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There are plenty of good reasons for wanting to own a home, including the chance to build equity in a property and achieve the financial stability that comes with it. If you’re hoping to own a home before the end of 2021, here are four steps you can take.
1. Choose side work to increase your cash reserves
Real estate values today are higher than ever. In July, house prices increased 19.7% vs. prior year, based on the S&P CoreLogic Case-Shiller Index.
To sell a more expensive house, you may need to increase your cash reserves to get a higher price. advance payment. And getting a second job temporarily could be your ticket to doing so. You can choose from many flexible side pushes these days, so do some research to see which gig is right for you.
2. Check your credit report for errors
You may have incorrect information about your credit report it works against you. Correcting mistakes, like past due debts that were never yours, could help improve your credit score.
One of the most important factors mortgage lenders When deciding whether or not to approve yourself for a home loan, take a look at your credit score. Your credit score indicates how financially responsible you are, so correcting credit report errors could help your score increase. A recent Consumer Reports survey estimated that 34% of consumers found a credit report error. So don’t assume that your credit report is correct.
3. Fight for a raise at work
If you’ve recently taken on more responsibilities at work, or your pay hasn’t been raised for a while, maybe now is the time to sit down with your boss and talk about your paycheck. Not only will getting a raise will help you pay for a home better, the higher your income, the more likely you are to qualify for the mortgage you need to buy one.
4. Pay off certain debts
Another important factor in getting approved for a mortgage is your debt to income ratio. This ratio measures the amount of your debt compared to your income, and the higher it is, the more it can prevent you from qualifying for a mortgage.
If you are in debt, now might be a good time to try to pay off some of it and reduce that ratio. By the way, if you land a side job or manage to negotiate a raise at work, it will help you find the money you need for pay off a loan or credit card balance.
Buying a home is a big business in general, and this year it’s not an easy thing to do. With property values being so high, you may need a larger mortgage to buy a home. So it’s worth doing what you can to increase your chances of qualifying for one. These steps could not only help you become a better mortgage candidate, but also put you in a stronger position to manage the many expenses associated with homeownership.
A historic opportunity to potentially save thousands on your mortgage
There is a good chance that interest rates will not stay at decades-long lows any longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger to buy a new home.
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