It’s a new year and families are creating new budgets to reach their goals. If you are planning on buying a new home this year, here are some tips to turn your American dream of homeownership into your reality!
1. Pay attention to your credit
Your credit score is one of the first things lenders look at when qualifying you for a loan. Keep an eye on your credit card minimum payments and pay everything on time, if not early. The higher your credit score, the lower your rate.
2. No large purchases
Do not make any large purchases that require a credit check. Whether it is opening a store credit card for an extra 10% off or buying a new car, it will hurt your overall credit score. A new car, that beautiful sofa you’ve been eying, or that giant TV to watch the playoffs on can wait until after you close on your new home.
3. Switching to Self-Employed
Taking the leap to start your own business is exciting! However, if you quit your job to dedicate all your time to your new business, you will be resetting the clock on buying a new home. Mortgage lenders love stability in your income stream. Becoming self-employed or changing your income type could potentially postpone the dreams of homeownership for 2 to 3 years.
4. Keep your bank account simple!
Apply the KIS rule (keep it simple) to your bank account. Mortgage lenders look at the last 60 days activity. Moving money from one account to another or taking it from underneath your mattress and putting it in your bank account could cause significant issues for your loan approval. If you have a large amount to deposit in your account, speak to your lender first to make sure it is done right.
5. Do not co-sign for others
As much as you want to get Cousin Eddie and his Winnebago out of the driveway, do not co-sign for anyone. That debt will be counted against you, even if they make the payments.
Schedule a time to sit with one of our trusted loan originators to walk through each step here!
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