We’ve all experienced unprecedented challenges in 2020, and now we’re more than ready to welcome a New Year. Turning the page on December 2020 and welcoming 2021 means a fresh start and a chance to spark new opportunities and fulfill long-standing goals.
For some, that means starting the search for a new home. You may be an apartment dweller who has had it with multi-family housing and are ready to spread out in more space. You like the idea of a bigger closet, a sprawling back yard, a garage for your car and not having to worry about being heard by neighbors through too-thin walls.
Or maybe you already own a home but you’ve outgrown it. Those two kids now have a new little brother. Your home-based business could use more room. That small bathroom needs an expensive remodel not to mention all the other repairs needed around the house.
So, you’re ready to resolve to buy a new home in the New Year!
Buying a home is a big step. We’ve got some tips to help you keep your resolution.
Making the Down Payment
A major obstacle for anyone in buying a home is saving for a down payment. The experts at Quicken Loans remind us that we may not need as much as we think. They say down payment options of around 3% are now common. The thing that can be really hard about saving is getting in the habit.
Improve Your Credit
A lender needs to know you’re going to be able to handle the loan they give you. Whether you’re new to credit or yours has a few blemishes, it’s always a good idea to know what’s on your credit report.
Debt has a major impact on your credit score. Part of your score is about credit utilization, so if you rely too heavily on credit and only make small payments toward your balances every month, you’re considered at higher risk of overextending yourself. Paying these down will raise your score.
A big part of the mortgage approval process is based on your debt-to-income (DTI) ratio, which measures how much of your monthly income goes toward paying off debts. The less debt you have, the more home you can afford.
Finding the Right Home
Start by determining a list of needs and wants in a new house. Make sure you talk to your significant other about the style of the house to head off any conflicts in the search. You should also get pre-approved for your loan. There’s no point in looking at five-bedroom Colonials if you can only afford a three-bedroom ranch.
Next Move Nation’s Capital serves real estate buyers and sellers in Washington, D.C., northern Virginia and Maryland. When you need a professional who knows the market, contact us.
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