by: Michael Creditfirm.
1. Figure Out How Much You Can Spend
This means going through your budget, income and expenses, and sitting down with your loan officer to figure out the monthly payment that you can afford as well as the loan amount you can be approved for.
Do not stretch yourself too thin, you will need to make sure that you will be able to afford all of your monthly housing expenses like the mortgage, insurance, taxes, association (if any), etc…
2. Budget Your New Expenses
At this point you’ve budgeted a certain amount of your income toward your future housing expenses. Now, the trick is to make sure that you can survive on what you have left.
Remember, utility bills like electrical and gas are a lot higher for homes than apartments. And don’t forget other expenses like water and sanitation.
Finally, you need to leave a little money aside every month for the inevitable repairs that come with home ownership.
A good way of seeing it you can afford all of these expenses is to put that money away as if you had those expenses and live on the disposable income that you would have if you purchased the home for a few months.
3. Down Payment
Although FHA loans only require a 3.5% down payment, the more you can put down, the lower your interest rate and monthly payment would be.
Putting 20% down on a home would get you the best possible interest rate and allow you to avoid paying PMI (Private Mortgage Insurance).
If you cant get a 20% down payment together and are stuck with a PMI, don’t forget to write it off your taxes. PMI is tax-deductible.
4. Check Your Credit Scores
A credit score determines a consumer’s creditworthiness when applying for a loan and is a key factor in determining the loan amount and interest rate.
The lending market’s credit score requirements constantly fluctuate, but it is generally accepted that a consumer needs at least a 640 FICO score to qualify for a mortgage loan.
Consumers looking to get the best available interest rates on their mortgage generally need a FICO score of 720 or higher.
Check your credit reports and credit scores at least 6 months before applying for a mortgage to give yourself enough time to straighten out any issues with your credit (if any exist).
If your credit score is standing in the way of you purchasing a house, sign up for CreditFirm.net’s professional credit repair service today.
Why Choose CreditFirm.net?
Assurance. Our Credit Repair process was developed by experienced attorneys.
Speed. Documents are typically processed and sent out for investigation within 5 days.
Support. Award winning customer service guarantees your satisfaction.
by: Michael Creditfirm
Here is what you need to know if you’re considering credit counseling.
A consultation and an actual meeting with a credit counseling agent has no impact on your credit. However, before you set up a debt management plan (DMP) with a Credit Counseling Company, make sure that all of the due dates on the accounts you have set up on the DMP have a due date that works with the expected date the payment will be received by the Credit Counseling Agency. This way you make one payment to the credit counseling agency and the agency sends the payments to the creditors on your behalf before the due date.
If you don’t have the dates coordinated on DMP you will likely end up with late fees and penalties from your creditors. Worst of all, these late payments will show on your credit report and your credit score will be affected.
Keep in mind, when on a credit counseling plan, you are not supposed to apply for any additional credit. Also, a creditor may place a note on your credit report that you are on a credit counseling plan.
The benefit of working with reputable credit counseling agency is that they may have existing relationships with many creditors, which may get you reduced interest rates, while in a credit counseling program. But, please keep in mind that working with a credit counseling agency doesn’t guarantee lower interest.
When on a debt repayment plan you make one payment a month to credit counseling agency, the money then gets allocated between the creditors until the debt is paid off. Typically credit balances are paid off within 5 years (depending on the amount of debt).
When choosing between bankruptcy and credit counseling, it is in your best interest to know exactly what you’re getting yourself into in each case. First and foremost, meet with a credit counselor to go over your budget, expenses and see if it credit counseling is beneficial for you.
CreditFirm.net is NOT a credit/debt consolidation company, we are a Credit Repair Agency. For more information about our services, please visit our Services page.
The Financial Awareness Video Festival will announce the names of the winners this month.
The New York Fed is currently running two concurrent festivals: one in New York State and northern New Jersey, and one in Puerto Rico. In each region, local college and university students are challenged to create a 30-second video on following subjects;
- Establish and maintain good credit
- Improve your credit score
- Check your credit report
- Repair Bad Credit
The winner will receive:
- $2,500 team prize
- Video will air in local movie theaters ($6,000 value)
- Professional career advice
Videos submitted for contest will be scored based on the following criteria:
Content Accuracy (20%)
- Are data or statistics presented accurately?
- Are the facts presented accurately?
- Are key terms defined correctly?
Financial Behavior (20%)
- Will the video motivate responsible financial behavior?
Connect (17 – 25 year old young adults)? (30%)
- Will the video connect to the target audience (17 – 25 year old young adults)?
- Is the video unique in conveying the message in its presentation?
The winner will be notified during an award ceremony to be held in late January 2013, where all participants who submitted a video will be invited to attend.
A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full.
They agreed that it was.
The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full.
They agreed it was.
The students responded with a unanimous ‘yes.’The professor then produced two Beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand.
The students laughed.. ‘Now,’ said the professor as the laughter subsided, ‘I want you to recognize that this jar represents your life. The golf balls are the important things—-your family, your children, your health, your friends and your favorite passions—-and if everything else was lost and only they remained, your life would still be full. The pebbles are the other things that matter like your job, your house and your car.. The sand is everything else—-the small stuff.
‘If you put the sand into the jar first,’ he continued, ‘there is no room for the pebbles or the golf balls. The same goes for life.
If you spend all your time and energy on the small stuff you will never have room for the things that are important to you.
Pay attention to the things that are critical to your happiness.
Spend time with your children. Spend time with your parents. Visit with grandparents. Take your spouse out to dinner. Play another 18. There will always be time to clean the house and mow the lawn.
Take care of the golf balls first—-the things that really matter. Set your priorities. The rest is just sand.
One of the students raised her hand and inquired what the Beer represented. The professor smiled and said, ‘I’m glad you asked.’ The Beer just shows you that no matter how full your life may seem, there’s always room for a couple of Beers with a friend.