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5 Tips for the new year to help you buy a new home!

28 January 20 Author:Michelle Gaffaney
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It’s a new year and you want to buy your new home! So, it is time to get your financial resume into shape to improve your buying odds!

We have put together 5 pieces of advice to help you get ready or buying your new home:

Avoid bouncing around jobs

Employment history and income are big factors that lenders will look at for your mortgage application. Moving to a new job may be a good career move, but if your planning on buying a new home just be aware moving jobs can be a red flag to underwriters.

A steady job history with as little gaps, or changes as possible, over at least two years is ideal. This helps the lenders to forecast your future income better. If you do get offered a job that you can’t refuse, make sure you advise your lender as soon as possible. It doesn’t mean you will get refused a mortgage, just that you may need more documentation.

Moving from self-employed, or commission based role to an employed/salaried role will certainly sway in your favour with a lender.

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Cut out any unnecessary payments!

Are you guilty of having lots of monthly payments for items you probably could live without? Magazines, Netflix, Recipe Boxes, Amazon prime, the list could go on. This is the time to go through your monthly outgoings and put a stop to the things you really can live without for now. Every little bit saved from cutting these outgoings out will be a bit more towards your new home!

Get a good credit history!

A lender will always look at your credit history first. They ideally want to see that people who have borrowed credit such as credit cards, and loans, have a history of paying on time. This signals that the individual is a responsible borrower and therefore less of a risk.

If you have never had any credit your chances of securing a mortgage could be challenging but not impossible. Records of paying rent, bills, student loans, or mobile phone bills could be put forward as evidence to show a potential lender that you have a good track record of paying bills on regularly and on time.

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Check your credit!

Your credit score can be the deal breaker when it comes to getting accepted for a mortgage. A low credit score can affect how much you will be able to lend as well as the interest rates you are given. Even just a few percentage points difference on an interest rate can end up costing you thousands over the length of the loan. Keep a close eye on your score, make sure you do everything you can to improve it, or keep it in the green, including watching for any fraudulent activity on your account. If you are unsure of your score sign up to a score reporter such as Experian or Credit Karma who can give you a good over view of any issues affecting your score.

Avoid splashing out!

You really want to avoid taking on any large debts such as buying a new car just before buying a house. Even if you have been pre-approved already for a mortgage it is advised to avoid any large purchases. Your debt-to-income ratio can significantly affect how much money a lender is willing to give you. If you keep your debts to a minimum it will help make buying a home go a lot smoother.

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Having a good financial resume will really help improve your chances of getting that new home you want! Ensure you go over it with a fine tooth comb, and clean any issues up first. Then look at the options available to you for buying a new home.

There are plenty online tools out there that you can take advantage of to help you such as an affordability calculator  or credit score agencies such as Experian or Credit Karma.

For any further tips or advice pop to our blog:

http://www.greenstone-design.co.uk/blog

 

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Michelle Gaffaney
Michelle Gaffaney - Architectural Director
With a wealth of experience working on a range of projects, Michelle Gaffaney has a passion for design and strong relationships with her clients. Connect with Michelle on LinkedIn