Pinetop White Mountain Blog

GOOD SUNDAY MORNING EVERYONE!

We woke up this morning to that cold white stuff all over the ground again.  The past couple of weeks had been very Springy, but today Old Man Winter made his presence known once again. 

I have been looking for something interesting to post for the past few days.  This morning I came upon some good information for buyers on how to get your finances in order so you can purchase a home. 

The information is from REALTOR® MAGAZINE, the online edition and is provided to you courtesy of Realtor.org, the website for the National Association of REALTORS®.  I hope you find it useful. 

Have a wonderful Sunday and get ready, Spring is almost here and some of those bargains you have been watching all winter are going to be gone.  It is already picking up so don't miss out.

READ ON!

8 Steps to Getting Your Finances in Order

1. Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses such as car repairs, illnesses, etc., as well as predictable costs such as rent.

2. Reduce your debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 and 28 percent of income, you need to get the rest of your installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 and 10 percent of your total income.

3. Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

4. Increase your income. It may be necessary to take on a second, part-time job to get your income at a high enough level to qualify for the home you want.

5. Save for a downpayment. Although it’s possible to get a mortgage with only 5 percent down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent downpayment.

6. Create a house fund. Don’t just plan on saving whatever’s left toward a downpayment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

7. Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.

8. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

Tax Benefits of Home Ownership

The tax deductions you can take for mortgage interest and property taxes greatly increase the financial benefits of home ownership. Here’s how it works.

Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value
______

$12,577 = Total deduction

$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
(12,577 X .28 = $3,521.56)

Note that mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.

THANKS FOR READING, WE HOPE TO HEAR FROM YOU SOON!

SANDRA & BRUCE PAULOW, GRI'S

YOUR HIGH COUNTRY REALTORS®