5 New Year's Resolutions That Can Help You Buy a Home in 2019

 
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Is one of your goals for 2019 to buy your first home?  Or maybe upgrade from your current one? Buying a home is a major financial undertaking but there are healthy habits, dare we say, New Year’s Resolutions, you can make to ensure this goal becomes a reality.

Habit #1- Steady Employment History

If you are planning to secure financing, you’ll need a mortgage lender to issue you a home loan.  And one of the three most important factors that lender will look at is your employment history. Most lenders want to see you in the same job (or at least within the same company) for two years, with a steady paycheck and if you did change jobs in the last two years, they want to see a small, if any, break in employment.

However, if you’re moving from a commission-based or freelance job to a salaried position that guarantees the same or greater monthly income, that could actually help you.

Habit #2: Pay Your Debts on Time

Your credit history is one of the first things a lender will check when determining how much to lend you and at what interest rate.  The worse your credit, the lower they’re likely to lend and the higher the interest rate they’re likely to charge. One of the best ways to increase your credit score (or ensure it stays high), is to pay your bills on time.  That means your credit cards, student loans, car payments, utilities, everything.

If you’re still in the process of building your credit, this habit becomes even more important.  In lieu of a lengthy credit history, a mortgage lender might ask you to show records of paying your rent, utilities and other bills on time.

Habit #3: Monitor Your Credit

Since you’re going to be working so hard to improve or maintain that credit score, you want to make sure there isn’t fraudulent activity on your account because even one surprise could delay your application process.  If you do see something that looks incorrect, contact the creditor and credit agencies immediately.

Habit #4: Don’t Take on new Debt

That means try and steer clear of anything you might need a large amount of financing for. .  Lenders look at your debt-to-income ratio, i.e. how much you bring in each month compared to your debt obligations, as a way to assess your financial health.  If your debts look high compared to your income, this could reduce the amount of money a lender is willing to offer you. 

Habit #5: Track Your Expenses

As I said before, buying a home is a big financial undertaking and it might require an adjustment in your monthly expenditures.  By tracking your expenses each month, you’ll not only see where your money is going but also where you have room to save, should you need to budget for a higher monthly mortgage or down payment.

By engaging in these five healthy financial habits, you can put yourself on the best road to buying a home in 2019.  Now all you need is a great realtor.