Your tribe or family has received a HUD 184 that will help you build, buy, or renovate a home. Relax for a moment. Bask in your success. Soon you will be living in a home that will make life better. Wait a second. The home is not truly yours until you can repay the money that you borrowed. Here are some ideas on how to manage finances after a Tribal home loan and steps to increase the likelihood of repaying the loan.
The earlier you begin to look into your finances, the better. By looking into the current state of your finances before, during, or directly after the approval process, you can determine how much money you can devote to repaying your loan. More importantly you will be forewarned if your monthly expenses will not allow you to repay the monthly premium.
Set a Budget
Whether or not you can pay your monthly premium, drawing out a budget is vital. Determine where your money is going. Pin point trivial expenses. Set limits to your leisure spending. While you can certainly go old school and tally up the numbers by hand, time can be saved by looking at your bank reports or buying online or desktop budget software.
Keep a Buffer
Life has a habit of throwing curveballs. Just as everything seems to be moving in the right direction all hell breaks loose. The car breaks down. The kiddies need school supplies. The pipes blow in the house. Suddenly you have another expense that will not allow you to pay your monthly home loan premium.
If that happens, you should contact your tribal lending representative. If you explain your situation, they can work with you to come up with a temporary solution. Chronic late payments or inability to pay may eventually lead to the loan default. The financial buffer will allow you to build savings that can be dipped into to prevent inability to pay the loan.
Pay Above the Minimum
The minimum premium often offers individuals who receive a home loan an easily achievable goal. With loans, you want to go above and beyond the minimum. Remember that home loans accrue interest each month. That accrued interest will need to be repaid before you can begin to chip away at the overall loan amount. During loan repayment the less time you take, the lower the overall cost of the home or renovation will be. Just remember that you need to balance the ability to pay above the minimum with the ability to produce a financial buffer. If money is tight, the financial buffer should be the priority.
Bring in More Money
Home loan premiums, accumulating savings, and attempting to pay above the minimum might be difficult on your current financial budget. Now is the time to look for potential new strategies to bring in some extra cash. Higher paying jobs, a second part-time job, or additional freelance work may increase the net income of individuals. In family units stay-at-home moms and dads can seek full or part-time employment. And don’t forget that older teens are eligible to work. If you’ve been carrying their entertainment and car expenses, now might be the time to encourage them to carry some of the financial burden.
Managing your finances is the most vital part of receiving a home loan. With the steps provided above, you should be off to a great start. 1st Tribal Lending recognizes that successfully repaying your loan can be complicated process. Feel free to contact us with any repayment questions.