Have you decided 2018 is the year you reclaim your American dream and purchase a new home?
Congratulations are certainly in order but you may have a little bit of legwork to do. Home buying takes preparation and in order to fast track here are a few tips and resolutions that will get those keys in your hand in no time.
Monitor Your Credit
The first thing that comes to mind as soon as the average American considers buying a new home, is their credit. Luckily, there are plenty of websites that allow you to check your credit score for free.
- Get your TransUnion Report
- Get your Experian Report
- Get your Equifax Report
- Get your 3-Bureau FICO Report
You want to stay on top of your score and check it at least every month. Just be sure the source you use isn’t damaging your score with each check.
As you pay off balances from loans and lines of credit you will see your number rise. Improving your credit score may take a bit of time, but takes very little effort to diminish. Stay on top of your balances and you should be fine.
If your score doesn’t seem quite right, go to your banker for a detailed report and discovery. There may be ways to eliminate old credit hits. If you’re really committed to improving your score before buying a home you will need to be proactive.
Budget EVERYTHING
Consider budgeting your new best friend. From weekly groceries, entertainment, and shopping--it’s time to start tracking the movement of your money, what’s coming in and what’s going out. The key here is precision. No guessing what you spent at the mall and certainly no rounding up or down (here's some resources to get you started).
Budgeting is undoubtedly a challenge and won’t magically grow your savings account, but it’s a necessary start. Soon you’ll have a down payment, mortgage payment, and a few other costs that come with the purchase of a new home. Consider budgeting as training wheels to help you learn to balance these new financial responsibilities.
If that’s not enough of a kick in the but, consider the consequences of NOT budgeting...
Save
Don’t let your new home’s down payment catch you off guard. Building that savings account will require you getting serious about keeping a tight lock on your expenditures assuring you always have “leftovers”.
NerdWallet has a great article and calculator to help you plan for your down payment!
Now that you’re buying a home, your savings account takes on two responsibilities--for the planned purchase of your down payment and closing costs and in the event of an emergency. You can go ahead and plan on life still happening and dipping its sticky fingers into your savings account. So, much like your budgeting, over prepare.
Reschedule Other Big Purchases
Do you really need the new car the same year you purchase a new home? I’m going to answer that for you. Unless you’ve hit the lotto--NO. Plan your other large purchases for the following year, including vacations. You don’t want to stand before your dream home $10,000 short because you decided you needed to go to Florida for spring break. Good things come to those who wait!
If you absolutely have to make a large purchase avoid having to use credit!
Follow the Market
We regularly post the ebb and flow of the housing market here in the Twin Cities. The housing market can change every 100 miles, so be specific in your research. Look into an area you want to live for at least 5 years.This will give you an idea of the right time and place to buy a home.
Interview Realtors
A reliable realtor is essential as you get ready to buy a home in 2018. They are more than there to take you to showings-- they are a great source of information to all of your house purchasing questions.
Take the time to get to know your realtor and what they value. Do they set up realistic expectations? Are they honoring your purchasing budget? Are they responsive and available? Brutally honest? These are just a few ways to discover if you’ve got the right partner to guide you through this important decision-making process.
Keep an Open Mind and Heart
The process of getting ready to a buy a home will be incredibly exciting and undoubtedly frustrating. You will be bombarded with tons of information, applications, rejections, approvals, and often feel pulled in ten different directions. Be sure to keep the end game in mind-- a new home for you and your family. Make the best of the experience.
The PRO Team wants to be with you every step of the way. For market trends, buying tips, listings and more, our team is here to help you buy a home in 2018.