Kids Ain't Cheap

But They Sure Are Worth It

How to Save Up For a Downpayment When You Have a Family

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Saving for a downpayment when you have the responsibilities of a family isn't easy but is doable. Here are some helpful tips.Homeownership is a huge goal for many people.

Given the many expenses that come with having a family, it is often, though not always, a goal that is easier to obtain before kids come into the picture. Just because you have a family before homeownership doesn’t make it impossible though, you just need to get creative when it comes to saving for a downpayment.

Get a Second Job

When you have kids, this can be difficult but if money needs to be made this is the simplest way to do it.

A friend of mine growing up always rented an apartment with her family until one day she told me her parents finally bought a house. Her dad had been getting up at 4am Monday-Friday to deliver newspapers. Though he hated the hours, he reaped the benefits when, two years later, he was able to buy the family home he has always wanted with the income he earned from his second income alone.

Sell Kids stuff

With kids comes stuff, and lots of it. After three years of collecting stuff for our kiddo I’m finally at the point of realizing some of it has to go. I had grand ideas of holding onto a lot of it in case we have more children but I’ve come to the realization that if we do have more kids they will likely get stuff too and then we’ll have multiples of things.

If things are kept in good shape you can get a decent return on money spent. By taking care of kids items and reselling them you can start a decent savings goal for that downpayment account.

Downsize temporarily

Whatever your current living situation, if it’s possible, downsize. Maybe siblings will have to temporarily share a room or you’ll need to get rid of some things for the move but short-term pain for long-term gain may definitely apply here.

My co-worker sold their house and moved in with her in-laws for six months to save money. In six months alone the managed to save $15,000 since they were able to live rent/mortgage free and no utilities. The mother-in-law insisted on no money but instead they paid for all the groceries while living there. Though she hated every second of living there, without doing so it would have taken her almost 24 months for the same goal.

Make it a Family Goal

If your kids are old enough, involve them in the plan. Explain to them what your goals are and why things may be changing to reach the goal. Maybe cutting out a summer camp or a dance lesson will be required to meet the downpayment goal but in the end the whole family will benefit and they need to understand this.

Homeownership can seem like an impossible goal to reach but with a little extra effort and family commitment, it is possible, even after the financial responsibility of kids creeps in.

Did you buy a home after your kids were born? Did you need to do anything differently?

3 Factors That May Keep You From Getting a Mortgage

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mortgageWhen it’s time for you and your family to buy your first home or upgrade to a new home, you’ll be presented with getting a mortgage. And before you begin your house search, and perhaps talk to someone like this mortgage broker malvern, it’s important that you know what kind of rates you qualify for and how much of a home loan you can comfortably carry.

There are certain circumstances that make it difficult to get a home loan, though.

Here are three factors that can limit your ability to take on a mortgage.

Bad Credit or No Credit

The better your credit, the lower the interest rate on your mortgage will be. That’s why it’s important to work on improving your credit score months before applying for a mortgage.

If you have no credit or bad credit you’ll likely be turned down for a mortgage.

Before applying for a mortgage try the following:

  • Check your credit score (you can do so for free at a place like Credit Karma)
  • Check your available credit to debt ratio
  • If you have a lot of consumer debt work on paying it down

You should also work on saving up a sizeable down payment for your next home.

Self-Employment

Self-employed people can have a hard time getting mortgages – or any type of credit. Generally speaking you’ll need at least two years of self-employment taxes. You’ll also need to provide bank statements showing the income you’re bringing in.

Another choice you’ll have is to apply for a contractor mortgage. Some banks are now making mortgages easier to obtain for independent contractors and freelancers. If you’re in this situation ask your banker for advice for contractors.

You Have Too Much Debt

Having too much debt can not only limit the amount of money the bank will loan you but it can also prevent you from getting a mortgage altogether.

Before you decide it’s time to take on a home loan start working on paying down your existing debts. By doing this you’ll lower your financial burden, increase your credit score, and also increase the likelihood of you being given a home loan.

Conclusion

If it’s time for you and your family to purchase a new home take some time to make sure you’re financially prepared. Pay down your debt, research types of mortgages you may qualify for, and work on improving your credit score.

With hard work and preparation you’ll put your family in a better financial position and hopefully, a new house!

Have you run into any of these problems?

Are You Ready to Buy a Family Home?

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family homeBuying a home for your family is a very exciting time. It is important that you consider all factors before making the transition though.

When hubby and I purchased the home that we currently live in, we fully expected to move eventually. It’s not a large enough home, nor is it in our ideal area. We currently live in the suburbs in a nice area but would rather not see our neighbors. What I mean is that once our priorities are taken care of (paying off debt, minus mortgage) we plan on moving further out towards the ‘country’.

Since we have considered everything we realize that this move won’t be feasible for a few years. These are things you need to consider when thinking about moving your family.

 

Have You Considered all Expenses?

For us, we want to have our non-mortgage debt paid off before we move again. By the time this happens we will be at max capacity of this home (nearing this point now) but have committed to paying things off before moving. This frees up money for other expenses such as larger down payment, legal fees involved with move, potential fees if we decide to build, and professional movers. We have moved twice with the help and kindness of friends and family, but there’s no way we could, or would do it again. Since our plan is to make our next move, our last move, we will be hiring professionals to do it for us. An expense but so worth it.

Consider ALL expenses before deciding to move. In our case when we move out of our current area, a second car will be a must, an added expense we can’t handle right now even with the decrease in public transit use.

 

Is Renting a More Viable Option?

You have to still consider if renting is a more viable option for you and your family. Home ownership is not for everyone. As long as you have a safe roof over your family’s head that’s all that matters. Some argue that rent is throwing money away but if renting means your able to live the life you want, debt-free, without property ownership than who cares?! For some, tying permanent roots down is daunting, they move often or like the idea of a swanky apartment with more amenities than a starter home. If home maintenance doesn’t interest you than don’t ever be pressured to buy.

 

Don’t Buy More Than You Need!

This is a tricky one. Especially if you’ve gone through the pre-approval process. You see how much the bank thinks you can afford and you’re expectations of home get out of control. Try and keep a modest list of wants and needs and be willing to make compromises if needed.

 

Beef Up Your Emergency Fund, Add New Budget Categories

If this home purchase will be your first, it’s time that you establish or beef up an emergency fund. Homeownership can be a bumpy ride and stuff can go wrong. Mother nature can be a real pain in the butt and hit you when you least expect it – whether that’s due to a sudden storm or for unexpected damages that necessitate a Crawl Space Remediation, make sure you have at least enough in your emergency fund to cover any insurance deductibles as well as minor home repairs.

You also need to set aside a small amount of money to new expenses such as insurance premiums and regular home maintenance repairs. If this is something that will send your budget over the edge, probably an indication that you’re not quite ready for homeownership.

Homeownership can be an amazingly fun experience but it can also be very stressful. Make sure you have everything figured out before deciding to embark on this venture, especially if there’s a family involved that you’re required to protect!

What else do you need to be ready for your family home?

Busy, Busy, Busy!

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I'm busyI feel like I have been AWOL from my own web site lately!  Things have been just a bit insane and I have had no time to post.  My day job has grown increasingly busier and I am only half way through my massive list of to-do’s on my house.  Thankfully I have some great writers that have picked up the slack.

I should probably catch you up since I haven’t really blogged about this all that much.  My wife grew up right next to her families farm on a beautiful piece of property.  The house that is on that property is only “okay” but it’s built well and the property more than makes up for what might currently be lacking there.  We have been rather unhappy with our current house and neighborhood for awhile now but with our financial situation being what it was/is, we haven’t been able to afford to do anything about it.

Our 5 year plan

Three and half years ago, we came up with a 5 year plan to get out of debt and buy the family house my wife grew up in.  We have been working very hard, cutting every corner and putting every extra penny we could to get out of debt.  We didn’t get in debt because we were trying to keep up with friends and neighbors, we got in debt trying to survive while one of my previous businesses failed around us.  It’s  been hard on all of us, especially my wife, but it made us stronger than we ever thought we could be and we attacked it as a team.

The results so far?  We are ahead of the curve on our goal and our credit has bounced back much sooner than expected.  My credit is almost back to the best it’s ever been and my wife’s is closely behind.  We are finally in a position where we can afford to explore the idea of selling our current house and buy that dream house.  It’s noting fantastic, it’s a 1500 square foot ranch house but as previously mentioned, the property is amazing and the house has a ton of potential.  Our plan is to sell our current house, buy this house and spend the next 20 years turning it into the house we know it can be.

The first step

The first step towards achieving that goal is to get our house ready to sell.  As everyone knows, the market is not very good right so we want to give ourselves the best opportunity to sell this house at a good price by making it the best it can be.  It’s kind of sad to say but the house looks better today than it ever looked before and we are only half way through our list of things to do before listing it.  It’s kind of sad that we were finally motivated to really make this house shine only so we can sell it but I guess that is just how it goes.

So that is what I have been up to.  It’s going to be crazy for us for the next couple of months but I am very hopeful that it will payoff.  I know my two boys will LOVE growing up in the country with all that farm and family around us.

What have you been up to lately?