3 New Year’s Resolutions To Help You Buy Your First Home In 2019
Buying your first home is an excellent goal — and it may be more possible than you think! Here are 3 New Year’s resolutions to help you get closer to this wonderful life milestone this year:
1. Save for Your Down Payment1
Save money and prepare your savings fund for your home purchase. Some lenders require at least a 20% down payment to qualify for an 80% loan-to-value ratio loan. But there are also different types of mortgage programs available for new or low-income buyers that may require a lower down payment.
Follow these practical ways to save more money for your new home:2
- Automate your savings.
- Save any extra or unexpected income.
- Cancel recurring subscriptions & memberships you don’t use.
- Always ask about discounts.
- Reduce energy costs & phone bill.
- Borrow, don’t buy.
- Pack lunch regularly.
2. Get Your Finances in Order for the Mortgage Process3
Check your credit score, and work to improve it if necessary:
- Take a look at your credit report before your bank does.
- Correct any errors as quickly as possible.
- Pay down credit card balances.
- Keep your credit utilization rate low.
How Does Your Score Compare? 4 Credit score Rating % of People
- 300-579 Poor 17.0%
- 580-669 Fair 20.2%
- 670-739 Good 21.5%
- 740-799 Very Good 18.2%
- 800-850 Exceptional 19.9%
Prepare any financial documents you may need when applying for a mortgage, including:3
- W2 statements (or 1099 income statements) for the last two years
- Federal tax returns for the last two years
- Bank statements for the last few months
- Proof of investment income
3. Get Pre-Qualified for a Loan & Start Shopping for a Mortgage 3
Look into getting pre-qualified for a loan.
Start the mortgage shopping process immediately to be able to negotiate for a better mortgage rate or get a pre-approved loan.
Which Type of Loan Do Most Buyers Use? 5
Type of Mortgage % of Buyers
- Fixed-rate mortgage 92%
- Fixed-then-adjustable mortgage 4%
- Adjustable rate mortgage 2%
- Don’t Know 2%
- Other 1%
Follow these tips and you will be well on your way to be a homeowner in 2019!