6 Things You Need To Know If You’re Trying To Build Long-Term Wealth

April is National Financial Literacy Month, which makes now a great time to explore a goal shared by many: building long-term wealth. Financial education and creating the right habits, such as setting budgets, putting aside funds for emergencies and investing in real estate and retirement savings plans, can help you achieve those wealth-building goals.

In particular, financial literacy skills can benefit you when it comes to purchasing your dream property as a long-term wealth-building strategy. New American Funding offers a range of programs to help you achieve your goals whether you’re a first-time homebuyer or a seasoned investor.

No matter how you plan to build your wealth, here are six things to know that will help make it easier to do so.

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1. Making A Budget Can Help You Meet Your Financial Goals

Creating a household budget involves determining your income and expenses over a specific period and monitoring it regularly to ensure you’re not overspending. Your budget should include all sources of income and all expenses, such as housing, utilities, food, entertainment and debt. Aside from recurring bills and personal expenses, your budget should include a column for entertainment and a target number for savings to hold yourself accountable and monitor spending/saving. Analyzing the history of your spending patterns will help you develop a financial plan that prioritizes efficient spending and saving while tackling any debt.

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2. Having An Emergency Fund Can Protect Your Finances Amid Unexpected Costs

Putting away money each paycheck can be challenging, but saving that money in an emergency fund or for a rainy day can be beneficial when you least expect it. A rainy day fund is for smaller emergencies — that cost less than $2,500. An emergency fund is for bigger expenses, such as several months of living expenses.

You can save money in several ways, including saving change, using coupon savings, taking advantage of discounts, making food at home instead of buying out or having a yard sale. Other tips for saving money include utilizing credit reward cards, canceling unused subscriptions, sending tax refunds right into your savings and making sure you have a budget in place to monitor your expenses.

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3. Home Equity Helps You Build Long-Term Wealth

Your home equity is an asset that plays a vital role in your loan qualification, representing the part of your property that you truly own and can increase or decrease over time based on the market value of the property and loan balance. You can build home equity by increasing your property value through improvements, such as a new roof, HVAC unit or full-room makeovers, or you can reduce your debt by paying more on the principal or swapping to a 15-year fixed-rate mortgage.

To estimate your equity, subtract your mortgage balance from the appraised market value of your home, or contact New American Funding for a more precise calculation of the final payoff amount.

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4. Saving For Retirement Now Will Benefit You Down The Line

You might not be thinking about it now, but retirement approaches quickly, and you want to establish enough savings for your next stepping stone in life. If your personal situation allows for it, take advantage of all available options now, including contributing the maximum amount to employer-sponsored retirement plans such as a 401(k) and individual retirement accounts (IRAs). If you can’t contribute the maximum, it’s essential to contribute enough to receive an employer-matching contribution, if offered. Compounding can turn small investments into significant savings, so beginning your retirement savings early will increase your wealth in the future.

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5. Real Estate Investment Can Generate Passive Income

Passive real estate investment involves minimal effort from the investor and can be done through methods, such as real estate trusts (REITs), crowdfunding opportunities, remote ownership and real estate funds, allowing individuals to earn extra income without the demand of physical labor or acting as a landlord. If you’re interested in investing in real estate and generating a passive income, contact a New American Funding loan provider to help you navigate the process.

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6. You Should Protect Your Assets

Insurance is crucial to protect your wealth from unforeseen events — such as fire, car accidents, disability — and to replace your lost income. Having home, auto, life and long-term disability insurance is important in providing financial protection. For example, home insurance will cover damages to your property in the case of a fire or catastrophic weather event and long-term disability insurance will replace your income if you fall ill or have an injury. Even if you’re young and healthy, it’s worth considering these insurance products now as they may become more costly as you age.

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New American Funding Can Help You Build Long-Term Wealth Through Homeownership

New American Funding provides a range of home-buying programs to help you make informed financial decisions and achieve your financial goals, including:

• NAF Cash*. NAF Cash, an affiliated company of New American Funding, allows home buyers to compete with cash buyers and potentially save money while enjoying the benefits of being a cash buyer. You can close faster, avoid financing or appraisal contingencies, and make your bid more attractive to sellers, giving you a competitive advantage in a low housing market inventory.
• 5-Year Protection Pledge. The 5-Year Protection Pledge locks in your interest rate at the time of purchase. Should interest rates drop anytime within the five years, you’ll have the option to refinance at a lower rate without any repeat fees.
• Buydown Loan. A Buydown Mortgage allows you to get a lower payment rate in the first one to three years of your 30-year fixed-rate mortgage without any additional cost, making it easier to afford minor home repairs or new appliances. Four options are available with varying payment rates lower than the note rate for the buydown period.

If you need guidance on government programs related to home financing, New American Funding’s Loan Officers can provide you with answers to your questions and assist you in navigating the process, so it aligns with your financial plan and objectives.

New American Funding provides a wide range of programs and support services for a positive customer experience and gives you options that can help with purchasing your dream home. In 2022, New American Funding was recognized as #1 in customer satisfaction among mortgage servicers by the J.D. Power 2022 U.S. Mortgage Servicer Satisfaction Study. The company was able to achieve this prestigious recognition through its dedication to helping every client from every background achieve homeownership.

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To find out more about how to build long-term wealth through homeownership, you can request a quote from a mortgage loan officer at New American Funding.

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*NAF Cash is fulfilled by NAF Cash LLC, an affiliated real estate company of New American Funding that is managed and operated in compliance with applicable legal and regulatory requirements. NAF Cash LLC does not originate loans or issue loan commitments. Terms and Conditions apply. Not available in all states. MI Real Estate Broker #6502431375. 41050 W 11 Mile Rd, Suite 220, Novi, MI, 48375. Phone 844-344-0531

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