Controlling Your Finances

In order to qualify for the best loan / mortgage rate possible you need to keep your finances in order. Here are some tips to help you control and set budgets for your finances.

• Setup a budget. When people usually setup a budget they define what they would like to spend on each item. Instead of just doing that why not look at what you have spent over the last 6 months or a year (you can do this by going thorough receipts) and base your budget on those amounts. That way your budget will be more realistic and you may also capture items that you may have otherwise missed out.
• Reduce your expenses. OK you have done a budget but is it taking into account those little items, for example, your morning cup of coffee at the local coffee shop. Make a note of everything you spend over a week, you maybe able to cut down on some of the smaller items.
• Reduce your dept. If you have high levels of dept (usually lenders look for no more than 36% of income) then you may want to reduce these levels.
• Increase your income. If you cannot qualify for the home loan you want then you may have to take on a 2nd job.
• Save for a down payment. You could get a 100% mortgage but you will get a better rate if you have a down payment on your new home. The general rule is the more down payment you can afford the better the rate.
• Create a house fund. In addition to the down payment you will also need money to spend on your new home, for example, you may want to buy new carpets.
• Don't change jobs. Lenders like to see that you have been in your current job for 2 years, if you are thinking of changing jobs then you may want to wait until after you have purchased your home.
• Get a good credit history. Make payments for loans and credit cards on time. The better your credit history the better the loan rate.