American housing month

In recognition of American Housing Month, it is important for renters and home owners to have essential information regarding choosing the right housing option, getting a loan and improving their credit score.

The key to successfully managing your credit is to establish credit by securing a loan and/or credit card, and to make the payments on time.

To establish credit, establish a financial presence by opening a checking and savings account; shop around for free or low-cost options, maintain a minimum balance in the account to avoid bouncing a check, make regular deposits, and contact your financial institution promptly if you experience any account problems.

Obtain a credit card (or two); review interest rates and fees carefully and don’t be lured by introductory rates, only to find that the rate goes up in a few months. Ask the issuer if it re-ports how you pay your bills to a credit reporting agency; if it does not, this card will not be appropriate. Too many credit cards may lead a creditor to believe that you are overextended and that you might fall behind in future payments.

Know your limits; don’t “max out” your card, as it’s better to charge less on both cards with room to spare. Don’t charge more than you can afford; get into the habit of paying the card off in full, and make absolutely certain that your payments are made on time. And finally, don’t accept every solicitation.

Some people rent a home because they think they can’t afford to buy one. Others like the flexibility that comes with renting. But there are many reasons for owning a home: an opportunity to build equity, tax advantages, monthly payment stability, or a sense of community.

When you’re ready to explore home ownership, ask yourself these questions: Do you have a reliable source of income? Do you have checking/savings accounts? Do you have a stable work history? Do you pay your bills on time? Is your monthly debt manageable? Can you afford these debts? Do you have money for down payment and/or closing cost? Can you afford the mortgage payment and utilities? Do you have time for home maintenance? If you’ve experienced financial difficulties in the past, can you prove that is was due to events beyond your control?

If you can answer “yes” to most of these questions, you are probably ready to think about owning your own home.

Once you decide to become a homeowner, you’ll start the mortgage process. Shop for your mortgage financing as carefully. Compare terms, fees and interest rates, and ask questions if you don’t understand the process.

Keep in mind that the lowest mortgage rate may not always be the best choice. Rates are important, but also consider the overall cost of the loan. Also, consider whether your payments will remain the same. Find out what the Annual Percentage Rate is for the loan. The APR takes into account the amount of interest you will pay over the life of the loan and the fees you must pay to get the loan. Most importantly, go with a lender you feel comfortable with.

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