{"id":5010,"date":"2021-05-26T09:52:00","date_gmt":"2021-05-26T16:52:00","guid":{"rendered":"https:\/\/www.soundcu.com\/?p=5010"},"modified":"2023-10-30T20:54:59","modified_gmt":"2023-10-31T03:54:59","slug":"five-steps-to-prepare-for-a-big-purchase","status":"publish","type":"post","link":"https:\/\/www.soundcu.com\/blog\/five-steps-to-prepare-for-a-big-purchase\/","title":{"rendered":"Five Steps to\u202fPrepare for\u202fa Big Purchase"},"content":{"rendered":"<div class=\"co-flex_row co-flex_row__blue co-flex_row__last co-flex_row__long-form-text\" >\n\t<div class=\"co-flex_row--row co-row\">\n\t\t\t<div class=\"co-long_form\">\n\t\t\t\t\t<div class=\"co-long_form--block co-long_form--block__nomedia prow items-start \">\n\t\t\t\t<div class=\"co-long_form--text pcol-md:12\">\n\t\t\t\t\t<div class=\"co-long_form--content\"><table>\n<tbody>\n<tr>\n<td>A\u00a0financial\u00a0journey\u00a0typically\u00a0includes\u00a0several twists and turns\u00a0\u2013\u00a0such as\u00a0understanding how\u00a0to manage\u00a0spending, build\u00a0savings and\u00a0control\u00a0debt.\u00a0There might be \u201cspeed bumps\u201d in the form of unexpected changes in income.\u00a0Along the way,\u00a0you might also navigate\u00a0milestone purchases such as financing a\u00a0home\u00a0or\u00a0car.<\/p>\n<p>When considering a\u00a0significant purchase,\u00a0the\u00a0destination\u00a0is\u00a0within reach when you\u00a0steer\u00a0through the following\u00a0five\u00a0financial steps.<\/p>\n<p><strong>1.\u00a0Look at\u00a0your financial picture<\/strong><\/p>\n<ul>\n<li>Start by considering\u00a0what you can afford given your\u00a0current\u00a0income, expenses and other debt obligations. Get a handle on\u00a0how much money\u00a0comes\u00a0into your household each month, and where the money\u00a0goes.\u00a0Make sure to consider your net income- what is available to you after taxes.<\/li>\n<\/ul>\n<ul>\n<li>When purchasing a home, a common rule of thumb is\u00a0to spend\u00a0about\u202f30%\u00a0of your monthly gross income on housing.\u00a0That\u00a0includes costs\u00a0like mortgage\u00a0principal and\u00a0interest, property taxes, insurance\u00a0and maintenance.<\/li>\n<li>For transportation costs, a\u00a0general rule of thumb is to keep total\u00a0monthly\u00a0car costs at about 20% of monthly take-home pay.<\/li>\n<li>These guidelines set you up to\u00a0understand\u00a0how a big purchase fits into your overall financial picture.<\/li>\n<\/ul>\n<p><strong>2.\u00a0Check your credit score and\u00a0report<\/strong><\/p>\n<ul>\n<li>Checking\u00a0your credit score and\u00a0report\u00a0is key when considering a big purchase\u00a0like a home or car.\u00a0Pull your\u00a0credit report\u00a0from\u00a0<a href=\"http:\/\/annualcreditreport.com\/\" rel=\"noopener\">AnnualCreditReport.com<\/a>\u00a0and follow the additional instructions\u00a0to\u00a0see your current\u00a0credit score\u00a0\u2013 which influences your cost of financing a home or car.\u00a0The higher\u00a0your\u00a0score, the lower your\u00a0interest\u00a0rate\u00a0and overall cost of borrowing\u00a0should be.<\/li>\n<li>Check your report for accuracy.\u00a0 Resolving errors or incorrect information often helps increase your credit\u00a0score,\u00a0giving you\u00a0more attractive financing\u00a0options.\u00a0If the report is\u00a0inaccurate,\u00a0file\u00a0a dispute with the credit bureau.\u00a0 Make sure to check all three bureaus, as sometimes one has information that another does not.<\/li>\n<\/ul>\n<p><strong>3.\u00a0Figure out financing<\/strong><\/p>\n<ul>\n<li>Before you purchase your home, give yourself enough time\u00a0to explore mortgage options\u00a0including types of\u00a0mortgages,\u00a0terms,\u00a0fees,\u00a0interest\u00a0rates and other information.\u00a0\u00a0Consider getting a preapproval\u00a0or\u00a0prequalification\u00a0letter from a lender, especially in a competitive market with low housing inventory.<\/li>\n<li>When looking to finance a car,\u00a0take inventory of the most competitive loans offered by the\u00a0dealership, credit union, bank or other lender.<\/li>\n<li>Make sure to use\u00a0trusted, unbiased information sources,\u00a0rather than depending upon advice from someone who might benefit from your choice.<\/li>\n<li>Check the fine print- is there a pre-payment penalty if you pay your loan off earlier than expected?<\/li>\n<\/ul>\n<p><strong>4.\u00a0Plan the purchase<\/strong><\/p>\n<ul>\n<li>A purchase plan involves understanding when to pull the trigger.\u00a0Do you have enough in savings to provide a good down payment on a home or car?<\/li>\n<li>Build your team.\u00a0\u00a0Have you taken the time to find\u00a0a real estate professional you can trust\u00a0to look\u00a0out for your best\u00a0interests?\u00a0Ask friends\u00a0or family\u00a0for referrals.<\/li>\n<li>For a car purchase, do you feel the dealership is able to provide advice and guidance?\u00a0 Have you taken the time to research vehicle make and model from a\u00a0reputable\u00a0source of information?<\/li>\n<li>This is also the time to get your documentation in order, like proof of employment, insurance or other financial\u00a0information.<\/li>\n<\/ul>\n<p><strong>5.\u00a0Make\u00a0the\u00a0deposit\u00a0<\/strong><\/p>\n<ul>\n<li>Finally,\u00a0get\u00a0ready to make an earnest money deposit\u00a0in the case of a home purchase,\u00a0which indicates you are\u00a0a\u00a0serious\u00a0buyer.\u00a0 Generally, earnest money deposits range from 1% to 2% of\u00a0a home\u2019s\u00a0purchase price\u00a0and are\u00a0only\u00a0refundable\u00a0under specific circumstances.<\/li>\n<li>\u00a0For a new car purchase, deposits typically\u00a0total about\u00a0$500\u00a0once\u00a0you agree to the\u00a0vehicle\u00a0price in writing.\u00a0\u00a0Understand\u00a0whether the deposit is\u00a0refundable\u00a0if you change your mind about the purchase.<\/li>\n<\/ul>\n<p><strong>The Journey Ahead\u00a0<\/strong><\/p>\n<p>While not an exhaustive list, these\u00a0steps help prepare for the financial road ahead.<\/p>\n<p>As you travel along your financial journey, take advantage of financial counseling and guidance provided by the trusted national nonprofit\u00a0<a href=\"https:\/\/www.greenpath.com\/soundcu\" rel=\"noopener\">GreenPath\u00a0Financial Wellness<\/a>.\u00a0<em>\u00a0<\/em><\/p>\n<p><em>This article is shared by our partners at\u00a0<a href=\"https:\/\/www.greenpath.com\/soundcu\" rel=\"noopener\">GreenPath\u00a0Financial Wellness<\/a>, a trusted national non-profit.<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Start by considering\u00a0what you can afford given your\u00a0current\u00a0income, expenses and other debt obligations. <a href=\"https:\/\/www.soundcu.com\/blog\/five-steps-to-prepare-for-a-big-purchase\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":10,"featured_media":5011,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_searchwp_excluded":"","footnotes":""},"categories":[47,50],"tags":[110,87,88,62,134],"class_list":["post-5010","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tools-advice","category-life-finances","tag-budgeting","tag-build-credit","tag-checking-credit-score","tag-credit","tag-credit-card"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/5010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/comments?post=5010"}],"version-history":[{"count":0,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/5010\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media\/5011"}],"wp:attachment":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media?parent=5010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/categories?post=5010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/tags?post=5010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}