Is buying your first home one of your goals in 2023? This exciting milestone requires the right preparation. Even with shifting market conditions that are out of your control, there are some things you can do this year to set yourself up for success as a homebuyer this year.3 Things to Do in the New Year to Prepare to Buy Your First Home

Do you have questions about finding homes for sale in the Carson City or Lake Tahoe areas? We can help. Contact us any time to learn more.

Keep reading for 3 things to do in the new year to prepare for your first home purchase.

1. Boost your credit score

When you apply for a mortgage, the higher your credit score the better your rate and terms will be. Any credit score above 620 is usually going to be high enough for help you qualify for a mortgage, but the higher you can get your score, the better.

Your credit score is determined by a variety of factors, all designed to show lenders how well you handle debt. Credit bureaus look at how long you've had debt, your payment history, your utilization rate (the percentage of your credit limit that you carry as a balance on your account), the types of credit you're using, and how much debt you have.

Get familiar with the factors that make up your credit score and take action to raise your score as high as possible before applying for your mortgage. Any changes you make will take time to be reflected on your score, so the earlier you get to work, the better.

Of course paying down your debts is a great way to boost your score, but there are also some things you can do without paying a penny more. These include:

  • Setting up automatic payments to eliminate the possibility of forgetting a payment. Late debt payments not only cost you money in late fees and additional interest, but they affect your credit score. Set up automatic payments, even for the minimum payment, to protect yourself from this possibility.
  • Ask for an increase in your credit limit. This is one of the easiest ways to change your utilization rate in your favor. For example, let's say you are carrying a $1,000 balance on a credit card with a $2,000 limit. In this case, you would have a 50% utilization rate. If your credit card company will raise your credit limit to $5,000, your utilization rate just went down to 20% without you paying a dime more than you planned.
  • Dispute any errors you see on your credit report. This will take time, and may require you to spend hours on the phone, but could be one of the best things you ever do for your credit score.

2. Automate your savings goals

One of the best ways to prepare for buying your first home is to boost your cash reserves. Not only will this help you pay for your home and qualify for a mortgage, but it can also allow you to present yourself as a buyer with a strong financial footing that leads a seller to choose you over a competing offer.

Avoid the temptation to divert money you planned to save for the house to other things by automating your goals. Have your bank automatically move the money you plan to save into a different account when your paycheck hits your account, allowing you to reach your savings goals more efficiently and avoid the temptation to spend what you planned to save.

3. Surround yourself with the right team of professionals

Buying your first home is a multifaceted process that can be stressful. It is absolutely crucial to have the right team of professionals on your side, providing insight, advice, and help all along the way. The best team will include both your real estate and mortgage lender teams. To learn more about how we can help you reach your real estate goals this year, contact us any time!