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Budget 101
Before you make a Real Estate purchase the development
of a household budget is a desirable activity and should continue on consistently during your ownership. By preparing a budget while you are looking at homes, you can better focus on mortgage payment goals and how the new house will affect your total expenses. Maintaining a budget during the time you own the home can help to prevent potential financial disasters, save money, and have more funds available for those things that you need or want.
Get everyone who will be spending involved in developing the budget.
Items and information you will need to develop your budget are:
- All other monthly expenses (such as child care, dues, etc.).
- All current monthly loan payments.
- Records of variable expenses (utilities, food, car repair, etc.) from the last 12 months. This will give you an estimate of your monthly expenditures.
- Records of annual or semi-annual expenses (such as insurance and taxes).
- An estimate of what your new mortgage payment will be.
- Records of other non-fixed expenses (for example, medical expenditures) for the last year.
- Records or an estimate of personal expenses (entertainment, travel, etc.)
- Having a current copy of your credit report can be very helpful. Not only will it reveal any inaccuracies in your credit history, it will also give you a clear picture of not only your total debt but your monthly obligations. You can get free copy of your Credit Report.
Be realistic in your budget assessment. Consider for possible increases in some items (i.e., school tuition's, insurance and taxes). Then, look for ways to get (and maintain) control over your budget.
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