The new decade is right around the corner. For many, the dream of homeownership is one they’d like realized in the near future. That’s why we’re sharing a few New Year’s resolutions you should make and keep so you can buy a new home sooner rather than later!
Improve your credit
When was the last time you checked your credit score? You need a score of at least 650 to even be considered for mortgage approval. A number of factors impact your credit score, including your payment history, utilization rates, length of credit history, inquiries into your credit score, and types of credit accounts.
There are a number of things you can do to improve your credit score. Getting a copy of your credit report is a good place to start so that you understand where you need to improve. You can find more tips on improving your credit score here!
Grocery shop more
Look back at your 2019 credit card statements and add up how much money you spent on take-out. It’s shocking, we know. It doesn’t have to be this way. If you’re prone to ordering in, then adjusting your dining habits is a great New Year’s resolution to make in order to start saving money. Just imagine if you put a fraction of the money you spent last year on dining out into a savings account for a down payment.
Cancel some subscriptions
We live in a time where memberships and subscriptions make day-to-day life more convenient, but it can also be a waste of money if you’re not using some of the services. There’s Netflix, Disney+, the gym, and there are countless “box-a-month” subscriptions for everything from toothpaste and deodorant, to pet supplies.
Do you need all of them? These are likely small monthly expenses, but that’s how they get you. All your subscriptions probably add up to hundreds of dollars a year, and when you’re saving for a home purchase, every dollar counts.
Plan a staycation
A lot of people plan at least one big trip a year, but this trip costs thousands of dollars because of airline tickets and accomodations, and then you have to spend money while you’re at your destination! In 2020, vow to stay home to save money, but that doesn’t mean you can’t go on vacation. Make it your New Year’s resolution to plan the best staycation ever.
What’s a staycation? It means you’re on vacation from work, but you’re staying at home or somewhere local, which allows you to save on travel. You can still have fun in your hometown or neighbouring areas. Maybe instead of going away for two weeks, you can plan a bunch of cottage long weekends. If you spend a few thousand every year on travel, bite the bullet in 2020 and put that money towards your savings.
People are intimidated by this step but it’s actually easier than you think. It’s important to be honest when getting pre-approved because it determines what you can afford based on your income and debt. If you lie to get approved for a higher amount, you’ll only be doing yourself harm when it comes time to apply for your mortgage, which is a more involved process.
Depending on where you get your pre-approval, it will likely be valid for 60-90 days. So, we recommend doing this when you’re closer to making a homebuying decision!
We hope these New Year’s resolutions help you buy a new home in 2020!