10 Financial Tips For New Home Buyers
So you’ve decided it’s that time in life and you’re ready to buy a home, well US Lease Option wants to point you in the direction of success. Check out these easy to follow rules that will ensure both a successful purchase and the ability to keep that purchase in the years to come.
Build an Emergency Fund
Saving up money that is used only in the case of an emergency is crucial for not going into crippling debt, being able to easily repair vehicles, A/C etc. This step is key to financial stability and a good idea for any homeowner or future homeowner to do.
Live Below Your Means
This may sound simple but living on less money than you actually make is important so that you can do things like build an emergency fund, pay down debt, make your mortgage payments every month on time, save for kids college fund and any of life’s other hardships or curveballs.
Pay Off Debt and Stay Out of Debt
When you have large amounts of debt it prohibits how much money you can save for a down payment on a house and or the amount you can pay monthly on a mortgage. If you are able to get out of debt and stay out of debt you will be able to buy a house easier and be more financially stable.
Work on Fixing Your Credit
Everyone has a few dings in their credit but habitual late payments, collection debt, or charge offs can seriously harm your ability to get a loan for a house or you will end up paying significantly more in interest if you do get approved. Part of using rent to own as a strategy is to give you time to fix your credit so you can both get approved for a loan and get a lower interest rate.
Dont Bite Off More House Than You Can Chew
This saying has multiple applications, first don’t buy a house thats a great deal that will need more work than you can afford to put in to make it livable. Theres no reason to buy a house at a great deal if you don’t have working plumbing or A/C. Second, don’t purchase a home that you can’t realistically afford. The process of buying a home you can barely afford is what fueled this economic real estate based disaster we have been experiencing the past few years. Play it safe when it comes to repairs and big fancy houses.
Find a Financial Planner
You might say why do I need a financial planner I’m just buying a house not trying to strike it rich? A financial planner is more than just for the white collar elite, they can help you diversify your assets like real estate and investments that can help you become financially secure and much less likely to go into foreclosure or bankruptcy. You can start your search for a financial planner with this article from US News.
Buy Life Insurance
This might seem out place but if your planning on buying a house on the basis that both you and your spouse will be contributing to the payment of the mortgage you could be in some serious trouble in the face of a tragedy. If you were to lose your significant other how would you pay the bills without the second income much less the grief you are dealing with. Don’t know where to start with life insurance, start here!
Watch Out for Variable Rate or Balloon Mortgages
While these types of mortgages are a much less common occurrence than we saw a few years back they are still out there and it can be a huge problem for an inexperienced buyer. If you are buying a home it is in you and your family’s best interest to get a fixed rate 15 yr or 30 yr mortgage that is secure. Surprises lead to missed payments and missed payments lead to foreclosure, don’t become another statistic! Don’t believe me do your home work and read what the mortgage professor has to say.
Location, Location Location!
Buying a home in the right place is key to not getting stuck in your home forever. Take for instance you get a great job opportunity in another state but you own a home in a not so great location. It will be hard to sell, difficult to get the money you have into it, and even worse you may end up losing money on it. If you buy in the right area at the right price selling should be a breeze, do your homework and don’t get stuck.
Pay Your Mortgage On Time
The most crucial thing for future or current homebuyers to remember is that you should always pay your mortgage on time. Forget birthday presents, big screen tv’s, that new computer, or whatever is burning a hole in your pocket. Your mortgage payment should be priority number 1 past eating and clothing. Because it is such a large amount if you get behind you may never catch up! In the worst case scenario you do need to catch up on mortgage payments check out our 5 quick tips.
Hope these tips were useful and will serve you well in your future homebuying endeavors. If you can follow these tips you will have no problem staying financially secure and buying a home that fits your budget.