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5 New Year’s Resolutions for Home Buyers from a Closing Attorney

We’ve all made New Year’s resolutions that we’ve struggled to keep in the past. But if you’re thinking of buying a home in 2019, there are a few resolutions (as a closing attorney, I’ve seen my share of mistakes and successes) that will help you secure a loan with a lower interest rate and make the whole process go smoothly…as long as you keep them.

Make 2019 the year you move into your new house with the help of these five New Year’s resolutions.

Check Your Credit

It’s important to check the health of your credit score before planning to buy a home. Your credit score can significantly impact how much a lender is willing to loan you, not to mention the interest rate you can get. To illustrate the effect that your interest rate cab have on your finances, a few percentage points can cost you thousands of dollars over the life of your loan.

It’s not just your decisions that can affect your credit score, either. If someone steals your identity and takes out credit in your name, you could be looking at years before you can get it back to a good level. Monitor your credit score closely before applying for a loan.

Build Your Credit

Once you know what your credit score is, you can then start to build it, if necessary. Lenders like to see that you are able to pay off debt on time because that means less risk for them.

Avoid Large Purchases

As a closing attorney, I’ve advised many people about what to do and what not to do before closing on a home. Taking on new debt falls in the “what not to do” category. Why? Because it affects your debt-to-income ratio. Not only can making large purchases keep you from securing a loan—it can hurt you even if you’ve already been approved.

Think of it this way. If you were lending a friend some money for their essential needs, how would you feel if they went and bought a brand new car? It wouldn’t instill confidence that you were going to be repaid, would it?

Reconsider Taking a New Job, for Now

When you’re a closing attorney, you know that two of the biggest things that lenders consider when evaluating your mortgage application are your income and your employment history. While switching jobs this year might make sense for your career, it can signal to an underwriter that you take risks, which may affect whether you get approved for a loan.

An ideal candidate for a loan has a steady job history with few (preferably no) gaps. Continual employment helps lenders more easily forecast your income, so consider holding off the job search until after you are approved.

Hire a Closing Attorney

Many people don’t realize that they can and should hire an attorney to help them take care of the final stages of buying a home. If you have any questions about closing on your new home, don’t hesitate to contact me. I’ll sit down with you to discuss your concerns so that we can get you the best outcome.

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