As New Year is approaching, you may have already planned your resolutions. You may plan to eat healthy, join gym classes, learn new skill or even get back to an old hobby. However, new resolutions can go beyond these promises and relate to finances as well. Buying a home can be on your to-do list this New Year. A home can be the biggest investment you’ll make in your lifetime. Therefore, we have compiled few New Year’s resolutions that can help you to keep your financial resume in premium shape.
Check your Credit
Your credit score plays an important role on your ability to buy a home. Lenders will use this score to other factors to determine mortgage eligibility. If you have a low credit score, it will have a negative effect on how much money a lender is willing to loan you and even on your interest rate. Therefore, you should monitor your credit closely to prevent any surprises that could delay the loan application process. Also, check all those unpaid bills. Even a one-day-late payment is still considered “late,” and can negatively affect your credit rating. Make sure to take some time to bring up the credit score before you start the pre-qualification process.
Organize your Finances
Make sure you have understood about your income and your expenses. Buying a home is not a child’s play. You cannot know exactly what the cost of home maintenance and utilities will be for the house you buy. Therefore, don’t spend money haphazardly. Also, consider keeping your monthly subscription services to a minimum. Though they are convenient, they can still add up. To keep the track of your finances, you can make list of your financial information. You can include your monthly income, the sum of your total monthly debt payments, your credit score and any credit issues and how much cash you can put down.
Avoid Job Hopping
You may look forward to a new job and it may look good for your career. However, if you are planning to get a loan, this may strike back. The lenders looks at your employment history and income while providing you loan. Thus, moving to another job may have negative impact especially if you’re moving to a different industry. What gives positive attitude is a steady job history and few or no gaps in employment over the past two years.
Save for Your Down Payment
If you are planning to buy a home then you need to start saving some money. You can allocate a certain amount of money towards your savings account each month. Reduce your living expenses whenever possible. You’ll want to save at least 3 to 20% for your down payment depending on the type of loan you want. Therefore, a New Year resolution should be how to come up with this amount in 12 to 24 months. There are several small changes you can make that will allow your funds to add up over time. You will be able to make a substantial down payment if you are disciplined and stick to your budget.
Avoid large Purchases
Even if you’re already pre-approved, avoid taking on large amounts of debt. This can be either buying a car or planning a large vacation. The lender usually compare how much money you make and how much you spend. This can significantly affect how much money a lender is willing to give you. Instead of spending money, you can save it for homeowners insurance, property taxes, and private mortgage insurance. This will provide you much help in the future. Thus, avoiding large purchase can be in your list of resolutions this year.
Hope you find this article useful and we wish you Merry Christmas and Happy New Year. If you are about to sell, buy, or rent any real estate materials, you can always visit basobaas.com.
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