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TRENDING BASIC MONEY MANAGEMENT TIPS
07.01.2020 / Borrowing « Back to all articles
5 Good Signs You Can Afford More House
Moving on Up
Buying your first house is a huge milestone, but it’s often not the “forever home”. Most people move into a home with a dream of moving into a better community, a bigger space, and with fewer needed repairs in the future. But when is it time to start moving on up? Here are a few signs that could indicate the time has come.
Positive Changes Are Happening
Negative changes are never a good reason to move up concerning a home purchase. When a divorce has happened, or prolonged illness, or the loss of a job, this could indicate that a change is needed, but not in a good way. It may make the buyer feel better to move into a better house, but these aren’t ideal circumstances to make a move. Wait for promotions, new babies, or an inheritance to start thinking about moving.
Low Debt-to-Income Ratio
The budget must be the harsh referee of whether to buy a new home. This is not so much about total income, or debt, but about the relationship between the two. How much of the monthly income is already committed to debts? If most of the money goes to the credit cards, the car payments, and student loans, there may not be much left for a major purchase. Someone who makes less money but has fewer debts may be in a better position to buy a house than a big earner weighed down with existing financial commitments.
Saving and Investing Are Going Well
Buying the next house should be made at a financial peak, not a valley. If the bills are being paid, but there is no money to save or invest, then it may not be time yet. But if debts are being rolled away, the emergency fund is full and the 401(k) is being maxed out, that’s a great time to consider upgrading your home.
Down Payment & Monthly Payments Are Achievable
Evaluating the potential for upgrading must be determined by the payment structure and budget. If your budget can handle a sufficient down payment of twenty percent for a second or larger home, as well as the monthly mortgage payments, then this goal is feasible. The down payment and mortgage payments will be higher for a bigger home, so that must be taken into consideration- but both need to be achievable. If your savings account could spare the down payment, but there is no money left over, it might be best to consider holding off.
The Credit Score Is Strong
And of course, buying a house entails borrowing a large sum of money. The credit score needs to be rock solid to even think about it. Pay off the debts already owed on time and in full, and your credit score will improve over time. This proves to the lender that the borrower is, in fact, capable of taking this step.
Mortgage 101: What You Should Know
07.01.2020 / Borrowing « Back to all articles
5 Good Signs You Can Afford More House
Moving on Up
Buying your first house is a huge milestone, but it’s often not the “forever home”. Most people move into a home with a dream of moving into a better community, a bigger space, and with fewer needed repairs in the future. But when is it time to start moving on up? Here are a few signs that could indicate the time has come.
Positive Changes Are Happening
Negative changes are never a good reason to move up concerning a home purchase. When a divorce has happened, or prolonged illness, or the loss of a job, this could indicate that a change is needed, but not in a good way. It may make the buyer feel better to move into a better house, but these aren’t ideal circumstances to make a move. Wait for promotions, new babies, or an inheritance to start thinking about moving.
Low Debt-to-Income Ratio
The budget must be the harsh referee of whether to buy a new home. This is not so much about total income, or debt, but about the relationship between the two. How much of the monthly income is already committed to debts? If most of the money goes to the credit cards, the car payments, and student loans, there may not be much left for a major purchase. Someone who makes less money but has fewer debts may be in a better position to buy a house than a big earner weighed down with existing financial commitments.
Saving and Investing Are Going Well
Buying the next house should be made at a financial peak, not a valley. If the bills are being paid, but there is no money to save or invest, then it may not be time yet. But if debts are being rolled away, the emergency fund is full and the 401(k) is being maxed out, that’s a great time to consider upgrading your home.
Down Payment & Monthly Payments Are Achievable
Evaluating the potential for upgrading must be determined by the payment structure and budget. If your budget can handle a sufficient down payment of twenty percent for a second or larger home, as well as the monthly mortgage payments, then this goal is feasible. The down payment and mortgage payments will be higher for a bigger home, so that must be taken into consideration- but both need to be achievable. If your savings account could spare the down payment, but there is no money left over, it might be best to consider holding off.
The Credit Score Is Strong
And of course, buying a house entails borrowing a large sum of money. The credit score needs to be rock solid to even think about it. Pay off the debts already owed on time and in full, and your credit score will improve over time. This proves to the lender that the borrower is, in fact, capable of taking this step.
