8 Steps to Getting Your Finances
in Order
- Develop
a family budget. Instead of budgeting what
you'd like to spend, use receipts to create a budget for what you actually
spent over the last six months. One advantage of this approach is that it
factors in unexpected expenses, such as car repairs, illnesses, etc., as
well as predictable costs such as rent.
- Reduce
your debt. Generally speaking, lenders look for a total debt load of
no more than 36 percent of income. Since this figure includes your
mortgage, which typically ranges between 25 percent and 28 percent of
income, you need to get the rest of installment
debt-car loans, student loans, revolving balances on credit cards-down to
between 8 percent and 10 percent of your total income.
- Get
a handle on expenses. You probably know how much you spend on rent and
utilities, but little expenses add up. Try writing down everything
you spend for one month. You'll probably see some great ways to save.
- Increase
your income. It may be necessary to take on a second, part-time job to
get your income at a high-enough level to qualify for the home you want.
- Save
for a downpayment. Although it's possible to
get a mortgage with only 5 percent down-or even less in some cases-you can
usually get a better rate and a lower overall cost if you put down more.
Shoot for saving a 20 percent downpayment.
- Create
a house fund. Don't just plan on saving whatever's left toward a downpayment. Instead decide on a certain amount a
month you want to save, then put it away as you pay your monthly bills.
- Keep
your job. While you don't need to be in the same job forever to
qualify, having a job for less than two years may mean you have to pay a
higher interest rate.
- Establish
a good credit history. Get a credit card and make payments by the due
date. Do the same for all your other bills. Pay off the entire balance
promptly.
If you're interested in starting the home buying process, or simply have questions, please call or e-mail. Add any special requests you have in the comments section.
ADVANTAGE JANES REALTY cooperates fully with all other real estate companies and we have access to all available listings in our area. As experienced Real Estate professionals, we will provide the dedication, honesty, and outstanding service that each client deserves. I look forward to working with you.
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