Top Tips To Take Care Of Kids While Managing A Mortgage
It’s important for prospective buyers to exercise a lot of caution en route to homeownership. These measures include making payments on time (if not, early), closely monitoring credit scores and delaying unnecessary purchases.
Do not let those healthy habits vanish upon the closing day. Being a new homeowner and establishing a family means you have more to lose from ineffective fiscal management. One way to ensure your home will not end up in foreclosure is signing your name on a mortgage note.
What Is a Mortgage?
A loan taken out to purchase a property is called a mortgage. Some mortgages are taken out from a bank, while others are with non-bank mortgage lenders. These could be credit unions and societies that offer mortgages.
Another alternative is having a mortgage contract established when you borrow money from people you know intimately, such as parents. That kind of mortgage contract outlines the amount you borrowed and repayment conditions.
Top Tips on Taking Care of Kids While Managing a Mortgage
It is a huge responsibility to manage a mortgage, especially when you have children. In fact, nowadays, mortgage lenders penalize couples with children. But you must not fret… it is still possible to take care of your children while managing a mortgage. All it takes is commitment and following the tips we provide below.
Avoid Excessive Purchases
A huge, unoccupied house can encourage new homeowners to go into a shopping frenzy. It may stir you up to purchase new furniture, appliances, and other things you may find essential at first.
- Don’t become a big spender: After spending your money on so many appliances and other home items, bills start to roll in, and in addition to your mortgage payment, you find you also need to pay for your furniture, kitchen appliances, fresh carpets and more. Do not over-extend your budget.
- Spend slowly and segregate your money: Schedule your expenses, and set aside money for infrequent expenses you may encounter. Hold off on making improvements until after closing on your new home. Be patient for a few weeks and be smart in figuring out the necessary improvements.
Get Used to New Expenses
All homes have various monthly expenses. Do you remember the utter shock you felt when you received the first electric bill in your new home? On top of that, there is a water bill, cable, fees, trash service, and more.
- Estimate your average utility bills: To manage your mortgage and other expenses, try to estimate the approximate monthly utility bills. Make sure that your budget adequately covers all your necessary expenses, and give your family some time to adjust before committing to other expenses.
Save Three to Six Months Worth of Your Money
There is no problem with purchasing items and dealing with expenses with optimism. Even if your income is exorbitant enough to manage your mortgage, equity is building and the market is advancing.
- Challenges in money occur: Whether you like it or not, challenges in money may occur and they might be minor or disastrous. Your income may take a fleeting hit, or illnesses can pull you out of your job for a couple of days or months.
- Keep three to six months of expenses in a segregated account: When troubles in finances come, it is extremely important to make sure you possess a money solution. Set aside three to six months of your living expenses in a different account to secure your family.
Take note that your reserved money is not meant to fund your splurge or dream vacation. You can only utilize that reserved fund for emergencies and other expenses are deemed necessary. It can be difficult to commit to this, but you won’t regret it, especially if an unexpected crisis comes along.
Pay Your Mortgage on Time
The easiest way to manage your mortgage efficiently is paying your mortgage on schedule. Remember that paying late can pile up a huge amount of penalties and jeopardize your credit score.
- Try prepaying: In the event that you can afford an extra payment, try paying an extra amount to the principal of your mortgage. Just a small quantity of extra money, like $25 a month, can save you hundreds and thousands in interest payments during the term of the loan and can leave you mortgage-free earlier than expected.
- Manage a new figure: Paying more on your monthly mortgage means paying it off in fewer years. Ask your lender how many monthly payments it will take to shorten the payment terms by 10 years. If you think you can handle the new payment term, then go for it.
Any higher amount of money you put in will bring an immediate effect on the interest you pay. Furthermore, paying off your mortgage in a shorter term is also a form of tax-free investment.
What Happens When You Pay Late Mortgage Payments?
The scariest thing that could happen in the situation of late mortgage payments is the possibility of a foreclosure. Rules may vary by state, but usually, if you are around 60 days behind on your mortgage payments, lenders will initiate foreclosure proceedings. Avoid the burden and heartache of foreclosure by ensuring you pay your mortgage on time.
Managing your children and a mortgage at the same time can be a challenging task. You will need to establish healthy financial habits. The key here is discipline and being committed to your responsibilities as a parent, and paying off a mortgage.
If you’re having a difficult time managing your mortgage, click here to explore your legal options and find peace of mind.
[su_box title=”About the Author” box_color=”#abbeef”]
Danielle Grate is a professional writer in the law industry. She currently writes pieces on various law topics for the common reader. In her spare time, she spends quality time with family and friends.[/su_box]
