buy<\/a> a home in the new year, know that job hopping can be a red flag to some underwriters \u2014 especially if you\u2019re moving to a different industry.<\/p>\nA steady job history and few or no gaps in employment over the past two years are ideal, as it helps lenders more easily forecast your future income.<\/p>\n
If you do get a new job while\u00a0home shopping, let your lender know as soon as possible. It doesn\u2019t mean you won\u2019t qualify for a mortgage \u2014 just be prepared to show extra documentation.<\/p>\n
If you\u2019re moving from a commissioned or hourly job to one that\u2019s salaried with equal or more compensation, it may help your application. Lenders often prefer borrowers to have steady, predictable paychecks.<\/p>\n
2. Limit monthly subscription services<\/h2>\n
Monthly subscription services are certainly convenient, but they can add up. Even if you pay off your credit card every month, you could be dinged for high credit utilization if your credit report is pulled midcycle.<\/p>\n
If you\u2019re thinking of buying a home this year, consider keeping your monthly subscription services to a minimum.<\/p>\n
3. Build a solid credit history<\/h2>\n
One of the first things a lender will look at is your\u00a0credit history. Lenders prefer borrowers who have a history of paying off credits cards and other debts on time \u2014 because it signals that you\u2019re a responsible borrower and less of a risk.<\/p>\n
If you don\u2019t have credit, securing a home loan may be significantly more challenging and time-consuming, but not impossible. Records of paying rent and utilities on time, 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.<\/p>\n
4. Check your credit<\/h2>\n
Your credit score can have a significant impact on your ability to buy a home. A low credit score can negatively affect how much money a lender is willing to loan you, as well as your interest rate.<\/p>\n
Just a few percentage point differences in an interest rate can cost you thousands over the life of a loan. Monitor your credit closely, especially for fraudulent activity, to prevent any surprises that could delay the loan application process.<\/p>\n
If you\u2019re unsure of your credit score, many financial websites offer credit score monitoring, or you can get a full credit report once a year.<\/p>\n
5. Avoid large purchases<\/h2>\n
Avoid taking on large amounts of debt \u2014 whether it\u2019s buying a car or planning a large vacation \u2014 before buying a house. This is advisable even if you\u2019re already preapproved.<\/p>\n
Your\u00a0debt-to-income ratio, or how much money you make compared to how much debt you have, can significantly affect how much money a lender is willing to give you. Keeping debts to a minimum can help make the home-buying process go a lot more smoothly.<\/p>\n
Just like proofreading your resume before you apply for a job, cleaning up your financial resume can help improve your chances of buying a home.<\/p>\n
Take advantage of online tools and resources, like our\u00a0affordability calculator, which can help you determine how much home you can afford. Our\u00a0mortgage<\/a> calculator\u00a0can also provide custom down payment estimates based on home price and interest rates.\u00a0And as you search for your future home, check out our extensive lender and agent reviews, which can help you find the best real estate partners for your needs.<\/p>\n","protected":false},"excerpt":{"rendered":"Thinking of purchasing a home this year? Below is a list of five New Year\u2019s resolutions that can help you keep your financial resume in tiptop shape. 1. Avoid job hopping Employment history and income are two of the biggest factors lenders look at when evaluating a mortgage application. A new job may be a…<\/p>\n","protected":false},"author":3,"featured_media":4143,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4142","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts\/4142"}],"collection":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/comments?post=4142"}],"version-history":[{"count":1,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts\/4142\/revisions"}],"predecessor-version":[{"id":5350,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts\/4142\/revisions\/5350"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/media\/4143"}],"wp:attachment":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/media?parent=4142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/categories?post=4142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/tags?post=4142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}