We use cookies to enhance your browsing experience and deliver our services. By continuing to visit this site, you agree to our use of cookies.More info
Park Group Real EstatePark Group Real EstatePark Group Real EstatePark Group Real Estate
909-696-6540Call Us:
Start the Process

Buyers

  • Buy With Us
  • See Our Featured Listings
  • Search For Homes
  • Calculate Your Mortgage Payment

About Us

  • Meet the Team
  • See How We Market Your Home
  • Watch Our Success Stories
  • Join Our Team

Sellers

  • Sell With Us
  • Get Your Home's Value
  • View Recent Home Sales
  • Concierge

Resources

  • Meet Your Digital Mayor
  • Read Our Blog
  • Areas We Serve

14589 Ramona Ave, Chino, CA 91710

909-696-6540[email protected]
  • Park Group Real Estate
  • December 23rd, 2022

5 New Year’s Resolutions for First-Time Homebuyers

Featured Image

 

2023 is around the corner, and everyone is setting goals and writing out their resolutions. Do your goals include buying a home for the first time? If so, you probably already know there are some steps you have to take to get there. You’re probably aware that you need to qualify for a mortgage, hire a real estate agent, and of course, find the perfect home.

For first-time homebuyers, that first step can be the most difficult. Especially with higher interest rates driving monthly payments up, many first-time buyers are struggling with affordability. Mortgage requirements can be tough to meet, so if your 2023 goals include buying a home for the first time, we suggest you make the following 5 resolutions.

 

Resolution #1: Work on Your Credit Score

Your credit score can significantly affect how much you'll pay for your home, the amount you must put down up front, and whether you'll qualify for a mortgage. A conventional loan requires a minimum credit score of 620, while a USDA loan might require a score of 640. A score of 580 can get you an FHA loan at 3.5 percent down, but a lower score could force you to make a downpayment of 10 percent or more.

You can raise your credit score by paying down debt, making monthly payments on time, and not opening new credit accounts or closing current ones. You also want to avoid applying for anything that requires a credit check (also known as a “hard inquiry” or “hard pull”) that damages your credit score.

Do you check your own credit score frequently? Don’t worry! Checking your credit report through a credit bureau or tracking your score as it’s provided for you by a creditor is considered a “soft pull” and won’t damage your credit score. It’s actually a good habit to keep your eye on your credit to make sure everything on there is accurate and so you know what progress you’re making toward mortgage qualification.

 

Resolution #2:  Pay Down Debt

Your debt amount doesn't just play a pivotal role in your credit score; it also impacts the size of the mortgage loan you can obtain. Lenders want to see a debt-to-income ratio of 43 percent or lower, with 50 percent or higher disqualifying you for loans with more attractive interest rates. To make the debt reduction process less intimidating, focus on one credit card or loan at a time while continuing to make your minimum payments on other cards or loans.

Which debts should you pay off first? That depends on your strategy. The most tried-and-true method is to pay off the ones with the highest interest rates first (again, while continuing to make minimum payments on other debts). Store credit cards usually have the highest interest rates, followed by credit cards, personal loans, and other installment loans like auto and student loans. Check your cardholder agreement or loan terms for the most accurate information.

 

Resolution #3:  Save for Your Downpayment

Any list of first-time home buyer tips should include saving for a downpayment. Once you've improved your credit score by reducing your debt, you can focus on gathering the necessary funds for this crucial step. Downpayments can range from a mere three percent for first-time homebuyers to over 20 percent of the home's value. The more you can put down, the better your debt-to-value ratio—and the lower your monthly payment will be. 

Another bonus of paying more up front? A downpayment of less than 20 percent might require you to purchase private mortgage insurance. If you can pay more now, you’ll save more in the long run on interest and mortgage insurance.

How can you save for a downpayment when you likely have to pay rent at the same time? Besides the common saving tips like budgeting, cooking at home, and spending less on non-necessities, you should also look for first-time homebuying resources in your area. Many states, counties, and even cities have programs that provide forgivable loans and grants for first-time buyers to use as downpayment assistance.

Still in doubt? Chat with our trusted lender partners who we work closely with in-house. If you let us know more about your unique situation, we will work together as a team to guide you on the right path toward reaching your goals.

 

Resolution #4: Avoid Large Purchases

If you’re trying to buy a home for the first time, you’ll want to steer clear of large purchases in the meantime. You’ll need as much money as possible for that downpayment, and spending it on a vacation, new car, jewelry, or another nonessential item only sabotages your effort. Making those purchases with a loan or credit card can prove especially problematic. You can't raise your credit score and lower debt while adding new debt to the ledger.

 

Resolution #5: Avoid Starting a New Job

New Year's resolutions typically include significant lifestyle improvements, including a career change or a new job. You might assume that a better position at a higher salary would make you look more attractive to mortgage lenders. However, lenders require applicants to maintain their current job for a minimum period to indicate their financial stability. Conventional, FHA, and VA loans require at least two years in your current job.

What can you do if you must switch jobs while buying a house in 2023? You can mitigate the potential damage to your loan prospects by remaining in the same industry. You can also submit proof of a four-year degree in a related field or a convincing letter explaining your job change.

If you’re like most first-time buyers, the home-buying process can seem intimidating… But it doesn’t have to be

Here at Park Group Real Estate, our team is there with you every step of the way. Not only are we a full-time team of local real estate professionals, but we also work closely with our trusted lender partners to provide you with unmatched full service. Schedule a no-obligation chat today with a team you can trust!

Don’t face the challenge by yourself.
Let us take the burden off your shoulders. Call 909-696-6540 to connect with us!

 

About the author

Park Group Real Estate

909-696-6540
[email protected]
Author Photo

Similar posts like this

House Hunting

11 Pool Homes to Keep You Cool This Summer

Read more
Local Insights

Top 10 Local Events to Enjoy This Fourth of July

Read more
Success Stories

How Kelly Sold Her Home for $163K More Than the Zestimate in Just 6 Days

Read more
Park Group Real Estate
Join Our Email List:

*We respect your inbox. We only send interesting and relevant emails.

Socials

Park Group Real Estate

  • Sell With Us
  • Buy With Us
  • Search for Homes
  • Our Marketing
  • Success Stories
  • Read Our Blog
  • About Us
  • Get Your Home's Value
  • Areas We Serve
  • Concierge
Contact
909-696-6540
[email protected]

Park Group Real Estate | CA DRE# 02071979

4740 Green River Rd #207, Corona, CA 92878

© 2025 Park Group Real Estate | CA DRE# 02071979, all rights reserved

Privacy Policy
Powered by