CCCS of San Francisco Offers Consumer Tips for
Removing Credit and Money Barriers to Homeownership

July 1, 2002 – For the average American household, using credit is a part of everyday life, whether in the form of a mortgage, a car loan or credit cards. The wise use of credit helps make the dream of homeownership a reality by helping consumers qualify for the most affordable mortgages available. However, unresolved credit problems remain a major barrier to many families who want a home of their own.

"Consumer Credit Counseling Service of San Francisco (CCCS-SF) is committed to helping consumers lower their debt, practice good money management skills, and improve their credit standing," says Rick Harper, CCCS-SF Vice President of Program Services and Housing Education. "We're moving future home buyers closer to the homeownership dream by teaching them how to manage money wisely and by educating them on the importance of credit in the home buying process. These are important tools people need to qualify for affordable mortgages and to successfully manage new financial responsibilities associated with a home," Harper added.

CCCS-SF, a member of the National Foundation for Credit Counseling (NFCC), has been helping consumers achieve their financial goals since 1969. An accredited, nonprofit, and HUD certified financial counseling and education agency, CCCS-SF offers housing education, money management assistance, a debt repayment program, and credit report review services.

"The Impact of Credit Counseling on Subsequent Borrower Credit Usage and Payment Behavior," a study conducted by Georgetown University Credit Research Center and Lundquist Consulting, shows how borrowers who received budget and financial management counseling at NFCC agencies reduced their debt and improved their credit profile over three subsequent years, compared to similar borrowers who did not receive counseling. This research strongly suggests that credit counseling greatly improves consumers' chances of qualifying for affordable mortgage financing in the future.

CCCS-SF offers future homeowners the following tips:

• Establish a good payment history. Pay all bills on time for at least a year. Late payments can disqualify you from some loan programs and increase the interest rate on others.
• Lower your debt load. Excessive debt will reduce your buying power.
• Build a savings account. Typical up front costs for home include a down payment of 3-5%, closing costs of about 3% of your mortgage loan, and moving/settling-in costs. You may also borrow from a pretax retirement account, such as a 401(k), to cover some of these costs.
• Consider attending a homebuyer education seminar. Learning about different homebuyer programs, loan programs, and required versus unnecessary fees could save you money. Log onto www.cccssf.org for a schedule of FREE first time homebuyer workshops.
• Check your credit report and verify its accuracy at least once a year.
• Seek help. Trying to solve your financial problems alone can be overwhelming. CCCS-SF offers consumers free confidential counseling and services to address debt, money management and credit problems. Call (800) 777-7526 for more information.

For more information about CCCS-SF, contact Jeannine Moore at (415) 788-0288 ext. 124.