The start of the new year is the time when many people make resolutions to themselves to improve their lives in some form or fashion. Losing weight, finding a better job, or traveling tend to be among the more popular New Year resolutions, but if buying or selling your home is on the agenda for 2017, there are other specific resolutions that should be on your list, and that you should stick to.
Here are some new year resolutions that you should be making to help you achieve your home buying or selling goals this year.
New Year Resolutions For Buyers
It sounds like a no-brainer, but it’s worth mentioning nonetheless. There’s no time like the present to start saving for a new home, and the more money you can muster up, the smaller the loan you’ll need to take out. If you can gather at least a 20% down payment, you won’t have to worry about paying Private Mortgage Insurance (PMI) that lenders charge to protect themselves in case you ever default on your mortgage.
If you can’t gather up that much money towards a down payment, don’t fret. You can still put down as little as 5% for a conventional mortgage, and even as little as 3.5% for an FHA-backed home loan.
Either way, you still need to save. If you have difficulty being self-disciplined with your spending and saving habits, consider automating your bank accounts so that you put aside a certain amount of your income into a separate savings account every month. If you don’t see the money while it’s being automatically deposited, you won’t be as tempted to spend it.
You should have an idea of how much house you can afford to buy, as well as all the extra expenses that come along with purchasing a home. Set up a budget that outlines in detail what your income is, and compare that amount with your current debts.
Make an effort to shrink your budget a little bit to help you make more room for saving up for your future home and reduce your debt amounts. Try to come up with a budget that takes into account the fact that your mortgage will take up a larger amount of your paycheck in order for you to start getting accustomed to spending less money on unnecessary things.
Improve Your Credit
A key factor that your lender will consider before approving you for a mortgage is the state of your credit. If your credit score is low, you stand a good chance of getting denied. Even if you are approved, you will likely be faced with a higher interest rate on your mortgage, which will cause your home loan to be more expensive over the long run.
Get a copy of your credit report to make sure there aren’t any errors on it that could be bringing your score down. If you find any, report them to the credit bureau so that the issue can be investigated.
If your credit score is very good (at least 700 or above), you’re in a good position. If it’s lower than that, you need to take steps to improve it. Start paying your bills on time and in full each month, and keep up on your credit card, student, and auto loans. Don’t use any more than 30% of your available credit, and make sure not to make any large purchases on credit, which can have a negative impact on your credit score.
All your lender wants to see is that you are responsible with your credit.
Get PreApproved For a Mortgage
Having a mortgage pre-approval will not only allow you to identify how much you can realistically afford before you start house hunting, it will also tell sellers that you are less of a risk compared to another buyer without a pre-approval.
Having said that, make sure you start gathering up all of your financial documents to provide to your lender so that the pre-approval process can get underway> This includes your tax returns, bank statements, and letter of employment, among others. You will also need to fill out and submit a mortgage application. It should be noted that a preapproval is not necessarily a guarantee that you will be approved for an eventual mortgage, but it certainly gets you one step closer.
New Year Resolutions For Sellers
Get Your Home Ready For the Market
Have a good look around your home. Does it look cluttered? Could your walls use a paint job? Are your shelves covered in family photos? Now is the time to clean up, make any repairs, or even redecorate to properly stage your home for the market.
Generally speaking, your real estate agent and professional home stager will likely recommend decluttering, depersonalizing, and neutralizing the decor of your home in order for it to be more appealing to a larger pool of buyers. The earlier you start this potentially big project, the more time you’ll have to make sure your home is ready to be viewed by prospective buyers.
Work Out the Time Between Selling Your Home and Buying a New One
This can be tricky, but it’s important to be able to calculate the rough timeline between selling your current home and buying your new one. You don’t want to be stuck with two mortgages because the closing dates between the two transactions overlap. Likewise, you don’t want to be rushed out of your home with no place to go because the closing dates are spread too far apart.
Determine whether or not you can afford to close on a new home before your current one sells. It can be somewhat stressful to sell your home and buy another one at the same time. Look at what your potential housing options are, and go over your finances in detail in order to plan out the most ideal timeline for both selling and buying.
Hire an Experienced Real Estate Professional
Having an experienced and knowledgeable real estate professional in your corner really should be top priority. These experts can help guide you in the right direction and assist you in making the right moves and decisions in proper succession in order to ensure the buying and selling process is a streamlined one. Choosing the right real estate agent can also help make sure that you stick to your real estate New Year resolutions!