Take Steps to Achieve Your Resolution of “Buying a Home in 2014”

By on January 7, 2014

The New Year is always a time for Americans to vow to get in shape and save more money. After all, who doesn’t want to be thinner and richer by the end of the year? Some people have more definite goals, such as buying a home in 2014, and in that case, you need some clear directions to help achieve resolution.

As we look back over 2013, home foreclosures were down, home prices surged mid-year and interest rates are still at historic lows. It may be harder to get the best mortgage terms or a bigger house, but it is still possible for many families to afford to buy real estate. This may be the perfect time to make a New Year’s resolution to purchase a home.

There are many reasons why 2014 is a great year to own a home: including everything from low mortgage rates to rising home prices expected in 2015 and simply the emotional satisfaction of having a financial safety net. Speak with your trusted financial advisor to come up with a plan to stick to your resolution by the end of the year. And use the money you’ve been saving from sticking to last years New Year’s resolutions for a down payment on a new home.

10 Steps to Keeping Your Resolution and To Put You on the Path to Becoming a Homeowner in 2014

1. Familiarize Yourself with Mortgage Terms

In 2014, mortgage lenders will have to comply with new rules for qualifying buyers. They will ask a lot of questions and require a lot of paperwork. Especially if you are a first-time homebuyer, brush up on real estate terminology and mortgage terms so you are not left dazed and confused when it comes time to fill out a mountain of forms.

2. Understand Your Credit History and Credit Score

The terms of your mortgage will greatly depend on the lenders belief in your ability to repay the loan. They will base this upon your income and credit score. The three credit bureaus give you a score based upon your credit history, how much of your available credit your are currently using and outstanding debt.

It’s worth knowing what your score is before you apply for a loan. If you score is weak, you will need to take steps to improve your score in order to qualify for affordable loans.

3. Pay Down Your Debts

Not only may you need to pay down debts to improve your credit score, but lenders will also consider your debt-to-income ratio when you apply for a mortgage. Even if your credit score determine you always pay on-time, lenders may want to determine if you spend more than you earn. Pay off the credit cards from the holidays.

4. Save For a Down Payment

The more money you can pay for the home upfront, the less you will need to finance to afford the home. It is often recommended homebuyers aim to save 20% of the cost of the home they wish to purchase for a down payment. If the home you plan to buy is $500,000, you will want to save $100,000 and finance the remaining 80 percent (400K).

5. Find an Affordable Mortgage with Terms You can Handle

Despite the government securing or guaranteeing nearly all loans through Fannie Mae, Freddie Mac and the FHA, every bank and lender offers different financing terms. With so many lending options, you will need to do some research and get offers from various lenders before making a decision.

6. Build a Home-Buying Team to Support You With Knowledge and Expertise

Whether you are buying a home or an investment property, it is important to have a support team of real estate and financial professionals who can help you find the right property, at the right price, on the best terms. You will need a reputable real estate agent, your mortgage lender, home inspector, financial advisor, tax preparer and (perhaps) even your lawyer ready to begin the home buying process.

Your team of experts have a vested interest in your success and they can provide you with the direction or assistance to choose a home that fits your needs, negotiate affordable pricing and get your paperwork in order for the most efficient and smooth home buying experience .

7. Make a “Wish List” for Your Ideal Property

Make a list of all the features you must have in a home and the things you are willing to compromise on; set your priorities but be flexible. Need move-in ready? Or are you willing to buy a “fixer-upper”? Can you live without those high-end finishes and stainless steel appliances until you have time to fully remodel the kitchen or do you need to negotiate down to cover the cost of updates and repair? Think long and hard about what it will take to make you comfortable at home.

8. Don’t Forget About Location. Location. Location

Where you decide to buy is going to impact your costs and lifestyle. Are you willing to commute an hour every work day to buy a bigger home outside of town? Are nearby school and neighborhoods given positive reviews and ratings? Zone in on a few target areas to find homes which fit your wish list.

9. Start Talking To Your Insurance Agent About Homeowners Insurance Now

Let your insurance agent know you are in the market to buy a home. They will need to secure a homeowners insurance policy to protect your new home from fires, thefts, financial liability in the event of personal injury or accident, and more. Your agent may be able to offer you loyalty discounts or savings for combining your existing auto insurance with the homeowners under one policy. Start exploring your options now.

10. Remember that Buying a Home is an Investment and Means of Building Wealth

Remember to look at the big picture. While buying a house is a great way to build wealth, maintaining your investment can be time consuming, labor-intensive and expensive. When unexpected accidents require new appliances, roof repairs and plumbing repairs, there will be no landlord to turn to, only your bank account. Don’t despair though; the money you invest in making repairs or improving your home can turn into equity that help you pay off credit cards, put your children through college, support you in retirement or help you start a business.

Keep Resolutions That Support Your Future Financial Stability

Anything is possible, but you have to start somewhere. Learn as much as you can about the home buying process and stick to your new year’s resolution to buy a home in 2014. Set some achievable goals, make small steps towards qualifying for a mortgage, find the right property and join the ranks of homeowners all across America.

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About David Leighton

FSN real estate investment journalist - Property can still be a great way for someone to secure or grow their portfolio. Any smart investor with a good education and understanding of the opportunities in the the market can buy their dream home, rental unit or commercial parcel. David wants you to have the tools and resources to make informed decisions in your real estate investments. Connect with David on !

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