Shaping Up Your Finances

First of all put together a family budget. Find out how much you spend over a six month period by looking at your receipts and establish a budget based on your figures. Most people pay attention to mortgage or rent payments, car loan, phone and hydro, but little thought is given to incidentals such as lunch, a trip to Tim Hortons etc. You should keep track of every penny you spend. You’ll be amazed at how much you actually spend on little things.
Lenders tend to look at total debt load of no more than 35-40% of your income. Since your mortgage ranges between 25-28% of your income, you need to keep you other loans at 8-10% range.
Make more money. Sounds simple but sometimes there is no other alternative, the extra money may be enough to allow you to qualify for your first home. So that part-time job doesn’t sound so bad after all.Save.Save.Save. The more money you have for a downpaymnet the better off you’ll be. Try to aim for a 20% downpayment although you can purchase with a minimum of 5%.
Set up a downpayment fund. When you pay your monthly bills consider putting away a specific amount towards your downpayment fund as if it was a bill. Before you know it you’ll have enough to by your first home..
Another important factor is employement stability. Most lenders like to see at least 2 years of steady employement with the same firm..
This last tip should always be on your mind. Develop a good credit history. Your credit rating makes all the difference when applying for a big loan such as a car or home. Make your payments by the due date and try not to carry a balance. A good credit rating will save you a lot of money over the length of the loan.