Finding Room in Your Budget for a Home

HouseBy Melissa Geiser, Research Specialist

Buying a home is a goal that most people have for themselves but it can be a scary process that has the potential to cause more headaches than happiness. can help you understand the home buying process, develop a plan for your budget, and give you the tools you need to be financially prepared for what will most likely be the largest purchase you’ll ever make.

Pre-purchase home ownership counseling reduces the rate of mortgage payment delinquency by about 30 percent. After the housing bubble of 2008 and the flood of sub-prime mortgages that resulted in thousands of foreclosures, it’s a great way for lenders to responsibly extend credit to potential home buyers. Most importantly, it’s an important tool that can be used to protect your household finances and your family from making the all too common mistake of purchasing a home that you really can’t afford.

A study done by NeighborWorks America, a community development agency, found that while 87 percent of adults feel that home ownership is an important part of the American Dream, there is a real concern about whether or not that dream is realistic. Increasing student loan debt and a general fear of the mortgage process is holding many potential buyers back.

Mark and Amy had been thinking of buying a house for a couple of years but, after seeing the financial bind that some of their friends had gotten into after they purchased a home, they were more than a little hesitant.

They knew the basics of buying a house but they felt they needed personalized help in creating a budget that had room in it for emergencies and all the other expenses that come along with home ownership. After meeting with one of our counselors, Mark and Amy felt comfortable buying a home they could afford and the financial well-being of their household finances.

Eileen Fitzgerald, the chief executive of NeighborWorks, has found that pre-purchase counseling can help potential homebuyers see what they can actually afford “beyond what a Realtor or banker would say”. There are factors such as child care, transportation and other costs that are a large part of the budget and have a significant impact on household finances.

Mrs. Fitzgerald also points out that pre-purchase counseling goes beyond the purchase of the home to ensure that the buyer knows to remain cautious after the purchase when credit card offers can make the impulse to buy furniture and other household items tempting. “It really does make a difference if you take a little time to get the information and work through your own budget before you buy a home.”

Pre-purchase counseling is totally free and allows you to:

  • See a copy of your credit report before you apply for a loan, and have assistance fixing problems
  • Understand what your new hypothetical budget will look like after you buy your home
  • Help you understand options you may have to pay down other debts while you prepare for buying your home
  • Give you referrals to home buyer assistance programs you may qualify to help with closing costs and interest rates
  • Empower you with an Action Plan that let’s you make the best purchasing plan available to you

At, our HUD certified pre-purchase housing counselors will work with you to determine how homeownership can fit into your budget. We are here to help you and your family make educated decisions that will give you confidence and peace of mind.

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