2019 is quickly coming to a close, and it’s the time of the year to reflect and create goals for the new year. If purchasing your dream home is one of your goals this 2020, here are some New Year’s Resolutions you can implement into your lifestyle to keep your financial resume in tiptop shape and prepare you for your dream home.

^{Avoid Changing Careers}

Employment history, alongside income, will be a major factor during your mortgage application evaluation. While a new job could be a good career move, most evaluators are looking for a steady job history with little to no gaps in your employment over the last few years.

Focus on Building Your Credit

--- Check Your Credit Score

Your Credit Score determines your creditworthiness; which banks and lenders use to determine if you qualify for a loan, at what interest rate, and what credit limit. 

Be sure to monitor your credit closely. If you’re unsure of your credit score, there are numerous financial websites that offer credit score monitoring. Plus, most of these credit sites will tell you what impacts your credit most. Be wiser this coming new year and change your spending habits. If you have large debts negatively impacting your credit, get started on a payoff plan so your score can improve.

--- Build A Solid Credit History

The first thing that a lender will check is your credit history.  Create a solid credit history by paying off debts and paying bills on time. Borrowers who have a history of paying off credit cards and other debts on time are preferred by lenders; as this signifies that you are less of a risk and a responsible borrower.

No credit yet? Don’t be disheartened. Securing a home loan can be more challenging and time-consuming, but not impossible. Your potential lender can look into your history of managing monthly payments and gauge if you are a responsible borrower through your on-time payment of rent and utilities, student loan debt or cell phone bills.

Cut Down Expenses. Create a Budget and Stick to it. 

Is there a monthly expense you can possibly cut down? The monthly subscriptions that you don’t actually use for example? How about limiting dining out and only buying things that are necessary?

--- Cut Down on Monthly Subscriptions

Although convenient, monthly subscription services can add up and you could be dinged for high credit utilization if your credit report is pulled midcycle even if you pay off your credit card every month.

Limit your monthly subscription services to those you ACTUALLY NEED.  Do you really need a cable subscription these days? 

--- Spend Wisely

How many times do you eat out? According to Business Insider, people in Indiana spend an average of $2,241 on dining out (Business Insider (2019): Here's what the average person spends on dining out in every state). This amount can already be thrown towards your down payment fund. So instead of eating out, pack your lunch. Not only do you save money, but you can also prepare healthy meals. 

---  Avoid Large Purchases

REMEMBER THE GOAL: BUY YOUR DREAM HOME! Don’t take on large amounts of debt- may it be a vacation or buying a car - before buying a house. 

Your debt-to-income ratio plays a pivotal role in your loan approval. If you make large purchases, the ratio could sway in the wrong direction. 

Just like anything worth having, preparing to buy your dream home won't be easy. You will have to make adjustments and sacrifices to achieve your goal. Luckily, there are many online tools and resources you can use to aid you in determining the factors necessary in buying a home, such as the Motto Mortgage Experts menu of home loan calculator that will give you an idea of how much home you can afford as well as provide custom down payment estimates based on home price and interest rates.