Financial Wisdom

How to Get the Money to Buy Your House

When the time comes to purchase a home, one of the most difficult parts is coming up with the money for the initial down payment.  For many of us writing a check for anything over $100 can be a very painful experience.  Luckily, in this wonderful State that we live in, certain towns are willing to provide a helping hand. 

There are many revitalization programs available throughout the state of Connecticut whose mission is to increase the amount of homeowners in specific municipalities in Connecticut.   Because of this, a lot of revitalization programs offer down payment assistance for home ownership.  There are many available throughout the state, but here a few that I know about in the Harford area: 

CHFA -CHFA (Connecticut Housing Finance Authority) is a state run down payment program, which will lend you money that can be used toward the closing cost or down payment when purchasing a home in certain towns in Connecticut.  The loan can be up to $15,000 and is offered at a very low interest rate.  Through this program you may be able to get into your own home with little of your own funds and at a great interest rate.

House Hartford-House Hartford is for people who are interested in moving to the city of Hartford, The program will give you the down payment to purchase your home.  Notice I said GIVE! This program is structured in a way that the city will forgive 20% of the money you borrowed every year that you live in the property. After five years the entire amount that is borrowed for the down payment will be forgiven.  This is a great program, because even through its not free money right away, it is after five years. 

The Windsor Down Payment Assistance Program– The last program is offered by my favorite home town, the wonderful New England suburb of, Windsor, Ct.   This program will allow you to borrow up to $8,000, at a low interest rate.   The money can be used towards the down payment and closing cost. 

These are a just some of the down payment assistance programs available throughout the state, and there are others. To find out more about these and other programs available in the State of Connecticut, contact a real-estate agent, your local bank, a mortgage banker or real-estate consultant. 

 

 

The 3 Things You Need For Real Estate Success

The first property I purchased was a three family house in the West End of Hartford. I bought it because I wanted to invest in my two year old son’s future. I figured, by the time he’s ready to go to college, I’d have enough equity to use to pay for his tuition.    Little did I know that I bought the property at the beginning of a major real estate boom.  Perfect timing! The housing market increased in value and my property went from the $120,000 sale price that I purchased it for to $250,000 in less than three years.

I put the house on the market and cashed in. I used the profit to invest in other real estate and start my own business.  I began enjoying the Good Life!

I remember feeling very lucky at the time, but then after thinking about it, I realized it wasn’t only luck.   If I had not been willing to take on the risks involved in investing in real estate, I would not have benefited from it.   I was fortunate to buy at the time that I did, the prices were very low. I had no idea that my money would double so quickly.

Here’s how it happened. The real estate market had been recovering from a major downturn, much like it is right now.  The economy began to get better and the demand for real estate increased and prices began to rise.   I sold as soon as I saw I could gain a good profit.  The one thing I kept saying to myself is, “I wish I had bought ten more of these properties when the price was so cheap.”

 Today, values in the real estate market have decreased by 40% in some areas from its highest point in the last real-estate boom.  To me this means buy, buy, buy.   If you want to make money in real estate you must buy low and sell higher.  If you track the history of the movement of real estate values you’ll find it moves much like the stock market, in the long-term it generally trends upward. 

If you want to make money in today’s real estate market remember these three things:

  1. Timing is Everything – Buying in a down market (like today’s market) is the key to positioning yourself for real estate success.
  2. Take the Leap – You must be willing to take on investment risk to gain real estate rewards.
  3. Market Demand-Buying when market demand is increasing means that you begin making money as soon as you purchase the asset.

If you lock in now at a low price you can sell at a higher price in the future, therefore putting money in your pocket. 

Ainsworth Thompson has been providing real-estate finance solutions for over ten years.  If you have comments or questions you can contact Ainsworth at 860-794-7932 or ainsthomp@yahoo.com.

 

Welcome to the Good Life

A step by step guide to making your dreams come true

by Ainsworth Thompson

Everyone wants to live the good life. Well a very important part of living a good life is to have good credit..Your credit score is a very important part of your financial life. Banks and lending institutions use your credit score to determine the interest rate that you will pay..  If you have good credit, you will be able to borrow money at a lower rate than those with poor credit.  Insurance companies use credit scores to determine your premium payments on insurance products. Utility service providers use the score to decide whether to provide service to a new customer..  And employers are now using credit scores to decide who gets the job.    

Your credit score can dictate how you live, where you work, the type of car you drive, the amenities you have available to you, and even how you play in your leisure time.

There are five factors that are weighted independently to compute your score.  Here is some inside information on how the credit bureaus figure out your score.   Remember the higher the score; the better it is for you.

  1. Payment History-35%

Making your payments on time is the single most beneficial thing you can do to keep your credit score high.  Delinquencies that occurred in the last two years impact your credit more than those that outside of 2 years.  Delinquencies, judgments, charge-offs and late payments will all have a negative impact on your credit scores.

  1. Outstanding Balances-30%

The ratio between how much credit you have available to you and the amount of credit you are using has an impact on your credit score.  Ideally you want to be using no more than 35% of your available credit.  If you use more than 35%, your credit scores will begin to be impacted negatively.

  1. Credit History-15%

The longer you have been in the credit reporting system is the better it is for your credit score.  A veteran borrower is better than a person who is using credit for the first time.

  1. Type of credit-15%

It is better to have a mix of credit items such as; car loans, credit cards, mortgages and other types of dept, than to only have credit cards. 

  1. Inquries-10%

The number of inquires made in six months period can impact your score.  Excessive amounts of inquires can reduce your score by 25pts per occurrence. 

Credit scores range from below 400 to above 800.  The Fair and Accurate Credit Transactions Act of 2003 or FACTA allows everyone a free copy of their credit report from the three credit bureaus (Equifax, Experian, TransUnion) every 12 months.  It is not uncommon for creditors to report the wrong information to consumer’s credit reports, afterall they are only human.  By checking your credit annually, you’ll be able to catch any mistakes and have them corrected.  Doing this will keep your credit in tip top shape and ready to use when you’re ready to live the good life..

Ainsworth Thompson has been providing real-estate finance solutions for over ten years.  If you have comments or questions you can contact Ainsworth at 860-794-7932 or ainsthomp@yahoo.com.

 

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