Tag: saving

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Financial Loans Real Estate

Low-Income Home Loans: What Are Your Options?

Low-Income Home Loans: What Are Your Options?

Working a job that provides a low-income can make homeownership seem like an impossible goal. Luckily, there are a variety of options available to assist those with a low income in buying a suitable home.

In this article, we’ll cover some of the most well-known home loans that cater to low-income individuals and families in some way.

Homeownership Vouchers

The Housing Choice Voucher (HCV) allows families assisted in the program to use a voucher to purchase a home. Families will also receive monthly assistance to help with household expenses. The voucher is only available to those families who are enlisted in the program. It’s also not available in every single housing authority.

Other qualifications for this home loan program are to meet specific income requirements as well as having gainful employment. Participants also need to be first-time homeowners, attend and complete a housing counseling program, and meet any other local eligibility requirements.

Indian Home Loan Guarantee Program

Indigenous people and native Alaskans make up some of the poorest populations in the United States. Because of this, the Indian Home Loan Guarantee Program was created. This program is exclusive to native people and guarantees them a reasonable home loan through private financial institutions.

In order to qualify for this program, you and your family must be enrolled members of your native tribe. You must also be in the process of searching for a home. The maximum loan length through this program is 30 years and there are no prepayment penalties either.

HomeReady and Home Possible Loans

Home Possible and HomeReady are two different loans but they have very similar benefits. HomeReady is a loan program backed by Fannie Mae. It is meant to help low-to-moderate income homeowners either buy or refinance their homes. They do this by reducing the standard down payment and mortgage insurance requirements.

Home Possible is backed by Freddie Mac. It is essentially the same as HomeReady, except that it requires a slightly higher minimum credit score to apply. This is perhaps the most helpful for the general population of low-income individuals as a lower required down payment means you don’t need to save nearly as much in order to purchase your home.

Good Neighbor Next Door

The Good Neighbor Next Door Program is an exclusive program to firefighters, K-12 teachers, law enforcement officers, and emergency medical technicians. The loan allows those in these professions to purchase a home at up to 50 percent less than the list price so long as they promise to live in the residence for at least three years.

Down Payment Assistance

Although it’s not technically a loan on its own, down payment assistance can be paired with your loan to decrease the amount you need to pay down on your house. There are approximately 2,000 down payment assistance programs across the country and they’re typically run through the city government.

There are four main types of down payment assistance: grants, loans that are paid alongside your mortgage, loans with deferred payments, and loans that are forgiven after a number of years. This assistance is typically used by first-time home buyers and past homeowners can use most programs after three years of not owning a home.

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Savings

Investing Vs. Saving: Which Should You Do?

Investing Vs. Saving: Which Should You Do, When, And How?

When you look at your opportunities in investing your money compared to your opportunities from saving your money, you might wonder: Is this a difference in quality, or kind? Is your money going to be more valuable in the future, or less?

And how do you act on these evaluations?

The Qualities of Investing and Saving

You have probably heard that when a person wins the lottery, they are given two ways of claiming their prize money: Either by taking it all in one big, heavily taxed, cartoonishly-oversized check, or in smaller installments overtime that ultimately amount to more money.

It seems obvious that the smaller installments overtime would be the more economical option. It amounts to more money, doesn’t it? Only a short-sighted fool would take the smaller sum.

Thinking about this is very similar to thinking about investing versus saving. Even a static amount of money has forces acting upon it.

Imagine you have a healthy sum of money in your bank account. After a year, your bank provides you with a 1% allowance of the money you have. So, a bank account with $100,000 in it would yield $1000 in interest.

However, the economy grows by more than that percentage every year. In fact, inflation goes up by more than that every year. Inflation usually results in every dollar losing 3% of its value. So while you may be given 1% in interest, you lose 2% of the value of that inanimate $100,000.

But if you invest that money and grow it by 4%, then in that case you have affected a growth of 1%. Granted, this is not a large increase. But it at least offsets the natural entropy of money’s value in the face of inevitable inflation.

Investing comes with risks that saving does not, however. Investing can make you lose money if you make a bad investment.

When To Do Either

For this reason, if you are currently managing your debts and not seeking to buy a house, car, or start a business, then you should save rather than invest.

The reason is because of the aforementioned risk involved in investment. You don’t want your ability to pay a bill to be reliant on the whims of the market.

Once your income eclipses your debts, then you can risk investments.

How to Invest and How to Save

The methodology of investing and saving are far more similar than you might expect. Saving your money means giving it to a bank. A bank will turn that money into loans, and the interest rate of the bank will see your savings grow as the bank grows.

Investing money is similar, as you still essentially give it away, but this time to a hedge fund. They will invest your money into venture capital and start-up businesses.

These will allow your money to grow as those businesses grow.

When, where, and how to invest and save is a matter of your own personal trust in these institutions. Use your money responsibly, and stay safe.

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Financial Savings

20 Ways to Take Control of Your Finances

take control of your finances

Many people struggle with their personal finances and money. Luckily there are many tips and tricks to help you get more in control of your finances. 

Evaluate How Much Money You Have

Before making changes to your finances, you need to evaluate exactly how much money and debt you have. This will give you a baseline of what to expect with your finances, where you need to improve, and where you can go with your finances.  

Track Purchases

When starting to evaluate your finances, you want to see where your money is going. When you do this you’ll be able to make changes about what you spend your money on. This is also something to continue doing once you have set a budget.  

Set a Budget

Once you have evaluated your current finances and seen where your money is going, you can set a budget. There’s a lot of software and apps you can use to set and track your budget. Having a weekly or monthly plan laid out will help you stick with your plan.

Review the Budget

Every budget will need to be reviewed, you can set this either weekly or monthly. Your financial needs may change and having a review can help you set those changes.

Make Financial Goals

Having a financial goal can give you something to work towards with your budget. It will be easier to stick to a budget when you’re saving for a house or business. 

Automatic Money Transfers

Having your money transfer automatically every paycheck will help you know how much money you have. It will also be harder to miss that money if it was never in your account to start.

Talk to Others

Talking with people that you admire money-wise will help you find ways to save and spend money you may not have known about previously.

Test Saving Methods

Some budgeting ideas will work better than others. Trying new ways will help ensure that you’re using a financial plan that works best for your situation.

Save Money

Saving money every month is the best way to know that you have enough money. This saved money can be towards a specific goal or a general savings fund. 

Minimize Debt

Debt can break many people’s budgets. Don’t let that happen to you by minimizing how much debt you get into. 

Make a Plan to Get Out of Debt

When you’re in debt, make a plan to get out of debt quickly. The more debt you have, the more interest you will have to pay.

Have an Emergency Fund

Don’t let a financial setback take you too far back. With an emergency fund, you can be prepared for many financial mishaps. 

Invest

Investing money can be a great way to build more financial equity. It can be used for retirement or other long-term goals.

Earn More Money

While saying “just make more money” is often easier said than done, you can get a side job or start a small business that can help you make more money.

Live Within Means

Many people can fall into the trap of trying to keep up with the neighbors. Staying within your financial means will help you stay out of debt and on track with your financial goals.

Shop Smarter

Shop with coupons or with deals to get the most of your purchases.

Direct Deposit

Direct deposit will ensure that your money gets in the back as quickly as possible so you don’t have to worry about it.

AutoPay

AutoPay ensures that you don’t fall behind on bills and incur late payment fees.

Read About Finances

Reading about finances will help you develop new financial and money-saving strategies.

Hire a Financial Planner

A professional financial planner can help you develop financial goals and ways to meet those goals.