With the New Year approaching, many people will want to get their dream home in 2022.  Today’s real estate market is a double-edged sword for home buyers. On one hand, it is the perfect time to buy a home. Mortgage rates are still hovering just above historic lows, which gives you an opportunity to save significant money on monthly payments. However, the inventory of available homes to buy is also at record lows, which gives sellers a huge advantage over buyers. This means that when you find a home you want to buy, you will most likely be in a bidding war. We think that every prospective home buyer should go into the next year with resolutions to help you stay on track and acquire your dream home. Here are three New Year’s resolutions we recommend to put you on track for your goals. 

Creating A Budget

One of the biggest considerations you need to make when buying a home is how much to budget for a down payment. Conventional wisdom is that you need to set aside 20% of a house’s value for a down payment. However, this is a myth.

There are several loan programs that allow you to put less than 20% down for a home loan. One of the methods is getting an FHA loan. FHA loans have backing from the federal government and allow people who have less than perfect credit to get their homes. In turn, this allows you to be flexible with your budget and put a smaller down payment. If you qualify for an FHA loan, reduced down payments that range from 3.5% to 10%. The 10% applies to people with a credit score ranging from 500 and 579. The 3.5% is for credit scores that are at least 580.

Applicants who have military service may qualify for a VA loan. Also federally backed, these loans do not require a down payment at all. They also do not have any credit score requirements. If you qualify, these loans are great for budgeting your new home. 

Although all of these loans are government-backed, there are also other options that don’t break the bank. Working with a professional mortgage broker like Peoples Choice Mortgage is key to getting access to lots of loan options. We work with several lenders and their own requirements to get the best home for you. Working with hundreds of lenders will give you a better chance of finding a home that is best for your budget. 

Raising Your Credit Score

Your credit score is a number between 300 and 850 that assesses a person’s creditworthiness. There are three credit bureaus that assess your creditworthiness. These are Experian, Transunion, and Equifax. An excellent credit score is one that is in the 781 to 850 range. A very poor score is one that is between 300 and 499. Everything in between varies because credit scores are calculated through many factors. The first common factor is your debt to income ratio. The debt to income ratio is the comparison between your outstanding debt and the amount of money that you receive. The more debt you have, the lower your credit score will be. These debts can be from outstanding loans, credit cards, car leases, or other sources of debt. 

Another part of your credit score is the history you have with lenders. Every time you ask for a loan, credit card, financing application, or even something like a mortgage. The more you apply for different loans, the more your history racks up. Another part of your history is your payment history. If you are late to pay back a loan, it will get reported to all three credit bureaus. 

Loans and debt can often feel like weights dragging you down, and this applies when you want a house too. Making moves to raise your credit score is a great New Years Resolution to aim for if you want to purchase a home in the next year.

Talk To A Professional 

One of the most important parts of buying a home is having guidance from a professional to help you achieve your goals. A professional will help you find a house that is perfect for all of your needs while still being in an appropriate price range. The last thing you would want is to regret a large financial decision like buying a house, especially following the new year. 

At People’s Choice Mortgage, we are here to help you with every step of your home buying journey. We can do a detailed report of your current credit rating and your financial situation in order to come up with a plan tailored to your needs. You would be shocked at how quickly your credit score can improve with some expert guidance and support. We also have a home purchase qualifier on a website that you can use at any time. Talking to someone who knows the ins and outs of your real estate market is a great New Year’s resolution to have. It will get you the knowledge and tools you need to find that dream home. 

Final Thoughts

As we end 2021, it’s important for future home buyers to prepare for the future. We want to make the process easy for you, which is why we broke down these resolutions into three steps.  Just know that you don’t have to go through the steps all by yourself. independent mortgage brokers at People’s Choice Mortgage are here to help you with every step of the process. We know that buying a home can be overwhelming, especially in this market. Our job is to simplify this process and make sure you are aware of everything that is happening. We never want our clients to be surprised by closing costs or other items that should be included in any budget. 

That is why we provide a complimentary, no-obligation mortgage qualifier to all of our clients. This allows us to get an accurate picture of your financial situation so that we can help you make your budget. We want to help you buy your dream house, but we want to make sure it’s affordable and within your budget. If you are interested in buying a home and want help crafting a budget that is perfect for your situation, contact us! There are a lot of mortgage products available on the market. Our goal is to make sure we find the specific one for your needs.