Is 2021 the year you’re finally ready to take the leap and buy your first home? If so, congratulations! There is nothing more exciting than getting the keys to you a home that you own for the first time! While the excitement is the most fun part of planning for a house, it’s important to remember all of the planning that should go into it as well to ensure you’re prepared. So, why not cater your New Year’s resolutions around preparing for this next big step in your life!
First up, save enough money for both a solid down payment as well as closing costs.
- Make sure you are saving specifically for your home. Start by taking a little out of every paycheck! This should be in addition to anything you already are saving for. An easy way to do this without burdening yourself financially is by cutting down your luxury expenses.
- Make your own coffee instead of ordering from your favorite shop.
- Instead of going out to eat or ordering takeout, make a fun new meal instead.
- Borrow items such as tools instead of purchasing them.
- Pack your lunch instead of eating out.
- Shop with discounts and sales.
These little changes will add up quickly!
Payoff as much debt as possible.
- While it seems incredibly overwhelming at times, it can’t be stressed enough that you want as little debt as possible when seeking approval for a home loan. The income to debt ratio is a major factor regarding loan approval!
Track your spending.
- We often don’t realize just how much we spend on a daily, weekly, or monthly basis until we actually track it ourselves. Getting your spending under control is a pivotal step in ensuring you’re ready for all of the financial costs that come along with buying and owning a house.
Get pre-qualified for a loan.
- If you aren’t ready to buy a house right away in the new year, don’t get pre-approved just yet. Instead, get pre-qualified. This will allow you to see what kind of loan you might be able to obtain with your current financial situation without being on a time constraint or taking any kind of hit to your credit. We work with the BEST mortgage loan officer and he’s always happy to help!
Do your research!
- Find the realtor you’ll want to work with. It’s crucial that, especially as a first-time homebuyer, you have a realtor working for you who is an expert in their field, the community and understands exactly what you’re looking for. Having the perfect realtor from the start will ensure you find the perfect home within your budget.
- Do you know exactly what you’re looking for in a home in 2021? Add researching neighborhoods, house features, and amenities to your resolution list! Since this will be your first home and first loan, make sure to make another list prioritizing what is most important to you and what you’d be willing to give up.
- When making this, keep in mind that some things could be an easy DIY and don’t have to be a necessity when searching! You can’t change things like a neighborhood or how big the yard is but you can eventually renovate a kitchen to more fit your style!
Budget, budget, budget!
- It’s crucial that you budget for how you’ll spend your money once you’re in a home! After all, you won’t have a landlord or property manager to fix problems for you anymore. Many people don’t factor unexpected maintenance costs into their budget which can quickly lead to stress and a headache when figuring out where the extra money will come from.
- Set your budget before you seek a pre-approval. This way, you know exactly what you can afford based on your spending and lifestyle and not based on what the bank says. Remember, just because you’re approved for a specific amount, doesn’t mean you have to buy a house for that much!
- Sticking to this budget before you sign a loan will be great practice to ensure it’s a feasible amount!
All in all, don’t give up! While the thought of saving, planning, and buying a home in 2021 might seem overwhelming, you’re investing in your future and that is a resolution you can always take pride in! Happy New Year!