Tag Archives: home ownership

afford a houseMany Americans are starting to feel as if they will never be able to afford a house, especially in areas like San Francisco, New York, and even Miami.

While many people choose to rent instead, you can still afford a house when you're broke. Here are a few steps to take if you want to own your own home.

Weigh Your Options

If you live in an area that buying a house is cheaper than renting (even factoring in insurance and repairs), it may be your best option to buy a home instead of rent. When trying to afford a house when you're broke, you may think that moving is expensive, but it doesn't have to be.

Some expenses may come up in your first few months of owning a home, but that is to be expected. Think about it this way: If you typically rent for $1,500 a month and you buy a home that only costs $800 a month, you are already saving $700 every single month. If something breaks down, and it costs $500 to fix, you still get ahead by $200 by having your own home.

Now, owning a home isn't always cheaper, so it's best to weigh your options. However, in many areas, including my own, owning a home tends to fare better than renting.

Look Into Assistance to Afford a House

Every state has home buying programs that can help you afford a house when you're broke. While the assistance varies from state to state, it's still worth it to look into what yours offers. Some will help you secure a loan as a first-time home buyer, even if you are low-income.

Some states even offer grants to move into less desirable areas or moving into more deserted places. It's best to look into these programs to see what you qualify for, you may be able to get your home for a lot cheaper than you first thought. ...continue reading

Wait, what!  Save money on a loan?  That’s right.  I bet you didn’t know that you could save money on the loans you have.  Sure, one simple answer is to look for the lowest interest rate. But in the days of the internet, it has become harder for lenders to charge more than the market rate for the privilege of using their money. 

Take, for example, your average mortgage.  Let’s say it is for $200,000 and is on a 30-year fixed rate loan of 6 percent. Based on that the monthly payment is $1,199 or a total payment of $431,640 over the life of the loan.   You got it right, the bank will charge you more than double what your original loan was for if you keep the loan for the entire 30-years. 

OK, enough with the depressing news, let’s see how you can save some money.

Extra Payments

Now you know how much your loan costs why would you be content with making the minimum payment every month.  Instead, you want to put together a plan to make at least one extra payment per year.

These payments will automatically be applied to the principal balance on your loan and this will help you to not only pay down the loan by eliminate some of the interest payable.  If you think this sounds too good to be true then check out the math for yourself. 

Based on the payment schedule mentioned earlier one additional payment per year will help you to save more than $45,000 and will cut nearly five years off the life of the loan – talk about saving.

Bi-Weekly Payments

You might have assumed that you can only make monthly payments on your loan but this isn’t the case.  Besides making extra payments another option is to ask your bank to put you on a bi-weekly payment schedule

Doing so will cut the total payment amount in half and this will make it easier to manage from a cash flow perspective.  In addition, you are reducing to total amount of time which the interest can compound and this will result in additional savings.

Shop Around for Mortgage Insurance

This is something else that most people don’t know but you can shop around for mortgage insurance.  In this way, you can find a policy which might be as much as 20 percent less than what you are paying now. 

However, you don’t want to take those savings and run to the casino, instead use the money to accelerate the payments on your mortgage.  Even if you only save $100 per month that is the cost of another additional mortgage payment every year and if you can do this AND make the additional payment as mentioned above, then you can save close to $94,000 and reduce the life of your mortgage by 10 years.

Property Taxes

This is something else which most people take at face value but in most places, you can ask to have your home reassessed, especially if the property values in your community went down over the last year. 

By doing so you can lower the cost of your property taxes in absolute terms and this will give you extra money to put towards your mortgage.

Hit the Reset Button

Ok, many lenders won’t be willing to do this but in some cases, you can ask to have your mortgage reset, especially if you regularly make large payments. 

This will recalculate the payment over the remaining time that is left on the loan and this could result in further savings.

Hit the Pause Button

While the other tips were geared for borrowers of all ages, this one is for older borrowers who can use the equity in your home to pay off their existing mortgage and then take the money they saved to invest for their retirement.

This is called a reverse mortgage and has become a more popular option in recent years.  If you want to learn more about reverse mortgages, then check out this state by state listing of vendors.

There you have it, six ways to save money on your loan.  Check them out for yourself as the money saved will help you to achieve financial freedom.


credit scoreOur credit score determines a lot of things we are able to do with in our financial lives.

Without a good credit score, we might have problems getting credit cards, get a decent deal on our auto loan and so on.

A good credit score enables us to get a decent mortgage so we can buy a house for ourselves and our families.

But, what if our credit score simply is not good enough to get a deal that is acceptable for our current financial situation?

Credit scores can mean the difference between a mortgage and down payment that we pay with ease, and one we’re going to struggle with.

Financial decisions are the cornerstone of our modern lives. Not handling our finances, the proper way, may cause our credit score (and thus our credit worthiness) to crumble.

This is a vicious circle and we should avoid bad financial decisions not only when considering to buy a house, but every time we use our credit card.

Because this is a very important topic for many of us, we want to break the whole credit score thing down to some basic elements in order to give you a glimpse at what it means to have a “good enough” credit score to buy a house.

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