Happy New Years

Happy New Years from URBANOMICS

I wanted to wish everyone a Happy New Years. To all the first time investors, part-time investors, or people interested in their financial well being: Welcome to the site that explains everything financial in an easy to understand format.  We have it all covered from how to check your credit for free, tax advice, and where to invest in the complex stock market. 

My Reality Show: Homebuying 101

My online reality show is probably the slowest show that you've followed in awhile, but hey its still running! If you recall, my show started with trying to determine if the stimulus bill really had any stimulus to it??? So I read through some of sweet parts of the bill to see if they could get a penny pincher like me off the sidelines and contributing to a deteriorating economy. The one part of the bill that immediately attracted me what the Homebuyer Tax Credit. Yes, welcome, first time homebuyers like me. I searched high and low and I'm sometimes surprised at the lack of direct information provided to help you through what is a huge huge purchase. So far here are the rules to help you finance the purchase of your next home:

Rule 1: From a previous post, you learned to CLEAN UP YOUR CREDIT. Click here to learn about how to view your credit for free ---> Free Credit Check

Rule 2: Find a reputable bank or mortgage broker who will pull up your credit and give you a Pre-Approval amount based on your gross income and outstanding debt levels (i.e., credit card balances, car loan, student loans, etc). Knowing "How Much Home You Can Afford" is critical! My rule of thumb is try not to spend more than 80% of what your Pre-Approval amount is. If you haven't received your Pre-Approval use this rule of thumb, don't spend more than 40% of your net monthly paycheck. Remember net = take home pay. This rule prepares you for a few things things that you may still want to spend money on like: the ability to still save/contribute to your retirement, afford new expenses, and still have a life.

Rule 3: SAVE, SAVE, SAVE for at least of a 10% Down Payment. This will be a huge step in determining if you are really ready to commit to buying a home. For instance, the average condominium (in my book) is roughly $300,000. This means you need to come up with $30,000 as a down payment!!!!

Tricks up my sleeve:

- A trick to Rule #1 is to contest all questionable items on your credit report with support and in writing. The nice thing is contesting your credit history can be done online.

- The trick to Rule #2 is to follow my "Rule of Thumb" notes above. Budget for less and you will be able to sleep easier at night.

- And my last trick! For Rule#3, consider or ask if the home you are looking into qualifies for a FHA Loan. This loan is government sponsored and only requires you to put 3.5% Down!!!

Stayed tuned on how to begin your house search...

My Reality Show: Pt.3 Homebuying 101

The good thing is I've picked the provisions in the stimulus bill that seriously has me thinking about getting me off the coach and spending money again. Now the catch is will I put in the work to get the job done. But my next dilemma is trying to find a step by step help to determine how to buy a house...oops forgot I live in Chicago and should say a condo or townhome.

I hope my steps will will assist anyone who is a first time homebuyer looking for answers.

Step one in my Homebuyer 101 steps:

1. I definitely will be needing a mortgage and my to get me going down the right path I wanna make sure that my credit history is clean and clear. My first goal this past weekend was to search through my credit report and make sure that there isn't any surprises in there. The only strange issue I ran into was that some of my father's credit history was mixed with my but luckily he has been reliable when paying his bills. At this point, take the time to dispute anything on your credit reports that you believe shouldn't be there. I've heard that it's best to submit your disputes in writing but the internet has made it pretty easy to also dispute something online. Don't forget to look at ALL 3 reports from the major credit bureaus,
Experian, TransUnion, and Equifax...because when it comes to a mortgage most banks and brokers pull ALL 3 to get a feel a good feel of your credit history.

The best thing is our work is now easier as the government has passed a rule that allows you and I to have a FREE view of our credit history, once a year...and it can all be done at one website! Please note that there is the only one website that will allow you to do this for free and it is attached here: https://www.annualcreditreport.com/cra/index.jsp

The others websites claim to offer this service but they come at price...so get it done for free.