Do These 4 Things if You Want to Buy a Home in 2021

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If your goal is to buy a home this year, here are some essential moves to make.

There are plenty of good reasons to want to own a home, including having the chance to build equity in a property and getting the financial stability that comes with it. If you're hoping to become a homeowner before 2021 comes to a close, then here are four moves it pays to make.

1. Pick up a side job to boost your cash reserves

Today's property values are higher than ever. In July, home prices were up 19.7% from the previous year, according to the S&P CoreLogic Case-Shiller Index.

To swing a more expensive home, you may need to boost your cash reserves to come up with a higher down payment. And getting a second job temporarily could be your ticket to doing just that. You can choose from many flexible side hustles these days, so do some digging to see what gig works best for you.

2. Check your credit report for errors

You may have misinformation on your credit report that's working against you. Correcting errors, like delinquent debts that were never yours in the first place, could help your credit score improve.

One of the most important factors mortgage lenders look at when deciding whether or not to approve you for a home loan is your credit score. Your credit score speaks to how financially responsible you are, so addressing credit report errors could help your score increase. A recent Consumer Reports investigation estimated that 34% of consumers have found a credit report error. So don't assume that your credit report is accurate.

3. Fight for a raise at work

If you've recently taken on more responsibility at work, or it's been a while since your pay was increased, now may be a good time to sit down with your boss and talk about your salary. Not only will getting a raise help you better afford a home, but the higher your income, the more likely you'll be to qualify for the mortgage you need to buy one.

4. Pay off some debt

Another big factor that goes into getting approved for a mortgage is your debt-to-income ratio. That ratio measures the amount of debt you have relative to your income, and the higher it is, the more it might prevent you from qualifying for a home loan.

If you're carrying debt, now would be a good time to try to pay some off and bring that ratio down. Incidentally, if you pick up a side job or manage to negotiate a raise at work, that'll help you come up with the money you need to pay down a loan or credit card balance.

Buying a home is a big undertaking in general, and this year, it's not an easy thing to do. With property values being so high, you may need a larger mortgage to buy a home. So it pays to do what you can to increase your chances of qualifying for one. These moves could help not only make you a better mortgage candidate, but also put you in a stronger position to manage the many expenses that come with homeownership.

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