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You may think of downsizing as something that makes sense when you have an empty nest. Larger families do, of course, need more room. Downsizing can also be financially strategic and rewarding for you and your family if you have the opportunity to do so.
How Much Is Your Home Worth?
There comes a point in your life when the amount of money that your home is worth is very important. Maybe you need the money for retirement and are looking to move to a cheaper city or state. Maybe it’s time for you to pursue your goals and dreams. Whatever the reason, your home is a very large asset.
If you downsize, you’ll have a bit more money available to invest for your future. You may even consider buying an investment property. If all of your money isn’t tied up in a home, you’ll have a bit more freedom to do other things with your money.
A Smaller Home Means Smaller Expenses
When you downsize your home you end up with much lower expenses for your housing. You’ll save big on both utilities and home maintenance. You’ll be surprised as to how much extra cash you’ll have each and every month that you’ll be able to use for other things like investing, travel, or other expenses. You’ll have the ability to do things beyond simply achieve that one dream goal of home ownership.
What If You Don’t Already Own A Home?
There’s a lesson to be learned here for renters as well. If you’re getting ready to buy a home, you may want to think small. A smaller home that can suit your needs will allow you to save thousands of dollars over the life of the mortgage on your home. Remember that a mortgage payment is more than just the cost of the home. You’ll need to include things like taxes, insurance, mortgage insurance, heating, electricity, and more. The smaller the house that you buy, the less all of these things will cost. Think of what you could do if you invested that extra money that you saved on all of these things each month.
What Would You Do With The Money You Save?
Having a big, beautiful home is a fantastic goal to achieve. You may have other dreams that you want to pursue in addition to owning a home. While downsizing isn’t for everyone, many people use the money they save to do some pretty incredible things like:
- Go back to school
- Buy a vacation home
The Negatives Of Downsizing
If you move into a smaller home, there are a few drawbacks. For one, you’ll have less storage and will actually need to downsize your amount of belongings as well. You’ll also have less room for visitors if hey come to stay. If grandkids frequent your home, you may be hesitant to sell and find a smaller place. It may also be difficult to find what you’re looking for at a certain price in a specific area. Think carefully before you decide to downsize and see if it has the right benefits for you.
You know that you want to buy a house, but you may have only a limited amount of time to conduct a home search and discover your ideal residence. Luckily, there are many things that you can do to speed up your homebuying timeline.
Now, let's take a look at three tips to help you accelerate your journey from homebuyer to homeowner.
1. Refine Your House Search
A list of homebuying criteria is a must-have, particularly for a property buyer who wants to enjoy a quick, seamless house search. In fact, with homebuying criteria in hand, you can refine your house search and move one step closer to finding your dream residence.
As you craft a list of homebuying criteria, think about where you want to reside too. That way, you can further narrow your house search and focus exclusively on homes in your preferred cities and towns.
2. Get Pre-Approved for Home Financing
At first, it may seem like a lot of work to get pre-approved for a mortgage. But if you receive pre-approval for a mortgage, you may be able to avoid time-consuming home financing hurdles down the line.
Oftentimes, it does not take long to get the financing you need to buy a house. Banks and credit unions are available across the United States, and these financial institutions are happy to teach you about a variety of mortgage options. Then, you can select a mortgage that matches your financial needs and kick off your homebuying journey with a mortgage at your disposal.
3. Collaborate with a Real Estate Agent
If you face a time crunch to purchase a house but don't know how to start the homebuying journey, there is no need to stress. By hiring a real estate agent who can offer in-depth homebuying guidance, you can find your dream house in no time at all.
A real estate agent will do everything possible to ensure you can speed up the homebuying journey. First, he or she will learn about your homebuying goals and help you create a homebuying strategy. A real estate agent next will help you search for residences and assess houses in the cities and towns of your choice. And if you discover a house that you want to buy, a real estate agent will help you craft a competitive offer to purchase your ideal residence.
Let's not forget about a real estate agent's housing market expertise, either. A real estate agent understands how to navigate a buyer's or seller's market. As a result, he or she will make it simple for you to review houses that match or exceed your expectations. If you have concerns or questions as you pursue your dream home, a real estate agent is ready to respond to them as well.
Ready to streamline the homebuying journey? Use the aforementioned tips, and you can quickly and effortlessly find a great house and make your homeownership dream come true.
Once you move in with a partner, you know you have reached an important milestone in your relationship. For the first time, you could be talking about money with your partner. Whether you’re moving into an apartment or buying a home together, it’s important to break down how you’ll merge your finances together.
While it’s one of the least romantic conversations that you’ll probably have as a couple, sharing your financial situation is one of the most vital. Below you’ll find some tips on starting that conversation and making it a smooth one.
In any relationship, honesty and communication are key. This is especially true when it comes to finances. There’s a lot that goes into your own financial picture, and it’s important that you share that with your partner. This is important for everything that will happen in the future including purchasing a home. Some things that your partner should know:
- How much loan debt you have
- A rough idea of your credit score and history
- Your income
- Your spending habits
- Your saving habits
It’s important to know how another person’s habits will affect you as a whole when you’re thinking of making an investment together like a piece of property. Everyone handles money differently, and you should know how someone’s spending habits meshes with yours. Do they live paycheck to paycheck? Do they save money regularly? Are they financially strained? All of these questions help you to understand where you are similar and where you are different when it comes to money.
Have A Plan For How You’ll Divide Expenses
It may seem like a 50/50 split on expenses makes the most sense. For many couples it does. In other situations, if one person makes more money, they may need to pay a bit more of the costs. Some couples have one person pay the rent while the other takes the utilities on as an expense. Take amounts and percentages that you feel comfortable with and do what wrks best for the both of you.
Remember that chores count too when it comes to dividing up the “expenses.” This is just an extra tip that will help you to build a stronger relationship in the long term and help to save arguments.
Use A Joint Account For Expenses
You should still keep your own bank accounts when you move in with a significant other. All of your money shouldn’t be funneled into one singular account. Create a separate bank account for your expenses like rent or mortgage and utilities. All of your personal expenses should come out of your own respective accounts.
No matter how much you feel that you can trust a person, it’s always good to put everything in writing. This way, if there are any disputes in the future, you’ll always have a contract that you can refer back to. It’s also important to have these documents for things like security deposits or down payments. If the relationship ends at any point, it’s important for the person who paid for certain things to get their money back.
Planning and tracking your finances when you move in with a significant other is important. It will certainly make your life easier if you have these conversations beforehand.
FHA loans have long been a valuable resource for Americans who want to fulfill their goal of homeownership but who don’t have the benefit of a lengthy credit history and equity.
If you’re hoping to buy a home in the near future but want to explore all of your options in terms of financing, this article is for you.
Today we’re going to talk about FHA loans and how to know if you qualify for one.
What are FHA loans?
FHA loans are issued by private mortgage lenders across the country, just like regular mortgages. The difference, however, is that an FHA loan is “guaranteed” by the federal government.
Lenders decide your borrowing eligibility, and how much you can borrow, by determining risk. If you don’t have a sizable down payment (oftentimes 20% or more) and you have a low credit score, most mortgage lenders will see you as a risky person to lend to.
When you get an FHA loan, however, the federal government assumes some of that risk, allowing you to secure the loan anyway.
This means you can buy a home with a low credit score, a smaller than usual down payment, and save on some closing costs.
How do I qualify for an FHA Loan?
To find out if you qualify for an FHA loan, you’ll head to the same place as a traditional mortgage--a mortgage lender. Oftentimes, you can simply call or visit the website of lenders to get the process started.
As with all things, it’s a good idea to shop around for a mortgage lender. Their offerings will be largely similar, but there might be minor differences that make one better than another for your particular circumstances.
Down payment requirements
To secure an FHA loan, you will need to make a down payment of at least 3.5%. However, this low down payment comes with a price. You’ll typically be required to pay private mortgage insurance (PMI) fees on top of your accruing interest for your loan.
Credit score requirements
While you can often secure a mortgage with a lower credit score through an FHA loan, there are still some requirements. To secure a loan with the lowest possible down payment (3.5%), you’ll need a credit score of 580 or above.
Previous homeowners and FHA loans
A common misconception about FHA loans is that they are only for first-time homeowners. However, you can still qualify for an FHA loan if you’ve owned a home before as long as it has been three years since you’ve had a foreclosure or two years since filing for bankruptcy.
If you meet these three conditions, you should be able to secure an FHA loan through a traditional mortgage lender.
The homebuying journey may be complicated, particularly for those who fail to plan for it. Fortunately, there are lots of things that you can do to boost your chances of enjoying a successful property buying experience.
Now, let's take a look at three tips to help you start a successful homebuying journey.
1. Establish Criteria for Your Home Search
Create homebuying criteria – you'll be glad you did. With homebuying criteria in hand, you can speed up the process of finding your dream residence.
Think about the features you want to find in your ideal house. For example, if you want to own a residence that boasts a luxurious in-ground swimming pool, you can search for houses that offer this feature. Or, if you want to purchase a home that includes a central air conditioning system, you can hone your house search accordingly.
Don't forget to consider where you want to reside too. If you prefer big city life over small town living – or vice-versa – you should account for this factor as you kick off your house search.
2. Get Your Finances in Order
Obtaining a home mortgage is key, especially for individuals who want to streamline the homebuying process. Luckily, banks and credit unions are happy to help you select the right mortgage based on your individual needs.
Banks and credit unions employ friendly mortgage specialists who can take the guesswork out of home financing. If you meet with these professionals, you can learn about all of your mortgage options. Then, you can select a mortgage and enter the housing market with a budget.
3. Hire a Real Estate Agent
Navigating the homebuying journey on your own may prove to be exceedingly difficult, regardless of whether you are operating in a buyer's or seller's market. However, if you hire a real estate agent, you can simplify your house search and discover your dream residence without delay.
A real estate agent knows the ins and outs of the housing market and will share his or her expertise with you. That way, you can work with a real estate agent to become a housing market expert.
In addition, a real estate agent offers comprehensive support throughout the homebuying journey. He or she first will craft a custom homebuying strategy for you based on your property buying goals. Next, a real estate agent will keep you up to date about available houses in your preferred cities and towns. Once you find a home you want to buy, a real estate agent will help you submit a competitive offer to purchase it. Finally, a real estate agent will guide you through the home closing process.
For those who want to enjoy a quick, easy homebuying experience, it usually is a good idea to plan ahead as much as you can. Thanks to the aforementioned tips, you can launch a successful homebuying journey and take the necessary steps to acquire your dream residence any time you choose.