If you’ve decided that 2016 is the year for you to become a homeowner, or even if you’re just considering it, this article from HousingWire offers some advice on how to improve your financial situation and save for a down payment.
New Year’s resolutions to improve your finances should be goals that are specific and measurable. For example, debt-to-income ratio is a huge deciding factor on credit scores and it’s one of the first things that lenders look at when putting your mortgage together. Lenders want to know how much debt borrowers have already accumulated compared against their income. The more debt the borrower has, the less of a loan they will be able to get.
Resolution: Pay off $150 of debt each month, or $1,800 over the year. A vague resolution to pay off debt won’t get you anywhere. Instead, resolve to pay off a specific amount of debt per month, or a specific amount of debt over the course of the year. Just be sure that your goal includes a dollar amount and an end date.
Resolution: Rather than spend less money, cut $50 per month off the grocery bill. The first resolution is admirable, but too vague to be meaningful. Spending less money is great, but how much less should you be spending? Where should you cut spending? The second resolution answers those questions and gives you a monthly measuring stick to see if you’re meeting your goal.
