If you\u2019re thinking of buying a new home next year, now is the perfect time to start planning. There are several advantages to starting early, especially since it prepares you to jump on the perfect home when you find it.<\/p>\n\n\n\n
Follow these steps to get yourself ready to buy a new home in the new year.<\/p>\n\n\n\n
If you haven\u2019t checked your credit recently (don\u2019t worry, checking your credit doesn\u2019t affect your score) now is a good time to see where you stand. Request a report from each of the main three credit-reporting bureaus and make sure the information is correct. It can take several months to have an error removed so the earlier you start this process before applying for loans, the better!<\/p>\n\n\n\n
Your credit score is an important three-digit number that can determine whether you\u2019re eligible for a mortgage and the interest rate you\u2019ll pay. A credit score of 680 is considered \u201cgood\u201d so if your score is lower, use this time to boost your score.<\/p>\n\n\n\n
If you\u2019re ready to meet with mortgage lenders, you can apply for a pre-approval to know exactly how much you\u2019ll be eligible to borrow. If you\u2019re not ready just yet, use an online mortgage calculator to estimate your affordability. Once you know how much you may be able to afford, you can estimate how much to save to cover your down payment and closing costs.<\/p>\n\n\n\n
Create a list of what you need and want in your new home. Think about what you don\u2019t like in your current home and what options would make it better for you. Be sure to consider your lifestyle; if you work from home, you may want to have an office space or at least an extra bedroom to use as an office space. Love to entertain? An open-floor plan is a must. Ranking your wish list items will help identify your priorities and ensure your new home has what\u2019s most important to you.<\/p>\n\n\n\n
Now it\u2019s time to do some research. Start by researching potential neighborhoods, school districts, and available homes. Take note of home prices in these areas; it will give you an idea of what you can afford in your target areas. It\u2019s also a good idea to start researching mortgage loans and home buyer programs you may be eligible for.<\/p>\n\n\n\n
Avoid taking on large debts before buying a home. Large purchases can harm your chance to secure a mortgage, especially if they add to your debt-to-income ratio<\/a>. Limit your spending in the months before you apply for a loan to improve your chances to securing financing at a favorable rate.<\/p>\n\n\n\n