If it involves owning a home for the first time, we’ve got some resolution suggestions that can help get you into a spread of your own. Here are five resolutions to add to this year’s list.
Get Your Credit in Tip-Top Shape
Without a solid credit score, getting a mortgage will be near impossible. Before you visit a lender to get a pre-approval letter and learn how much you can afford, take some time to clean up your credit. There are lots of ways to improve your credit score, and a few points here and there can make a huge difference in the rate that you get.
- Check your credit report with all three credit bureaus.
- Follow up on any late payments and request that they be removed from your report if they have been paid. Make reminders for all your payments moving forward and look into setting up auto payments so none are late in the future.
- Make sure there are no errors – you’d be surprised by how many other people have your name and how their credit issues accidentally end up on your report.
- Pay down your credit card balances – the lower your debt to credit ratio, the better.
- Don’t open new credit accounts because these young credit lines can lower your score.
Create Must-Have and Would-Like-to-Have Lists
It’s easy to get wrapped up in the emotional aspects of buying and forget about the necessities. Don’t worry, it happens to all home shoppers at one point or another. The way to get around an emotional buy you may regret later is to create two lists right now before looking at any homes.
1.) Must-Have List: Include five things that a home must have in order for you to even consider it. Things that often end up on this list include price, number of bedrooms/bathrooms and location.
2.) Would Like to Have List: These aren’t necessities like the must-haves, but they are preferential. If you have more than one house that meets your must-have criteria, the items on this list will then come into play. Common would-like-to-have items include a laundry room in the house, a certain floor plan and stainless steel appliances.
Get Familiar with Different Neighborhoods
There’s nothing more important than location when it comes to buying a home. Once you have a good idea of the area of the city you want to live in, start touring different neighborhoods during various times of day. This will give you a good idea of the amenities, safety and general feel that each one offers. Choosing specific neighborhoods instead of an area will help you focus your energy where it matters most.
Find a Buyer’s Agent
If you are serious about buying a home, then having your own buyer’s agent is a must. Find out which companies work regularly in the neighborhoods you’re interested in by checking out for sale signs. Also ask friends, family members and neighbors for references. Once you have a handful of potential agents, interview them to get a better gauge of their knowledge level, experience and professionalism. It’s also important to get a feel of how your personalities will work together, because you’ll end up interacting with your agent quite a bit during the home search and closing phases.
Enlisting the help of a buyer’s agent won’t cost you anything. Their commission is paid by the seller, and if you have a signed agreement their fiduciary duty is to you. That means they legally have to do what is in your best interest and will be looking out for you every step of the way.
Create a Move Timeline
Coming up with a move timeline will help you put everything in order so that when you find that perfect home, there’s nothing standing in your way. A big part of the timeline will be when you can move out of your current residence. Unless you can make two house payments at the same time, careful planning will need to happen so that you can move into your new home as soon as you no longer have to pay for your old place. If your lease contract is expiring, see if the landlord will let you do a month-to-month contract at the end of the term. Also, keep in mind that typically you’ll have a month after closing before your first mortgage payment is due.
Another consideration is the time it takes to find and close on a home. Depending on the availability of homes in the neighborhoods you are looking at, it could take a week to find a suitable home or it could take a few months. Give yourself at least two months to search, and plan for the closing to take 30-45 days after the contract is accepted.
Deciding to become a homeowner is a big decision that will change the way your entire family lives. There’s a lot that has to be done before putting in an offer, but all the work is worth it once you’re settled into your home.
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