We get it – saving for a down payment to buy your first home or land, seems to be full of unexpected challenges. For you, tertiary education expenses, high rent or even a lower-than-expected salary are significant hurdles that have made your dream of homeownership appear difficult or even impossible to achieve.
You may have set goals, say getting your own place by age 35, but with mounting debt and expenses and no real financial plan and you may be trapped in a debt cycle that you do not know how to escape.
If you want to be free of this uphill fight against debt, start today. Build the habits that will get you to freedom. Here’s how:
1. Make a plan and stick to it
Are you motivated by saving the most money while still paying off your debts, or do you get motivated by seeing quick progress? Whichever one you choose, develop a plan that is right for you, one that helps you tackle your current debt the right way.
2. Choose a strategy to attack your debts
Consider the debt snowball method. Start listing out all your debts, from the smallest amount to the largest. Pay the minimum balance on each one, but with the smallest, dedicate as much cash as possible each month until it is repaid. When you get that first one paid off, move on to the second-smallest debt. According to Harvard Business Review, this ‘snowball’ method is the most effective strategy because you are more likely to stay motivated if you can see your debts disappearing. Watch how you are snowballed towards debt freedom.
3. Draw lines – Give up what you do not need
When trying to get out of debt, what is the worst thing you can do? You guessed it, create more debt. Figure out your weak spots/temptations and set firm boundaries to keep you from falling into them.
Keeping track of your monthly expenses can help put you one step closer to reaching your homeownership goals.
4. Hustle … hustle real hard
In addition to keeping your spending in check, look for ways to potentially increase your income. After all, you can only slash your expenses so much, but with extra funds, you can pay more toward your debt or savings.
5. Figure out what you really can afford – in real time
While you are working on getting your financial habits in a gear, you can start researching all of the costs involved in getting your home or land. You can consider a new home, a fixer-upper home or buying land and building.
Use this time to get a realistic idea of what you can afford. Try our online Mortgage Calculator which lets you know how much you can afford, your interest rate and monthly payment.
Apart from the mortgage payment itself, be sure to factor in the down payment, potential debt consolidation needs, closing costs; insurance, and other fees that you’ll also need to save for, ahead of applying for a mortgage.
For guidance, check out a conversation with Ms. Romessa Taylor – Romessa Taylor – TTMF From Here… to Home Testimonial – where she tells us how her debt was managed with TTMF’s assistance, which helped her to clear her path from ‘renter’ to becoming a homeowner.
Become Home Smart
We’re here to help. Make an appointment with a knowledgeable TTMF representative to find out more about how we can help you. Log on to www.ttmf-mortgages.com to chat online or call 623-TTMF.
There are several things we think about when buying a house: from the type of neighbourhood it is in, to the impact of rainfall and flooding, to whether the property is a single unit or apartment or a townhouse, to even the number of bedrooms it contains. Frankly, looking around for a new home comes with many, many considerations.
So while the aesthetics and location of your new home might be your main focus, you cannot overlook the task (and usefulness) of finding a suitable mortgage insurance. It is extremely important that you make sure you are protected in case something goes wrong with you or with your home.
To help you better understand what is involved, here are a few homeowner’s insurance considerations for new homeowners:
1. There are several major types of mortgage insurances to protect you and your home.
Homeowner’s insurance, contents insurance and life/disability insurance are easy examples of some of the main types of coverage available to a homeowner. The first type, homeowner’s insurance, covers the most important investment – your home. It applies to coverage for the structural components of your home i.e. the walls, roof, floors, fixtures and fittings.
Personal Property or contents insurance includes coverage for the same risks to your valuables in your home, and also theft. These include, for example, jewellery, art and electronics.
Life/disability insurance covers you in three broad instances: (1) where you are unable to work or total disability; (2) temporary disability, for example if you lose your job or you are unable to work because of poor health, and (3) in the event of your death.
2. Mortgage lenders usually require homeowner’s insurance.
Homeowner’s Insurance is that safety net that can protect your home in the event of some unfortunate situations.
It is very important to note that homeowner’s insurance is a legal requirement when getting a mortgage. Borrowers need to ensure that they have this insurance in place, and that it covers the full value of their property.
Once you are in a mortgage arrangement or in the process of buying a home, you should make sure you have this coverage in place, because when you exchange the mortgage contracts, both you and the lender both have a financial interest in the property that must be protected.
You do have the option to seek this coverage on your own or elsewhere, but remember, it must be in place before any monies are disbursed to acquire your property.
3. Your homeowner’s insurance must cover the full replacement cost of your home.
Usually, a condition of your mortgage arrangement is generally that the insurance coverage on the mortgaged property be maintained at the full replacement value of your home, throughout the term of the loan. You should have enough insurance to cover the rebuilding cost of your home. In other words, if your property unfortunately gets burnt to the ground, the homeowner’s insurance should pay for it to be rebuilt.
A replacement cost valuation is recommended every five (5) years, to ensure that the insurance coverage is on par with the replacement value of your property. But remember that the rebuild cost is not the same as the sale price or the current market value of your home. In fact, it is often times lower. Take a read of Mortgage Insurance for more information
4. There are other risks that may require coverage.
Instead of shouldering the full financial burden after suffering damage, you can turn to your insurance coverage which will assist you in replacing items, repairing or rebuilding.
In situations where you would have lost your job, or due to poor health so you cannot work, your family and you should be given the peace of mind that regardless of what happens, your loans will be paid off.
Most lenders require life insurance on the life of the borrower so that the loan is covered in the event of the borrower’s death.
At TTMF, while life insurance is not required, we provide an option that covers you for both death and disability. If you become totally and permanently disabled and are no longer able to work or in the event of your death, your loan balance will be paid off in full. For more information, please check out our Advance Protector Insurance and Brochure for more details.
5. Start compiling a home inventory now.
As you think about and decide on the right insurance for you, and your family, it is also handy to have something called a home inventory. A home inventory is really very simple. Go through every room in your house and list every valuable item and its worth. This home inventory should be easily formalised and updated when necessary as it is most useful not only when damage is sustained to the home but also in instances of theft.
Become Home Smart
Buying a home can sometimes be a complicated process, but it doesn’t have to be. Regardless of the extent of damage, these insurances ensure payment for its repair and more importantly, an easy start again.
With our help and support, we make your journey to purchasing a home a smooth, efficient and an incredible step towards your future. Buying your home is a life-long investment and the way to protect that cherished investment is embarking on that journey with us.
If you are interested in exploring your options, or to speak with a knowledgeable representative to find out more about how we can help you, please contact us. Log on to www.ttmf-mortgages.com to chat online or call 623-TTMF.