New year, new you, right?
Hopefully, you placed buying a new home on your New Year’s Resolution list at the beginning of the year?
How’s that turning out for you thus far?
According to U.S. News, about 80% of those resolutions will fail by the second week of February, so you’ve got the odds stacked against you!
However, if your finances are in a proverbial sweet spot and you are mentally ready for the big move, perhaps buying a new home this year is something that can be achieved!
There are 6 simple (but we didn’t say easy) things that you can still do in order to make the possibility of buying a home a reality this year:
(1) Skip away from job-hopping
Seriously, it’s career suicide. Even though you might think a new job brings an exciting experience, it does contribute to financial INstability.
One of the biggest things that home loan companies or banks look at is your career history!
So, a steady job with few gaps in between the unemployed years is the best way to land a loan for your new home. If you do happen to land a new job when shopping for a home, let your lender know immediately and provide as much documentation necessary.
And of course, if you are working per commissioned check, it would be a good idea to provide your lender with these pay slips as proof of regular income.
(2) Avoid large purchases
Before you decide to buy a house it is important that you avoid spending money on large items.
The car that you want or the lavish vacation that you want to take will have to wait until you get your bond approved.
Your so-called debt-to-income ratio can definitely affect the amount of money a lender is willing to offer you and it is best to keep this as low as possible.
Your lender wants to see that you are responsible and trustworthy enough to pay back the monthly instalments on your loan.
(3) Do a credit check
Your credit score will definitely impact your chances of buying a home.
A credit rating that is too low will negatively affect how much money a lender is willing to give you and it will influence your interest as well.
Make sure that you monitor your credit score closely and report any activity that might seem fraudulent to you.
Remember that even the smallest change in your score could lead to a more expensive instalment on your bond!
If you are unsure of your credit score, you can have it checked out online or you could ask for a yearly (free) credit report.
(4) Build a solid credit history
The most important thing that you can do is have a stable credit history. This is one of the things that lenders will look at first.
Lenders like seeing that their borrowers are capable of paying off debt, like credit cards, because it shows that you can afford to meet a monthly instalment on your bond.
(5) Check into getting a pre-qualification
There’s nothing worse for a home buyer to find his dream home and then to find out that his financial affordability isn’t anywhere what was anticipated!
Luckily, nowadays, there are bond originators who can get all that sorted out beforehand (without it costing a single penny!), which means you’ll be better prepared going into the negotiations as well.
So, what are you still waiting for: go get that pre-qualification today!
(6) Cut down on monthly subscriptions
Do you really need that clothing account or the subscription to the newspaper you toss in the garbage the next day?
Even though monthly subscriptions are convenient, they add up to your total debt per month!
Even if you pay off your credit card every month, it can show quite a high figure if the report is pulled up in the middle of the month.
So, consider keeping your subscriptions to a minimum if you are keen on buying a home this year.
Just like you would proofread your CV before applying for a job, cleaning up your financial resume is a good way to impress potential lenders and convincing them that you are ready for a home of your own!
How did you prepare yourself for the home-buying journey this year? Any particular (financial) actions you performed in order to get an extra edge? Feel free to share your comments with us below!
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