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Why Small Businesses Should Pursue Financial Planning

As a small business owner, you understand the challenges and time it takes to maintain both your personal and business accounting and financial statements. However, maintaining accurate financials is vital to your business’s success. There are several reasons you should pursue small business financial planning.

Tracks Your Progress

As a small business owner, you probably work much longer than you ever thought possible. You also face challenges you never could have imagined. You may feel overwhelmed and wonder if your actions are even moving you toward your goals. Accurate financials tell you whether you are moving toward your company vision and whether you have the money to reinvest and grow your business. Your documents give you hard evidence of your growth or lack thereof. They can identify areas where you should make strategic changes to improve your revenues and realign your company to its mission and vision.

Evaluate Expenses

Every business should seek to manage its expenses. This means getting the best interest rates and finding ways to reduce your fixed and variable expenses. It also requires prioritizing future expenditures, such as purchasing equipment and expanding buildings. Even hiring staff should be prioritized. For example, you may be able to outsource some of your nonessential duties until your company’s revenues increase and you can hire inhouse help.

Avoid Common Mistakes

Business owners without a financial plan often make the same mistakes. First, they frequently take a salary that is too high. Taking a lower salary keeps more money in the business during the year. At the end of the year, if you have higher profits than you thought, you may consider taking an additional profit distribution. A financial plan will also prevent you from mixing your personal and business expenses. Your corporate structure and interest rates may also be affected by lack of planning. Retirement planning and proper financial assistance, such as a reputable bookkeeper or accountant, may be delayed. Finally, you may not understand the insurances your company should purchase to protect your assets and revenues.

Don’t wait to pursue business financial planning. Consider working with a reputable financial advisor to help you get started.

 

The Basics of Financing Home Loans for First-Time Buyers in Perth

Getting a home loan is a very important step when buying your first house, and there are some crucial factors for picking the right one. While the multitude of financing options is readily available for first-time buyers can be overwhelming, taking a lot of time to do some research about the basics of property financing can help people save a lot of time, money, and energy.

Knowing the market where the house is located and whether it offers good incentives to buyers may mean additional financial benefits for people buying the property. And by taking a closer look at their finances, they can make sure they are getting the loan that best suits their needs. This article will outline some of the crucial details first-time buyers need to make their first purchase.

To find out more about financing, click here for more details.

Loan types

Conventional mortgages

These loans are mortgages that are not guaranteed or insured by the state or federal government. They are usually fixed-rate mortgages. These things are some of the most challenging kinds of mortgages to get certified because of their strict requirements. More significant down payments, high credit scores, the possibility for private mortgage insurance requirements, and lower income-to-debt ratios are some of its qualifications.

But if people can qualify for traditional mortgages, they are less costly compared to loans that are guaranteed by the state or federal government. Traditional loans are defined as nonconforming or conforming loans. In nonconforming loans, lending institutions underwriting these loans set their guidelines (usually portfolio lenders). Because of regulation, these mortgages can’t be sold on secondary markets.

On the other hand, Conforming loans comply with guidelines like limits set by government-sponsored enterprises or GSEs. These lenders usually package and buy these mortgages and sell them as securities on secondary markets. But these things that are sold on secondary markets need to meet certain guidelines to be classified as conforming mortgages.

To know more about this subject, check out websites like https://www.orangefinance.net.au for more info.

Federal housing loans

Federal housing mortgages are part of the government urban and housing development that provides different programs for property buyers. These things have lower down payment requirements and are a lot easier to qualify for compared to traditional ones. These things are excellent for first-time buyers because, aside from its lower upfront mortgage costs and less rigid credit requirements, people can make down payments as low as 3%.

These things cannot exceed the limit described above. But all FH borrowers need to pay insurance premiums rolled into their payments. These insurances are policies that protect title holders and lenders if borrowers pass away, default on their payments, or is otherwise cannot meet the contractual obligations of their credits.

Income and equity requirements

Lenders determine the pricing on these things in two ways, and both methods are based on the credit report or creditworthiness of borrowers. In addition to checking the credit score from major credit organizations, lenders will also calculate the LTV, or Loan-to-Value ratio, as well as the DSCR or the debt-service-coverage ratio to determine the amount they are willing to lend to borrowers, plus interest rates.

Loan-to Value is the amount of implied or actual equity that is available in collaterals being borrowed. For property purchases, these things are determined by dividing loan amounts by purchase prices of properties. Lenders assume that the more money people spend (like down payments), the less likely they are to default on their mortgages. The higher the Loan-to-Value ratio, the greater the risk of defaulting on the credit so that financial institutions will charge more.

The debt-service coverage determines people’s ability to pay their credits. Lenders or financial institutions divide borrowers’ monthly net income by the credit cost to assess the probability of defaulting on their credits. Most financial institutions will require a debt-service-coverages of greater than one. The more excellent debt-service-coverage ratios, the greater the possibility that people will be able to cover the borrowing cost and the less risk financial institutions assume.

The greater the debt-service coverage, the more likely lenders will negotiate loan rates; even at lower rates, lenders receive better risk-adjusted returns. Because of this, people should include the types of qualifying incomes they can when negotiating with financial institutions. Sometimes, extra part-time jobs or other passive income can make a huge difference between qualifying and not qualifying for these credits or receiving the best available rate.

Private credit insurance

LTV will also determine whether people will be required to buy PMIs or private mortgage insurance. These things help to insulate lenders from defaults by transferring portions of the credit risk to insurers. Most financial institutions require these insurances for any credits with at least 80% LTVs. It translates to any credits where people own equity that is less than 20%.

What is a PMI? Visit this site for more information.

The insured amount, as well as the lending program, will determine the cost of the insurance and how it is collected. A lot of insurance premiums are collected on a monthly basis, along with property and tax insurance escrows. Once these LTVs are equal to or less than 70%, private credit insurance is supposed to be removed automatically.

People may also be able to cancel their PMI’s once the property’s value has appreciated enough and a particular time has passed, usually after two years. Some financial institutions will assess the insurance as a lump sum and capitalize them into loan amounts.

There are various ways to avoid paying these insurances. One is not to take more than 80% of the loanable amount of the property value when buying a house. The other is to use a second mortgage or home equity financing to put down at least 20% of the entire amount of the property.

The most common plan is called an 80/10/10 loan. The 80 stands for the first mortgage’s LTV, the first 10 are the second loan’s LTV, and the other ten are the equity people have in the house. Although the second loan rate will be a lot higher compared to the first one, it should not be higher than 90% of LTV loans. An 80/10/10 credit can be more expensive compared to paying for insurance. It also allows people to accelerate their second-mortgage payments and remove the portion of the debt a lot quicker so they can pay off their house early.

Tips for Finding a Reputable Payday Lender

Payday loans offer a fast and effective way to get cash in an emergency situation. However, it is important to note that not all payday lenders are created equal. Because of this, you need to find the right lender for your needs.

The good news is, there are a few tips you can use to find a quality and reputable provider of payday loans Mississippi. Keep reading to learn what these tips are.

Ask for Recommendations

When searching for a payday lender, the first thing you should do is to get recommendations from other people who have used this source of funding in the past. Take some time to create a list of the top lenders in your area or online. This is going to give you a great starting point.

Learn More About Your Options

It is also a good idea to learn more about the available options. Take some time to find out what past customers have to say about the services and if they had a good experience. There are unscrupulous payday lenders out there, and you need to take steps to protect yourself by making sure you don’t use their services.

Get to Know the Terms of the Loan

It is important to learn the terms of the loan before you sign anything. If possible, compare terms from several different payday lenders. This includes the interest rate and other factors that will impact what you have to pay.

When you are informed, you can feel confident that you have found a quality and reputable payday lender. Take time to use the steps here. This is going to pay off and help you get the money you need quickly. This is the goal of payday loans, but finding a reputable lender is essential to ensure you have a positive experience.

 

Guide on How Businesses can Simplify Different Types of Payouts

Every business needs a well structured financial management plan to successfully implement its goals. Businesses not only need to focus on the cash flow but, crucially making payouts is also an area to excel.

What is a Payout?

The expected financial return from a business, company or investment within an expected amount of time is called Payout. To put it simply, Payout means when a business or company can earn back its capital investment with a minimal amount of profitability.

In the case of annuities and dividends, Payout refers to money distributed to the investors in periodicals. Also in terms of annuity payouts are given regularly (monthly or quarterly). The payout ratio is given to the investors in the shape of distributions. Nowadays, companies process payouts using UPI, IMPS, RTGS and NEFT.

Different types of Payouts

There are four types of payouts:

  • Customer payouts: The refunds, cashback or any other types of monetary rewards paid or gifted to the customers.
  • Partner payouts: Commissions issued by a company to another one from selling, cross-selling their products and services.
  • Employee payouts: Employees are paid by their employers for their work.
  • Vendor payouts: Payments transferred by the company or business after getting material from the supplier or vendor.

Common payout problems

Here are some common payout problems discussed below.

  • There are limited banking hours for payouts using NEFT and RTGS.
  • Due to complicated file formats, making a bulk payout using a bulk contact list is very intricate and prone to errors.
  • Before making a payout it is not possible to verify the validity of the bank account number of the receiver.
  • There are also limitations on payouts if you are using UPI and IMPS.
  • Because of complicated and vague error messages, it is not easy to track and identify errors.
  • In case of failed transactions settlement and recovery of failed transactions and refunds is difficult.

Simplifying different types of payouts

Businesses need to make their online payment process easy for their customers. A complicated payment process can drown the business for good. Here are some simple ways to simplify the payout process:

Direct debit from bank accounts

Every customer usually possesses a debit or credit card and they are also ready to put their card details in the online portal. Third-party payment portals authorize customers to make direct payment from their bank account using debit and credit cards. The plus point is that if a customer can make payments easily, it is highly likely that the customer is going to come back for repurchasing as well as recommending other users at the same time. There’s also a bonus point here, third party services have made it easier for the user to make payment using the one-tap payment option. Using third party services can be a good idea for making the Payout process easier with its obvious benefits.

Automatic payment set up

In the case of product and service providers who charge on monthly subscriptions setting up an automatic payment method, businesses still have things in their favour. Users can set up an auto-pay option and forget about it after signing up once into their account. However, they need to keep in mind that the debit amount is already available in the bank account.

Instant Transfer methods

Businesses can also consider instant transfer methods using wire transfers and bitcoins. This way both the sender and receiver will not have to wait for 24 hours to send and receive the payment. The instant transfer payment method is easier and convenient for the company and the users.

If you are part of a newly established business or company that needs technical help with the cash flow and payout management system, you can click here for detailed information.

When Is the Right Time to Refinance Your Mortgage?

Mortgage refinancing is when you pay off your existing home loan with a new one. Homeowners refinance their mortgage for a number of reasons, mainly:

  • To get a lower interest rate
  • To cash out equity for large purchases and financial emergencies
  • To shorten the life of a mortgage
  • To convert from one type of mortgage to another

To maximize the benefits of refinancing, you must only do so when it makes sense. Keep in mind that refinancing can be a risky move, and it takes a lot of time to process. That said, it’s best to push through with refinancing if the following signs are present.

You want to renovate your home

One of the main reasons why people refinance their home is to fund large home renovation projects. Acquiring a home renovation loan is a great way to generate funds for renovation expenses. But if a home renovation loan is not the best option for you and you have substantial equity in your home, refinancing should be your next consideration.

Cash-out refinancing is when you get a new loan that is higher than your outstanding balance on the current mortgage, and receive the difference in cash. The lump-sum amount will allow you to fund major renovation projects, as well as other large expenses like college tuition, medical bills, vehicles, and properties.

You have a strong credit score

A good credit score is one of the first things lenders look for when assessing people for refinancing. Aside from increasing your chances of qualification, a good credit score will also help you get lower interest rates.

If your credit score has recently increased and is far better than the credit score you’ve applied for your current mortgage with, it’s a good sign that refinancing is right for you. A credit score of 680 and above can get you a low interest rate when you decide to refinance.

Your income has grown

Over time, our income increases as we climb the career ladder. Putting that extra money towards your mortgage is a great idea. Not only will you save money on the biggest debt you have, but you can also make a significant reduction in your loan term.

If you are making more money now than when you first secured your mortgage, it could be a wise financial decision to get a new mortgage with a shorter life. By making larger payments, you can pay less in interest with fewer years of payment and get to enjoy your full income sooner.

You are going to retire soon

If you are nearing retirement, your income will inevitably decrease as you leave the workforce. In this case, getting a new loan with lower payments can make it easier to pay your mortgage. On the other hand, you can refinance to a shorter loan so that you can become debt-free when you finally reach retirement age.

You have an ARM and rates are increasing

Most adjustable-rate mortgage (ARM) loans begin with a fixed-rate period (typically around 3-7 years) where the interest rate is fixed. After that period, the rate adjusts depending on market conditions. If the interest rates are getting higher each year, you may find yourself paying more in interest.

Refinancing to a fixed-rate mortgage could be an effective way to avoid the increasing interest rates. Watch the trends and refinance your mortgage when rates are at record lows.

You have positive home equity

Find out how much your home is truly worth in today’s market. If it’s substantially higher than when you took out your loan, that means you’ve built up quite a good amount of equity on your home. Refinancing can free up a significant amount of cash that you can use for investments, emergencies, savings, travel, and just about anything else that you want to spend money on.

Your lender is offering lower interest rates

Your lender may be offering lower interest rates today compared to when you got your mortgage. To save money on interest and possibly cash out your built-up equity, ask your lender about refinancing to the mortgage that you qualify for today.

How do you know if your lender is offering lower interest rates? Keep watch on the current market trends. If the rates are getting lower in many parts of your state, it is likely that your lender is following the trend.

Refinancing a mortgage is sometimes done to get out of debt or pay for unexpected expenses. However, refinancing is not only a last resort or a saving grace in case of financial strain. If you notice that the abovementioned signs are true for you, refinancing your mortgage can help you save more money, attain a shorter loan life, and free up equity for other important expenses.

Can I get mortgage loan with bad credit?

Buying a house is a very important and big decision in one’s life and it is quite different from buying a car or renting an apartment. A customer wishing to get mortgage loan should evaluate his current situation and educate himself on the best ways to get approval of mortgage loans.

Factors to consider before applying for mortgage loan are:

Credit score checkup

First thing is to check your credit score to remove any errors from credit report which can harm your possibility of getting mortgage loan. Besides you will get to know the current position of your credit score. In case of low credit, you may need a co-signer or need to improve your credit.

Calculate monthly income and debts

You have to make record of your monthly income and debts payments and provide them to lenders. The lenders may count the average of last two year’s income to decide how much you can pay for mortgage payment.

It is better to pay off other loans before taking new loan.

Saving for down payment

You need to figure out how much you can save for down payment for your home. Expect your lender to demand 10 to 20 percent down payment and you must be ready for it. Do not tempt into buying more expensive house than you can afford.

Make your mortgage budget

Before applying, review your mortgage budget and how much you can afford to pay back. It is advised that your housing repayment including all fee and charges, should not exceed more than 35 percent of your income.

Speaking of credit, people with bad or not so good credit may find it difficult but not impossible to get mortgage loan. Mortgage lenders have poor credit financing offers for borrowers. Credit scores do not remain low and with few financial adjustments, people become able to get mortgage loan. After working on credit, it is possible to improve it to better credit category and get less interest rate.

Credit score ranges from 300 from bottom to 850 from top. You need high credit score to get better rates, but a survey by FICO tells us that most borrowers are not in highest credit range. A bad credit score can affect your mortgage loan badly as mortgage lender can charge you with high interest and you will have to pay a lot of money which will be difficult for you.

Large down payment reduces the risk for the lender and helps you get mortgage loan with bad credit. Keep some cash reserves on hand for unexpected repairs in home.

Another tip is to pay off mortgage loan regularly and consistently on time every month.

Avoid getting new loans. Mortgage lenders evaluate your debt-to-income ratio before approving your loan and if you have high debt ratio, lender can reject your loan application or offer a lower mortgage. Try to pay off your consumer loan completely before looking for mortgage loan.

If you are not qualified for mortgage loan due to bad credit, do not feel bad, instead work on improving your credit and finances by careful planning to achieve your financial goals.

Why should you take term-life insurance?

What plan do you have for your family in any case the worst happens today? While it isn’t reasonable to plan for your own death, you’ll agree that it is inevitable unless you are immortal. Term-life insurance is a type of policy that matures only if the policyholder dies during the time of policy, and the money paid to designated beneficiaries. In other words, term life insurance is a pure protection policy for your dependents.

Other insurance policies that tend to rival the benefits of term life insurance include universal life and whole life insurance. However, there are many reasons as to why you should take term life insurance in place of anything. Well, check out on the following:

  • Most affordable premiums

Term life plans are considered to have the lowest premium in all life insurance plans, thanks to its terms and conditions. It, therefore, makes this plan not only affordable but also available to literally anyone in the society. Moreover, a lower premium allows policyholders to afford an optimal sum assured in regards to sufficient financial security to the families in case of untimely demises.

  • Future financial security

The primary motive of the policy is to provide financial security for the nominees and take care of the family’s financial needs. In case of premature death, family members of the policyholder will be able to achieve their set goals and continue the legacy even when the breadwinner is no more. Having that in mind, it is essential that you have sufficient sum assured so that everything can be smooth in the future. The best thing about returns from term-life insurance policies is that they are tax-free in most jurisdictions, therefore making it an ideal investment for anyone who has the future of their families at heart.

  • No saving component

Most life insurance policies have a saving component in that they have the option of paying a maturity benefit in any case the policyholder survives the term of the policy. Term life insurance has the priority of your family’s financial security at heart and should always come first. If you want other plans, it is advisable that you go for term life first.

  • Open for anyone

Lastly, term-life insurance is open for anyone, provided they are of legal age to consent and sign for a contract. You also don’t have to be employed as you are only required to afford the premiums. And the fact that there is an option for affordable coverage, it can be the best choice for small-scale business people. They are self-employed and would want a life insurance.

We live in a world full of uncertainties; hence it is necessary to have some protection and surety that our loved ones will be safe financially; in any case, the life of their breadwinner is cut short. If you are working in a high-risk career such as private security the this is the best gift that you could give your family in case the unfortunate happens. Get a term life insurance today and live a stress-free life!

How To Choose The Right Mortgage Brokers In Sydney

So, you’re planning to buy your next home in Sydney? Good for you!

And you’re searching for that best mortgage broker to help you out with the task? Why, that’s even better.

Trouble is, most mortgage brokers talk the same and walk the same lines. This makes it difficult for you to settle on the right one for your purposes. And you really can’t take any chances on what is probably the most significant loan of your life.

That’s why you need to take extra care and settle on the right mortgage brokers in Sydney. True, that’ll take some extra diligence and hard work on your part. But it will save you a lot of headaches in the long run.

With that in mind, let’s take a look at how you can settle on the right mortgage brokers in Sydney.

Research First

Before heading to the mortgage brokers, take some time to research what you need. Getting a home loan is a big deal, and it comes with lots of caveats and terms. Make sure you understand every option.

Once you go to your broker, they will likely inundate you with a truckload of info. And if you don’t understand the basics, you’re likely to get lost. Plus, an informed client is always a pleasure to work with. So research first before you walk in through that door.

Ask Those Who’ve Done It Before

This is one of the best decisions you can take. People who’ve already taken out a mortgage are already familiar with the ins and outs of the process.

Ask what they feel were the mistakes they made. This will allow you to avoid walking the same path. Also, if they had a good deal, you can always consider going with the broker they used.

Never Settle For The First One

Settling on the right broker is a daunting task. So naturally, you might be tempted to go with the first one you talk with.

This, however, would be a mistake. No matter how impressed you are with them, it’s always a good idea to get a second opinion. This allows you to compare the services and settle on the right one. Plus, you might always end up with a better deal.

Look For Red Flags

When you are choosing a broker, remember one thing: you’re the one who’s going to have to pay the money back. So always take care and have all your doubts cleared.

Prepare a list of your queries and talk with the broker to ensure complete resolution of the same. Also, while talking make sure that they don’t try to pressurize you into accepting a deal. Brokers restoring to forceful tactics devoid of logic can be a serious red flag.

Final Words

And there you have it! Keep the above points in mind, and you will be well on your way to selecting the best mortgage plan. By hiring the right broker, you will be ahead of your peers in terms of wealth management.

Mortgage Loan Modification

Mortgage Modification

A mortgage modification is a change to your current mortgage loan terms. It is similar to a refinance however you are not paying off your current loan and taking out a new one, and since you are simply “modifying” your current loan, it is not based on your credit score.

A new modification program was recently released by the name of the “Flex Modification” and this program gives homeowners who may have had trouble with refinancing a potential way out. The program is exclusive to those with mortgages owned/insured by Fannie Mae and Freddie Mac, however many different lenders follow similar program guidelines. Aside from Flex, there are also other modification programs still available such as “FHA-HAMP”, “streamlined modification”, “in-house modification” and more. Successor to the Home Affordable Modification Program; with Flex; you do not have to be behind on mortgage payments. You can be current and on time with your payments and unlike a refinance, it doesn’t matter if your credit is poor, have had late mortgage payments, are in bankruptcy, upside down or currently in foreclosure.

Adjustments that can be made through a modification

Typical adjustments through modification include one or more of the following:

  • Lowering of the Interest Rate
  • Deferment of any missed/skipped payments to the remaining principal
  • Extending the loan term (some investors leave the maturity date the same)
  • Forbearance
  • Principal Reduction (possible but rare in today’s real estate market)

Forbearance

A forbearance is a deferment of mortgage payments that are due and lenders at times can issue a forbearance for three months and with some cases up to twelve months. A forbearance allow borrowers to defer/skip the payments for a certain time period (3 month, 6 month, 9 month 12 month etc). This doesn’t mean the payments disappear for good and you will never owe it, they just become due and payable at the end of the three months or 6 months whichever you are doing. In fact at the end of forbearance you may have to pay back the entire deferred/skipped payments in a lump sum or the lender may agree to capitalize it into your previous loan or into a new/modified loan.

How to apply for a Mortgage Modification

If you want to be considered for a modification, you have several options. You can call your lender directly, contact a local HUD approved counseling agency or hire a professional third party. If you’re going to choose to hire a third party, never ever pay anything upfront as it is against the law to charge a borrower for a modification until the third party secures an offer from your lender that you choose to accept.

Steve Kay from New Vision Direct says: “Hiring a third party representative to help you get a modification is similar to hiring a CPA to do your tax returns, or going to a doctor for a broken bone. There is no law that says you must hire a CPA, and you can treat your own broken bone if you choose. It’s a similar consideration with modifications. Just like the doctor doesn’t technically‘heal’ your broken bone, the third party doesn’t ‘give’ you a loan modification.

“You’re not hiring and paying someone for the modification itself, but the work that goes into putting together a qualified package and more importantly the strategic planning involved with putting together the best possible package for the lender’s review. Most people don’t have the time, experience, knowledge and resources to negotiate a modification.

You really want someone on your side to advocate and help you get the lender’s bottom line offer. Keep in mind that no matter what anyone says or does, a lender may not agree to your proposal or be able to approve a mortgage modification. It’s at the lender’s discretion to give you one; however if presented and packaged strategically and correctly, a lender may be convinced a modification is a win-win for them – as well as you. Lenders want to avoid liability, defaults, lawsuits and foreclosures from happening.”

New Vision Direct work with you $0 upfront and work on a contingency where we are only due a fee if we successfully get you an offer you accept.”

Hiring an Expert

You should consider hiring an expert to represent you in negotiating a loan modification for several reasons such as:

  • Your mortgage company trains its agents and representatives to act in the best interest of the investor/note holder of the loan.
  • In some cases, you may have only one shot at submitting your request application correctly. Having an experienced expert prepare and package your application is like having a headhunter craft your resume.
  • A loan modification expert knows the system and how to work it for your benefit.
  • An expert can take all the hassles off your plate, freeing up your time and energy to get a better handle on your finances.
  • A seasoned pro knows immediately whether the offer a lender pitches is fair and square.
  • You’ll probably more than recoup the cost of hiring an expert from the amount of money he or she saves you by getting a better deal than you could on your own.

Lenders often try to dissuade distressed borrowers from hiring their own representation. After all, lenders often claim, “We’ll modify your mortgage for free.” Sure, they’ll modify it, but are they going to modify it to true affordability?

Any company engaged in assisting a consumer with negotiating a loan modification must make certain disclosures to you, including:
  1. “You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [insert amount or method for calculating the amount] for our services.”
  2. “[Name company] is not associated with the government, and our service is not approved by the government or your lender;” and
  3. “Even if you accept this offer and use our service, your lender may not agree to change your loan.”
  4. It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting hud.gov.

Learn More:

Are You Buying a Home for the First Time? Here’s What You Need to Know

First-time home buyers can be understandably uncertain or confused as to what steps they should take when it comes to purchasing their dream home. But if you’re a first-time home buyer, you simply need the right information to help you along your way. So, what can you expect when you are planning to buy a home and are thinking of getting a mortgage? Here’s what you need to know.

The deposit

The deposit you can save or borrow will be crucial since it will affect the kind of mortgage deal you will get, how much you will have to repay every month and the amount of interest which will be charged to you with your mortgage. You need to make sure that you already have a deposit before you begin checking out different properties. In general, you need about 5% to 20% of the total cost of the property you want. For instance, if you are interested in buying property worth £150,000, you would need to save a minimum of £7500 in order to come up to 5% of the property’s value. If you can, you should save more than 5% – if you have more than 5%, you will have better access to a broader selection of more affordable mortgage products.

The costs

The cost of purchasing property does not just end with the deposit. Far from it. There are other costs you need to consider, and you need to have the budget for this as well. These costs include the survey cost, the fee of the solicitor, the cost of building insurance, the mortgage arrangement fee and the valuation fee, and other costs such as decorating and furnishing expenses.

 

The repayments

You should carefully work out how much you can really afford to borrow when it comes to your mortgage, as this will affect how much you have to pay every month. Make a list of your expenses and your income and calculate how much you can afford to pay each and every month. You should also think about possible situations in the future, such as if you make a change in career, if you become redundant in your job, if you become ill, or if you decide to have children. Will you be able to pay your monthly mortgage bill then? It would actually be a good idea to make a plan for this, such as trying to save enough money to last you for 3 to 6 months if such situations arise.

The mortgage

There are definitely a lot of mortgage deals around, and this is where it can actually get a bit confusing. Your best bet would be to speak to a mortgage expert such as those from mortgage-wise.co.uk so you will know the options available to you and you can understand the different kinds of mortgages more easily. This way, you can make a better, more informed choice.