Teaching Your Little one to Save Like a Pro
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Teaching Your Little one to Save Like a Pro

When it comes to saving money, a little know-how, some commitment, and practice all make the task easier as time goes on. Setting your child up with the opportunity to start saving money from a young age is an awesome way to ensure that they are prepared to make smart saving and investing decisions once they start working as an adult in the real world. Assigning paid tasks around the house and using jars as “bank accounts” for saving and spending is an effective foundation to start with. Here, you’ll learn tips, tricks, and techniques that can be implemented as your little one ages to accommodate their learning abilities and maximize their chance of saving success in the future.

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Teaching Your Little one to Save Like a Pro

3 Things Every First-Time Homebuyer Needs To Know Before Buying A Home

Claudia Bravo

Owning a home is said to be the American dream. If you have finally decided that you are tired of renting and would rather enjoy a slice of that dream pie, you are not alone. As of 2013, 64.9% of the American population owned their own home. However, as a first-time homebuyer, there are some things you need to know before you terminate your rental contract and finalize your purchase decision.

Calculate Your Debt-to-Income Ratio

When it comes to purchasing a house, most homebuyers are too caught up in their credit score to factor in the importance of their debt-to-income ratio. Although your credit score is important, lenders also take into consideration your DTI. Your DTI is defined as the relationship between your monthly housing expenses and obligations compared to how much money you make.

Lenders generally suggest that your front-end DTI should be 28% or lower. Anything beyond 28% and you could find yourself struggling financially. If your overall expenses are too steep, you may find yourself unable to cover unplanned expenses let alone those you plan for. In order to calculate your total front-end DTI, you would need to add together all of your monthly housing expenses and divide that amount by the amount of money you bring home each month before taxes.

When purchasing a house for the first time, calculate your monthly expenses, which would include your mortgage payment, homeowner's insurance, and property tax. Before you make your decision purchase, ensure that the amount you spend on your house does not put your DTI above 28%. By doing this, you will be able to make a better-informed purchase decision so you can find a house you and your family can afford.

Consider the Big Picture

There are plenty of loan programs available for first-time homebuyers, which makes purchasing a home far easier than you might expect. Some programs are even available to those with less than perfect credit. However, you should consider the big picture before you jump on the chance to own your first home.

For starters, you should determine if your income can support homeownership. Owning a home goes beyond paying your mortgage, your insurance, and your monthly utilities. It is best to do a rough estimate of your expenses to determine how much money you will have left to set aside into a savings account each month.

If you find that you will have just enough to pay your monthly expenses, you may not be ready for homeownership. You should be able to put a decent amount back into your savings account each month to cover any unforeseen expenses. When you rent, your landlord is most likely responsible for covering any repairs your home needs. When you own a home, you have to factor in the cost of any expenses needed for repairs.

For instance, you may come across a situation where the roof is in need of repair or the HVAC system needs to be replaced. Home repair costs can quickly add up, which can put you in a financial bind even if you are prepared for them. If you are unprepared, however, you may find yourself needing to take out a second mortgage in order to cover the cost of repairs to your home.

Clean up Your Credit Score

Your credit score is one of the most important factors when it comes to purchasing a home. If you have a good credit score, which is typically 660 or higher, the chances that you will find a loan program to purchase a house are good. If your credit score is below 660, your chances start to decrease. That is not to say that you won't qualify, but you may find less than ideal mortgage rates and far fewer lending opportunities.

Your best bet is to speak with a variety of loan program officers to determine if you qualify for a home loan and what rates you would face with your current credit score. If you find that you do not qualify or the rates are less than satisfactory, your best bet would be to clean up your credit score. In order to do this, you will need to obtain a copy of your credit report.

Make sure and follow-up with any debt collectors listed on your credit report. One of the best ways to clean up your score is to set up payment arrangements to pay down any debts you owe. When you finish paying off your debts, ask the debt collector to provide you with proof that your debt has been paid. In doing so, you will be able to clean up your credit score and qualify for various loan programs.

For additional assistance in obtaining a home loan, your best bet is to speak to a loan program officer from a company like First Mortgage Company, Inc. A loan officer can provide you with more information regarding the best ways for you to qualify for a first time homebuyer's loan.


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