To assist clients with housing options, housing counselors can help clients determine what type of housing may be most appropriate depending on their circumstances. In this module, you’ll learn to calculate housing and debt-to-income ratios using information about income and credit. You’ll also learn to evaluate the benefits and drawbacks of renting versus owning a home, including scope of payments, upfront costs, and tax implications.
By the end of this module, counselor will be able to:
- Evaluate various housing options for a client when summarizing the costs and benefits of renting versus purchasing a home.
- Apply knowledge regarding the funds a homeowner needs at the close of escrow for a home purchase and the funds a renter must come up with to sign a lease.
- Calculate a client's maximum housing payment, including PITIA for mortgages and rent/insurance for renting.
- Determine annual and monthly income for clients with various pay schedules and incomes and determine expenses based on documentation provided and a credit report.
- Calculate a client’s back-end ratio to determine if high debt is an obstacle to meeting housing goals.
- Apply knowledge of the Four C's of Credit (character, capacity, capital, and collateral) to client information to predict whether a client is likely to be approved for a mortgage loan or rental housing application.