Step 18 to Buying a Home: Continue Saving, Stop Spending!

So, it looks like we are nearing home and you must be excited. Don’t start shopping for furniture and other high ticket items unless it’s on your debit card. Don’t charge any high ticket for your home on your plastic – especially those DON’T PAY UNTIL promotions – that’s a big NO! The moment you sign up for those, then the charge will be officially on your card and although you don’t start paying, it is counted towards your debt ratio. Unless you plan to live in your fridge or your couch then you have to zip your wallet, freeze it in the freezer if you have to or lock it somewhere where your fingers can’t touch it. Don’t start renewing your car lease or purchasing a car on loan either unless you plan to live in it. When you applied for a mortgage, all your debts and liabilities are taken into consideration and as a general rule your total debts (including mortgage, condo fees and property taxes) must not be over 42% of your total income. Some banks will take it at 40% and if you have excellent debt repayment history, maybe at 44% max but don’t get to the max as there are other factors that they consider that may hurt your eligibility to buy your dream home. Check out the Do’s and Dont’s When Applying for a Loan to give you a better perspective on how to keep your purchase as smooth as possible. If you process your mortgage thru us, you will be well aware of these things ahead of time so you don’t end up guessing or stressing.