McArdle. "Additionally, the Federal government's Making Home Affordable Program was just extended through 2015 to ensure that there are continued resources available to help Americans maintain homeownership." 

As a HUD-certified housing counseling agency, CCCS of Chattanooga offers first time homebuyers' education as well as foreclosure prevention assistance.  To learn more about available services, click here or call (423) 490-5620.  

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help millions of consumers through more than 700 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit

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Home values have plummeted across the country.  Mortgage interest rates continue to hover between 4 and 5%, a historical low.  Both seem to suggest it's a good time to buy a house.  So, is now the time to pull the trigger on a new mortgage?

There are a few things you should consider before you start looking for a house.  First, how comfortable would you be if you were to become "upside-down?"  That means you would owe more on the home than it's actually worth. 

Property values continue to fall and there's really nothing to indicate they will stabilize anytime soon.  Point being, you might be buying on the way down rather that at the bottom or even on the way up.  Today some 28% of homeowners are in that same position and trust me, most of them wish they weren't. 

Second, don't buy a house simply because the rates are low.  Too many people are focusing just on the interest rates and that's a bad idea. Remember, when you borrow $250,000 to finance a home, you still owe someone $250,000.  Just because the loan has a very low interest rate doesn't make you any less in debt than someone who has a horribly high interest rate.

If you're going to buy a house, then do so because you want the home, you love the neighborhood, the school district is good, or you're tired of renting.  Don't do it just because the rates are low.  Think of the low rate as being the cherry on top, not the ice cream on the bottom.

Just because you're hearing advertisements for incredibly low interest rates it certainly doesn't mean that you'll actually qualify for those rates.  You better have killer FICO credit scores and you better have them at all three of the credit reporting agencies.  Remember, mortgage lenders pull all three of your credit reports and all three of your FICO scores and then use the middle of your three scores on which to base their decision.  

And finally, you may have to pony up a 20% down payment to get those really low rates. The world of mortgage lending has changed dramatically since the end of 2007.  There are no more "liar loans" (when you would tell someone how much you made and nobody verified the accuracy).  There are no more "110 LTVs" (loans that were 110% of the appraised value of the home).  Sanity has worked its way back into the mortgage lending environment, which means better credit is required and income has to be, well, real income.


Authored by John Ulzheimer, President of Consumer Education at,  credit blogger for, and a Contributor for the National Foundation for Credit Counseling. John is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, he is the only recognized credit expert who actually comes from the credit industry. Follow him on Twitter here 

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