Are you thinking of buying a house this year? We have put together New Year Resolution 2021 that can help you keep your financial resume in top shape.
Avoid Job Hopping
Employment history and income are the 2 biggest factors that lenders look at when assessing mortgages. A new job could be a good career, but if you are planning to buy a house in the New Year, know that a job can be a red flag for some signatories – especially if you are moving to another industry. Stable employment history and few or no job gaps over the past 2 years are ideal, as it helps lenders predict your future income. If you get a new job while home shopping, let the lender know as soon as possible. That does not mean you do not get a mortgage – just be prepared to show extra documents. If you are moving from work or hourly work to a job that is paid with equal or greater benefits, it can help your application. Lenders often prefer borrowers to have stable, predictable paychecks.
Limit Monthly Subscription Services
A monthly subscription service is certainly convenient but it can improve. Even if you pay off your credit card every month, you could be in for a huge credit crunch if your credit report is pulled in the middle of circles. If you are thinking of buying a 3 BHK flat this New Year, consider keeping your monthly subscription service to a minimum.
Build a solid credit history
One of the first things a lender will look at is your credit history. Lenders prefer borrowers who have a history of paying off credit cards and other debts on time – because it indicates that you are a responsible borrower and less risky. If you do not have creditworthiness, it can be very demanding and time consuming to secure a mortgage, but not impossible. Timely pay-as-you-go records, as well as student loan debt or cell phone bills, can help show a potential lender that you have a history of managing monthly payments.
Check your credit
Your credit rating can significantly affect your ability to buy a home. A low credit rating can have a negative effect on how much money a lender is willing to lend to you, as well as interest rates. Just a small percentage difference in interest rates can cost you thousands over the loan period. Keep a close eye on your credit, especially for fraudulent activities, to avoid surprises that could delay the loan application process. If you are unsure of your credit rating, many financial websites offer credit rating monitoring, or you can get a full credit report once a year.
Avoid large purchases
Avoid taking on a lot of debt – whether it’s buying a car or planning a big vacation – before you buy a house. This is advisable, even if you have already received approval. The proportion of your debt or how much money you earn based on how much you have can have a significant effect on how much money a lender is willing to give you. Keeping debt to a minimum can help make the home buying process much smoother. Just like proofreading your resume before applying for a job, clearing your resume can help improve your chances of buying a 2 BHK flat.