If you were to ask 100 women “What would you like to achieve financially?” Buying a home is usually one of the answers. Some women think that they can never own a home – which is not true! There are so many success stories of home buyers who never thought they would get there. In addition, homeowners tend to have greater financial success in the other areas of their finances life.
The benefits of owning a home include: building equity, saving money on taxes and an integral step towards building wealth. With interest rates so low, this is a great environment to buy a home. This following is a checklist with tips and guidelines to buying a home. If you already own a home, some of these tips will be helpful for refinancing your home. Real estate is not a substitute for stocks but it plays a big part in your financial fitness.
1) CHECK YOUR CREDIT. Get a recent a copy of your credit report, especially your FICO score (the score lenders use to determine your interest rate). You can get your FICO score and all three credit reports at MyFICO.com.
2) HOW MUCH HOME CAN YOU AFFORD? Start with your monthly payment and plug it into a mortgage calculator. (Great one on www.eloan.com: Home Affordability Calculator). This site tells you how much home you can afford assuming certain numbers. For example, if you make $6,000 per month before taxes, you can afford anywhere from a $125,000 to $442,000 home purchase price assuming $25,000 as a down payment. There are different choices with the actual monthly payments. If you don’t have enough saved for a down payment, create a separate savings account and come up with a savings schedule. Only borrow what you can afford!!!
3) ORGANIZE YOUR DOCUMENTS. Get together the following documentation: past 3 years of tax returns, recent paychecks, bank statements, investment statements and all other financial statements.
4) WHICH MORTGAGE IS THE BEST FOR YOU? Understand the different mortgage options. Most are based on a 30-year amortization cycle: fixed-rate, adjustable and a hybrid. Hybrids are very popular now; fixed rate for a certain amount of time and then they adjust annually. Consider a 15- or 20-year fixed rate mortgage. The payments will be a bit higher, but you will end up paying much less interest over the course of the mortgage and be debt-free much sooner!
