Christmas Shopping Done? 8 Steps To Healing Your Finances

Your Christmas shopping days may be over, but if you're shopping for real estate in Alexandria VA and feel like your finances are spiraling out of control, here are eight wasy steps to whip your finances into shape and prepare yourself for home ownership.

1. Develop a family budget. Instead of pretending to be a drill sargeant and being unrealistically harsh on yourself, review what you've spent over the past six months and use that as your starting point.  It's human nature to want to prove that you're disciplined and start strong, and gradually go over your budget and ultimately give up.  You'd be surprised at how realizing how much you're wasting (for example on coffees, teas, muffins, movies, etc.) can be a better way to help you save more for a down payment for your new home in Kingstowne.
2. Reduce your debt. Lending guidelines are getting tighter and mortgage companies want assurance that you will make your payments on time.  If your credit cards are close to the limit, concentrate on paying them off.  Reduce the temptation to "save an extra 10% by opening an account" the next time a department store representative makes the offer. When qualifying for your new Kingstowne or Manchester Lakes home, a good rule of thumb is to have your total debt total no more than 36% of your total income.
3. Track your expenses. Become your own CFO, or chief financial officer.  Give yourself a title, and report to yourself monthly. There are tons of free downloads for you to simply plug in your numbers, and autocalculate and sort your expenses. Create a recurring appointment in your PDA or online calender to input your numbers from the previous month and review your totals. After just three months, you'll have your first quarterly report and you'll start to see trends that will help you adjust. 
4. Increase your income. Get qualified for your new Kingstowne or Manchester Lakes home quicker by bringing in more money. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want. 
5. Start saving for a downpayment. Although it’s possible to buy a home in Kingstowne or Manchester Lakes with no money down through a VA loan, or a VHDA loan, after January 1, the minimum down payment for an FHA loan will likely increase from 3% to 3.5%.  While the jury is still out on this change, plan for the higher down payment, and be prepared.
6. Create a house fund. Don’t just plan on saving whatever’s left toward a downpayment for your new Kingstowne home. Instead decide on a certain amount per month you want to save, then put it away as you pay your monthly bills. 
7. Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate. With the tighter lending guidelines, a stable job history will increase your chances of obtaining a mortgage approval at a more competitive rate.
8. Establish and maintain your good credit rating. If you don't have any credit, get a credit card and pay off the balance in full each month.

For more information, visit HUD's new consumer dedicated website.