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    New Home for 2020? Here are a Few Tips to Get You Ready

    JN Bank

    If your New Year’s resolution for 2020 is to expand your real estate portfolio, here are a few tips to get your finances in shape for that life-changing purchase.

    1. Reduce personal debt. Prior to approving your mortgage, lenders consider your ability to make payments. If your debt-to-income ratio is close to, or higher than, 40 per cent, you should take steps to reduce it.
    2. Postpone large purchases. Access less credit and save more of your income. Start a home ownership savings plan today!
    3. Get to know all the costs involved in the mortgage process. You may need up to 25 per cent cash, up front, to cover the cost of fees such as: closing costs, escalation fees and legal costs.
    4. One practical step towards saving for the deposit includes preparing a budget and sticking to it. Avoid spending on non-essential items and impulse purchases, as this impacts negatively on your ability to save. Open a separate bank account, ideally a high-earning savings account and set up an automatic salary deduction and make top-ups when possible.
    5. Pre-approval is a critical first-step in the journey towards home-ownership. The pre-approval process looks at your total financial health – that is, your income against your total debt. This will tell you what you can afford to pay for a house.

    Pre-approval is a service that is offered, at no charge, at JN Bank. The pre-approval process is quite simple. It entails providing your income details and outlining any existing debt you may have.

    All you need to provide is:

    • Valid government issued identification, such as a driver’s licence or passport
    • Social insurance number
    • proof of address
    • income verification letter and last two payslips
    • completed credit report forms and statement of affairs