If you’ve long been dreaming of buying a home but always find something holding you back, then it’s time to make a plan to stop procrastinating and start buying! New Year’s resolutions are the perfect way to get serious about tackling the obstacles keeping you from buying a home.
Here are five New Year’s resolutions if you want to buy a home in 2020.
Establish a Budget—And Stick to It
Buying a home costs money. And we’re not just talking about your monthly mortgage or the sizeable down payment; there are a number of regular and one-time expenses associated with homeownership. Before you buy, it’s important to know just how much money you spend every month—and how much you’ve got left over to spend on your home.
If you’re spending a large percentage of your paycheck every month, you might want to take a look at where most of your money goes, and whether you might be able to cut down on some of that cost.
Concentrate on Savings
Once you figure out where you spend, and hopefully cut out some non-essentials, you probably want to start putting some portion of your monthly income into a savings account. Remember, the down payment can be as high as 20% of the total cost of the home, and it’s hardly the only up-front cost. Closing costs add an additional 2 to 3% (a few thousand dollars) to the amount you’ll be paying out of pocket.
Bump Up Your Credit
Credit is a big deal when it comes to buying a home. Good credit means low interest rates and favorable loan options. Poor credit… well, poor credit typically means higher rates at best, and failure to procure a loan at worst.
Improving credit takes some time, but it starts with things like paying down debt, always paying on time, and avoiding new cards or loans.
Hold Off on High-Dollar Purchases
Big-ticket purchases are a big no-no before buying a home for a couple of reasons. First and foremost, they deplete your savings. Secondly, if you’re making a big purchase on a credit card or using a loan, this can actually hurt your credit score. And thirdly, big purchases can send red flags to lenders, who’ll be closing monitoring your financial spending—which includes bank accounts, credit cards, and loans.
Want to get an idea of where your financial red flags might be? Not sure about your credit score? Have no idea how much home you might be able to afford? Ask a lender! Getting prequalified is pretty easy—just pick up the phone, then send over some financial information—and it doesn’t obligate you to work with any one lender.
Getting prequalified isn’t just a good way to start talking to lenders and comparing loan rates; prequalification also provides you a wealth of information to help you determine what loan options you’ve got, how much you’ll pay for a down payment and closing costs, and what your monthly payments will look like at various home prices.
Ready to Buy a Home in Port Liberte in 2020?
Are you thinking of buying a home in Port Liberte in the new year? Then Century 21 Viewpoint Realty is here to help! Contact us to learn more about how we can help you find the perfect home in just the right location.