5 Habits for Home Buying Success
Creating new habits can be a challenging process, but if you’re looking to purchase a home in the near future, it’s important to get ahead of the financial stresses and lifestyle changes that occur during the home buying process.
If you want to find a home that checks most of your boxes without feeling like you’re breaking the bank, try incorporating these 5 habits into your current, everyday life to test your homeownership readiness and prep your bank account for what’s to come.
1. Cut out excess spending
Break down your spending to determine where you need to cut back. If you’re ordering takeout multiple times each week, have an astronomical cell phone or cable bill or are paying monthly subscription services that you can live without, it may be time to consider cutting some things out.
It’s also important to stay laser-focused on your ultimate goal to buy a home and stray from other goals that may become distractions or burdens down the road. For instance, if you’re also wanting to upgrade to a newer, nicer car, consider holding off - not just for your credit score’s sake, but also for your wallet’s sake. A hefty car payment is the last thing you’ll want to keep up with on top of your monthly mortgage payment as you recover from the impact your down payment made on your bank account. If your car is still able to get you from point A to point B, wait until your financial situation has simmered a bit before swapping in your wheels.
2. Regularly feed your savings
It’s hard to put away money into savings once that paycheck comes in. You see the new balance appear on your bank account and it feels great! No one wants to see that number decrease as soon as it clears, but when it comes to chunking away money for a down payment, make a habit of putting a designated amount into a home savings account designated to your down payment. Over time, you’ll make a habit of transferring that money over, and you won’t even miss it! Before you know it, you’ll have a substantial sum ready to put down on the home you love.
3. Live like a homeowner
Start penny-pinching. Whether you’re currently renting and considering becoming a first-time homeowner or are already a homeowner looking to upgrade, start budgeting and spending according to your target mortgage payment. Make sure you’re saving any additional housing expenses and maintenance fees by setting aside around 10% of your target monthly mortgage payment each month. Try living on this budget with your current salary for a while. If you have a hard time making it happen, you may want to consider purchasing a home in a lower price range.
4. Show your credit some love
Make sure you’re taking the best care of your credit score as you possibly can. It’s essential to pay all your bills on time and to do so consistently. Whether or not a monthly payment effects your credit score, it’s important to make a habit of diligently ponying up the money you owe.
Keeping your credit score in tip-top condition is essential to applying for a home loan. You’ll want your score to reflect healthy spending and payment habits to increase your chances of being approved for a loan and a great rate. Avoid applying for anything that would issue a hard inquiry on your credit score as you lead up to buying a home as this can damage your score and leave lenders a bit wary.
5. Do your research
If you foresee buying a home in your future over the next few years, it’s not too early to start shopping around. Look for homes in your price range that offer the features you need. Determine where those homes are in relation to where you want to be geographically and start pinpointing where you’ll actually be able to afford. From there, consistently keep an eye out for homes in those areas. Consider how long these homes actually stay on the market before selling and start attending open houses to get the lay of the land. If you’re looking for a home in a specific area that tends to sell quickly, you’ll want a skilled and experienced real estate agent on your side that can help you negotiate your offer.
It’s important to prepare yourself for buying a home before committing to doing so. Changing your habits and mindset are key to making it happen so that, when you do find the home of your dreams, you can enjoy the process rather than worrying about breaking the bank.
When you are ready to start looking for a home, it’s important to find the right real estate agent for you. Check out our blog post on how to find the best real estate professional to work with.