BUYER'S GUIDE: What YOU need to do before you hire a Realtor!

Get Out of Debt:

It's very important to work on paying down your debt, especially your credit card debt. This will help to improve your credit score, and can affect how much you will be qualified to borrow when you apply for a mortgage. Getting rid of your debt means that you will have less stress about financing when you buy, and everything will be easier. It is always better to pay your debt rather than settle the debt, which will show up on your credit report.

Clean Up Your Credit:

Clean up your credit report before you apply for a mortgage. Pull a copy of your credit report and credit score to see where you stand. The higher your credit score means you will qualify for lower mortgage rates. Pay your creditors on time for the year. This will help improve your score. If you do decide to close some credit cards, be sure to leave the oldest one open, even if you never use it.
If you don't have any credit, consider using a credit card to establish your credit history. Pay off the card in full each month. Any instalment loans can help with this, such as student loans or a car loan. Also use your rental history to help establish your credit rating. Be sure that you are paying on time each month.

Save Up a Down Payment:

Saving up for a down payment will prove to yourself that you are ready to purchase a home. It will also help you prepare for the extra costs that come with purchasing a new home. The larger your down payment, the more you will be able to spend on a home. A large down payment can make homes that may seem out of reach affordable since you are putting more down when you make the purchase. Save some additional money for closing costs on your mortgage as well.

Pay Attention to the Market:

Over the next year as you get ready to buy a home, start to pay attention to the market in the area where you want to buy. This helps you understand what homes are selling for and what to expect when you start shopping. It gives you time to research schools and other factors that may play a role in where you buy a home. 

Set a New Budget:

The final thing you can do is to set up a new budget and practice living on it. Work in additional costs of owning a home like utility bills, repair and maintenance costs, and any extra that you would pay for the mortgage. The extra money can be set aside for your down payment. This will give you a good idea of how much you can afford for a monthly mortgage payment and help you be ready when it is time to purchase your home.

Links for Credit Reports: 

www.equifax.ca
www.transunion.ca