Getting into a home can be exciting, but it is also stressful for many people. Working with a mortgage lender can be a challenge if you don't know what you are doing. This is why it is important that before you start the process of home buying you know what will be expected of you so that you don't make critical mistakes. Here are some tips.

1. Don't Open Any New Lines Of Credit Before Buying The House

As a general rule you should avoid opening any new lines of credit before you buy the house. This is for two reasons. The first is that whenever you open a line of credit, it will hurt your credit score. This is not a permanent ding; you can get it back up, but it will take time. Thus, if you open a credit card, even at your local department store, a month or two before buying the house, your credit score will reflect it and you may get a higher interest rate.

Second, your debt-to-income ratio will play a major role in how much house you can afford. Thus, if you have a car payment against you, then it will decrease how much the mortgage lender will approve you for. This is why it is better to wait until after you get into the house to buy anything on credit.

2. Have A Good Savings Account

Many people recognize that it is important to have a down payment to put towards the house, but what they might not realize is that good savings will also work to your advantage. The mortgage lender will ask for all of your financial information, including bank statements. They want to see that you have money saved up so that you have a safety net if things get hard. For instance, if you lose your job and are unemployed for a couple months, your savings account can cover your mortgage payments during that time. This is why a savings account is so important.

3. Work Consistency

Lastly, the lender wants to see that you are in a consistent line of work. If they see that you have been in the same industry-- not necessarily the same job-- for the last couple years, they will know that your employment is stable. However, if you have jumped around from industry to industry, they might be worried that your employment isn't stable enough.

By knowing these three things, you can prepare yourself to apply for a home loan. Contact a mortgage broker in Cold Lake or your area for more information.

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