ROCKAWAY, N.J. – Jan. 17, 2016 – Many people commit to losing weight or quitting smoking in a new year, but those planning to buy a home in 2016 should make five resolutions now in order to make house hunting easier when it's time to jump into the market:
• Get my financial house in order
Good credit is key to getting a mortgage with a reasonable interest rate. If it's been more than a year, find out what your credit score is. You can improve your score by paying bills on time, working with a no-fees housing counselor and beefing up your credit literacy. Free online resources can help, such as Freddie Mac's CreditSmart online training.
• Figure out how much I can afford
What do you earn? What do you spend? How much do you have in savings? Answering these questions will help you learn whether you're financially ready for homeownership. Make a budget and use free online tools and calculators to determine how much you can afford and the amount you have for a downpayment. If you're short, reduce optional expenses and set up a monthly, automatic deposit into your savings account.
• Explore mortgage options
Don't assume you don't have enough for a downpayment or won't qualify for a mortgage without 20 percent down. In fact, about 40 percent of today's homebuyers' downpayments are less than 10 percent, and a recent study found that 87 percent of U.S. homes qualify for downpayment help.
• Find out if I'm eligible for local, state or federal downpayment assistance
Some options may be as low as three percent. But keep in mind that if you're not putting at least 20 percent down, you'll pay extra each month for mortgage insurance. Contact several mortgage lenders to shop around and find the best deal.
• Get pre-approved for financing
It's highly recommended that you work with a lender to get pre-approved before house hunting. Pre-approval tells you how much home you can afford and helps you move faster and with greater confidence in competitive markets.
• Rely on professionals
© 2016 The Neighbor News, North Jersey Media Group, Inc. All Rights Reserved. Courtesy of StatePoint
The typical homebuyer looks at 10 homes over a 10-week period, so finding and working it's critical to find the right assistance team. Realtors, housing counselors and lenders all play an important role in the buying process. It's best to have professionals with the expertise to advise you every step of the way.