6 New Year’s Resolutions for The First-time Home Buyers.

Happy New Year! If you’re looking to make 2018 the year that you finally become a homeowner, then it’s time to make a few New Year’s resolutions. Your dream can be achieved with a simple plan and the desire to see it through all the way to your new home!

1- Save for a down payment
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. Small changes in your lifestyle like making your coffee at home instead of buying from coffee chains, and prepare your lunch instead of eating out or buying fast food can save you a few hundred dollars each month.

2- Pay off debt within reason
If you’re sitting on debt, commit to paying off enough amount each month to improve your debt-to-income ratio. Eliminating debt altogether is ideal, but it may be unrealistic if you also need to save for a down payment and closing costs. Instead, focus on bringing your debt-to-income ratio below 36% which will still qualify you for favourable mortgage programs and rates.

3- Keep track of your credit score
Your credit score impacts whether or not you’ll get approved for the home of your dreams. If you haven’t monitored your credit score in the past, resolve to keep track of where you stand this year.

Get your free credit report and use it to check for errors in your history that can affect your score like delinquencies, late payments, liens or fraud. 

4- Decide what is your housing need
This next resolution is figuring out what you need in a home. Here’s a basic list that can help you decide. The number of bedrooms, bathrooms, neighbourhood, proximity to schools, Local traffic/Public transportation or shopping centre. 

5- Get prequalified 
Prequalifying for a mortgage is the first thing you should do to start your home search. A prequalification letter gives you an estimate of the mortgage amount you can get approved for. You can use the estimate while searching for a home to narrow down your options. 

6- Budget like a homeowner
Once prequalified for a home, start simulating a budget that includes paying your mortgage and other costs. This is crucial for first-time home buyers since owning a home comes with more financial responsibility than renting.

Add expenses like insurance and taxes into your budget to simulate payments. You’ll know you can comfortably afford the mortgage if you can manage payments and have money left over for living expenses. If not, adjust the price of the homes you’re shopping for to make sure you can afford them.

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