It is best to build equity in your home over a number of
years. Your goal should be to pay your home off in 15 or
30 years or earlier, if possible. Then sell it, and live
off the proceeds as part of your retirement, or leave money
to your heirs to start their own home. Should you decide to acquire a new home loan your income
should easily support the new payment. If you do not have
an income or your income is limited, you should not acquire
a new loan. If you do acquire a new home loan you should: 1. Have income to easily support your home loan 2. Have researched an affordable, high quality loan yourself
or have a relative research one for you. Compare several
home loans, read the fine print, ask plenty of questions,
understand all of the terms of the loans. See home buying
at MsFy.com. 3. Make sure the appraised value of other homes in your
neighborhood substantiates the added cost of a new or additional
home loan. Understand and verify in writing you have a high
quality loan with no balloon payment attached. 4. Understand in writing, the actual interest rate of your
loan, obtain an interest rate you can afford or do not obtain
the loan. Sometimes interest rates change before signing
for your new loan. 5. Understand it does not make good financial sense to replace
a loan that is nearly paid off with a long-term loan of 15
or 30 years. 6. Visit, www.fdic.gov (see “looking for a mortgage”) There has been a lot of information in the media lately
about predatory lenders, they prey on the poor, undereducated
home owners with lots of equity in their homes. If you know
of anyone in this category educate them about the dangers
of un solicited home loans or home loans with potential balloon
payments. Remember; do not forget to read the
fine print. Also, if you don’t have a job, don’t get another loan.
If you need a business loan, don’t use your house;
get a bank business loan or Small Business Administration
loan, see www.sba.gov. Another option is to delay starting
a business until you can acquire proper funding.
Lois Center-Shabazz is the founder of MsFinancialSavvy.com
and author of the 3-time award-winning personal
finance book, Let's Get Financial Savvy! ISBN
#0971979502.
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