New Year’s Resolutions to Buy A House in 2019
Thinking of buying a home this year? It’s a big step, requiring planning ahead and plenty of financial preparation. Here are 5 New Year’s resolutions that can prep you to find that perfect home and make your move!
Evaluate Your Credit Score
A credit score evaluates data from a person’s credit file, and it indicates the likelihood that debts will be paid on time. The higher the score, the better the chance of timely payments. Your credit score can have a significant impact on your ability to buy a home, so it’s crucial to build and monitor your credit closely, especially for fraudulent activity, to prevent any surprises that could delay the loan application process.
You are entitled to a free credit report from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) once every 12 months, and AnnualCreditReport.com is the only site explicitly directed by Federal law to provide you with free annual reports.
Build Your Credit Score
Once you know where you stand with your credit score, you can take the next steps to either improve your score or start moving forward with a mortgage lender. Ways to improve your credit score include paying all your bills on time, use no more than a third of your credit limit, have a good mix of credit lines, avoid debt repair options that promise quick results, and correct any errors that pop up on your credit report.
Avoid Big Purchases
Avoid taking on large amounts of debt whether it’s buying a car or getting new furniture before buying a house, even if you’re already pre-approved. Your debt-to-income ratio, or how much money you make compared to how much debt you have, can significantly affect how much money a lender is willing to give you. Keeping debts to a minimum will make the home-buying process go a lot more smoothly.
Don’t Change Jobs
Employment history and income are two of the biggest factors mortgage lenders evaluate in a mortgage application. A new job may be a good career move, but if you plan to buy a home in 2019, know that it can be a red flag to some underwriters. A steady job history and few or no gaps in employment over the past two years are ideal because it will help lenders forecast your future income. If you do get a new job while home shopping, let your lender know as soon as possible and be prepared to show extra documentation.
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4 Unexpected Factors That Decrease Home Value
When buying a house, you likely think about how it’s the biggest purchase you have ever made or how much you are looking forward to making it feel like “home.” Have you considered how it can also be an investment for your future? Protecting this investment starts with understanding the factors that may threaten your home’s value.
Protecting the value of your home isn’t confined to your four walls, much less the entirety of your property. Neighbors who don’t take care of their yards or house or even cause disruptive noise around your neighborhood can negatively impact your property value! So before buying a house, be sure to check nearby homes for signs of neglect like overgrown landscapes, excessive clutter or unrepaired damage. Also, visit the house at different times of the day and on different days of the week to get an idea of the noise level of the neighbors and the entire neighborhood.
While home renovations are commonly believed to increase a home’s value, they can also pose problems. For example, an entirely new landscape might look great in photos, but potential buyers might see their free time spent on upkeep. A fire pit or pool might have been a great addition for your family, but young families with small children might view them as potential hazards. Before starting on a renovation or addition, stop and think if it has the potential to devalue your home or pose any concerns for buyers.
Outshining the Neighborhood
Spending money to upgrade your house is great if you plan to live there long-term. There are times, however, when having the best house on the block could negatively impact you. Here’s why this might not be the best strategy. If similar homes in your neighborhood are at one price point, all the upgrades in the world won’t make a buyer pay more for a home in that neighborhood, making the offer process difficult and disappointing for the seller.
Always think twice before getting into the do-it-yourself home improvement game. While the owner probably feels like they made all the right improvements, buyers might quickly spot the shoddy workmanship and unusual-looking finished product, forcing them to either walk away from the sale or causing them to low-ball you on price.
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