Sam in Reverse

As a renter or someone living in an older home, you may have settled into what was a relatively comfortable budget. Now that you’re getting ready to purchase a home, you are going to need to sit down and take some extra time to review your budget, making changes for the new line items you’ll need in your new place. Regular Monthly Expenses First you need to consider the expenses that will occur monthly, on a regular basis. These include:

The decision to buy a home is a tough one. Actually choosing that home is even tougher. You're going to see tons of houses that you're absolutely in love with on paper (or on the computer), only to feel disappointed or overwhelmed when you see them in person. Then, out of nowhere, it hits you – the perfect home. Don't be blinded, though. Make sure you keep your eyes peeled for flaws as you move through the decision making process. Understanding the Neighborhood Do a little bit of research about the neighborhood the home is in as well as the surrounding neighborhoods – especially if the area is new to you.

Wikimedia Commons Ouch!  Earlier this week it was announced that Citigroup had settled the inquiry into the company’s mortgage practices – to the tune of $7 billion. The deal, which was settled with the Justice Department, represents one of the largest settlements ever made in response to a federal inquiry; specifically in terms of the penalties levied. Of the $7 billion, $4 billion was in penalties alone while $2.5 billion will go towards providing mortgage modifications to homeowners. Another $500 million will go to the Federal Deposit Insurance Corp and 5 separate states.

There’s nothing quite like the feeling of getting out on your own. And while signing the lease on your first rental house or apartment probably gave you a sense of independence, there is really nothing that compares to signing the loan and closing papers on your first home. Feeling unsure about your financial situation? The following are three great signs you’re ready to buy your first house. You Have Been Saving a Down Payment If you haven’t been, you shouldn’t even be considering a home. Most lenders want you to have at least 20% of the purchase price of a home before you buy. That means you’d need $60,000 to buy a $300,000 home. That’s a lot of money. While some programs may alleviate some of that initial burden, it’s important to start off on the right foot. Loans that require no down payments, or a very small down payment, often cost you more in the long run.

If you know a homeowner, or are one already, you know people who have had their mortgage loan applications approved by some sort of bank or lending institution. What you may not hear about as often are the stories of those who have had their mortgage applications rejected. While the market is easing up a little bit, it’s definitely harder than it was before to get a loan for a home purchase. In 2010, lenders were only accepting about 55% of the applications presented to them. While that number has gone up, it’s still important to recognize the warning signs of a potential rejection – and to know what to do to avoid them. Your Income Documentation isn’t Clear One of the most important factors when looking at a home loan application is proof of income. Your lender won’t care how wonderful your credit score is if you don’t prove you have a consistent, reliable income. You need pay stubs, tax records, and anything else you can show to prove you are earning regularly. There