To understand what to do with a windfall or extra disposable income when it comes to paying down a mortgage or investing the money, we need to discuss and understand the concept of opportunity cost.
Currently, this is a great time to be in the market for a new home. The interest rates on mortgages have fallen countless times over the past few years. Even though interest rates have been in the double-digits in the past, there are homeowners today who are able to agree to a mortgage for less than three percent.
Buying a home for the first time can be a challenge. One of the tools created to help people buy a home for the first time comes in the form of FHA loans. There were loans that were supported by the Federal Housing Administration (FHA). They can require a down payment that is as low as 3.5 percent.
There are many individuals who end up on a fixed income once they reach a certain age; however, their expenses aren't always fixed. Sometimes, there is a large medical expense. In other cases, someone might need money for a new car or a home repair. In the event that someone needs cash quickly, one option is called a reverse mortgage.
It can be hard to convince a lender that a young person is ready to buy a house. There may not be a long credit history, a lack of assets might make it hard to fund a down payment, and the buyer's age can cause banks to hesitate. One of the ways for parents to help with this process is to co-sign on the mortgage. Before doing this, there are a few important steps to keep in mind.