Want to buy a house this year?
Here are 5 things you must do if you want to buy a house this year!
1. Stay Planted
Employment history and income are two of the main things lenders look at when considering your mortgage application. A new job may be a good career move, but if you plan to buy a home soon, know that a job change can be a red flag to some underwriters.
Just remember, lenders are trying to predict your future income. So it really helps if there are minimal gaps or changes in your employment history.
2. Limit Expenses
Monthly subscription services are certainly convenient, but they can add up. Even if you pay off your credit card every month, you could be dinged for high credit utilization if your credit report is pulled midcycle. This is a great time to evaluate all of your regular expenses. I think you will find that there are some that you can live without.
If you’re thinking of buying a home this year, consider keeping your monthly subscription services to a minimum.
3. Pay On Time
One of the first things a lender will look at is your credit history. Lenders prefer borrowers who have a history of paying off credits cards and other debts on time — because it signals that you’re a responsible borrower and less of a risk.
4. Check Your Score
Your credit score can have a significant impact on your ability to buy a home. A low credit score can negatively affect how much money a lender is willing to loan you, as well as your interest rate.
Just a few percentage point differences in an interest rate can cost you thousands over the life of a loan. There are many websites that offer free credit monitoring. They will tell you your score and let you know what you can do to improve it.
5. Avoid Major Purchases
Avoid taking on large amounts of debt before buying a house. Reconsider buying that new car until after your home purchase.
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 can help make the home-buying process go a lot more smoothly.