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Buyer's Handouts
8 Steps to Getting Your Finances in Order
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.
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 percent and 28 percent
of income, you need to get the rest of installment debt—car loans, student
loans, revolving balances on credit cards—down to between 8 percent
and 10 percent of your total income.
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.
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.
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.
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.
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.
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.
Copyright 2005. All rights reserved.
The Shannon Jones Team
6621 E. Pacific Coast Hwy.,
Suite 150
Long Beach, CA 90803
P: 562-961-1415 •
F: 562-961-1465
DRE #01247705
The Shannon Jones Team specializes your real estate needs! If you're buying or selling real estate in the Long Beach, Seal Beach, Signal Beach or Lakewood California areas in Orange County, contact The Shannon Jones Team at 562-961-1415 for outstanding service and phenomenal results.
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