Q: Why has Colorado led the nation in the rate of house foreclosures in recent months?
A: It’s not one issue in particular. In some cases, it’s a missed connection of the wrong (mortgage) product for the wrong person. Or it’s an employment issue where people lost their jobs, or it’s medical issues. And we’re dealing with high-cost housing here. People might be stretching to buy that home. You have people who want to become homeowners. They’ll look at some of the other products, like adjustable-rate mortgages. Situations change, and that can put them in trouble.
Q: What’s your best tip for homebuyers looking for mortgages?
A: You should learn what products are available and carefully compare similar products and pricing. Understand how it works when you’re comparing mortgage products – or any financial products, like credit cards and car notes.
Q: What’s the best consumer financial research tool?
A: Rely on trusted sources. You can check them with the Better Business Bureau. There should be disclosure statements. You can certainly step away if you see something that was not discussed.
Q: How do homeowners know when to refinance?
A: With an adjustable-rate mortgage, depending on the note, the rates will change and prices will go up or stay flat. If you’re going to have difficulty repaying, you might think about refinancing. Research who holds the note. Shop around, especially to see what’s available for low- and moderate-income families. First-time homebuyers can contact the Colorado housing financing authority.
Q: What else can consumers do to help themselves?
A: Your credit scores are key. For folks just starting out, you have to establish a strong credit history. If you have credit cards or pay for utilities, pay them off on time. That affects your score and your cost of credit. Establish bank accounts, even savings accounts, instead of using check-cashing services, which in many cases can have higher costs.
Q: What if you can’t seem to establish a bank account or to stop using credit cards?
A: It’s important to have good budgeting and an emergency fund, so when an emergency hits, you have some funds available. It gives you a sense of a little more security, so if the car breaks down and you need the car for work and the repairs are going to be $300, you have the emergency fund right there.
Q: What advice do you have for college students?
A: We have a lot of kids coming out of college with a lot of debt. One thing is to pay it off on time and to look at your spending. If you’re going to be using it, don’t make late payments, because it affects your credit history. Look at the terms and rates available.
Q: How can consumers save more?
A: I’ve done some work with families to see where they’re spending money. Often they don’t realize they’re paying so much for communications. They might have the land line and a cellphone. Or (getting rid of) cable with all the premium options could save them $50 per month. Cigarettes, lottery tickets. Buying a cup of coffee every day instead of making the pot costs money. It is all of those things that save more money for a down payment and closing costs.
Q: How did you get involved in financial counseling?
A: I’ve always worked in the community and economic development field. My studies were in development. I was in the Peace Corps in Botswana as a community extension officer after college. In the United States, I’ve always worked with low- and moderate-income people. It comes down to a sense of responsibility of making our communities stronger.
Q: What do you do on your days off?
A: I enjoy reading, and I’m interested in green building, credit issues and financial education. Our 7-week-old son and a home- remodeling project keep us busy. I also like hiking and biking.
Para leer este artículo en español, vaya a denverpost.com/aldia
Edited for space and clarity from an interview by staff writer Beth Potter.
