Are you planning to buy a new home in the new year? If so, you’ll need some tips to help you get your finances into good shape so you can buy the home of your dreams. With this in mind, here are some resolutions to help get you started.
Stop Changing Jobs
The two main factors that lenders will look at whenever they’re evaluating your application for a mortgage is your employment history and your income. While you may think that getting a different job would be a great move for your career if you’re making plans to buy a home in the next year don’t do it. This can be a drawback to many underwriters, especially when you also happen to be changing the industry in which you’re working.
It’s ideal to have a steady job history for the past two years before buying a new home. There should be no gaps in your employment or at least as few as possible. This is important because it helps the lenders be able to forecast your future income with greater ease.
If you happen to change jobs while you’re involved in buying a new home you really should tell your lender as soon as possible. By no means does this mean that you won’t be able to qualify for a mortgage. However, you should be prepared to show additional documentation.
One thing that could potentially help your application here is making the move from either a commissioned or hourly position to one that’s salaried as long as it has equal or more monetary compensation. This is because most lenders do prefer for you to have a steady, predictable paycheck when you buy a home.
Limit Your Monthly Subscription Services
Although monthly subscription services are quite convenient, they do add up. While it is a good idea to pay off your credit card every month you may still be dinged for having a high level of credit utilization if a lender pulls your credit report mid-cycle. This is why you should keep these things to a minimum when you’re in the process of buying a new home.
Work on Building a Solid Credit History
Your credit history is one of the first things that a lender is going to look at when you’re ready to buy a home. They’ll look to make sure that you have a history of paying off your credit cards and other debts on time. This is important because it’s a sign that you’re a responsible borrower, which means that you’re less of a risk to them.
When you don’t have any credit it’s going to be much more difficult for you to secure a new home loan. While it’s not impossible to do so, it will take you significantly more time. Things like records of you paying your rent and utilities on time, student loan debt, and cell phone bills will all help you show a potential lender that you’re someone who has a solid history of being responsible when it comes to managing your monthly payments.
Check Your Credit
Your credit score will significantly impact whether or not you can buy a new home. When you have a low credit score may harm how much money a lender is willing to loan you as well as the interest rate you’re charged.
Over the life of a loan, you can be charged thousands of dollars more in interest rates simply because of a few percentage points. This is why it’s so important to closely monitor your credit, especially watching for fraudulent activity. Doing so will help prevent any surprises that may delay your loan application process.
Avoid Large Purchases
When you’re ready to buy a home you’ll want to avoid taking on large amounts of debt (e.g. a car, a vacation). This is also true if you’ve already been preapproved to buy a new home. The reason for this is that when you want to buy a home your debt-to-income ratio (this has to do with how much money you earn in comparison with how much money you owe) affects how much money a lender is willing to loan you.
When you’re in the market to buy a home, you really should consider a new home. If you live in Tampa, FL, make sure you talk to Vitale Homes today.
Vitale Homes builds new single-family homes in both large and small master-planned communities as well as self-developed neighborhoods throughout the Tampa Bay area, with a particular understanding of the Land o Lakes, Wesley Chapel, Hudson, New Port Richey, Odessa, and surrounding towns of Pasco and Pinellas counties. Whether this is your first home or twentieth home, you’ll experience the Vitale Difference of personalized customizations, exceptional included appointments and finishes, upgrades, and energy features often above industry standards and always above expectations.
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