If you are one of those folks who are considering the purchase of a home, the current mortgage interest rates remain near or at record lows.
You have made a decision to possibly buy, but you are wondering, "Can I?" You need to assess your finances and get them in order first.
The following points can help you with that:
(1) Where is your money going? As a first step, it is important to identify where you are currently spending your money. How much on rent, your car, utilities, food, and other expenses, essential to your current living standard?
(2) Identify discretionary spending. How much are you spending at the mall, your lattes, spa treatments, and items not considered necessities? This exercise will provide you will a keen view on possibilities for saving money.
(3) Create a budget. Rely on your receipts to develop a family budget. This assists you in getting in touch with where your money has been going. Many folks haven't a clue where money has been spent.
(4) What percentage of your income has been going toward housing or rent? The usual range is typically between 25% and 28%. Other monthly installment debt, your car payments, department store balances, and credit cards, etc., need to be reduced to between 8% and 10% of total income.
(5) Can you generate more income? Some folks consider additional employment - either through a part-time or second job, to create more income to bring that total up to a viable level for mortgage qualification; or for a down-payment.
(6) Good credit history is vitally important. Make certain you are current and timely on making payments to credit cards and all other bills. Consider paying extra, rather than the minimum each month to get those balances more quickly reduced, and/or paid off.
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