Personal Financial Advice

[HouseHunter]

Hello. I'm looking for some type of professional advice on personal finance decisions, such as buying and selling a house. My girlfriend and I are discussing potentially buying a house, and I wanted to have an assessment of our finances done by a professional. Is this type of service provided by personal financial advisors? or do they mainly focus on wealth management and investments? If so, what kind of companies specialize in this? Thank you!

[snshijuptr]

Housing counselors are available to help you with this type of thing. Here is the link from HUD:

U.S. Department of Housing and Urban Development (HUD)

Some are no charge if you cannot afford it. Although if you cannot afford credit counseling, how are you supposed to afford a house?

[maat55]

IMO, it is best to limit your payment to 25% of your take home pay on no more than a 20 year note. I have no problem with using a 30 year note as long as the price would fit in the 20 year term, and you take the savings in payment and invest it(in addition to regular retirement).

You should be out of debt(credit cards,car payments etc.). You should pay at least 10% in addition to closing costs. You should have at least 3 months payments and expenses in savings for emergencies.

I highly recommend you read a few books on personal finance. I suggest these:

The Total Money Makeover by Dave Ramsey

The Automatic Millionaire by David Bach

[jIM_Ohio]

I will give you this advice for free:

1) save 30% of house cost for down payment. 20% of house cost is the down payment, the other 10% are costs which come up when moving (moving company, escrow, taxes, home inspections and more)

2) Spend less than you earn (I suggest saving 20% of gross and spending 80% of gross).

3) Re-read #2 and make it how you live... use an online ammortization table (I use the one's from microsoft) and calculate a house payment based on your own inputs (you need the loan amount, interest rate, and payment term- like 30 years or 15 years). Do #2 while renting (spend less than you earn) but do budget like you own house.

Example:
You make 50k combined
you save 20% (10k) and spend 40k. 7500 of the 10k goes to 401k or retirement, 2500 of the 10k goes to house fund and short term savings
rent cost is 600/mo
your projected mortgage of 100k at 6% costs $1000/mo, so while renting, you pretend like you have a $1000/mo rent payment
the $400 difference gets added to house savings

The result of the $400 difference is you almost feel the cost of the house in your budget before you move in.

Everything you need to figure out you can do yourself. If you really need to pay for a second opinion, tell me where you live and I will do it for $200 plus travel expenses.

[tripods68]

Jim got some excellent advice.


Here's my free advice: Live within your means. Don't spend more than what you or your partner make. Start using cash instead of credit card.

Cut all the unnecessary things in life that you can live without. That doesn't mean you break COLD TURKEY. For example, instead of dining out 3 times a week, do it once a week. Cook more at home.

Limit your spending day on a preset amount (mine is $10 a day). Bring lunch to work.

Eliminate Starbucks, make your coffee at home instead.

Start selling stuff/junk in your apartment, home, that you don't really need anymore (clothes, toys, etc).

Lastly, cut your cable bills by 30 to 40 percent a year by calling them and asking for discount. (I renegotiate my cable bills after contract each time). Save me tons of money each year.

Doing many of these things, will save you several thousand a year.

[snshijuptr]

He wants adivce on if he's ready to buy a home, not how to cut his spending. House, do you plan to ever get married? If so purchasing a house with a "girlfriend" can lead to ugliness upon breaking up.

[jIM_Ohio]

He wants adivce on if he's ready to buy a home, not how to cut his spending. House, do you plan to ever get married? If so purchasing a house with a "girlfriend" can lead to ugliness upon breaking up.

keep house in one person's name (and only use one person's income to get house)

if the other partner wants to contribute, have them pay utilities or something
keep the legal property in one name until you marry

[woodie96]

Lots of great advice from Jim and the others,
The best part of it that I heard was to keep legal property in one name until you are married. If the other wants to contribute then awesom, but if something did go awry in the relationship, it wouldn't be a big ol ugly mess.

[money blogger]

The best thing you could do is lean it on your own and then hire a very good advisor.

I would always tell my clients that nobody will care about your money as much as you will. At the end of the day your advisor will most likely get paid whether or not you make money or not.

You can not know eveything but you should not also keep yourself in the dark. Learn a little then hire a great person to help you alog the way. This way you can challange them as they give you advice and not just follow them blindly.

Hope this helps,

Brandon

[jason_simpson]

I'll suggest you to go for the FHA loan. An FHA loan isn’t really a loan, it’s a program that insures home loans. The FHA (Federal Housing Administration) doesn’t actually fund your home loan in any way. The FHA simply provides mortgage insurance to help consumers become homeowners. In other words, the FHA insures lenders from losses associated with homeowner default. This helps mortgage lenders prepare mortgages for people who might not otherwise qualify for a loan.