6 Benefits of a Discover Online Savings Account
Start saving with a convenient, high-yield account that has no fees.*
The post 6 Benefits of a Discover Online Savings Account appeared first on Discover Bank – Banking Topics Blog.
Start saving with a convenient, high-yield account that has no fees.*
The post 6 Benefits of a Discover Online Savings Account appeared first on Discover Bank – Banking Topics Blog.
As a small business owner, you may have a tough fight when it comes to standing out. Not only are you competing against other small businesses in your field, but you’re also competing against bigger corporations. And those big businesses have a more national reach and have the necessary cash to better promote themselves. Do …
Continue reading “5 Best Ways to Promote Your Small Business in 2021”
The post 5 Best Ways to Promote Your Small Business in 2021 appeared first on GrowthRapidly.
This post contains references to products from our advertisers. We may receive compensation when you click on links to those products. The content is not provided by the advertiser and any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed … [Read more…]
Would you like to spend less money up-front, drive away from the dealership in a brand-new car, and spend less time and money on vehicle maintenance? Consider leasing your next car. What Does Leasing a Car Mean? Leasing a car is a lot like renting oneâbut for a much longer period of time. When you… Read More
The post Leasing a Car: 7 Reasons Why You Should Consider It appeared first on Credit.com.
The sad thing about cars is that like boats and diamond rings, they’re depreciating assets. As soon as you drive yours off the lot, it immediately begins losing value. Some people are lucky enough to live somewhere with a reliable … Continue reading →
The post How Much Should I Spend on a Car? appeared first on SmartAsset Blog.
It’s imperative to keep your important documents in a fire safe box that can withstand the damage.
The post What Items Should You Put in a Fire Safe Box appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Singapore is a tiny country made up of 64 islands clustered around the end of the Malay Peninsula. Most of its population of nearly 6 million lives in Singapore City. Many locals speak English, and it is home to many … Continue reading →
The post How to Retire in Singapore: Costs, Visas and More appeared first on SmartAsset Blog.
If youâre thinking of withdrawing money from your 401(k), itâs important to understand if youâre eligible, how the process works and what the potential downsides are before tapping into retirement savings.*
The post Considering a 401(k) Hardship Withdrawal? Hereâs What You Need to Know appeared first on Discover Bank – Banking Topics Blog.
Buying your first house is a big decision. Not only is it a major financial investment, but the location of your home determines your community, neighbors, and perhaps where your children go to school. Becoming a homeowner isn’t for everyone—but if it is one of your financial goals, I recommend that you begin preparing as far in advance as possible.
In this post, you’ll learn 7 key home-buying tips to get prepared, save money, and become a happy homeowner. Plus, I’ll cover some generational trends and challenges that Millennials, Gen Xers, Baby Boomers, and the Silent Gen may face when buying a home.
According to a National Association of Realtors study, 36% of home buyers are Millennials or Gen Y, who are age 37 or younger. And 65% of these buyers are first-timers who are also married couples. They’re increasingly buying single-family homes in the suburbs.
Gen X buyers, who range in age from 38 to 52, make up 26% of home buyers. The NAR report shows they are ethnically diverse, in their peak earning years, and purchase more expensive homes compared to other generations. They’re the most likely to choose homes based on convenience to work and the quality of school districts.
Younger Boomers from age 53 to 62 make up 18% of home buyers. They typically move for a job or to downsize after their kids leave home. Older Boomers in the 63 to 71 age range make up 14% of home buyers. They’re more likely to move the longest distances for retirement, to downsize, or to be closer to family and friends.
Those age 72 to 92 are part of The Silent Generation and make up just 6% of home buyers. Most have already retired and have the lowest income compared to other age groups. They’re more likely to purchase a residence in a senior-care facility than a detached home.
The process of buying a home is largely the same no matter your age. But keep reading for tips to overcome some generational challenges you may face and how to get the best home deal possible.
Most of us start out renting because it doesn’t require a big upfront financial investment. But the downside to renting is that your monthly payments are a pure expense. In other words, once you pay rent, that money is gone forever.
When you own a home, it comes with some nice financial perks, including:
Additionally, when you own a home, you can have the lifestyle you want, spread out, and express your personal style.
But depending on where you live, renting may be more affordable than owning a comparable home. This is usually the case in big cities, such as New York and San Francisco.
Renting also comes with a convenient lifestyle, especially if you don’t like dealing with maintenance, doing yard work, or you travel frequently. So, no matter your age, knowing if you should buy a home really depends on:
For the vast majority of home buyers, you’ll need to qualify for a home mortgage to purchase property. Building credit is always important, but it’s critical before buying a home. Whether you’re a first-timer or a seasoned homeowner, your credit is a primary factor that mortgage lenders consider when evaluating you.
Not only does repairing and building credit help you get approved for a mortgage in the first place, it’s the key to locking in a low interest rate that saves huge amounts of money over the life of your loan.
For example, if you get a $200,000 fixed-rate mortgage with excellent credit, you’ll pay about $145,000 in interest with a 30-year loan. But if you have average credit, you’ll pay close to $190,000 in interest for the same loan.
Having less-than-stellar credit costs you $45,000 just in interest. Even if you sell your home before paying off the mortgage, having excellent credit translates into a monthly payment that’s $125 less than if you have average credit.
If you invested $125 per month for retirement, instead of paying it to a mortgage lender, it could easily grow into a nest egg worth over $200,000 within 30 years. Small financial habits, like how you handle credit, really add up. Read 6 Steps to Build or Repair Your Credit Before Buying a Home for key strategies to follow ahead of your home loan application.
Building credit takes time, and Millennial home buyers may have a short credit history or more student loan debt, compared to Gen X and Baby Boomers. That means Millennials should review their credit reports and make financial adjustments earlier in the home-buying process than older buyers.
There are many great programs for first-time homebuyers that may include mortgage interest subsidies or down payment assistance. But did you know that even if you owned a home in the past, you may still be eligible?
Many first-time homebuyer programs define a first-timer as someone who has not owned real estate in the past three years.
Many first-time homebuyer programs define a first-timer as someone who has not owned real estate in the past three years. So be sure to investigate and ask your mortgage lender how these programs could save you money, no matter your age or even if you owned a home in the past.
The U.S. Department of Housing and Urban Development (HUD) and one of its agencies, called the Federal Housing Administration (FHA), have helped more than 30 million people become homeowners since 1934.
These agencies don’t make loans, but they insure loans. That means lenders that give them will get paid even if the borrowers don’t make loan payments. This encourages lenders to give mortgages to hopeful homebuyers who might not qualify otherwise.
With an FHA loan, you don’t need excellent credit or a high down payment to qualify. The loan limits for a single-family home vary throughout the country but typically range from the low $100,000s to just over $200,000.
Ask your lender for details about FHA programs for first-time buyers. Or contact a HUD housing counselor for free or low-cost advice about your options.
Before you can qualify for a mortgage, you’ll need to prove to a potential lender that you have enough in savings to fund a down payment. It’s a one-time cash payment you pay at the home's closing.
You must make a down payment because home lenders generally won’t finance 100% of the purchase price. The bigger the down payment you can make, the less risky the loan is for the lender.
When you make a purchase offer on a home you can request that the seller pay some or all of your closing costs.
Plus, there are closing costs in addition to a home’s purchase price. These costs vary depending on where you buy a home. But remember that in real estate, everything is negotiable.
When you make an offer on a home, you can request that the seller pay some or all of your closing costs. You can also haggle with your mortgage lender not to charge certain upfront fees.
If you do negotiate with a lender to avoid fees, just make sure that it doesn’t cost you more in the long run. They can make up for fees by charging you a higher interest rate or including fees in the total amount of the loan, which means you’d end up paying interest on your closing costs.
The money for a down payment can come from your savings or gifts from family. If you’re already a homeowner, your down payment can come from the money you make when you sell your current home.
If you can make a 20% down payment on a home, you’ll avoid paying private mortgage insurance or PMI. PMI is s a special kind of insurance that lenders typically require you to pay when you borrow more than 80% of the value of a property, even if you have excellent credit.
So, exactly how much down payment you’ll need is difficult to pin down. It depends on the price of the home, the type of mortgage you get, and customary closing costs in the market. In general, you need enough cash to cover these main costs:
Once you begin saving money for a house down payment, you’ll probably get a little anxious about where to keep it. You might be tempted to invest it with the hope of turbocharging its growth.
But financial markets are volatile in the short term, which means you could lose all or a significant portion of your money right before you need it. Instead, tuck your down payment savings in a high-yield, FDIC-insured savings account.
That ensures your money will be completely safe, give you flexibility, and earn some interest to boot. Online banks typically offer the highest interest rates because they don’t have as much overhead as institutions with local branches. However, local credit unions can be competitive—if you qualify for membership.
Once you’re ready to become a homeowner, have good credit, and plenty of down payment funds, the next step is to get preapproved for a mortgage. Not only does a pre-approval tell you how much you can afford, it indicates that you’re a serious buyer who could close the deal quickly.
Depending on the seller’s circumstances, being able to close quickly could give you a huge leg up. They may accept your offer instead of a higher one that would take longer to close.
But remember that just because you’re pre-approved for a certain amount doesn’t mean you should borrow it. You’ll have other costs every month, in addition to the mortgage payment. These are called the PITI, which stands for principal, interest, taxes, and insurance:
Taxes and insurance can be rolled into your mortgage payment and then paid by your lender on your behalf. Additionally, you’ll have to pay utilities, maintenance, and perhaps homeowner association dues.
Don’t make the mistake of stretching your finances too far to buy a home. It may leave you house-rich but cash-poor and unable to save for other goals, such as retirement.
When you make an offer on a home, use your poker face with the seller or real estate agents. As I’ve mentioned, in real estate everything is negotiable. So, be interested, but not too eager.
Most sellers expect you to negotiate on one or more factors of the deal such as purchase price, potential repairs, and closing costs. Always make a purchase offer contingent on the results of a professional home inspection, a C.L.U.E. home insurance claim report, and additional evaluations customary in your area, such as a termite report. Do your due diligence carefully.
Before the closing, you should receive the Settlement Statement, Form HUD-1 from the real estate agent, closing attorney, or title company. Review it carefully, ask questions about charges you don’t understand, and make any necessary changes.
The closing agent will have a stack of documents for you and the seller to sign. You can handle it in person or remotely through the mail. The mortgage and deed will be recorded in the county records registry and you’ll receive a copy of everything. And finally, you can celebrate becoming a homeowner.
It’s easy to get swept up in the beauty of a home, its décor, its neighborhood, or the new lifestyle that you envision there. But take a step back and view every real estate purchase as an investment, even if it’s going to be your home sweet home.
To connect on social media, you’ll find Money Girl on Facebook, Twitter, and Google+. Also, if you’re not already subscribed to the Money Girl podcast on Apple Podcasts or the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web. The show is also on the Spotify mobile app! Click here to sign up for the free Money Girl Newsletter!
Key house image courtesy of Shutterstock.