The New Year is a wonderful time to start fresh and reprioritize your goals for the future. Helping you get to where you want to go in simple, actionable ways if done right, New Year’s Resolutions don’t have to be confined to improving your diet, going to the gym more often, or cutting out bad habits. They can extend into any aspect of your life that you choose, including your dreams for your home. Whether you are a homeowner looking to move into a new home or a renter aspiring to buy, here is our definitive list of real estate resolutions perfect for a fruitful 2022.

Track Your Finances

The best way to start your year off right with a simple real estate resolution is to take a hard look at your finances to identify opportunities for improvement. This means understanding how you spend your money, creating a budget, or reevaluating the one you currently have and paying attention to your credit score. 

When reviewing your finances, you want to make note of where most of your paycheck goes (rent, food, entertainment, shopping, etc.) and decide if there are areas where you can learn to be more frugal. Often non-essential spending like shopping, entertainment, or eating out, for example, can be cut down. 

Everyone’s budget will look different, depending on your income level, where you are living, and your lifestyle. However, as a general rule of thumb, experts agree that you should strive to spend 30% of your income or less on rent or your mortgage each month. Another common hack for budgeting is called the 50/30/20 rule, which refers to 50% of your income going to essentials, 30% of your income going to non-essentials (wants), and 20% of your income going to savings or any debt payments you may have. You can easily work your rent or mortgage payments into the 50% of your income that comprises essentials. 

There are many ways to create a budget, either in Excel by hand, with budget templates found online, or with another budgeting application. Once you have selected a budgeting tool or method, be sure to factor in recurring expenses like your car payment, student loan payments, or car insurance to the budget you create. Above all, try and be realistic when budgeting so you avoid being too stringent with yourself and ultimately breaking your budget.

Understand Your Credit Score

Knowing your credit score, especially when it comes to your real estate goals, goes a long way in understanding your financial situation, since mortgage lenders take a close look at your score when you apply for a loan. Many online services will give you your credit score for free without hurting your credit or compromising your security. Credit scores are based on your payment history, the amount you owe, the length of your credit history, the total credit accounts, derogatory remarks, and credit inquiries. 

Once you have your score, you need to interpret and apply your observations. Credit scores of 740 or above are considered very good, whereas credit scores under 579 are considered poor. If you want to improve your credit, you can do so by staying on top of your payments, paying past-due bills, keeping your credit card utilization on the lower side, and having several credit accounts open and active.

Save for a down payment and closing costs

Saving money for a down payment and closing costs becomes much easier once you have first completed the real estate resolution of reviewing your finances and credit to make a plan. Despite what most people think, you don’t need 20% for a down payment. However, if you want to avoid taking out loans, saving up 20% of the ballpark price of the type of home you intend to buy may be the smartest move for you. You can go about doing so in a variety of ways, from lowering monthly expenses to minimizing debt or taking on a side hustle. 

To figure out how you can lower your expenses each month, you can look back to your spending history for non-essential areas where you tend to overspend. For many people, this means eating out frequently or mindlessly shopping. For example, you may decide to cook at home during the weekdays instead of buying a lunch every day to cut down on your restaurant spending. 

If you want to minimize your debt (if any) consider paying higher than the minimum amount on any loans you may have for a short period of time in order to pay off these debts faster and lower the principal of your balance. 

Remember that every little bit you put into your savings account adds up. If you can put 20% of your income aside every month into savings that’s great, but if you can’t, put aside a percentage that is feasible for you and don’t touch it once it hits your savings account. Before you know it, you will be well on your way to buying the home you want!

Declutter your life

While preparing to house hunt, consider decluttering where you let go of things in your home that no longer serve you. Whether you are planning on moving to a bigger place, finding a place with similar size constraints, or downsizing, decluttering your living space can be cleansing and cathartic as you go into a new chapter of your life. It allows you to make room for new furniture, clothes, and other household items and helps you avoid doing extra work for yourself during the moving process. Plus, you can sell any items you want to get rid of that are in good condition online for some extra moving money.

Find an agent you trust

Once you have saved up an amount you are comfortable with for a downpayment, it’s time to find an expert real estate agent to help you in your search. Be sure to do your research and due diligence when selecting an agent to work with. Most real estate agents don’t last more than a year in the industry and inexperienced agents who use your financial future as a learning opportunity can cost you valuable time and money. 

Opt instead for an agent who has had extensive training and has marketing support to back them up. Agents on the Keri Shull Team, for example, undergo some of the best training and have the support of an entire team of knowledgeable experts to help them serve clients exceptionally well. 

If you follow all of these easy real estate resolutions, they will propel you one step closer to a successful year in your dream home. Unsure where to start when it comes to finding a mortgage that works well for you? Check out our how-to guide to finding the right loan.

Interested in working with a home-buying expert from the Keri Shull Team? Our agents can help you understand how much home you can afford, get you pre-approved for a loan, and much more. Book a free initial consultation with us today and learn how we can help you get the best deal possible on your dream home, whether you are a first-time or established buyer!