If you want to buy a house, you're going to need the backing of a bank or other mortgage lender to afford anything larger than a shed in your parent's backyard in Brampton. Power of sale rests with the seller but if you think power of buying rests with you, think again. It's the banks who have the final say. So how do you get them to say yes? There's no hard and fast rule about how to approach them, but they're more likely to approve you if you've got your finances in order. Here are some tips on organizing them in preparation for a home purchase.

Balance Your Chequebook

This is a basic life skill that seems to be going the way of the dinosaur thanks to credit card pre-approvals. Many otherwise competent working professionals aren't even aware of how much money they're spending compared to how much they're making, and will spend recklessly until they've exhausted their credit and are forced to take cash for jewelry in order to make the minimum payments. People like this are a risk for lenders, so sit down with your bank statements and go over them to see if you're solvent or not.

Collate Bills and Receipts

Balancing your chequebook will be a lot easier for you if you've been saving all your receipts. Organize them by date so that they'll be easier to compare with your bank statements and store them in the same drawer or file box as the reports on your active ETFs and other investments for easy access. Keeping your financial documents together will help you to easily review your purchases and determine which luxuries you can do without to balance your budget or increase your savings.

Save Money

In order to be approved for a commercial mortgage or even a residential one, most lenders want to see you put up a sizeable down payment to show that you're committed. It will be somewhere in the vicinity of 20% of the purchase price of the property, but requirements vary between institutions. To save money, open a special account which you do not take money out of for regular purchases like groceries. Money should only go in, not out, until you've reached your goal.

Keep Payments Up to Date

Don't confuse saving money with refusing to pay your bills. Putting the $40 you owe the phone company into your savings account is not a smart decision. Companies charge you interest if you don't pay them on time and may even cancel your services. Having overdue payments to creditors can effectively kill your bid to buy Newmarker real estate since what guarantee does the bank have that you won't "forget" to pay your mortgage payments?

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