New Year, New Home? Set Home-ownership Goals Whether You’re Buying, Selling, or Staying Put
The start of a new year always compels people to take a fresh look at their goals, from health and career to relationships and finance. But with historically low mortgage rates, increased home sales and price growth, and a tight housing inventory, the time is right to also make some home-ownership resolutions for 2021. And as January comes to a close we want to make sure your goals are ready to go.
Home buyers, is this the year you work to improve your credit score, pay down some debt, or save for a down payment? Check out our Resolutions for Home Buyers below.
Home sellers, we have laid out plans for you to get top dollar for your property. Timing your home sale, making your property stand out from the crowd, and investing in your extra living space. Check out our Resolutions for Home Sellers below.
Homeowners, even if you’re staying put for awhile, you can resolve to improve your status quo by evaluating your home budget, finalizing your home maintenance schedule, or maybe investing in a second property. Check out our Resolutions for Homeowners below.
So, no matter your home-ownership status, we’ve got some ideas and advice for you to make this year your best one yet. Read on to learn more.
Resolutions for Home Buyers
- Qualify for a better mortgage with a higher credit score.
- Improve your credit health by paying down debt.
- Create a financial safety net before applying for a mortgage.
Resolution #1: Qualify for a better mortgage with a higher credit score.
Your credit report highlights your current debt, bill-paying history, and other key financial information. Importantly for your home-buying journey, it is also used by lenders and companies to calculate your credit score, which partly determines if you are qualified to obtain a mortgage. Therefore, before you start house-hunting, make sure your finances are in the best possible shape by checking your credit report from Equifax, Experian, and TransUnion (via AnnualCreditReport.com). You can also obtain your credit score for free from some banks and credit card companies.
Your credit score will be a number ranging from 300-850. Generally speaking, a credit score of 740 or higher is considered very good to excellent. If your FICO score drops below 740, you might need to work at boosting your score for a few months before you begin house-hunting. Ways to do this are to pay your bills on time every month, keep your credit card balances low, and avoid applying for new credit.
Resolution #2: Improve your credit health by paying down debt.
Do you have student loans, credit card debt, or car payments tying up your income each month? That debt is hurting your “buying power,” or the amount of home you can afford. Not only is it money that you can’t spend on your new home, but your debt-to-income ratio also affects your credit score, which we discussed above. The less debt you have, the higher your FICO score and the better mortgage you can obtain.
If you can, pay off some debt in its entirety – like a low balance on a credit card. Then apply that “extra” money you previously paid on that credit card to pay off bigger debt, like a car loan. Even if you can’t pay off all (or any) of your debt in full, reducing the balances of each account will help you qualify for the best possible mortgage terms.
Resolution #3: Create a financial safety net before applying for a mortgage.
Don’t forget that buying a home requires some cash as well. A typical down payment can range from 3-20% a home’s purchase price. In addition to the down payment you will need to pay for closing costs which are typically 5-6% of the purchase price. Some loan products allow for you as the buyer to ask for closing cost assistance to help cover some of these costs, but keep in mind as our market stays strong and most homes see multiple offers, the less assistance you need the better qualified your offer is.
You’ll also need money for moving expenses and any initial maintenance tasks that might pop up. And as the pandemic taught us, you never know when an unforeseen event might cause a job loss, drop in income, or health scare, so having some liquid savings will ensure that you can still pay your mortgage if a crisis occurs.
Dedicate some effort to building up your reserves. Cut down on unnecessary expenses, and consider having a portion of each paycheck automatically deposited into your savings account to avoid the temptation to spend it.
As local market experts, we have the knowledge, experience, and networks to help you achieve your home-ownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year. You can schedule a meeting right on our calendar or call us at 717-450-7090.
Resolutions for Home Sellers
- Decide on the right time to sell your home.
- Boost your home’s resale value by making your property shine.
- Invest in your “extra” living space to meet current buyers’ needs.
Resolution #4: Decide on the right time to sell your home.
If you’re looking to maximize profit on the sale of your home, selling earlier in the year makes sense. Listing prices historically increase early in the year, peak in May, plateau through June, and decrease for the remainder of the year. And, according to the National Association of Realtors, “with both mortgage rates and the number of homes available for sale expected to remain relatively low, home prices are likely to continue to increase. In mid-January, home prices typically begin a quick ramp-up in a normal year.”
But sales price isn’t the only thing to consider. You might not be ready to sell your home yet because you don’t want to uproot your kids during the school year or because you need to tackle some minor upgrades before placing your home on the market.
This means that there is no one month or season that is the perfect time to sell your home. Instead, the right timeline for you takes into account factors such as when you’ll earn the highest profit, personal convenience, and whether your home is even ready to put on the market. We can help talk you through your specific needs to clarify when to sell your home. Click here to find out the current value of your home.
Resolution #5: Boost your home’s resale value by making your property shine.
Housing inventory is at historic lows across the country, and with limited inventory your home is likely to get a lot of attention. Selling your home in 2021 has the potential to net you a huge return right now, and you can maximize that amount with some simple fixes to encourage multiple and high priced offers.
You might consider a quick refresh of your homes flooring or paint. Outside, you might consider improving your curb appeal by removing a dead bush, trimming a tree that blocks the front window, or power-washing your moldy driveway and sidewalks.
Part of the Emmily Longenecker Team’s listing process is to do a walk-through of your home and make any recommendations of quick fixes that can result in a higher price for your home.
Resolution #6: Invest in your “extra” living space to meet current buyers’ needs.
Due to COVID-19, more people are staying at home to work, go to school, exercise, and stay entertained. And these lifestyle changes are showing up in home buyer preferences. For example, buyers are looking more and more for homes with formal, outfitted home offices, private outdoor spaces, and updated kitchen appliances.
So, if you’ve got an underutilized room, consider turning it into an office, home gym, schoolroom, or multi-purpose room to meet current home buyer needs and attract better offers on your home. Got some underwhelming space outside? You could turn it into an outdoor entertainment area by adding a fire pit, upgrading the patio furniture, or installing a grilling area.
As local market experts, we have the knowledge, experience, and networks to help you achieve your home-ownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year. You can schedule a meeting right on our calendar or call us at 717-450-7090.
Resolutions for Homeowners
- Evaluate your household budget to reflect financial changes.
- Save money now (and earn more later) with a home maintenance plan.
- Invest in real estate for a better standard of living.
Resolution #7: Evaluate your household budget to reflect financial changes.
After this past year, in particular, your financial picture may have changed. Maybe you were furloughed, had your hours reduced, or got a new job further from home. Perhaps you’ve kept the same job, but you’re now working remotely. A work-from-home arrangement could mean less money spent on gas, tolls, a professional wardrobe, and dining out for lunch.
But this could also mean new (or increased) expenses now that you’re working at home, such as new tech-related purchases, faster Wi-Fi, and higher energy bills. January marks the perfect opportunity to update your income and expenses and review last year’s spending habits, tweaking as needed for 2021.
Resolution #8: Save money now (and earn more later) with a home maintenance plan.
Having a schedule of regular home maintenance projects to tackle will save you money now and in the long-term. You’ll avoid some surprise “emergency fixes,” and when you’re ready to eventually sell your home, you’ll get higher offers from buyers who aren’t put off by overdue repairs.
Even if nothing necessarily needs fixing right now, you can lower your energy costs by maintaining and upgrading your home. According to the U.S. Department of Energy, simple fixes add up: replace five most frequently used bulbs with ENERGY STAR ones to save $75/year; repair leaky faucets to save $35/year; replace older toilets with low-flow models to save $100/year; and seal air leaks to save $83-$166/year.
Check out our monthly home maintenance blogs for ideas on what to do to keep you home in tip top shape.
Resolution #9: Invest in real estate for a better standard of living.
Even if you don’t plan on leaving your current residence, real estate is a great way to improve your quality of life in 2021.
Have cabin fever from the long quarantine? A vacation home in a getaway location you love lets you safely spread your wings. And if you have been looking for a second stream of income, an investment property might be your answer. Just be sure to consult with a real estate professional to get a realistic sense of a property’s true income potential.
Without a plan and a support system, 55% of Americans will break their new year’s resolutions. Whether you’re looking to buy, sell, or stay put in your home, it helps to connect with a trusted real estate agent to keep you motivated and on track.
LET US HELP YOU WITH YOUR 2021 GOALS
As local market experts, we have the knowledge, experience, and networks to help you achieve your home-ownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year. You can schedule a meeting right on our calendar or call us at 717-450-7090.