After I entered the job force at 18, I had money problems for quite a number of years. I earned a decent income, but I lived paycheck to paycheck and just felt like I would never get ahead financially. One day, determined to get ahead, I decided to record every purchase I made for a month to find out just where my money was going. I learned a hard lesson that day that small purchases here and there throughout the month really add up. I committed to a much smaller budget and began stashing savings away. Then, I researched the world of investing and made a few strategic ones with some of my savings. I am now doing much better financially, and I want to help others who need it, so I am starting a blog. Come back often for money management tips and tricks explained simply!
Becoming a homeowner can be a major accomplishment for anyone. However, it will typically require the use of financing to make this purchase. For those that are in the early stages of buying a first home, there may be some information that can help individuals make informed decisions regarding their financing needs.
What Are the Advantages of Buying a House Compared to Renting One?
It may seem like it will simply be easier to continue renting a house. In addition to limiting what you can do with your home, it can also deny you of a number of important financial benefits. For example, the mortgage payments for a moderately priced home will often be less than the monthly rent for an apartment in many cities. Additionally, your mortgage payments will help you to build your own share of equity in the property. This can later be used to help you obtain loans for starting a business, dream vacations, or other major expenses.
Why Should You Be Careful With Adjustable Rate Mortgages?
Adjustable rate mortgages have been a fairly common type of financing. While it can allow you to take advantage of smaller early payments, these can quickly increase. This is due to the fact that the mortgage's interest rates will reset after several years. When this happens, the new interest rate will be determined by the current market rate. Due to this, you may be exposed to a sudden increase in mortgage payments when the new interest rate takes effects. In contrast, a fixed rate mortgage will have the same payments throughout the life of the loan. If you decide to opt for an adjustable rate mortgage, you should adjust your budget so that you will be able to handle this increase if it were to occur.
Why Would You Need to Purchase Mortgage Insurance?
One of the more difficult aspects of purchasing a house is coming up with the down payment. For individuals that are unable or struggling to save the money or this down payment, there are lending programs that may allow you to make a low down payment or skip this part entirely. However, it is often required to have mortgage insurance if you use this option. These insurance policies will compensate the lender in the event that they are forced to foreclose on the mortgage. This may add an additional expense to your monthly payments, but minimizing the hassles of making this down payment will may be worth paying this additional expense.Share
31 March 2017