Owning a home is still a goal that many Americans wish to accomplish. However, if the collapse of the housing market taught us anything, it’s that home ownership is not for everyone. Buying a home is a huge decision that requires an extensive review of your current and future financial circumstances. Essentially… it’s an investment. While there are instances in which you can refinance your mortgage for financial relief, starting off on the right foot is your best option. With that being said, being well informed about the home buying process and your personal finances is a must to prevent financial hardship down the road. In order to do this you will need to:
- Understand Your Current Financial Status
- Apply for a VA Home Loan
- Hire a Real Estate Agent/Being Home Shopping
Understanding Your Current Financial Status
Purchasing a home requires a significant amount of finances and the continued means to pay for the property. Interested veteran home buyers should start by assessing their current financial status to ensure that they are in fact ready to buy a home. In assessing your current financial status you will need to:
- Know what you can afford
- Know your credit standing
What Can You Afford?
It might seem very self explanatory when purchasing a home. However, many first time buyers make the mistake of underestimating the true costs of homeownership. This is in no way to deter you from purchasing a home, but to ensure that you’re purchasing a home that you can enjoy and not fall into debt with. Your monthly mortgage payment is not the only costs that you will incur once you sign on the dotted line. You will be responsible for closing costs, down payments, homeowners insurance, property taxes, utilities, and maintenance. It is ideal to get a general understanding of how much you’re looking at paying each month for the home. This will help you to factor what you can really afford.
What Does Your Credit Look Like?
Even if you intend to apply for a VA home loan, having a decent credit score and history are ideal. Good credit scores open the doors for more mortgage programs and allow you to get a better interest rate on your mortgage (which saves you money each month). You should pull your credit report to determine exactly what you’re dealing with. If you notice that you have a low credit score, you may want to clean things up before you begin searching for a home loan. Try to pay off old and outstanding debt and dispute any negative ratings that should not be on your report.
Applying for a VA Home Loan
American veterans have an abundance of programs and options out there for homeownership. Selecting the right mortgage provider will require a basic understanding of home loans as well as knowing a bit about the mortgage provider you intend to work with. As such, it is recommended that you do research on at least two to three mortgage providers before making a final decision. When looking at various VA mortgage programs, be sure to review information such as:
- Down payment amounts – While may VA loan programs offer a no down payment incentive, it is not offered by all providers. Therefore, find out what the down payment percentage is and what the eligibility requirements are for qualifying for a low or no down payment offer.
- Government guaranty – No one plans to default on mortgage payments, but in this recovering economy, there is always a chance. As such, the government often offers assistance for veterans which state they will pay a percentage of the home loan should you default for certain reasons.
- Credit requirements – VA loans don’t have such strict credit requirements but are still worth looking into. Find out what the minimum credit score is for qualifying for a VA loan.
- Interest rates – Lastly, check the interest rates of various mortgage providers based on your current credit score. You ideally want to find a mortgage provider that also offers good rates. This will save you money each month and allow you to pay off your home loan a lot faster. The Low VA Rates blog contains numerous resources on this subject, including a free Low VA Rates Buyer’s Guide E-Book.
After assessing the above information, you can then select the best mortgage provider. Once you’ve applied for the mortgage, you will be given a pre-approval letter which is necessary to begin viewing homes for sale.
Once you’ve gotten an approval notice, you are ready to begin shopping for your new home. Be sure to secure a real estate agent that understands the area you’re looking to buy in and also has an understanding of VA home loan regulations. From there, it’s just a matter of waiting until you find that place that you want to call home.
A successful entrepreneur has to have much more than a great idea for a business. Starting a business is full of challenges that can be discouraging and cause a person to doubt the validity of his or her idea. A successful entrepreneur has what it takes to follow through with an idea for a product or service despite the challenges. Sukanto Tanoto is one example of a business person who has experienced success as an entrepreneur. Take a look at some of the qualities that help to make entrepreneurs successful in what they do.
Most successful entrepreneurs are persistent. They thoroughly believe in their idea for a business. This makes it possible for them to push forward with a business regardless of the hurdles. Businesses can face challenges such as a loss of funding, construction delays, inventory issues and product flaws. If the person is not persistent in solving these problems, the business begins to suffer. The quality of persistence can also help an entrepreneur convince others such as investors that the performance of the business is going to exceed their expectations.
A Solid Education
An entrepreneur doesn’t necessarily have to have several degrees from a university to be successful with a business. The person does have to be knowledgeable about the industry that he or she wants to work in. For instance, a person who has worked her way from dishwasher to waitress to manager has a lot of knowledge and experience when it comes to the operation of a restaurant. This knowledge can help her become an entrepreneur who starts her own unique restaurant. Someone who knows the facts about a particular industry is more likely to be successful in starting a business within that industry.
A Desire to Keep Learning
Another important quality in a successful entrepreneur is a desire to keep learning. An entrepreneur can make adjustments and changes in his or her business by staying aware of trends in the industry. Also, he or she can run a business more efficiently by learning about current technology and methods of operation. In short, an entrepreneur who is always open to learning is able to sustain success in his or her chosen industry.
Excellent Communication Skills
An entrepreneur must be able to communicate well with others. Whether it’s talking with an employee, a franchise owner, a customer or a vendor, an entrepreneur should have great people skills. When an entrepreneur is easy to talk to, people are more anxious to work with the person to achieve the goals of the business. In fact, the best entrepreneurs are people who are inspiring and enthusiastic about what they do!
Finally, an entrepreneur must be dedicated to the success of the business. Even if the business starts out making lots of profit, the person must continually look for ways to make it better. This means that the person has a lasting dedication to the fundamental idea of the business.
Some people become accidental landlords simply by letting out their existing home when they have to move out for work or other reasons, and others set out to try and build a property empire.
Whether you are letting one or numerous properties, you are still a landlord and with that job title comes a set of rights and responsibilities that need to be observed and regulations that need to be adhered to.
This landlord checklist takes a look at what is involved in letting your property and what rules and regulations that you need to ensure compliance with.
Preparation is everything when it comes to letting your property and there are a number of things that you need to address before you hand over the keys to your new tenant.
Take a look at addressing any minor repairs or maintenance issues before letting your property, such as fixing leaking taps, replacing light bulbs clearing any clutter that is unsightly and could also be a potential safety hazard.
In addition to the physical standards of the property being acceptable there are also safety standards that need to be met relating to gas and electrical services and also things like making sure any furniture like sofas, are flame retardant compliant.
Keeping your tenants safe
It is your responsibility as a landlord to make sure that any tenants in your property are protected to the best of your ability and that they are safe and free from any potential health hazards.
This will mean that all the gas and electrical equipment that you supply in the property has been safely installed and maintained according to current regulations.
The frequency of the safety checks will depend on whether your property is classified as an HMO, which is a House in Multiple Occupation. In England and Wales, your property will be considered as an HMO if at least 3 tenants live there from different families, or it is occupied by more than 5 people in total. Seek to verify the status of your property with your local council if you are unsure in any way.
Health and Safety
Local authorities operate a Housing Health and safety Rating System (HHSRS) which was introduced under the 2004 Housing Act and it may be that the council decide to carry out an HHRS inspection on your property at some point, to establish if you are compliant with these regulations.
This normally happens when a tenant contacts them to ask for an inspection because they feel it is not safe or it might be down to the fact that your rental property is situated in an area where other similar properties have been shown to be hazardous, so they will want to check that your is not in the same condition.
If you follow the rules relating to fire safety and have the gas and electrical equipment checked on an annual basis, you will not only be maintaining a good standard of health and safety in your rental property, but you will also be helping to keep the property fully rented with happy tenants who feel safe and comfortable in their surroundings.
Rules came into place after April 6th 2007 that are designed to protect tenants deposits and if you rent out your home under an assured shorthold tenancy, you must use the tenancy deposit protection scheme.
This government-backed scheme is designed to provide a framework for receiving deposit monies and provides a system for releasing the money at the end of the tenancy subject to certain conditions being met.
You have to return the deposit to the tenant within 10 days of agreeing the figure to be returned and provided that they have met the terms of your tenancy agreement, there was no damage caused to the property and there are no rent arrears outstanding.
If you have a dispute with the tenant at the end of the letting period, you are entitled to keep the money within the scheme whilst you resolve any issues and agree on a final settlement figure if there are to be any deductions for damage or repairs etc.
Getting repairs done
If there are repairs to be carried out or faults that need rectifying whilst there are tenants in the property, you will need to give at least 24 hours’ notice of your intention to enter the property to inspect or carry out the work required.
You might be able to obtain immediate access in the case of an emergency, but the key to getting repairs done and keeping tenants safe is to maintain good dialogue with them and listen to any reasonable complaints or issues that are raised.
Being a landlord can be financially rewarding but it also comes with a set of responsibilities, which you ignore at your peril.
Tyler Cooper is a property investment consultant and researcher. He has also built up his own portfolio of buy to let properties. His articles mainly focus on the challenges of being a landlord.
What’s more fun than a great vacation with a bunch of friends? How about a great vacation with a bunch of friends that doesn’t cost a lot of money?
My wife and I just spent the Thanksgiving holiday weekend with my family in St. Louis. Since we live in Dallas, it obviously takes a little bit of time and money to get from here to there.
A quick check of flight prices and it looks like it costs about $250 for a single round-trip ticket from Dallas to St. Louis. That makes it a $500 trip (not to mention renting a car), which would have priced us out of the trip entirely since we are saving as much money as possible for our house.
However, we were able to make the trip for just $120 by turning it into a road trip.
Okay, so this isn’t ground-breaking personal finance advice here, but it’s worth mentioning because gas prices just keep falling. It certainly helps that Missouri has the cheapest gas prices in the country, and Texas isn’t far behind at #5 according to Gas Buddy. For my geography majors out there, about half of our driving was in the state of Oklahoma, which has the 4th cheapest gas in the country.
Overall we paid about $2.50 a gallon for the 1,200 mile trip. That comes to $120 in a car that gets 25 miles a gallon on the highway, which is pretty darn cheap when you compare it to the plane ticket costs. We saved $380!
With gas prices so low it might be worth it to get a few friends together and plan a road trip. Maybe you want to go skiing in Colorado or hit beach in Florida while the rest of the country freezes their buns off.
Obviously Christmas is just around the corner, and if you haven’t bought plane tickets by now then you’re going to be looking at paying huge premiums to fly around the holidays.
My suggestion: take a road trip. Here are the benefits of driving to your next vacation destination:
- Cheap gas = save money!
- Avoid getting molested by TSA agents
- Don’t have to rent a car once you reach your destination
- Stop at exciting roadside attractions like the World’s Largest Rocking Chair
- Did I mention it saves money!?
If you’ve been meaning to get a bunch of friends together to go somewhere fun and do something crazy, now seems like a great time to make it happen!
Christmas shopping can be stressful and expensive. But let’s be real, we put that on ourselves.
Christmas is a time when we should be enjoying family not going broke over the latest toys and gadgets. If you want to skip all of the stress that comes along with Christmas this season these tips will help get you there.
Communicate with Family About Christmas Budgets
Having to buy gifts for everyone in your family not to mention friends, teachers, babysitters, and more gets expensive fast.
If you’re feeling stressed out about having to buy so many gifts it’s pretty likely that your other family members are too. Talk to your family and friends and set realistic expectations.
Maybe instead of buying everyone a gift you can do a gift exchange. Or instead of spending $30 on a gift you can spend $15. Maybe some family members would be willing to abandon gift exchanges altogether.
Work out some sort of arrangement that everyone is comfortable with.
Keep Your Budget Realistic
It can be really hard to stay in the budget you set for yourself. It’s fun to buy the people you love gifts that you know they’ll enjoy, which makes going overboard easy.
Instead of falling victim to impulse purchases and overspending set your budget and stick to it. Once you have someone’s name marked off your list stop buying!
Look for Great Deals
If you shop smart you can make your money go pretty far. The key is finding those great deals.
You can use a service like Chippmunk to look for online deals and coupon codes based on price, retailer, and department. It’s pretty much a one stop shop for finding good prices and coupon codes when Christmas shopping online.
And if you’re shopping in store don’t forget to look for a mobile coupon to pair with the sale you found.
Create Memories – Not Clutter
Christmas doesn’t have to be about lavishing everyone with gifts. It should be about spending time with family and creating memories.
Instead of worrying about spending money create a tradition. If you have kids pull out the elf on the shelf and have fun with that. If you want to create memories with your extended family host a party, have movies watching session, or bake cookies.
In the end those memories are what really matters!
Win a $500 Visa Gift Card
And now, to make your money go farther we’ve partnered with Chippmunk to give one lucky winner a $500 Visa gift card!
This giveaway is open to residents of the United States and will end at 12:00 am on 12/15/14. You can enter the giveaway through the Rafflecopter widget below and the winner will be chosen at random. See the rafflecopter for terms and conditions for more info.
Good luck and Happy Cyber Monday!
I shared some big news a few days ago. My wife and I are building a new house! We are so excited but also nervous because this is a huge step for us, both for our finances as well as for our marriage and our family.
A lot of our friends and family want to know “why?” Why build a house instead of buy an existing one? Why not wait until your first child is born? Why are you getting such a big house?
The answer is we don’t know. We didn’t really think about any of that.
Haha just kidding.
Here are some answers to the most common questions we are being asked.
Why Build Instead of Buy?
This is a really good question, and after a lot of thought we decided to build our next house because this is going to be our forever home. My wife has literally been looking at houses online almost every day for the last two years, and in that whole time she only found one or two she was truly excited about.
We told ourselves that we didn’t want to jump from house to house, upgrading every few years to something a little bit closer to our dream house. We decided that we just want to do this once, and we want to do it right.
In building this house, we are able to customize everything from the countertops, hardwood floors, backsplash, carpet, and a whole lot more. We can customize the cabinet exactly how we like them. We can truly make this our dream home.
Not to mention the fact that the layout of the home we are building is exactly what we are looking for. While there will be some compromises on the finishings, this will essentially be our dream home right from the start.
Why Buy a House Now?
There are so many reasons we jumped at this opportunity now I always forget at least one when I’m talking to someone in person. I will try to remember them all for you guys.
- Interest rates are low today. I can’t tell the future but I believe they are going up based on the Federal Reserve’s decision to stop quantitative easing. Rates have already gone up since that announcement. I’d much rather get my forever house now at 4.125% than wait a year and get it at 6.25%. Unfortunately when you build you have to wait until the house is almost done before you lock your rate, which was the hardest part of building instead of buying
- Let’s add a few bullets about price. The prices literally went up $10k the day after we signed the contract. We knew we had to get in before the price increase.
- There are only a few lots left in the current phase. In the next phase, each lot will cost at least $50k more. The neighborhood we chose is selling like crazy and prices are going up.
- Speaking of the next phase, it’s a weird situation where the next phase is actually in a different county. If we had waited until the next phase, we would have to pay about 0.4% more per year in property taxes.
- Finally, our current house is not laid out well to have a baby. We are hoping to start our family soon, and in our current house the nursery would literally be as far away from the master bedroom as it could possibly be. We needed a layout conducive to having a baby, so we needed a new house.
Why Buy at the Top of your Budget?
There’s no question this house is at the top of our budget. Why make your house such a large chunk of your budget? It’s a darn good question, but I believe we have some darn good answers.
- It’s gonna be a bit of a challenge for us right now. However, my career trajectory is not flat. I know that I can work my tail off and earn a promotion in the relatively near future. And I can get another promotion from there. I’m darn good at what I do and my salary “tomorrow” is going to be quite a bit higher than it is “today”.
- With a fixed rate mortgage, as my income increases, the cost of my house stays the same. The house will go from the top of our budget to fitting very comfortably in our budget in a relatively short amount of time.
- I truly see this house as an investment as well as our forever home. It’s in a very desirable location and as you can tell by the fact that prices are already increasing by $60k in the next phase, there’s a really good opportunity here to build a lot of equity in this house.
- The whole reason we did a 2-week trip in Europe a few months ago is because we wanted to travel before we devoted our money to our new home. Sure there are other places we want to travel one day, but we are at the point in our lives where we are ready to put our money into our home and our (hopefully) future children.
We are Going to Love our New Home
The bottom line is that we are going to raise our family in a wonderful new home that is customized to our style. It is also, in my opinion, a great investment and will give us so much equity in the home after a few years that we can have a lot of financial freedom if we choose to sell and cash out on the equity we’ve built.