As becoming a homeowner is mostly a financial responsibility, you need to be in a good financial position before taking the plunge. If you’re thinking of switching from renting to finally owning your place, it is essential to start the year with new habits that can increase your savings and make you an attractive buyer.
Spend Less
As down payment is essential to a home purchase, you might want to limit your spending, especially in terms of shopping, eating out, or buying fancy coffee every day. You can also try making your lunch daily or downgrading your fitness membership. Ditching a few of your indulgences can increase your savings and help you become financially disciplined.
It is also important to know that paying a significant down payment (20% or more) can help you avoid private mortgage insurance (PMI). Mortgage companies in South Jordan note that this also shows that you are a serious buyer and are committed to making all your loan payments as agreed.
Anticipate the Cost of Homeownership
Maintaining a home is more than about paying your down payment and monthly mortgage. There are also maintenance costs, utilities, and unexpected repairs. This is why it is a good idea to test your lifestyle and find out if you can live within your new budget.
Do a trial run at becoming a homeowner. You can do this by setting aside money for monthly household expenses (mortgage, bills, and credit), as well as your rainy day or emergency fund. Do some research to know the costs that new homeowners can expect.
Make Regular Deposits
It is good to have a savings account, but if you are serious about buying, it is best to have a designated home-buying or down payment savings account. Then, get into the habit of making weekly or bi-weekly deposits.
You can also team up with your partner if both of you are paying for the house. This can help you come up with a good amount for the down payment or even get approved quickly by a lender. Be sure, however, not to go overboard with buying a house that is more than what you can comfortably afford.
Pay Your Bills on Time
Having a good (or high) credit score is one crucial requirement when applying for a loan. Paying your bills on time is one way to increase your score and obtain credit or loans with lower interest. This also shows that you know how to take control of your financial life, which can improve your chances of owning a home.
It is advisable to make a list of your bills and their due date and add your payments to a calendar. You can use an online diary or create a handwritten calendar listing. If you always forget, you can set your bills on automatic payment to avoid delinquency and keep paying on time.
You can be a successful homebuyer by doing your homework and getting your finances in order. Contact a reliable mortgage lender today to find out how you can make yourself a more attractive borrower.
