3 Ways to Use Your Stimulus Check to Own a Home - ALCOVA Mortgage

3 Ways to Use Your Stimulus Check to Own a Home

View of Wilmington North Carolina from across the river

If you are one of the 90 million people who are eligible for the third round of stimulus checks, you might be wondering what are the best ways to save, invest or spend these funds based on your financial goals. If owning a home is a personal ambition you want to achieve, here are three tips on how your stimulus check can help!

Pay Off Some of Your Debt

Your debt-to-income ratio, or DTI, plays a large role in whether you qualify for a mortgage, and it helps lenders decide how much you can borrow. Simply defined, it is the percentage of your income that goes toward paying your monthly debts. To calculate your DTI, divide your monthly debt costs by your monthly income. The lower your DTI, the better, and an ideal DTI ratio is 36% or less.

If you feel like your DTI is too high, you can take steps to reduce it by making extra payments on some of your debt accounts to lower your monthly costs and avoiding taking on more debt. Additionally, if you want to qualify for a higher loan amount, paying down some of your debt will make that goal even more attainable. Paying off debt and keeping credit card balances low will also improve your credit score which can help you secure a lower interest rate.

Add Your Stimulus to Your Savings Fund

A home mortgage is the biggest financial investment you will make in your lifetime, so it’s not surprising that saving for a down payment can be a major hurdle for people on their journey to home ownership. While a 20 percent down payment is ideal, most people pay less. In fact, according to the National Association of Realtors, the average down payment among first-time buyers was about 10% in the fall of 2020. There are even loans options that do not require a down payment at all! At any rate, applying your stimulus check towards your savings can move you closer towards owning a home.

Use It Towards Closing Costs

Whether you are refinancing or buying, you will have to pay closing costs. Typically, closing costs can range from 2% to 5% of the loan and include property taxes, mortgage insurance and more. Closing fees vary depending on your state, loan type, and mortgage lender, so it is important to pay close attention and budget for these fees.

For many buyers, the process of becoming a homeowner can be an intimidating process. It’s a big purchase that comes with plenty of responsibilities and costs, but it’s also a long-term investment that can help secure your financial future. If you are ready to buy or even refinance your current home, we are ready to help!

3 Tips for Moving with Pets

Moving to a new home can be stressful for anyone, especially your pets. But with a little consideration and planning, you can ensure that your next move will go more smoothly for you and your pets.

Buying A Home While Balancing Student Debt

Before you let your student loan debt stop you from getting a house, look at your options, do your research, and ask any one of our loan officers about your options for buying a home!

Who You Need to Notify About Your Move

It’s easy to forget about notifying the right people and organizations about your upcoming move. With these these helpful tips, you won’t leave anyone out!

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Equal Housing Lender LogoALCOVA Mortgage LLC | NMLS#40508 | (www.nmlsconsumeraccess.org)
Licensed in AL, AR, CO, DC, FL, GA, IN, KY, MD, NC, OH, OK, PA, 
SC, TN, TX, VA, WA, WV | 308 Market St SE, Roanoke, VA 24011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equal Housing Lender LogoALCOVA Mortgage LLC | NMLS#40508 | (www.nmlsconsumeraccess.org)
Licensed in AL, AR, CO, DC, FL, GA, IN, KY, MD, NC, OH, OK, PA, SC, TN, TX, VA, WA, WV |
308 Market St SE, Roanoke, VA 24011