The new year isn’t only a good time to set lifestyle goals, but it’s also a great time to take a look at your finances. This is especially important if you are considering buying vacant land, a new home or even if you’re thinking about making upgrades to your home.
Making a Budget and Making Decisions
Before grabbing a calculator and making a budget, you should take a look at what debt you have and what type of financial standing you’re in. This allows you to see how eligible you are for certain loans based on your credit and gives you an idea of how much debt you have yet to pay off. You can check your credit report from the major three bureaus once a year here.
Once you have identified the debt you have, it’s time to start listing out your monthly payments. This is going to help you decide if you can take on more debt for a land, house, or construction loan.
If you have enough extra income to tack on another bill, you have to decide if you want to. Just because you can afford to take on a new loan doesn’t necessarily mean it will leave you with enough money each month to live the lifestyle you desire. Consider if the long-term investment is worth having less spending money.
Remember, just because you get pre-qualified for a loan doesn’t mean you can – or should - afford it. Get advice on figuring out what’s best for your budget in this article.
If you listed your debt and realized you need more time before taking on more monthly bills, take time to put together a plan to start eliminating some of that debt. You may wish to start by listing out your debt in order from smallest to largest. Then, create a plan to begin making larger payments on the smallest debt. When that debt is gone, move to the next smallest debt, and so on and so forth. Soon, you may be ready to reconsider that new property or home upgrade!
Setting Aside Money
Another way to position yourself to take on a new loan is by setting aside money now that you can use later for a down payment. When financing through GreenStone, many loans require a 20% down payment for home or vacant land loans. Having that cash set aside will help you be ready to move fast when the perfect property comes your way!
One idea as you start the year is to consider participating in a “no spend month.” This is when you only pay your bills and necessities for a month and spend no other money. So, no lattes, dinners out, or nights at the movie theater. Instead, stay in and enjoy a movie at home or by spending time playing cards with friends. When the month is over, take the money you saved and set it aside for your future loan.
Securing a Loan
If you’re serious about buying new land or securing a new home, sacrificing extra spending now is worth the reward.
When you decide you’re ready to take out that new home, land or construction loan, our team is here to help. Find a GreenStone location near you here and give our team a call to see what financing options are right for you!
