Home > 10 Things you should know before buying a property.

1. Pay your bills and start saving! "No. 1 - pay your bills on time. There is no single element that can so dramatically impact the success of an application as your credit history. Another thing, of course, is savings. People should have a good disciplined savings pattern. That's the kind of behaviour that's going to make the banks view you as a potential successful homeowner.

2. Don't forget what kind of money personality you have when getting a mortgage. Don’t take out a 30 year mortgage and think you can re-invest the extra money you have, or make extra monthly payments, if you are the kind of person who spends any extra cash on dinner and a movie twice a week. You could be better in a situation where you force yourself into saving by going with the shorter term loan and higher payment.

3. Don't forget that homeownership brings with it many burdens. The cost of defaulting on a loan is much greater than the penalty of missing a rent payment. Too many black marks on your financial history will mean trouble if you ever need to refinance or re-draw on your loan.

4. Make loan and other debt payments on time. Especially over the months leading up to the filing of your mortgage application. Every 30-, 60- or 90-day delinquency on a loan or credit card is going to reduce the credit score the lender ends up considering as part of the loan file. That score, in turn, will determine how good a loan you get – or if you get one at all.

5. When buying your house, watch what you say to "your" real estate agent.
Know who your agent works for. The agent works for the seller, unless your agent has signed a contract (called a buyer agency agreement) that specifies that he or she works exclusively for the buyer. Remember - the agent you deal with ultimately works on the seller's behalf. If you say something like, "We would be willing to pay $360,000, but we'll offer $320,000," a seller's agent is obligated to pass along all of that information!

6. Check your credit report before getting a mortgage. When you plan to buy a house or refinance, the first thing to do is check your credit report, so you'll have plenty of time to fix any mistakes. Credit reporting errors take many forms: Your report might say that you have declared bankruptcy, when in fact someone else with the same name filed for bankruptcy. It might list closed accounts as open. It might not have record of a credit card that you have been paying on time. It might say falsely you're late in your payments. Wrong information on your credit report can cost time and money when you're getting a mortgage. If you find out about it too late, you might have to delay the closing while the errors are fixed. Or you might end up paying a higher interest rate than you deserve.

7. When buying a house, do not buy or lease a car or charge up your credit cards, between making the offer and closing on the mortgage.
The mortgage lender doesn't want your monthly debt payments to exceed a certain percentage of your monthly income. The lender will check your credit report just before closing, and if you have added lots of new debt since you applied for the home loan, you suddenly might not qualify. Wait until the mortgage closes before assuming new debt – and make sure you can afford it!

8. Count the cost of taxes and insurance into the home-buying equation. A rough rule of thumb goes like this: Figure out how much the mortgage's principal and interest will cost each month, and assume that taxes and insurance will cost about a quarter again. Keep this in mind and you're less likely to buy more house than you can afford.

9. Save for repairs and maintenance. Houses do cost quite a bit of money in upkeep and maintenance. Think of all of the things that you have had repaired over the years in your rental property – which the owner of the property has paid for. From tap washers and contractors, to roof maintenance and expensive items like hot water systems, these are all expenses that you will have to budget for from now on.

10. Contact your bank before taking steps to get rid of mortgage insurance. If you get a mortgage for more than 80 percent of the home's price, you will also need to pay for mortgage insurance. You keep paying for the insurance until your equity exceeds 20 percent of the home's value. There are ways you can stop paying.

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