Successful Home Buyer Habits
If this is the year you’re ready to buy a home, set yourself up for success by adopting these daily, weekly, monthly, and yearly behaviors.
Indulgence — No More!
Saving for a down payment can be hard work. A typical down payment is 20% and if you’re not able to put that percentage down, you will have to pay for mortgage insurance. So, all in all, saving for that 20% is crucial step to owning a home and a way to help is by cutting your spending.
Adapt to some daily habits like skimping on that Starbucks latte, getting rid of cable TV, eating out less, and making your own lunch each day. But, it’s also not just skipping the coffee, as you will want to avoid making big purchases, too. For example, if your car is your biggest expense consider trading it in or selling it for an older model.
Use A Home Savings Account
Designating a specific account to save for your home is a wise choice for those who need to make a new habit of saving. By having a set weekly amount transfer into your home savings account, you can easily see your account grow into your down payment. Soon enough you’ll be able to look into starter homes and get approved by a lender.
Open For An Open House?
Start attending open houses weekly to get a feel of what homes are available in your price range. Doing this will motivate you to save more money and will educate you on the current market. Seeing what houses are currently selling for will also ease your mind of the question, “Am I ready to buy?”.
Test Out Homeownership
While owning a home is an exciting part of life, it also comes with more expenses than a down payment and a monthly mortgage. You’ll also have to prep yourself for routine maintenance on your home and unexpected repairs. Ensure that you won’t be at your wits end by testing it out prior to purchasing.
For one month, set aside the expected amount of your housing expenses and what you would need for an emergency fund. According to Realtor.com, “A good rule of thumb is to save 10% of your mortgage amount every month for maintenance fees. So if your payment is $1,200, sock away $120.” This is a good way to test out the waters before committing.
Pay Your Bills
To qualify for a reasonable interest rate, you’ll need keep your credit score high and be in the habit of paying each bill on time. Mortgage lenders will first look at your auto loans and leases, so these areas are especially important. And if you easily forget, set automatic payments for your rent, utilities, car, etc. If you’re going to purchase a home, you may need a referral from your landlord, so be on their good side by always paying on time.
Credit Report Check
Lastly, keep up with your credit score. If you haven’t looked at it recently or don’t even know what it is, research it. You can get a free copy of your credit score many ways and it can be as easy as asking your bank how or typing it into Google. A couple great resources are CreditKarma.com or AnnualCreditReport.com.
There could be things on their that you aren’t even aware of, so check it as often as you can to stay on track for purchasing a home this year.