Get Your Finances Organized


Develop a household budget

Rather than creating a budget of what you’d like to spend, use receipts to develop a budget that accurately reflects your actual spending habits over the course of several months.


Reduce your debt

Lenders usually like to see a total debt load of no more than 36 percent of your income, including your mortgage.  Do what you can to reduce your installment debts – car loans, student loans, and revolving balances on credit cards.


Look for ways to save

You probably have a good idea as to how much you spend every month on rent, utilities and debt payments, but if you look hard at other expenditures, you could probably find ways to save such as cutting down on the Starbucks runs, or eating more meals at home.


Save for a down payment

Designate a certain amount of your income each month to put away in a savings account.  It is possible to buy a home with as little as 3 1/2 percent down, but up-front costs on these loans are higher and you will have to pay a monthly mortgage insurance premium.


Establish a good credit history

Lenders like to see three trade lines open, with payments made on-time.  If you don’t have a credit card, get one and make payments by the due date.  Lenders also look to see if you are “maxing out” your credit cards.  It’s better to have more than one credit card to spread out your debt, and use only a small percentage of the available balance.