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by Robert DeFalco
on Saturday, December 31st, 2016 at 3:29pm.
Is one of your 2017 resolutions to buy a home?
Even if you’re months away from hiring an agent and touring homes, there are things you need to do now to make that dream happen. After all, this is a huge purchase and it requires some preparation. Getting the building blocks in place will ensure a seamless transition from renting to buying, both financially and mentally.
What habits do you need to think about this far in advance? Quite a few, actually. We recently shared some bad habits you should break, and now we'll share some GOOD habits (via Realtor.com) that you should pick up as soon as possible!
Set Your Savings to AutoPilot
The recommended amount for a down payment is 20 percent of the purchase price. That can be a lot of money to come up with, and a sore temptation to skip on if you hit a tight spot. You really can't start too early or save too much.
Yet one practically painless way to get started is to automate your checking account to regularly set aside a small amount of your paycheck into a separate savings account dubbed your “house fund.”
And once it's in a designated account, don't touch it! Just pretend it doesn't exist, and anything you can't buy without tapping in is something you'll have to do without for now.
Build - and Protect - Your Credit
A lender will want to see that you pay off debts, so make timely payments on any outstanding credit accounts you have while resisting the urge to open any new lines of credit.
But don’t steer clear of credit altogether. If you’ve never had a credit card or a bank loan, you won’t have a credit history. Once you have credit established, keep it pristine. Pay all your bills on time—this cannot be overemphasized.
Your income won't matter if your debts are past due. But don't close accounts either. Just concentrate on paying them down and doing so on time.
Learn to Budget
You'll have to look into your local rates to see whether ownership will cost you more than renting. You know the down payment is going to put a clinch on finances, but your monthly expenses may go up as well. Start living on less.
Downsizing your budget early also means you’ll be able to save more for your down payment, pay down debt, or save for furniture for your new home.
There's an additional perk... If you find you actually can live on less than you've budgeted, the remainder will seem like found money. You can roll it over into upgrades or other purchases.
Get Hands On
If you've never thought of yourself as "handy", you'll have to start.
One of the big perks of renting is that any problems around the home—leaky faucets, broken boiler—are your landlord’s responsibility to repair. But once you own, you should probably know how to roll up your sleeves and fix it yourself if you don’t want to shell out for a handyman every time something goes wrong.
Fortunately, technology has provided us with YouTube (which has lots of useful how-to's) as well as several book series marketed for "dummies". Save yourself time, money and frustration by learning some new skills!
Finally, it's a good idea to learn your local housing market. (Or your target market, if you're looking to relocate.)
“It’s a good habit to start browsing homes online to get a sense of what is available in your price range and the neighborhoods and amenities you’ll realistically be able to afford,” he says. “This can help avoid disappointment when it comes time to really look.”
Start getting into good habits NOW, for a more positive home buying experience for 2017!