Get Ready to Apply
By following these steps, you’ll be well-prepared to apply when the next application cycle opens!
Step 1: Check your credit report.
Negative items on your credit report are the most common reason applications are denied. Before you apply, take advantage of a free credit report at www.annualcreditreport.com. We recommend checking your credit report from all three major bureaus: Equifax, Experian, and TransUnion.
The following items may cause your application to be denied:
- Past due accounts
- Accounts in collections
- Charged-off accounts
- Bankruptcy within the last 5 years
- Foreclosure within the last 3 years
Reviewing your credit report before applying can help identify and address potential issues.
Visit consumerfinance.gov for more information about checking your credit report for free.
Creditors often will hire a collection agency after a borrower is 60–90 days or more past due with a debt. Learn more at investopedia.com.
A charge-off means a company has written off a debt because it does not believe it will receive the money that it’s owed. You are still responsible for paying debt that is a charge-off. Learn more at investopedia.com.
Step 2: Calculate your debt-to-income ratio.
Your debt-to-income ratio (DTI) is calculated by dividing your total monthly debt payments by your gross monthly income. Lenders use this number to assess your ability to manage monthly payments and repay the money you plan to borrow.
Use the calculator below to estimate your DTI.
Please note, this calculator provides an estimate only. We cannot determine if you qualify or answer questions about your DTI until we have reviewed your full application.
Step 3: Get financial education.
f you have a high debt-to-income ratio (DTI) or negative items on your credit report, credit counseling can be a helpful resource! The following organizations are certified by the U.S. Department of Housing and Urban Development (HUD) to provide credit counseling services:
Phone: 770-790-3112
Email: housingcounseling@ccatlanta.org
Visit their website: https://catholiccharitiesatlanta.org/housing-counseling/
Phone: 866-889-9347
Visit their website: https://www.moneymanagement.org/credit-counseling
We also recommend the FDIC (Federal Deposit Insurance Corporation) online financial education program: How Money Smart Are You?
Visit https://playmoneysmart.fdic.gov/games to play and learn!
Step 4: Save money for closing costs.
Habitat for Humanity homebuyers are required to pay an estimated $5,500 in closing costs.
- A minimum of $1,500 must be paid at the time of closing.
- The remaining balance can be repaid monthly over the first 4 years of homeownership through a 0% interest loan from Habitat.
Saving money for closing costs and a down payment can also improve your chances of qualifying for a conventional loan. The more you pay upfront, the lower your future mortgage payments will be!