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How Do I Know If I Can Afford to Buy A Home? NJ Citizen Action Is Here to Help.

By Orlando Salas, FSHC Communications Strategist (And Aspiring Homeowner)

I’m hoping to purchase a home sometime next year, so I figured I would start looking around to see what the market is like. As many people do, I turned to Zillow. And of course, the listings with beautiful extravagant houses caught my attention — but I was quickly humbled when I looked at the prices.

Now to be honest, I don’t even really understand “the market”. I’ve heard things like “buyers market” and “sellers market”, but at the end of day all the houses seem expensive to me. How do I even know whether I can afford to buy a home? And how do I know how much house I can afford?

The whole process can be very overwhelming: mortgages, interest rates, property taxes, all of it is just so confusing. So I turned to Google and began educating myself on the home buying process. I read articles and watched Youtube videos — and although it did help, I felt like I needed some extra guidance. I wanted to be able to sit down and talk to someone about the process; someone who could break things down for me and provide a safe space where I will not feel embarrassed if I ask a stupid question. I know I could go to a real estate agent, but at the end of the day the agent is incentivized to make a sale, so I didn’t want to deal with that pressure just yet.

As I continued with my research, I discovered NJ Citizen Action (NJCA). The organization combines political advocacy, electoral campaigns, public outreach, and community empowerment programs to make a real difference in the lives of everyday New Jerseyans.

NCJA’s  program that piqued my interest was their First-Time Homebuyer, Rental & Foreclosure Counseling program. I found that their HUD-Certified Housing Counseling Service provides free one-on-one counseling to low- and moderate-income first-time homebuyers seeking to purchase a home in New Jersey, along with providing foreclosure prevention counseling for homeowners who are struggling financially.

I signed up for one of their free First Time Home Buyers webinars, where they educated me with general information on the homebuying process — credit scores, home insurance, property taxes, and much more. After the webinar I signed up to be paired with a housing counselor.  I later received a phone call from their senior HUD-certified counselor, Sandy. She told me more about the program and what it would entail. We then scheduled an appointment at a future date to go over my finances, run my credit report, and see what banks I may be eligible to receive a mortgage from. In the meantime, I had to gather some documentation; W-2’s, tax returns, bank statements, and so forth.

During our appointment, Sandy reviewed my employment and credit history to determine if I am ready for the mortgage process. Fortunately I was ready! So she educated me on four different bank product offerings.

Over the years, NJCA has negotiated Community  Reinvestment Act (CRA) Agreements with more than 30 banks in New Jersey, totaling over $30 billion in commitments to low- and moderate-income individuals throughout the state. These special programs are designed to make down payments, closing costs and mortgage payments more affordable to low- and moderate income families and individuals. And for those who aren’t ready for the mortgage process, NJ Citizen Action will assist in preparing you through credit counseling, budgeting, and other resources.

My next step is to do my homework.. I have to take a deeper dive into the four bank product offerings to see which one works best for me. Sandy handed me her business card and a “Client Handbook” which includes information such as what documents to gather for a mortgage application, what closing costs are, important questions to ask a home inspector, and other valuable resources.

If everything goes according to plan, within the next few months I will be a homeowner. Be on the lookout for my next blog post for updates!