Can Your Monthly Budget Afford a Home?
If you\’ve been renting for a long time, you may have fallen into the false notion you can never buy a home. But before you throw in the towel, take some time to evaluate your rent expenses versus a home loan payment after all tax deductions. After thoroughly evaluating both alternatives, you still feel a mortgage loan is beyond the reach of your monthly income, don\’t give up complete hope. You have many other creative alternatives to help you conquer a devastating loan payment.
If you set things up right, you could make up for most of your monthly loan payment and a large portion of the utilities. When you factor in the tax savings and increased net worth, you have the potential to net a respectable profit. Plus after you pay off the mortgage, you own and asset without any liens and encumbrances. Many renters, single or married, have benefited from home ownership after taking the necessary steps to enter the real estate market. Here are some other alternatives to check out:
1) Add an income producing guest quarters to your home.
2) Reduce your monthly loan payment by switching to a low adjustable rate loan. In light of the recent melt down in the mortgage business, you should consult with an experienced mortgage agent or real estate lawyer prior to locking yourself into this type of loan.
3) Slash your monthly mortgage expenses by signing up for a graduated payment loan.
4) Sign up for a balloon mortgage to cut your monthly expenses.
5) Consider purchasing a duplex, triplex, or some other income producing home to help you cover the cost of the mortgage.
6) Check to see if your area offers a mortgage credit certificate (MCC) program. With a MCC, the Federal government gives you a mortgage subsidy up to $2000 per year.
7) Seek out a part time job to increase your monthly income.
Ask your boss for a raise or housing aid.
9) Look into the alternative of buying a property together with a family member or friend in the same financial circumstances.
10) Speak to a mortgage agent about the alternative of an interest rate buy down.
11) Look into the option of assuming a low interest FHA or VA loan.
12) Acquire a low-equity rate buy down.
By using the above options, you can slash your monthly loan obligations and increase your cash flow. But if you are serious about increasing your ability to purchase a better house, practice good money management and budget your monthly income and expenditures.
One eye opening exercise is to list down on your normal monthly expenses and determine where you devote most of your money. Even though most renters value owning a home, they spend most of their income on things such as new cars, electronics, entertainment, and other non-appreciating items. If you can prioritize your budget and eliminate wasteful expenses, you can save more money towards owning a home.
Are you searching for the best Carmel homes for sale? See what these Carmel Realtors can do to help you find your dream home.
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