It’s the New Year, and if you’re like 40 percent of Americans, you’ve probably set some New Year’s Resolutions. Maybe you want to eat healthier, get more exercise, or arrive 5 minutes early to your meetings instead of 5 minutes late. Whatever the resolution, it’s time to put your plan into action if you want to be one of the 8 percent of Americans who achieve their resolutions!
If your New Year’s Resolutions include buying a new home, we have some tips to help you get moving!
Take a tour of your credit report
If you are thinking about buying a home, you’ll want to see exactly what’s on your credit reports. Did you know that you are entitled to copies of your credit report every 12 months? It’s important to check all three –Experian, Equifax, and TransUnion - because each report may contain different items. There are several sites available that offer free credit monitoring, too, such as Credit Karma, and even more that will offer this service for a monthly fee. It is important to keep an eye on your credit as you get ready to buy a home. Doing this a few months in advance will also afford you the opportunity to dispute any questionable items on your report.
Lend an ear to a lender
After arming yourself with the knowledge of what’s on your credit report, you’ll want to talk to a lender who can translate your credit report into your creditworthiness (meaning whether or not you will be approved for a loan.) Even if you are not ready to get pre-approved, a lender can answer questions you may have about your situation, such as job changes and down payments. Most importantly, they will offer you some great advice that will help you improve your creditworthiness so that you can get the best possible interest rate on your loan when you are ready to apply. Some of these tips may include: don’t make any major purchases that will alter your debt ratio and don’t open or close any lines of credit. There are many nuances to a credit score, and a knowledgeable lender will help you figure out how they apply to your situation. A lender will also help you determine your buying power, meaning what you can afford each month, and how much you’ll likely need to save for a down payment. Eastwood Home has several lenders that we trust to work with our homebuyers. You can find those lenders on our "Find Your Home" page. Simply click the area you are interested in and scroll to the bottom of the page for those links.
Save for moving day
Most often, you’ll need some money down to purchase a home. There are a few 100% financing options available (most commonly in USDA-eligible areas), but chances are you’ll need a minimum of 3.5% of your loan amount as a down payment when buying a home, as this is the minimum down payment for FHA financing. Saving more money for a down payment can open up other types of financing, as well, and if you can save 20 percent of your purchase price, you can even eliminate the requirement for private mortgage insurance (PMI), which will save you money on your monthly mortgage payment. This time of year is a great time to begin saving money for a new home, especially as homebuyers are receiving their tax refunds in a few weeks. Another money-saving idea is to simply pack a lunch. Most people spend about $10 a day on lunch. Packing a lunch will save you about 60 percent of that money. That works out to be $1,500 savings a year just by making your own lunch! Couple that with a few of the methods mentioned in this money-saving blog, and you could be well on your way to achieving your down payment goals. At Eastwood Homes, we also offer down payment assistance to help reduce the money required out-of-pocket when new home buyers use one of our approved lenders.
Make an escape plan
Planning is important, and it is a good idea to consider the best time to leave your current home or apartment. If you rent, you’ll want to check your lease and find out if there are penalties to breaking the lease early or if you can live on a month-to-month agreement once you fulfill your lease. A month-to-month agreement may increase your rent but it may save you more in the end if you are not bound to a contract and forced to pay a break-lease fee, which typically ranges from one to two months’ rent after proper notice has been given. If you own your home, you may consider consulting with a Realtor who can give you a market valuation of your home and also offer advice on improvements you could make to improve your sales price. Make these plans while considering the length of time it will take to build a new home. At Eastwood Homes, it takes about five to six months to build a home (that can vary by neighborhood). However, we do have move-in-ready homes available, as well, for those buyers who need to move sooner.
Compute the commute
As you work out the many details behind making a move, venture slowly into the real estate market by researching the best locations for you while keeping in mind commute times, tax rates, amenities, schools, and more. Consider starting your real estate wish list. Prioritize that list with details that are necessary, followed by preferences you’d like but may compromise on if needed.
When you’re ready, we suggest reaching out to our Internet New Home Specialists who can help match up that real estate wishlist with the neighborhood and home that best meets your needs!
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This time of year can be significant for new homeowners as they celebrate their first holiday season in their new homes. Family and friends of the new homeowner can help make this time even more special with gifts especially geared toward new homeowners. These gift ideas will help you show the new homeowner in your life that you are celebrating this momentous occasion with them!