You have made that all-important decision to buy a house. Your dream is finally close to becoming a reality. Once the decision is made, the real work begins. It is imperative to get your finances in order.
Pay Down Your Debt
When you begin the process of looking for a lender, you will find that most want your total debt to be no more than 38% to 40% of your gross income.
For example, your income is $ 3000 a month, and then the bank figures your total debt can be $ 1240 a month. If you already have $ 1000 in debt, you will only have $ 240 left over for mortgage payments. By paying off credit cards and car loans, you will greatly reduce this number an increase your borrowing power.
Begin with the highest interest items first, normally credit cards. Then move onto car loans and lastly, … Read More