Are you planning to buy or refinance a home in 2013? Then one resolution you need to make this year, is to get your financial house in order before you do anything. Here are some steps you can take to improve your financial situation.

1. Make the commitment to get your finances in order and do it. Set clear financial goals.
2. Gather and organize your financial documents, including tax returns, credit card statements, phone and utility bills, bank statements, investment paperwork, insurance and mortgage payments, and other financial records. Keep all your paperwork in a safe and secure place. Depending on the state you live in, keep copies of these documents for up to 10 years. Shred older paperwork.
3. Analyze your spending. Determine where you’re spending your money and identify ways to reduce your expenses and save money.
4. Develop a budget and stick to it. To stay on track, record your expenses each month and compare it to your budget. Make spending adjustments as needed. Practice a “want” or “need” strategy when shopping.
5. Reduce your debt. Too much debt from loans and lines of credit can lower your credit score. Establish a plan to pay down your debts, such as paying off high-interest rate debt first, or paying the smallest debt first and then moving on to the next highest debt. Transfer credit card balances to 1 or 2 cards with low APRs. Get your credit card balances low – within 20% of your credit line. Balances near the top of your credit limit can decrease your credit score. Pay more than the minimum-required credit card payment each month.
6. Limit opening new lines of credit. When you apply for new accounts (credit cards or loans), you can lose up to 10% in points from your credit score. If you must open new accounts, space them out by at least 6 months or more. Keep no more than 3 cards to build credit and use in emergencies.
7. Use cash or debit cards when making purchases instead of credit.
8. Increase your income. Get a better paying job and keep it. (Note: Having a job for less than 2 years may mean you’ll have to pay a higher interest rate.) Ask for a raise. Get a second job.
9. Save for a down payment. Determine a specific amount of money you plan to save each month. Automate your savings to prevent you from spending the money. Ideally, plan to save for a 20% down payment, although you may qualify for a home with a lesser amount.
10. Reduce any financial fees, such as ATM, checking account, credit card, late payment or overdraft fees.
11. Pay all your bills on time – not just credit cards and loans. Any reported late payments can lower your credit score by as much as 100 points. Set up automatic payments to pay your bills before their due date.
12. Check your credit report. Make sure the information is accurate. Dispute any errors immediately with the credit reporting agency (Experian, Equifax or TransUnion) to improve your credit rating.
13. Review your financial progress regularly. Revise your plan and determine new ways to save money and improve your credit score.

By focusing your efforts and keeping yourself accountable to obtaining your goals, you can improve your finances, enhance your credit score and save more money this year. With time and patience, you can eventually qualify for a new home or refinance loan.

For more information on how you can qualify for a home loan, contact Grandview Lending at 1.866.690.4920.