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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.
James E.
Bohne, Jr., REALTOR®
Mobile: (801) 791-9579
Office: (801) 476-9500
Fax: (801) 476-9581
E-mail: j.e.bohne@att.net |
Crest
Realty Inc.
Equal Housing Opportunity.
Equal Opportunity Employer. |
Copyright © 2005,
James E. Bohne, Jr., All Rights Reserved
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