Buying a house is a milestone that many people work towards in their life. Depending on where you live it can be a real challenge, as housing prices are on the rise (especially in larger markets).

Despite the fact that it can sometimes be a challenge, it is definitely possible. As a mortgage broker I have helped many people who thought buying a house was out of their reach.

Here are my tip five tips for setting yourself up for success when applying for a mortgage.

Save for your down payment

This may sound obvious but you would be surprised how many people step into my office who haven’t saved for a down payment.  Depending on which way you go, a down payment will be anywhere from five to 20 per cent of the total cost of the house and this doesn’t include legal fees and closing costs. Those usually sit at about 1.5 per cent of the cost of the home. Five per cent of a $300,000 house is $15,000. If you include the legal fees and closing costs your down payment will be close to $20,000. Not an amount that most people can just pull out of thin air.

Buying a house takes planning.  Set up a savings plan so that once you decide you are ready to break into the housing market, you have the funds set aside.  P.S.  There are other options, we can talk…

Look after your credit

If you want to qualify for a mortgage, having good credit is key. Make sure you are paying all your bills on time. This includes anything from your credit card to your cell phone.  If there are any late payments or arrears in your history this will definitely show up on your credit score and will be taken into consideration when a lender looks at your file. If you have had trouble with your credit in the past, let’s talk about how to ensure you are back to where your credit would look favourable to lenders.

Don’t change careers

While a change in workplace or job is fine, I do not recommend changing your career path right before you try to qualify for a mortgage.  Lenders will want to see provable income and if you are in the middle of changing careers that will be difficult to do. There is nothing wrong with wanting to do something different, but if you want to buy a house make that a priority and wait to shake up your career until after you are in your new home.

Don’t make any large purchases

If you want to qualify for a mortgage the less debt you have the better. I do not recommend going out and buying a new $50,000 vehicle right before you apply for a mortgage.  Lenders look at the ratios between your debt and your income and the better that looks on paper the more likely you are to qualify for the mortgage you need. Save the large ticket items (cars, boats, RVs) for another time when you aren’t planning on buying what will most likely be largest (and most important) purchase of your life.

Have a realistic budget

This last one isn’t directly related to qualifying for a mortgage but I think it is important to talk about anyway. When you are thinking about purchasing a new home, I recommend people figure out what they can realistically afford.  In some cases lenders will qualify you for a mortgage that looks doable on paper but realistically it may leave you with very little leftover for other life expenses. Figure out how much you are comfortable spending on a monthly basis for your mortgage and housing costs and base your housing expectations on that.

Remember, your house is only one part of your life and it is important to have enough money to pay your mortgage comfortably while also saving for things like retirement and your children’s education and HOLIDAYS!!!!  * Disclaimer, I LOVE Vacationing.  I NEVER recommend people become house poor because of a house they can’t realistically keep up with.

There you have it. My five tips for qualifying for a mortgage. If you have more questions or would like to start the process of applying for a one, please feel free to contact me. I would love to be a part of getting you into your new home.