If you’re looking to create your dream home, you already know that it starts with the bricks and mortar. Buying a house, whether it’s for the first time or if you’re looking to purchase a larger property, can feel daunting. However, now is the best time to start saving your money and planning for a new life.
With the COVID virus likely to dissipate in 2021 with the introduction of a vaccine, we know that doesn’t mean that the economic crisis is over too. In fact, Bloomberg suggests that the crisis in commercial real estate is only just beginning, which will have a real-life impact on jobs and the economy.
When facing uncertain times, you have to tighten your belt if you want to be able to purchase a property, which will help you grow your money and provide security in the future. There are lots of ways you can actually save money during a pandemic, such as chasing refunds for services you’re not using while in lockdown (like the gym!).
Coronavirus has negatively affected billions of people around the world. But for many, despite being affected, it doesn’t mean that all parts of life stop. Babies are still being born and growing families need more space!
These tools will help you make the most of 2021, enabling you to purchase a property in the future.
Minimum Income Requirement For A Mortgage
First step, work out how much you can actually borrow. With this Home Loan Limit Calculator, you can work out how much you can borrow with your current income, debt and existing cash down-payment.
There’s even a tab which will enable you to search mortgage rates in your area, so you can get an accurate understanding of how much you would pay to the bank each month.
This stage is all about information-collecting. It will ensure that you fully understand where you’re at with your finances so you can plan for where you want to be.
Calculate Your Debt
Once you know how much you can borrow, you’ll be able to see how that amount changes as you pay off more debt. You may find that, by paying off more debt, you’ll be able to afford the property that you want and will be able to grow your family in.
While there are lots of strategies for paying off debt, remember that you can negotiate with lenders for lower interest rates.
You can quickly work out your existing debt-to-income ratio using this DTI Calculator which highlights loan limits for conventional, FHA, VA & USDA loans.
Debt is often one of the most likely blockers to a higher mortgage, a remortgage or just getting on the property ladder, so it’s important that you know where your finances are at and where you want them to be.
Make A Plan
Now you know exactly where you are financially, you’ll be able to plan for where you want to be in the future. Spend some time mapping out how you’ll save money and what you can go without in 2021 in order to prepare for a more secure future.
As suggested by Forbes, there are seven steps to plan for a better financial future. These include knowing what you’re saving for, making sure your saving goals are smart, reducing expenses, creating a budget, consider escalating your savings over time and sticking to a plan.