Yes, a bankruptcy can stay on your credit report for up to 10 years. But, that doesn’t mean you have to wait that long to buy a home. In fact, you could be eligible to apply for a mortgage sooner thank you think.
It all depends on what type of bankruptcy was filed – Chapter 13 or 7 – and the type of loan program you’re applying for. It also depends on how hard you work to rebuild your finances and credit score. Here are three important things to focus on:
Save, save, save: The more money you have saved for a down payment, and the more money you have squirreled away for emergencies, the better your chances will be of getting a loan approved down the road.
Make monthly bill payments on time: Ideally, you’ll want to aim for at least 12 months of consistent, on-time payments for all your monthly obligations before you apply for a home loan again. Keep all your documentation showing you made the payments on time.
Rebuild your credit: After a bankruptcy, you’ll want to take on small amounts of consumer debt and pay them off as promised. You want to show a housing lender that since your bankruptcy, you are handling credit responsibly. Part of doing this is using only a modest portion of the credit that’s available to you and paying your bills promptly.
Whether it’s your first, second or third home, you can’t always afford all the space you want. Here’s how to make any home feel more spacious:
Choose colors wisely. Darker paint colors and tones can bring warmth to a room and make it feel cozy, but when a space is small to begin with, they can make it feel like the walls are closing in on you. Choose light and airy colors to create an open feeling and make a space seem larger. But that doesn’t mean everything needs to be white and sterile. Accessorizing with pops of color or accent pieces will keep things interesting.
Go easy on the furniture. Using too much furniture, or the wrong scale of furniture, can induce a feeling of claustrophobia. For example, if you have a small living room, a giant sectional sofa may not be the best furniture choice. Too much furniture can have the same effect. A room should be open enough that you have space to move around in it. If furniture is blocking walkways or restricting access, it’s probably the wrong scale for the room.
Use multi-purpose pieces. Multi-functional pieces, such as a bed with storage drawers underneath or an end table that’s also a bookshelf, can help make your room feel bigger.
Keep clutter under control. Trinkets, knick-knacks, or too much stuff everywhere can be overwhelming. Keep rooms free of clutter to make them feel more open and spacious.
When you buy a home, there is a specific amount of money you will need to pay to secure the house. The rest of the cost of the house can be divided into monthly payments using a home loan. The following is how you can figure out how much cash you’ll need when you use an FHA loan to buy a house.
About the FHA Loan
The FHA loan is the easiest loan to qualify for because you can have less than perfect credit and the down payment requirements are the lowest.
You will need to work with your lending institution to find out if you qualify for this type of loan. However, if you are approved, you can expect to pay about 3.5% of a house’s sales price.
The amount of cash you need for a down payment all depends on the cost of the house. If the house is $200,000, you will need to pay 3.5% of it, which is about $7,000.
This amount does not cover other costs, such as closing costs. This can be about $4,000 for a home of this value.
Depending on your savings, you will have to seek a home that falls within what you can afford. If you can’t pay $7,000, you may need to purchase a home that is $100,000. This down payment would be about $3,500 without factoring in closing costs.
Once you save enough money for a down payment, you will also need to save money for at least two months of mortgage payments. This means that if your mortgage is $1,000, you will need at least another $2,000 in your bank account to cover your mortgage in case anything were to happen to you financially.
Other costs have to do with a home appraisal and closing costs. A home appraisal can cost anywhere from $400 to $600. You need to pay for it. It cannot be rolled into the loan.
Closing costs are usually about 2% to 5% of the house’s sales price. The good news is that this can be rolled into the loan. For an FHA mortgage, you can roll in up to 6% of the home’s value into the loan for closing costs.
All you need to do to start the process of buying a home is to meet with a lending institution to figure out how much you can afford. Once you know the home price range you need to stay in, you can start looking for a home. Using a real estate agent or realtor can help you find a house that has what you’re looking for while staying within what you can afford as far as down payment and other fees.
Do you have a fire extinguisher? If you don’t, it’s time to add it to your shopping list. Every homeowner should have one on each floor or area of their home and know how to use it.
Fire extinguishers are life savers. Make sure to purchase one from a reputable manufacturer. Class A fire extinguishers are designed to put out fires involving paper, wood and plastics. rubbish, wood, and paper fires; Class B are for flammable liquids such as oil and grease. oil and grease fires; and Class C are for electrical fires. Class ABC models work on all the fires above.
The higher the rating number on an A or B fire extinguisher, the more fire it can extinguish. But higher-rated units are often heavier — too heavy for some people to hold and operate. If you’re buying a fire extinguisher, make sure you, a member of your family or co-worker, can easily pick it up and use it.
Do you know how to use a fire extinguisher? In an emergency, fire fighters say many people can’t get one to work on the first try. Read the informational material that comes with your device. Consider having local fire department personnel show you how or attend a training class. The acronym PASS can help you remember the basics of operation: Pull the pin to release the handle, aim the extinguisher at the base of the fire, squeeze the trigger, and sweep the discharge stream at the base of the fire.
Fire extinguishers are not designed to fight a large or spreading fire. Even against small fires, they are useful only under the right conditions, such as when a fire is confined to a small area, such as a wastebasket; when everyone has exited the building; after the fire department has been called or is being called; and if the room is not filled with smoke.
When it comes to home improvements, not all upgrades pay off when you sell your property. Trying to decide how to spend your home improvement dollars? Here are some tips from the U.S. Appraisal Institute that may shape some of your decisions. And if Stone Passion can help you achieve those dreams, even better.
Don’t neglect ‘green’ renovations. A number of ‘green’ projects, such as replacing windows, installing Energy Star appliances and adding extra insulation, are likely to pay off in two ways — in your monthly utility bills and when you sell your home. You’ll want to consider both when deciding whether they are worth your while.
Go neutral. It’s been proven time and time again: Basic upgrades offer the largest returns. These may includes projects as simple as painting your walls neutral colors. Or, they could include replacing countertops with a more durable product that shows well at the time of sale. You may love the idea of wallpaper with farm animals in your kitchen, or perhaps a kid’s room painted in purple, but a potential buyer may consider these things to be a major turnoff.
Stick with neighborhood norms. As a general rule, you’ll want to undertake renovation projects that are on par with your neighborhood. If most homes in your neighborhood have one or two bathrooms, you may not have a great return on an investment in a third bathroom. Exercise caution with projects that take a home significantly beyond the neighborhood standard. However, basic upgrades to kitchens or bathrooms that enhance the living space and provide increased functionality will yield financial returns in the end.
If you need help making upgrades to your home sweet home, let us know. Stone Passion can provide you with kitchen and bath solutions that can help you increase your home value without breaking the banking. Call us today!