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Purchasing your first home is a considerable undertaking. There is so much to consider and prepare for. Finding an appropriate home may be challenging, but there’s much more to examine. You’ve got to come up with a down payment, get qualified for a home loan, consider closing costs, and much more. For the first time home buyer this may seem daunting, so we’ve put together some tips to provide you with every advantage when it comes to buying your first home.

How Much Home?
The first things you need to consider before pursuing your first home purchase is what you’ll be able to afford. You need to find out what your total monthly housing expenses will be.  A mortgage calculator is a great way to determine what you can afford on a monthly basis. But you’ll want to consider the additional costs associated with home ownership. You’ll need to include property taxes, home insurance, and miscellaneous closing costs. These can add considerably to your monthly outlay.

Property taxes can be determined by checking with your local government, as these vary greatly from state to state. Getting a home insurance quote is a simple way to determine those costs, and save as well. Closing costs vary, but they can often be negotiated with your lender. Be sure to account for Private Mortgage Insurance if you plan on making a down payment less than the standard 20 percent. The important thing here is to get an idea of what your total expenses will be. Most experts will recommend that your total monthly housing costs not exceed 28 percent of your gross income.

First Time Home Buyer Loans
When shopping for a home loan you’ll want to consider the government funded first time home owner programs. These often offer lower interest rates and lower down payment requirements, when compared with conventional mortgage loans.

Fannie Mae and Freddie Mac
Both government-sponsored organizations, Fannie Mae and Freddie Mac offer first time home buyer mortgage programs. They don’t lend directly to the public; rather they guarantee the underlying mortgage loans through approved lenders. Without these organizations, many first time home owners would be out of luck.

Fannie and Freddie are especially popular for their first time home buyer low down payment programs. These loans can be had for as little as a 3 percent down. Though in Fannie Mae’s case, a larger down payment of 5% allows for loan approval on smaller salaries. Loan limits have temporarily increased to as high as $729,000 in high-cost areas from $417,000.

FHA & HUD
The Federal Housing Administration (FHA) insures loans for certain approved lenders. There are a number of programs, but they typically offer low down payment loans, lower closing costs, and easier credit qualifying when compared to traditional mortgages. Much like Fannie Mae they do have their limits, however. You can check the current limits based on your area by going to the FHA limit page.

If you have credit issues a FHA loan may be just what you’re looking for. Amazingly, you may be approved for a FHA home loan even if you’ve had major financial issues in the past.

• Lower credit scores qualify when compared to conventional mortgages.
• Bankruptcy or foreclosure isn’t a cause for discrimination with the FHA.

You may qualify with either, assuming you’ve maintained good credit for two to three years after the occurrence.

Housing and Urban Development (HUD) offers many programs and grants. First time home buyer grants and programs can be found on HUD’s website by searching your region. Before applying for a particular program make sure you qualify and understand the guidelines. Some states may require repayment upon future sale of the home, for example.

If you have a good credit rating and income you may qualify for a more attractive conventional type loan. Be sure to do your homework and compare all your options. An Adjustable Rate Mortgage (ARM) for example, may offer lower monthly payments initially, but there are certain risks that need to be considered. Unfortunately, for some, the recent housing downturn is currently exposing these risks.

Home buyers who are applying for home loans are best served to do so with a good credit rating, and first time home buyers are no exception. Borrowers with higher credit scores pose less risk to lenders, and are rewarded with lower interest rate loans as a result. Your credit score will have a considerable impact on how much you’ll have to pay. Checking your credit report for issues or mistakes is a prudent step in the home buying process. Credit repair can only be completed if you’re aware of any issues on your credit report. You can check and address any issues rather easily by getting a free credit report online.

First Time Home Buyer Tax Credit
The newly passed Housing and Economic Recovery Act of 2008 was signed into law by President Bush on July 30, 2008. One of the underlying items within the act is a temporary $7,500 tax credit for first time home buyers. This may sound like an exciting opportunity for some, though it is not free of restriction. A few things to consider when determining whether the first time home buyer tax credit is right for you:

Eligibility

Effective Dates

Income Restrictions

Payback Provisions

Penalty Free IRA Withdrawal
Thanks to the Taxpayer Relief Act of 1997 you can withdrawal Individual Retirement Account (IRA) funds penalty free when used for a first time home purchase/expenses. Typically, early IRA withdrawal will incur a penalty of 10 percent when withdrawn prior to age 59 ½. First time home Buyers can forego these penalties when buying their first home. You can withdrawal up to $10,000 without penalty. This $10,000 limit is a lifetime limit, and can only be used once. It’s important to keep in mind that you will be required to pay taxes on traditional IRA withdrawals. Due to the tax-free nature of Roth IRA’s, withdrawals from these accounts are free from tax and penalty.  Early withdrawal rules for the Roth IRA differ from their traditional counterparts in that the Roth account must be held for 5 years.

You don’t necessarily have to be buying your first home to take advantage of the penalty free withdrawal. The IRS defines first time home buyers as those who haven’t owned a principle residence in the past 2 years. Moreover, this can be utilized for you, your spouse, your children, your grandchildren or even your parents.

It’s all Worth It
Becoming a first time home buyer may seem a bit intimidating these days. Utilizing the tools available to you along with some strategic planning can help you get there.  It’s all worth it, of course, as there’s nothing like being a first time home owner.

If you’re like many Americans, you face a variety of challenges every day. Most parents and some grandparents find themselves fighting a battle on two fronts: saving for retirement and college at the same time. This can be a tricky problem. Saving more money in one of the plans invariably leads to saving less in the other. Obviously you want to have enough savings to retire comfortably, but at the same time, to put your kids or grandkids through a quality college.

So where do you draw the line between taking from one to give to the other? And how do you plan successfully to find a proper balance that benefits both you and your children? That problem is highlighted by the question of whether or not you should withdraw from an IRA to help pay for college tuition. The general consensus seems to be: not if you can help it

Generally you want to have a successful enough college savings program that you don’t have to worry about finding alternative sources of money for tuition. But with sky-rocketing credit hour prices and housing costs on the rise, it’s a more difficult proposition than it was even a decade ago.

But while prices have been increasing, so have opportunities to save. Savings Accounts, Prepaid Savings Accounts, and Coverdell Accounts are just a few of the easy ways to save for college.

One advantage of an IRA withdrawal is that the money can be used for any qualifying educational expense. But, the disadvantages are obvious. You’re taking away from future retirement savings and you’re reducing the amount of earning power you previously held. You’re also faced with the fact that IRA annual contribution limits ($4,000 for 2007 and $5,000 for 2008) can make it hard to restore your previous savings level. But that doesn’t mean there aren’t ways to catch up. Currently, for people over 50, the law allows you to make extra contributions of up to $1,000 a year. While this isn’t much, it can at least help restore some of your withdrawal.

However, just as college savings opportunities have increased, so have retirement savings opportunities. Part of a comprehensive retirement plan includes investing in various types of retirement plans, including 401(k’s and private savings. In addition, your entire retirement shouldn’t be too heavily anchored in one savings vehicle, IRA or otherwise

No matter what you do, it’s usually wise to seek input from a financial professional. Withdrawing from an IRA to pay for college has a lot of unseen consequences that can harm your retirement plan and make  your golden years a bit leaner. One of your best bets is to plan carefully for college as soon as possible  for your children or grandchildren so you’re not forced to decide between retirement or college.

If you turn on your local financial news, you’re bound to hear the phrase Dow Jones Industrial Average at some point. Most people assume that this just means the stock market, or that it refers to the New York Stock Exchange. But what is the Dow, and what exactly does it measure?

The Dow is a market average. It is used by investors to figure out how certain companies that are being traded are doing. The Dow isn’t the only market average out there, there is the S&P 500 and The Russel 2000, as well.

The Dow takes into account 30 industrial stocks of well-known companies. The 30 companies are likely ones you’ve heard of, like Goodyear, Exxon, IBM or General Motors. The Dow calculates the rises and falls of these 30 stocks and presents a picture of how the overall market and the overall economy are doing. While it may sound complicated, it really isn’t. The Dow is simply a list of 30 companies that have their estimated values averaged together with a particular formula.

The other averages follow essentially the same methods. The S&P 500 uses the values of 500 major companies, while the Russel 2000 keeps up with 2,000 companies that are smaller than the ones used in the S&P and Dow.

The key to following the Dow or any of the other market indexes is to look for trends. Market analysts can decipher problems or benefits in the current economy by looking for particular stocks that go up in certain situation, and particular stocks that go down in others.

The Dow company, now known as Dow Jones & Company was founded in 1882 and they classify themselves as a financial information and publishing firm.

The Dow is responsible for the publication of the Wall Street Journal, maybe the most well known financial publication in the world. The Journal’s first issue was on July 8, 1889. Dow also publishes several other financial publications, as well as Barron’s Magazine.

The Dow also runs several websites dedicated to financial news and information, such as CareerJournal.com and OpinionJournal.com.

The Dow also has a hand in the broadcasting world, where it helps to provide financial content for the CNBC cable network, as well as two finance-oriented radio shows.

The Dow Jones & Company machine is one of the most powerful forces in American investing. Their indices are the industry standard, and the Wall Street Journal has the second highest circulation of any newspaper in North America. The Dow helped to start finance in the US and they look to be a big part of finance in the future.

For those that are new to investing, learning the lingo that is used on Wall Street and in economics classrooms around the globe is essential. When you hear the phrase “stock market” you get a vague picture of a group of men and women running around like crazy people with slips of paper in their hands and yelling out numbers and words that you can’t quite make out. To understand what’s going on, let’s start at the beginning and find out what stock is.

Stock can be described as the wealth (or capital) raised by a company or a corporation from the issuance of shares.

If you own stock in a company, say Microsoft, that would make you a shareholder in Microsoft. If you take all the shares available from Microsoft, or any other company and put them together, that is called Microsoft’s market capitalization. This is figured by multiplying the current price of a stock times the number of shares.

Stock falls into four major categories. There is common stock, preferred stock, duel class stock and treasury stock. Common stock is, just like the name says, the most common kind of stock available. Ownership of common shares usually comes with some voting rights when it comes to decisions made by the corporation. Preferred stock is different from common stock in the sense that they usually get paid more dividends and usually come with extra rights and decision making abilities for the company they are for. Dual Class stock is a combination of the previous two kinds of stock and the rights attached to each share vary. Finally, treasury stock are shares that were once issued to the public, but have since been bought back by the company.

The history of stocks goes back many hundred years to the Dutch East India Company, who began offering shares of their stock as far back as 1602. The East India Company helped to pioneer the idea of joint ownership and helped the economic growth in Europe at that time.

The most popular place to trade stocks in the United States is, of course, the New York Stock Exchange, where millions of shares change hands on a daily basis.

The world of economics and stock trading can be very exciting and very profitable for those that know the ins and outs. Hopefully, this article helped shed some light on what stocks are and how they are used by companies.

Once you’ve finished searching for that real estate investment of a lifetime, you’ve gone to the open houses, you’ve gotten the financing, made an offer, sat at home worrying if it’s going to be accepted, had the celebratory dinner once it was and then moved in, you’re faced with the chore of protecting it. The number of threats that your property faces can be staggering. It’s not just termites and crude neighbours that are looking to sink your land value, natural disasters are a part of owning land, too.

It doesn’t seem to matter where you live in North America, there is a natural disaster with your name on it. The south has their hurricanes, the northeast and Midwest has blizzards and the west has earthquakes. A quake is the most sinister of all natural disasters. People in the rest of the country can see a hurricane and blizzard coming days, sometimes even weeks away and properly prepare their property for the coming storm. With quakes, there is no warning (usually), there is no report on the news that morning saying you’re scheduled to get one. They just happen. So, how can you protect your investment from getting a bad case of the shakes? Here are a few tips.

A good first step would be to pick up the phone or log onto the company that carries your home insurance. Almost no homeowners policies cover earthquakes. If you have the extra cash every month, earthquake insurance is a very good idea, but be warned, it is considered catastrophic insurance, so the deductible is going to be very high, usually between 10-15 percent of the amount of your policy. It’s still a good thing to have. Check the website of the US Geological Survey to see if you live in a high enough risk area to warrant extra insurance.

A quick quake-proofing of your home is another good idea. This won’ so much protect your house as it will protect you if one strikes. Use latches to keep cabinets closed, always make sure you have fresh water around and working batteries in all flashlights. These are common sense steps that anyone who lives in any sort of disaster area should follow, whether it be earthquakes, hurricanes or blizzards.

A final step to safeguard your home is to know where your utilities shut offs are. Fires are common after earthquakes and you’ll want to know where your gas main shut off valve is so that you can turn it off and hopefully keep your house safe after a major quake. Also, do not turn the gas back on until you are told it’s safe to do so.

Keeping your investment safe from natural disasters can seem impossible, but with a little common sense planning, you can minimize the damage.