Revising Your Household Budget for the New Year


Far too many households don’t set up a budget. Even if you do, it’s important to regularly adjust it. Factors such as FHA mortgage rates can affect your situation, but an FHA loan isn’t the only one.
Are you finding yourself living paycheck to paycheck, using credit cards to cover basic expenses or going over-budget on entertainment every month? It may be time to revise your budget before you apply for home loans or refinance. Here are some tips on how:

  • Adjust your spending based on increases or decreases in your income. Tally your monthly receipts and subtract the total from your monthly take-home pay. If the number is negative, adjustments are needed, including cutting out unnecessary expenses like shopping and entertainment.
  • Assess your financial goals. While FHA loans and VA loans are convenient, they require financial planning. Do you need to pay off a student loan or car, or have you done so? Perhaps you paid off a credit card. Working toward or reaching financial goals changes your situation and determines if you’re prepared to visit a mortgage broker.
  • Use money smartly. If you received an inheritance, huge raise, or won the lottery (it’s a long shot, but it happens), don’t blow all that cash. You can save toward a down payment or apply for a mortgage loan. Perhaps it’s time to consider a mortgage company or types of home loans you can afford.

Your budget can influence whether you apply for a fixed rate mortgage or not or vice versa. It can also factor into choosing a cash-out refinance or rate and term refinance. For more insights, contact Elite Financial at (805) 494-9930 or get a quote or pre-qualified online today.