Three of the most common New Year’s resolutions include:
- Getting in shape
- Getting a new job
- Finding a new place to live
As we slide into the middle of January, many of our New Year’s resolutions to eat better and work out more may already be falling by the wayside, but if you were one of the many people who woke up on January 1, 2014, with a desire to make any kind of change to your real estate situation this year, here are five key resolutions any buyer or seller needs to make — and stick to all year!
1. Determine how much house you can really afford
This is a resolution you should make this year (and any year). Determine how much house you can really afford and stick to your price point. Trying to buy the most house you can with the least amount of money is so 2007! People who did this six years ago were really stuck when the bubble burst. Underwater homes, foreclosures, short sales — you name it. We all “want it all” when it comes to size, amenities, location, etc., but remember that your eyes may be bigger than your wallet. Even in today’s new market with tighter lending restrictions, just because a bank or lender is willing to lend you the money to buy a house, that does not mean you can afford it! You have to be realistic, do your homework first, and buy within your means.
2. Save money for a 20% down payment
When you buy a new home, you should always put down 20%. Especially now more than ever, with the new mortgage regulations being rolled out. (Click here for more info on the new rules.) Before the housing market downturn, people were getting accustomed to buying a home with little to no down payment if they qualified for a full-price loan, and now that things are starting to look up, it’s time to reiterate how important the 20% rule really is. With 20% down, you’ll have a smaller monthly mortgage payment and a lower interest rate, which will save you thousands (if not tens of thousands) over the life of the loan.
3. Stop deferring maintenance — make small improvements now!
Tackle that “honey-do” list ASAP! Whether you’re looking to sell this year or five years from now, making small improvements to your home in 2014 will pay you back in spades. If you’re looking to sell soon, having your home shipshape will only make it more attractive to buyers and help you get top dollar. Small things like scuffed walls, dirty carpets, outdated appliances, and overgrown landscaping are often magnified in the eyes of potential homebuyers and can chip away at the equity you’ve worked so hard to build in your home. Make these small improvements now and you’ll be golden when the “For Sale” sign goes up out front. Not quite ready to sell? Well, if you make these small improvements this year, you’re saving yourself the headache and high costs that deferred maintenance wreaks on homeowners. Keeping up with the to-do list ensures that when you’re finally ready to sell, you can move quickly.
4. Examine your mortgage — and refinance ASAP!
If you haven’t yet “refi”-ed, now would be a great time. Rates are at historical lows and likely won’t stay that way for long. If you have an adjustable, a teaser, or an interest-only loan — or if your interest rate is over 5.5% — this may be your last window to get a better fixed interest rate. Make it happen!
5. Tackle your credit and pay down revolving debt
Get your credit in tiptop shape by closely reviewing your FICO score and fixing any errors. Good credit opens the door to success, and bad credit will close it. With so many tighter restrictions on lending and mortgages in 2014, your credit and scores must be as close to perfect as possible. If you want to get on that road to immaculate credit immediately, make 2014 the year you start to fortify your score by paying down your revolving debt and resolve to take on less credit debt by curbing any excessive spending.
