Personal Finance Information |
Affording a Home
Can you really afford a house? If so, how much house can you afford? To determine this answer will take serious financial planning, and the best time to start is at least six months before buying the home. Although buying a new home may seem like an American Dream or romantic venture, the reality is that the house you can afford depends on your current income and debt obligations. You must be able to pay your mortgage, satisfy all your current debt, and still have money left over each month to put in the bank. When you consider all these issues, you may find you will actually be shopping for a lower-priced house than the anticipated dream home. If after careful financial evaluation, you realize you cannot afford the house of your dreams, don't feel tempted to count on expected annual raises, thinking that eventually you'll be able to afford the higher payments. Most raises are generally 4% to 7%. In bad times, you won't get a raise, while inflation overtakes you. In the worse case scenario, you may get laid off and you won't be able to afford your monthly bills. If you don't have a budget that includes a savings account worked out on a spreadsheet, you are faced with a serious debt problem waiting to happen. If you cannot recite from memory all the creditors you owe and how much you owe them, you have a credit problem. MONTHLY BUDGET SHEET At the top of your planning list, you must determine what your mortgage payments will be, while not ignoring other monthly expenses. Remember, you need this complete research, and an organized budget sheet, to guard against becoming seriously in debt. For example, besides the home loan, monthly expenditures to add to your budget sheet may include: * Homeowners insurance, Second on your list is to clean up your credit report. YOUR CREDIT REPORT CALCULATING YOUR CREDIT SCORE Everyone has a credit score calculated at the time your credit report is requested. It's based on over 100 different proprietary variables and algorithms developed by Fair Isaac (FICO). The range is 300 to 850. You can get your credit score from Equifax Score Power, True Credit, or Consumerinfo. Most lenders consider people above 650 to be prime borrowers, meaning they will most likely be approved at favorable rates. According to a credit report from Equifax, 71% of the people with a credit score from 500-550 will default on their credit. Another 51% of buyers with a credit score from 550-600 will default on their credit. It is for this very reason that lenders run your credit report and focus on your FICO Beacon score. FACTORS AFFECTING YOUR CREDIT SCORE So, take an inventory of your credit cards. Do you have department store credit cards, appliance store credit cards, and computer store finance cards that are no longer used? What's worse, even if a store is defunct, your account may still appear on your credit report as open. Call all sources and close these accounts since you never use them. Just remember, it takes about 30 days for the closing transactions to appear on your credit report. Once you successfully dispute and remove negative items from your credit report, wait 30-60 days and order another copy of your report to verify that the bad debt was removed and you now have a higher score. Genesis Font is an SEO and Developer for LoansInteractive.com > Mortgage and Loan Officer Websites. We also offer Quality Web Hosting Services.
MORE RESOURCES: Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 403, exiting |
RELATED ARTICLES
Chex Systems - Why Every American Needs To Guard His Checking Account With His Life Most Americans have been brought up to be concerned about a good personal credit rating, because of the role a positive rating can play in your long term plans; purchasing a home, buying a car, getting a business loan, etc. They have also been made to understand that the premier organizations that pretty much hold the key to their financial futures are Equifax, TransUnion and Experian. Basic Bank Accounts Failing the Basic Needs of Consumers The lists of bank and savings accounts that are available to most people are bewildering. A quick look at a comparison site like Moneynet or Moneyfacts will reveal thousands of different products. Personal Finance - Have Consumers Had a Belly Full of Personal Debt? For months, we were trigger-swipe happy, putting our groceries, clothes, holidays and service charges on our credit cards. We wanted mortgages, we took out loans, we watched Property Ladder and What Not To Wear. Banks Are More Than Just A Place To Park Your Money If you've been to a shopping mall lately, you've probablydiscovered two different banks within a few feet of eachother. Go inside the food store in that shopping plazaand you'll see yet another one, just waiting to offer theirservices to you. Understanding Your Finances Can Give You Power And Choice What is finance and what do you need to know? Finance can mean different things. It may refer to your personal financial situation. Take Control and Master Your Kitchen Those who keep a watchful eye on where their money is spent, have long conquered the kitchen woes. No last minute panic trips to the market. Why Live Frugally What is it about being frugal, why do it at all? Actually, some people don't do it at all, they have decided that what they want and desire is what they are going to get and they feel they deserve it. I have no trouble with that; more power to ya, live long and prosper and may you die with the most toys. One Income Source Is Not Enough! My personal opinion is that in today's new economy, it is wise to have multiple income streams. Reliance on one income source poses a risk to individuals, entrepreneurs, and even large corporations. Organizing Your Finances - Thinking Outside the (Shoe) Box If you're like most people, your personal financial records are most probably kept in less than "Good Accounting Practices" standards. For example, stashing old ATM receipts and hanging on to a stub showing what you paid for a pack of mints two years ago (cash, of course), might be filed with your paycheck stubs, credit card statements - paid and unpaid alike - as well as a few tax forms, a stray paper clip and a penny. Single Mother and Learning how to Save Saving may seem easier if you were saving for a new car, or a vacation however when it comes to saving in general it may prove to be more challenging because you may not necessarily feel you are receiving a reward from it. However saving pays off, especially as a single mother. Financial Fitness - Are You Exercising the Right Muscles to become Financially Fit? Are your financial muscles well toned and healthy or flabby and weak? Do you want to change your relationship with money so you can have control over your financial future or do you want to continue to complain that you don't have enough? Exercise these 10 muscles to achieve Financial Fitness.1. Eight Ways To Sink Yourself Financially 1. Don't focus on your finances. More Money? My Cup Runneth Over...But Im Still Thirsty Most of us, especially those of us who have debtor's disease (if you have it you know what it is!), have commented or at least thought, "If I could just win the lottery, or sweepstakes, everything would be better." Unfortunately, even if that big dream did come true things probably would get worse instead of better. Personal Checks - Extreme Benefits Millions of people have a checking account and many people have two of three. They have the choice of choosing a variety of check designs to compliment the checking account. Kundalini Lessons - Money I've been going through and interesting growth period lately that I thought I'd share, as some of the lessons were pretty profound (at least for me).I've written before about my awakening and the joys and tribulations since, and I've also mentioned that it's an ongoing process which, as far as I can tell, doesn't really end til you shuffle off this mortal coil. The Changing Shape of Family Finances Super-mumsIt seems that the proof of maternal efforts is no longer found in the pudding ? it's in the spending. Women are increasingly outsourcing personal grooming tasks and the pressure of looking good, feeling healthy, maintaining a tight ship and IQ level has meant that housecleaning and gardening are again fashionable methods to promote the family brand; housewifery is now a career, with all the attitude of 21st century post-feminism. UK Parents Inactivity Harming Their Children's Future University and Mortgage Savings The British government at the beginning of this year officially launched its Child Trust Fund (CTF) initiative in an effort to encourage parents and children to develop the savings habit and to teach children the value of saving their own money.Chancellor, Gordon Brown said, "The Child Trust Fund is designed to ensure that every child in our country has assets and wealth and that no child is left out and all children in Britain have a stake in the wealth of the nation". The Origins of Check Writing People haven't always written checks to buy goods and services. But you know that right? So how did people transfer money from one place to another in times of old?In ancient times the most popular form of money exchange was the trade. 10 Tips To Save Money When Dining Out Here are some tips that can help you save money when dining out. Keep in mind that these tips are intended to help you save money when dining out at a restaurant type setting. Should You Borrow From Your 401(k) Account? If you have a 401(k) account, it can be very tempting to borrow from your account especially when your balance is very high and a loan could easily pay off existing debt, fund a home purchase, or pay for college tuition. Before you make the decision to borrow money, there are several things you must keep in mind to avoid risking your funds. |
home | site map | contact us |