If one of your goals for 2020 is to buy a home, here are 5 resolutions that will improve your financial picture and put you on the path to homeownership.

1. Avoid Changes in Employment

Employment history is one of the major factors considered when lenders review your application, as it is used to forecast future income.  Two or more years of steady income at the same employer are ideal, so try to avoid job hopping before purchasing a new home.

If you must make a career move, this isn’t always a deal breaker; Just be sure to consult with your lender. Sometimes a job change can actually help your application if your income will increase or become more steady.

2. Repair Credit

Your credit score is basically a barometer of your financial health. It indicates your ability to pay bills on time and the likelihood of you paying back your home loan. Lower credit scores can result in higher interest rates or require a higher down payment.

If your credit score has room for improvement, there may be some changes you can make over the next few months that can significantly increase your credit score in a short amount of time.

Pay All Bills on Time – There are several factors that contribute to your credit score and payment history holds the most weight, making up 35% of your credit score.

Reduce Credit Card Balances –  Right behind payment history comes credit card utilization at 30%.  Try to pay down all cards as much as possible. Do not cancel cards with low balances as this will actual hurt your credit utilization.

Address Errors or Delinquent Accounts – Check your credit report for any derogatory marks and address them right away. Remember it may take some time for your score to increase after you resolve the issue.

Consult with a mortgage lender in Oakland County to learn which items to prioritize to increase your score as quickly as possible.

Read More: Improving and Maintaining Your Credit Score for a Michigan Home Loan

3. Avoid New Loans or Lines of Credit

The last thing you want to do is apply for new loans or credit cards before buying a home. First, applying for a loan will result in a hard inquiry on your credit report which will lower your credit score.

Also, acquiring new debt will lower your debt-to-income (DTI) – another factor lenders use to assess your financial situation.

4. Avoid Large Purchases

Are you excited to buy some furniture for your new home?  Or maybe some appliances? The best thing to do is to wait until after you close on your loan.

Putting a new purchase on your card will decrease your DTI and increase credit card utilization. Even if you use cash for the purchase, you will be decreasing cash reserves, which can affect how much money a lender is willing to loan you.

5. Set a Savings Goal

Thanks to FHA loans and other down payment assistance programs, homebuyers are no longer required to save a 20% down payment. Even a conventional loan only requires 3% for first time buyers. This can make your savings goal much more attainable and less daunting.

Start setting aside money now for your down payment and closing costs. You should also save money for emergencies and home repairs.

Are there any subscriptions that you can cancel or other small adjustments you can make to expedite your savings? Remember, every little bit counts!

Read More: Mortgage Lender in Rochester, MI Gives Tips for Saving Money

Contact a Mortgage Lender in Oakland County

Julie Krumholz is an Oakland County lender who has been helping Michigan homebuyers for over 30 years. She has several loan programs available for various financial situations and brings a wealth of experience to her clients.

Call Julie from Main Street Bank at: 586-382-5482