Buying a House? How Much Home Can You Afford?Written by Carrie Reeder
Maybe you’ve heard expert advice that your debt to income ratio shouldn’t be more than 36 percent of your total income. But do you truly know what that means, and how lenders will look at your financial history in order to decide whether or not to extend you a mortgage? If you need help figuring out your debt to income ratio, simply follow guidelines below and soon you’ll know whether or not you’re in a position to apply for a mortgage loan.Your debt to income ratio is amount of monthly debt you pay out in contrast to how much income you have coming in. Start by figuring easy part—your income. If you are on a structured paycheck, then it will be easy—simply calculate your monthly salary. If you work on a commission or other type of varying income, total your last six month’s earnings and divide by six. Now you will need to figure your monthly debt. You should total your car payment, credit card payments (use minimum amount payments for this calculation, even if you pay more), any other monthly debt—such as child support payments—along with estimated amount of your new mortgage payment.
| | Can you become rich?Written by Cory Bain
What does becoming rich mean to you? Is it early retirement? Perhaps it is big house and fancy car. Do you want personal freedom that comes with being wealthy? Knowing you could go anywhere in world you wish at anytime. Imagine knowing that your children and even your grandchildren will be taken care of financially after you are gone. Becoming rich is not a birthright or a random act of chance, it is a choice. So question is, do you choose to be rich?What is definition of wealthy? It is not someone who makes a lot of money. A doctor with a six figure salary could still be considered poor if he/she spends every cent they make. The true definition of wealth is someone who makes enough money to live without having to work. That is, their monthly passive income is greater then their monthly expenses. So what is passive income? Passive income is essentially money you earn that did not require your constant presence to do so. If you stopped showing up to your job you would no longer earn a paycheque. A passive income opportunity may take time initially to set up. However, if done right you will be earning passive income even as you sleep. This is also known as residual income, or leveraged income. A good example is a home that you rent out to a tenant. Once you have bought property and set up systems of management there is very little for you to do except collect money from your bank account. Another example would be financial instuments that pay you a monthly yeild, such as a bond, a dividend or a distrubution. These are but just a few examples. The wonderful thing about passive income is you no longer have to trade your time for money. If you choose to be rich then passive income will be your investment of choice.
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