Be Prepared For Opportunities
Whitney M. Young, Jr. said, “It is better to be prepared for an opportunity and not have one than to have an opportunity and not be prepared.” So often people decide to get their money or credit right when they want to buy a house. That is not a bad thing. However, when asked when they want to buy the house the answer is usually, “in three months” or less. They want you to work miracles! I believe that I am good at what I do but there are some limitations.
My advice when thinking about a major purchase like a home is to start planning early. Since this is a major purchase, there are several things that need to be in order before you are going to be able to sign on the dotted line. Just because your good friend or relative just bought a house with little or no down payment does not mean that you are going to be able to do the same tomorrow. Sometimes we either forget to ask them what steps they had to take to buy the house, they exaggerate and leave out important information, or we only hear the steps that we want to hear. Doing any or all of these things can and will lead to major disappointment.
- Start to prepare now. Either look for an organization or a financial coach that can assist you in getting your finances in order. Either will help you to assess your current situation, prepare a plan to reach your financial goal(s), and work with you to help you to stay on track.
- If you want to work alone, then create a budget. It is important to know what your income is and what expenses you have. Remember, a mortgage is a loan, so you are going to be evaluated to see whether or not you can afford a mortgage and how much you can afford.
- Order a copy of your credit report. Since a mortgage is a loan, the decision of whether or not to give you a loan will be based on your credit. It is important to know what is on your credit report. There may be errors or derogatory credit that you forgot about. Order a free copy of your credit report from www.annualcreditreport.com. Whether or not that opportunity that comes your way is a home purchase, it will most likely require that your credit is in good shape.
- Start saving regularly. Whether it is money for a down payment or money for an investment, it is highly likely that you are going to be asked to contribute something. Start where you are. Even if it is a small amount. Then build up to a larger amount. You will surprised to see how quickly your savings account grows.
You may not be thinking about buying a home, funding college, buying a car, etc. But things like this have a way of creeping up on you. You are going to have another child, and you decide that you want a home of your own. Your oldest child is going to be graduating from high school and you need to apply for a small school loan to finance their first year. You get a new job and need a new car to get back and forth. You can get a loan for a high interest rate but could make a good down payment and get a loan for a lower interest rate if your credit was better. Do any of these sound realistic and/or familiar? They could happen. Remember, be prepared for an opportunity. You never know when it is going to come. All the best.
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