- ‘Really, Really Messed Up My Life’
- Quick Start to Healthy Weight Loss
- Black Men Can Beat Prostate Cancer
- Health Screenings for Older Black Men
- Healthy Man of the Month for July 2016
- HIV Testing is HIV Prevention
- Your ‘Mental’ Endurance
- Bisexual Health Priorities
- Entertainment CEO DonJuan Clark
- New Drug Helps Men with Melanoma
Buying a Home
Recently, you read about the most practical savings tips and strategies from James Molet if you are looking to buy a home in a year. Now we have the second and final part of the series. Among the many things to consider in your savings plan is to account for new expenses in your budget, continue your dedication to saving, and perform detailed research before you make that home purchase. We break it down month-by-month.
Month 7, account for new expenses in your budget: You can expect larger bills and new expenses with a home. As a renter, some of your utilities (e.g. water) may be paid by a landlord; and those you pay now are likely to be higher in a larger house. Additionally, there will be new expenses:
- property taxes
- homeowner’s insurance
Be prepared to update your budget accordingly.
Months 8 – 10, continue saving: Along with your credit score, the amount you are able to save will be a key factor in determining if you will be able to afford a house. During this period, verify the anticipated amount of money you will have for a down payment as you will need that information when you speak with potential lenders.
Months 11 – 12, perform detailed research: Get recommendations for potential lenders from friends and family. Evaluate your bank, other mortgage bankers, as well as credit unions. Search credible websites. From these sources, identify at least three potential lenders.
The lenders you have chosen will pre-qualify you for a loan based on your gross monthly income, total monthly payments (e.g. car and credit card payments, etc.), and credit score to determine the amount of the loan – and the interest rate – they would be willing to make to you.
With the costs of potential homes in mind and the offers from the lenders in hand, use an online mortgage calculator to determine what your monthly payment would be based on the loan amount, the down payment, the interest rate, and factors such as PMI if necessary. Doing so will reveal if you have enough money for a down payment on a home that meets your needs and if you can afford the monthly payments.
If not, do not get discouraged. Now that you have started saving, managed your credit report, understand the process of picking a lender, understand how much you will need for a down payment, and identified the amount required run a home on a monthly basis, you are in a good position to buy a home at a slightly later point in time.
James Molet is the author of RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit available on Amazon.com. Mr. Molet shares insightful financial information for Healthyblackmen.org readers seeking to purchase a home, this is part two of a two-part series.