4 Tips To Help You Budget for Your Perfect Home

Finding your dream home is a thrilling experience, but it can be daunting, especially when it comes to budgeting. Between finding the perfect location, deciding on the size and style of the house, and working out the financial side of things, it's easy to feel like you're drowning in the process.

As a future homeowner, you want to make sure that you don't go beyond your means and end up with a budget that leaves little room for other things. Fortunately, there are a few tips and tricks that you can follow to help you budget for your perfect home.

In this blog post, we'll share four tips to help you budget for your perfect home.

Set a Realistic Budget

The key to creating an effective budget is to be realistic. It's important to strike a balance between setting a budget that's too tight to afford the basics and one that's too lax, leading to potential debt. 

To achieve this balance, you'll need to carefully consider your income, expenses, and determine how much you can feasibly allocate towards a mortgage payment each month. 

By taking these factors into account and being mindful of your financial goals, you can develop a budget that is both sustainable and tailored to your specific needs and circumstances.

Work with a Buyer's Agent

When you're in the process of purchasing a home, it's highly beneficial to work with a dedicated buyer's agent. 

A buyer's agent not only assists in finding properties that align with your specific requirements but also excels in negotiating the best possible deal on your behalf. 

Moreover, they provide invaluable guidance on the local market, offering insights that can significantly enhance your home-buying experience. By leveraging their expertise, you can navigate the intricate process of buying a home with confidence and ease.

Consider All the Costs

When buying a house, there are various factors to consider beyond the property cost. Alongside the purchase price, it's important to take into account the closing costs, which encompass fees for appraisal, inspection, and title search. 

Moreover, it's crucial to budget for additional expenses such as moving costs, homeowner's insurance, and property taxes. By keeping all of these aspects in mind, you can create a comprehensive budget that accurately reflects the total cost of homeownership.

Save for a Down Payment

Saving for a down payment is a crucial step in the home-buying process. It not only helps you secure your dream home but also has long-term financial benefits. 

By putting down a larger amount upfront, you not only lower your monthly mortgage payment but also potentially qualify for better interest rates. Aim to save at least 20% of the purchase price, as it shows financial stability and reduces the need for private mortgage insurance. 

Additionally, explore special programs offered by government organizations or non-profit groups that provide down payment assistance, helping you achieve your homeownership goals sooner. 

Remember, the more you save, the closer you are to turning your homeownership dreams into a reality.

Final Thoughts

In conclusion, budgeting for your dream home doesn't have to be an overwhelming process. By setting a realistic budget, working with a buyer's agent, considering all the costs involved, and saving for a substantial down payment, you can make the journey to homeownership smoother and more manageable. 

Remember, the key to a successful purchase lies in careful planning and a comprehensive understanding of the financial commitment involved. Take your time, do your research, and don't rush this important decision. 

Your dream home is within reach, and with these tips, you're one step closer to unlocking the door to your future. Happy home hunting!

Tips for Financing a New Home

Financing a new home can seem daunting, but it doesn't have to be! There are plenty of options available for those with good credit scores and even for those with bad credit scores.

The most important thing is to research the different ways to pay for a home, the costs that will be expected of you during the process, and which of your options will be the best for you. 

Below are a few things to consider when looking over your financing options.

Credit Score

Your credit score is one of the most important factors in financing a new home. The higher your credit score, the lower your interest rate will be. 

If you have a good credit score, you may be able to qualify for a conventional loan with a low down payment. However, if your credit score is low, you may need to look into other options, such as an FHA or VA loan.

An FHA loan is a mortgage insured by the Federal Housing Administration. This loan is a great option for first-time homebuyers or those with less-than-perfect credit. 

The down payment on an FHA loan can be as low as 3.5 percent of the purchase price of the home.

A VA loan is a mortgage backed by the Department of Veterans Affairs. These loans are available to active-duty service members, veterans, and their spouses. The down payment on a VA loan can be as low as 0 percent.

Home Loans

There are many different types of home loans available, and the type that you choose will depend on your financial situation. Some common types of loans are fixed-rate loans, adjustable-rate loans, and jumbo loans. 

Fixed-rate loans have interest rates that stay the same for the life of the loan, while adjustable-rate loans have interest rates that can change over time. Jumbo loans are for borrowers who need to finance more than the conventional loan limit.

Down Payment

The amount of money that you put down on the house you’re looking to buy as a down payment will also affect your monthly payments. If you put down less money, your monthly payments will be higher. 

However, if you put down more money, your monthly payments will be lower. It's important to consider how much money you can afford to put down before you apply for a loan.

Closing Costs

Another factor to consider when financing a new home is closing costs. Closing costs are the fees associated with getting a mortgage and can vary depending on the lender you choose. 

Typical closing costs include private mortgage insurance (PMI), appraisal, and origination fees.

PMIs are insurance policies that protect the lender if you default on your loan. Appraisal fees are charged by the lender to have a professional appraiser assess the value of the home you're looking to purchase. 

Origination fees are charged by the lender for processing your loan application and can vary based on the type of loan you're applying for.

When you're ready to finance a new home, the process doesn't have to be difficult or overwhelming. By doing your research and understanding all of your options, you can find the best option for you and start fresh in your new home. 

Also, don't be afraid to ask questions and get help from a professional if you need it. With a little preparation, financing your new home can be a smooth and stress-free process.

First Time Buyer? 7 Things You Need To Know Before You Purchase A Home

Are you a first-time home buyer ready to get into the market? Between advice from friends or family, loans, closing costs and more, it can be overwhelming. Here are seven important things you need to know that can help alleviate your anxiety: 

Examine Your Credit

A poor credit score, or no established credit, can alter your home-ownership plans. Get a free credit report and read through it for errors. If you find any mistakes, contact the credit reporting bureau to ensure they are corrected. This can greatly affect the loan you may get. 

Collect Documentation

Gather pay stubs, W-2 forms, bank statements, filed income tax returns for the past two to three years, and any other documentation you may feel is necessary. Have them available to show to the lender. You may need to provide this paperwork to a few different people, so it's important to have them readily available. 

Pre-approval

Getting pre-approved for a mortgage is important when you are house hunting. Your current bank or local credit union, like Saginaw Medical Federal Credit Union, are good places to start your search. You can also search online to find lenders offering the best rates in your area. Applying to multiple lenders helps increase your chances of getting a loan approved at the best rate possible without having a negative impact on your credit score. 

Create Your budget

One of the most important steps is to establish your budget. It’s necessary to determine how much you plan to pay for your house. It is recommended that buyers spend no more than one third of their income on housing. Your monthly payment can also vary depending on how much you plan to use for a down payment. 

Find Out Closing Costs

Closing costs usually contain origination charges, settlement and title fees, taxes and items like homeowners' association fees and homeowners insurance. Sometimes, they are often higher than expected, so it's important to budget accordingly. 

Choose A Real Estate Agent

It is ideal to find and choose a real estate agent to assist you with the process. Utilize local ads or the internet to research and assemble a list of local agents and start finding out more about their experience. Look for realtors with a lot of experience, especially in the area and price range where you intend to buy. These realtors will be familiar with the current housing market and the history of the market in your preferred area, and they can help you distinguish between good and bad options.

Be Patient

First-time home buying is time-consuming and stressful. Many first-time home buyers become disheartened due to rising property prices and increasing interest rates. There's also chances that there may not be enough properties available that suit the buyers needs.

Taking important necessary steps before the home-buying process can save you time and money. It's important to do your research and talk to different professionals before you decide to make an offer on a home. These tips can help you to be prepared to buy your first home.

Related articles

• A Complete Guide to Refinancing Your Home Mortgage
• How to Differentiate the Rates
• Benefits Of VA Loans In GA
• Options for Down Payment Assistance

How to Know When You Can Finally Afford to Buy a Home

If you have always dreamed of owning your own home, you might be afraid that you can't afford one. 

Even with the right planning and months or years of saving, it can be a big step that doesn't always seem attainable. 

However, there are a few signs that you can look for to determine if you truly can afford to purchase a house. These are a few signs that your bank account can handle a mortgage payment.

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You Have a Down Payment Saved Up

First and foremost, you will probably be required to save up a down payment to purchase your home. In many cases, you will need to have at least 20 percent of the price of the home in savings. 

Even if you don't have to pay this much, having saved up a down payment is a great first step. After you have saved for a down payment, consider allocating that monthly savings amount to something else like closing costs. 

Once if you have reached a savings goal, continue to add that money to your savings so it never feels like a burden, but rather an expected “expense” each month. 

You're Paying All of Your Bills On Time

It's important to be paying all of your bills on time before you think about purchasing a home. Not only do you have to worry about your credit rating, but you don't want to fall even more behind on your bills after purchasing your home. 

If you can comfortably pay all of your bills and have money leftover to save, buying a house could be a good option for you. Ideally, you should be putting money into your savings for a house that equals what a monthly payment would be. 

This will allow you to see how much money you have leftover if you really did have a mortgage payment. 

You Qualify for a Mortgage

Before you can purchase a home, you have to ensure that you qualify for a mortgage. Luckily, you can find loans which can make home ownership easier than you think. 

For example, if you are a veteran or active service member, you can purchase a home with a VA loan, which requires no money down. Take a look at Low Va Rates to find out how you can afford to buy a home. 

You Have an Emergency Fund in Savings

It's important to have an emergency fund in your savings account. Then, if something goes wrong with your home, you will have the money that you need to cover the expenses. Your emergency fund can also help you if you fall behind on your mortgage due to unforeseen financial emergencies. 

Your Income is Steady

Your income should be steady, and you should know how much money you will bring in every month. If your income is unreliable, then you will need to be able to make your mortgage payment with the smallest amount of money that you receive in a month. 

This is a good indicator of how much you can really afford for a new home. 

You've Had the Same Job for a While

Your mortgage lender will probably want to know that you have had your job for a while. Different lenders have different requirements, but you will probably need to have the same job for at least one year before you can look into a mortgage.

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Purchasing your own home can be a wonderful milestone. Although you might be afraid that you can't afford to purchase a home of your own, these are a few signs that it is finally time. 

If these things apply to you, then you can schedule an appointment with a banker to find out more about qualifying for financing and purchasing your first house.

How to Finalize a Stress-Free Mortgage Deal?

There are a lot of words that people have used when describing mortgages, but “stress-free” isn’t one of the more common ones. Much of the time, every aspect of getting a mortgage is loaded with stress and causes a good deal of anxiety for the borrower.

Not only do you have to go through the approval process, which can be stressful all on its own; you also have to finalize the deal and close everything so its all legal and ready to go. There’s no magic formula that’s designed to take all the stress or unforeseen obstacles out of getting a mortgage, but if you know some of the potential issues ahead of time, you may be able to move through the process with little or no stress.

Make a List

One of the more annoying things about a process like this, is that it’s easy to think of a ton of pertinent questions when you are sitting in traffic or out grocery shopping, but you draw a blank when it’s time to ask. Make it easy on yourself and carry around a small notebook and pen, or use your mobile device to type questions as they pop into your head.

Whether the question is for the real estate agent or your lender, you’ll have it there in front of you so you can ask when you speak with them. Sometimes, the questions you ask ahead of time will provide information that will make finalizing the mortgage deal easier than if you’d kept the question to yourself.

Take One Last Look

You may have gone through the new house multiple times and had a home inspector do his thing, but it’s not a bad idea to walk through the house one last time a couple days before the closing date. This is more of a “better safe than sorry” kind of approach, but it’s not completely unheard of for people to change things that were supposed to remain the same or take things they were supposed to leave before the deal closes.

It’s also a good time to see if any new damage has occurred, especially if there has been bad weather since the last time you were there. Check to ensure the electricity is working well and the plumbing seems good. If the present homeowner was supposed to make any fixes or do renovations before you moved in, you should check for those improvements too. If things aren’t as they should be in any part of the property, contact your real estate agent right away to have the issue rectified before the deal is closed.

Check the Document Preparation

All of the documents prepared as part of your real estate deal were drawn up by professionals, but that doesn’t mean you shouldn’t look them over a handful of times before closing. In all likelihood the information will be just as it should be, but no one is perfect and you certainly won’t have a stress-free closing if something is wrong.

Check over the wording, all the names for spelling and all the digits for accuracy. The interest rate is also important to check. Don’t just assume that any mistakes will be fixed later and everything will be fine. That may well be the case, but give your lender a call immediately if you notice any issues or even if certain information doesn’t make sense to you. Also, keep a copy of every page of every document you sign.

Call the Utilities

If you want to move into your new home right after the mortgage closes, or even within a few days you should call the utilities ahead of time. If you’re moving to a new area and aren’t sure about which utility companies are used, ask the seller for the names and then get them transferred into your name so there’s a smooth, stress-free transition when you move in. This way, if there will be any delays or issues they can be dealt with before you get there.

Keeping Up with Costs

If you have ever purchased a home before, you know there can be a laundry list of closing costs that the buyer never saw coming. Inspection fees, attorney fees, deposits, etc, they all add up and they can be quite stressful when you think you’re home free and the deal is done. Make a point of finding out what the closing costs will be ahead of time, so you’re ready when they spring them on you. The number you get might not be 100 percent accurate, but it will be close and you’ll be prepared.

Author Bio:
Jonathan Baker is an active blogger who writes about business and finance. He lives in Toronto with his family and also works as a financial adviser to The Butler Mortgage team. He keeps himself about the latest trends in finance and business world and passes on these information to others through his blogs. He can be followed on twitter @Jonatha97039368Image 

Source: www.shutterstock.com

The Top 5 Tips to Refinance Your Mortgage

In efforts to improve lending in the struggling U.S. economy, the government has begun to reduce the federal interest rate by buying bonds. This has created a lending environment which is very favorable towards the borrower. Since it has become less expensive to borrow money, lenders can provide great interest rates for home owners to refinance. In addition to taking advantage of the currently low rates, there are a few other things a homeowner can do to reduce their interest rates, reduce cost and fees, and save time overall.

Here are the top 5 ways to reduce your costs and expenses when refinancing: 

Reduce Closing Costs - there are a bevy of "fees and expenses" that can be tacked on when you apply for a mortgage or refinance. Closing costs usually amount to about 2 - 5% of the total cost of your home. These expenses include things like appraisals, title search fees, pest inspections, origination fees, broker fees, etc. In your GFE, or good faith estimate of fees (when you apply for your refinance), brokers or lenders will include an itemized list of these expenses. 

This list will include all the necessary fees as well as extra expense which pay the broker or lender. It is possible to reduce closing costs by negotiating with your mortgage broker or lender. Ask a lender to explain the fees and see if they can "waive" application fees, underwriting fees, and processing fees. Buyers may negotiate with the sellers to absorb some of the closing costs. You can also opt for a no closing cost refinance. Sometimes this type of mortgage does pass the costs and fees into the mortgage at a higher interest rate. 

Refi to get rid of Private Mortgage Insurance - PMI or private mortgage insurance is required if you have lower than 20% equity in your home. PMI can be expensive and can cost in the range of $50 per every $100,000 borrowed. For many homeowners, this amount can mean the difference between buying and renting. If the expense of PMI is too large, a borrower can refinance in order to get rid of it. A lender can get rid of your PMI by re-appraising your home and determining whether or not you have 20% equity in it. If you believe that your home values have improved, and that your equity position is 20% or better, refinancing to get rid of PMI might be a good step to take. 

Improve Credit to get Better Interest Rates - having pristine credit will always improve your access to loans and cheap money. There are ways that you can actively improve your credit score. Ways you can improve your credit include pulling your own report and clearing any mistakes which may be pulling your credit number down. 

Experts estimate that over 30% of credit reports contain inaccurate data that could negatively affect a borrowers ability to get a loan. Since all U.S. citizens get access to 1 free credit report per year at annualcreditreport.com, it is very easy to pull this report and check for any bad data. If you see anything that look inaccurate, you can write a letter disputing the inaccurate information. 

If your report seems up to date and accurate, but your score still needs help you may need to take a more active role to improve your score. In this case, you may consider a "credit builder loan" from a credit union. This type of loan is a small easy to re-pay loan, designed specifically to improve a borrower credit score. It usually takes around 6 months to repay and can improve a borrowers credit a number of points. 

Shop Online For The Best Interest Rates - since the online marketplace for loans is one of the easiest ways to find rates, you can compare multiple lenders fairly easy. There will still be a fairly large difference in rates and expenses from lender to lender. Some lender costs ranges from $100's - $1000 for the fees that compensated to each broker or lender. By searching online, you can quickly determine which lenders are charging the most in fees. You should also contact multiple lenders to let them know you are working with other companies to get the best rates. This will give you some leverage and you may be able to negotiate to get the best rates possible. 

Reduce the Amortization Period (shorten loan term to save) - most mortgages come with a repayment (or amortization period) of 15 to 30 years. The simple fact is that, the longer the amortization period, the more money you will repay in interest. Even though a longer repayment term will come with a lower monthly payment, you will still end up paying more money in the long run. 

By reducing this repayment period, you will end up paying SIGNIFICANTLY less interest on your mortgage. The difference of 5 years on a $200,000 mortgage (at 4%) can amount to as high as $25,000 in total interest payments. You need to decide whether or not a lower monthly payment or less in the total amount of interest payments is better for you.