What should come first, the house or the car?

So you just got a shiny new car and now you want a shiny new home to go with it.

Will that new car payment affect your mortgage pre-approval?  The answer…. YES it will!!

Unless you have already done your home work with your mortgage broker by getting a mortgage pre-approval that factors the new car payment into it and your budget, you may be in for disappointment.

But it doesn’t necessarily have to be the one or the other.  Here are some tips to get set for mortgage approval success:

  1. Get pre-approved.  Seek the guidance of your mortgage broker to know exactly what you qualify for, before you start the house hunting process.
  2. Be realistic with what you can afford.
  3. Remember to save and budget for more than the mortgage payment.  When you own a home, your monthly payment consists of more than just the mortgage payment.  You will also pay property tax, home owner insurance and utilities.
  4. Clean up your credit.  Paying off credit balances can not only help improve your credit score, it can also increase your buying power.
  5. Avoid making big financial changes.  Most lenders want to see that you’re a stable applicant.  Doing things like buying a new car before you buy a new house does not establish you as stable.

Original article: www.dominionlending.ca/news