New Year’s Resolutions to Buy A House in 2020
Thinking of buying a home this year? It’s a big step, requiring planning ahead and plenty of financial preparation. Here are four 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 2020, 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.
Ready to get started on your home buying journey? Contact one of our expert loan officers today!
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