Happy New Year! 2015 has been swept away and 2016 has arrived with a bang! It’s a brand new year and a Leap Year to boot (which means 366 days of exciting opportunities)!
If you’re looking to make 2016 the year that you finally become a home owner, then it’s time for you to make a few New Year’s resolutions.
Yes, yes, New Year’s resolutions can be difficult to stick to (we all want to lose that extra ten pounds), but the resolutions for first time home buyers can be achieved by planning them out and giving it your best to see them through.
Every resolution for a first time home buyer starts with two simple words: “I will”. Just those two simple words should start every one of your resolutions for becoming a home buyer. Don’t waste time with “I will try” or “Maybe I will”. Make an affirmative declaration that you will actively use these suggestions.
Before each and every one of the suggested home buyer resolutions, stand up and read the headline aloud, starting with “I will”. Get your mind and body involved and you’ll be putting your best foot forward as 2016 begins.
I WILL Start Saving More Money
As you know, buying a home is going to take a lot of money. Sure, you might have some cash stored away in your savings, but that’s just a start.
Wouldn’t you feel much more confident if your savings were much larger than they are right now as 2016 begins?
Granted, the start of the New Year usually sees people spending lots of money in celebration, but you don’t have to spend money to have a great start to the New Year. Sometimes the New Year is best celebrated with the people you care for the most in the comfort of someone’s home.
Saving money to buy a home doesn’t mean you have to make giant cuts from your monthly budget. Actually, the smallest cuts from your day to day routine are often the ones that can save you money because they all add up over time.
Here are a few ways that you can start saving money to put towards home buying:
- Make your coffee at home instead of buying from coffee chains
- Brown bag your lunch instead of eating out/buying fast food
- See if you can commute to work instead of drive, saving money on gas
- Invite friends over instead of going out partying
- Become a grocery list shopper so you don’t buy more food than you need
Adding to your savings is another way you can bolster your cash reserves. Look around for a part-time job (something that won’t interfere with your main job) to add an extra source of income into your savings.
Remember that when it comes to saving money, you can never have too much saved away.
So now you have a few ideas on how to start saving money as 2016 gets underway. The next resolution you should make encompasses a vital component of your eventual mortgage application.
I WILL Make My Credit Score Stronger
Your credit score is one of the main foundation blocks of your mortgage application. To put it simply, the stronger your credit score is the better your mortgage could potentially be.
No matter what your credit score currently looks like, there is always room for improvement. Improving and maintaining your credit score is vital in the lead up to buying your first home. It is not something to be taken lightly.
To learn everything you need to do to fortify your credit score in preparation for buying a home, you can read more about it from this helpful guide.
In order to maintain your credit score, start making a habit of these kinds of good credit practices:
- Record your spending
- Keep up with your debt payments
- Don’t go over your credit limit
- Use your credit card(s) responsibly
- Don’t make large purchases (i.e. new furniture, new vehicles, etc.)
The benefit of this home buying resolution is that it can help you start forming the kinds of good habits that will make homeownership and paying your future mortgage less stressful. New Year’s resolutions are meant to help you form a virtue or two, and getting into good payment and credit habits is certainly a virtue.
I WILL Know What I Need in a Home
The next resolution you should make to keep your intentions of buying a home going is figuring out what you need in a home.
Remember, what you need in a home comes first and what you want in a home comes second. The home you want may not necessarily be the home you need.
For example, you may want a home two-story home, but do you actually need it? If you’ve got a growing family, then yes, you may actually need it. But if it’s just you for right now (and maybe a pet), then a two-story home will mean you’re paying for space you’re not using.
When thinking about what you need in a home, here are the features that you need to focus in on:
- # of bedrooms
- # of bathrooms (full and half)
- Square footage
- Local traffic/Public transportation
- Home age
All of these are necessary variables that need to be factored into your idea of what you’re looking for in your first home. Knowing all of this ahead of time will make a later resolution much easier for everyone involved in it.
All of these factors come together to form a general idea of what you need in a home. All of these will come together once you actually start looking for a home.
I WILL Find a Professional Real Estate Agent
Once you have an idea of what you need in a home, your next resolution revolves around finding a real estate agent who will listen to you and tailor their service to your needs and not their own agenda.
Finding a real estate agent who will represent your best interests when buying your first home will take research and patience on your part. Like many aspects of home buying, the sooner you get started, the better.
Using the internet to hunt for a reliable real estate agent may be your first inclination, but hold that thought for just a moment. Instead of typing real estate agents near me into a search engine, go and ask your friends and family members for recommendations first.
Asking your friends and relatives for recommendations is a great way to start looking for real estate agents because it gives you a few places to begin once you start hunting online. With the names that you got from others, you can check online reviews of those specific agents, client testimonials, and other ratings that will give you a better picture of their service.
Of course, if none of those recommendations meet what you’re looking for in a real estate agent, then you’ve got the whole internet in front of you to comb through.
Also, if you kept to the previous resolution and have some ideas about what you’re looking for in a home then you’ll make the real estate agent quite happy. While real estate agents make their living off of helping clients find homes, helping a client who knows that they need will make their jobs that much easier.
If you want to make this New Year’s resolution, promise yourself that you won’t just settle for some random real estate agent. Take your time and find one who will work with you, has a reputation for strong communication skills, and is willing to answer all of your questions.
I WILL Find a Lender and Get Pre-approved
Once again, this is a New Year’s resolution that you’re better off getting done sooner rather than later (waiting around is the reason that a lot of New Year’s resolutions fall flat by February).
Just like you did with the real estate agent, ask your family and friends for recommendations first. Or, if you’ve already got a real estate agent lined up, ask them if they have any lender recommendations. The mortgage and real estate industries are close-knit worlds that bring a lot of interaction between real estate agents and loan officers alike.
If the results offered by either don’t seem like enough for you, then you can always do more research online. The point to remember here is that you have plenty of options when it comes to lenders. You need to find one who will work with you rather than just work for themselves.
After you have a few likely lending candidates in mind, take some time to talk with them (either in person or over the phone) and find out more about what kind of mortgage options they have available. This will help you learn more about which options you could potentially pursue.
Pre-approval (which is not the same as pre-qualification) is a vital step in the mortgage application process. A lender will pre-approve you for a loan (which means that you don’t have the loan yet) based on official proof of items including (but not limited to):
- Your credit score
- Your income/finances
- Tax returns
- Current debts
Pre-approval may sound slightly scary, but it is something that is endlessly beneficial for new home buyers. Pre-approval gives you a stronger standing in the eyes of listing agents and sellers because it means that you’re prepared to start making offers. Window-shopping ended on Christmas Eve: the time to start negotiating is now.
Speaking of making offers on a home, which leads into the last New Year’s resolution for first time home buyers.
I WILL Make Reasonable Offers on a Home
The glut of house flipping and DIY home improvement shows on television have caused an annoying trend of first time home buyers believing that they can make unreasonable lowball offers on home and that the sellers will just accept it.
In a turn of events that has surprised absolutely no one, these lowball offers often insult the sellers and leave first time home buyers literally and figuratively stuck out in the cold while their real estate agents grow more frustrated.
You can negotiate with a seller, but don’t lowball them. Yes, you want to get a good deal on your first home, but the seller is also trying to walk away with a profit.
If you’re going to make an offer on a home, consult with your real estate agent first. They’re you’re greatest asset during the home buying process when it comes to figuring out an offer that will help get the ball of negotiation rolling forward. If you only stick to one of your New Year’s resolutions then make it this one.
New Year’s Resolution Resolve
New Year’s resolutions for first time home buyers are meant to help you put your best foot forward as you look for your first home. These resolutions aren’t as difficult as other resolutions (such as jogging or being a better person) so there’s no excuse for you to not stick to them.
Hold strong in your New Year’s resolutions as a first time home buyer and you may just see yourself celebrating the end of 2016 in the comfort of your first home.