7 Steps to Getting Your Finances in Order

There's freedom in having a financial plan, a written guide to help you buy your FIRST home! It takes discipline, committment and an attitude of "yes, I can do this"! Use these 7 quick steps to get you going:

1. 1.  Develop a family budget. Instead of budgeting what you'd like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

2. Reduce your debt. This can be tough, but "yes, you can do it".  Generally speaking, lenders look at your total debt load and compare that against your income (debt-to-income ration). The lower the debt the better. 

3.  Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You'll probably see some great ways to save.

4.  Increase your income. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.

5.  Save for a downpayment. This is the toughest one of the list.  Although it's possible to get a mortgage with only 5 percent down (it's not as easy as it use to be) but just know that you can usually get a better rate and a lower overall cost if you put down more. Try saving a 20 percent downpayment.

6.  Keep your job. This is better in the long-run. Having a job for less than two years may mean you have to pay a higher interest rate.  You don't necessarily have to be in the same job as long as you're in the same "line of work". 

7.  Establish a good credit history. Lenders look at your "credit history".  Are you on time with your bills? If you're one of those people that think it's a good thing NOT having a credit card...wrong. Get a credit card and make payments by the due date, this establishes "history". Do the same for all your other bills. Pay off the entire balance promptly.

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Chris & Maria Jeantet