If you are just starting to shop for a home, you need to think about more than what kind of house you want to buy. You also need to start thinking about how to secure your financing. You do not want to run into a situation where you want to buy a home, but the financing falls through for one reason for another. Here are some tips that will help you secure financing for your first home.

1. Clean Up Your Credit Report

If you have not seen your credit report for a while, it is worth requesting it from each of the three credit reporting agencies to look for potential problems. It is a possibility that you have debts that are still listed on your credit report, even though they have been paid off completely. It can take some time to dispute items on your credit report, so you'll want to take care of this problem as early as possible.

2. Don't Cancel Credit Cards

Your credit reports should give you a good idea of what sort of financial history a lender is going to see when they run your credit, and it will give you a chance to clean things up before you apply for a mortgage. That said, it is not necessarily a bad thing if you have a lot of active credit cards, as long as you are not maxing them all out. Don't make the mistake of canceling credit cards that you're not using to make your credit report look better.

One thing that will be looked at is your credit utilization and if you are responsible with your money. If you have five credit cards with a $1,000 limit on each of them, but you only have a $500 balance across them, that means you are utilizing 10% of your available credit. This can make you look more responsible to a lender, because you are not maxing out all of your credit cards. If you cancel two of those cards, your credit utilization would jump up to 16.6%, even though you made no changes in spending habits.

3. Avoid Making Big Purchases

Once you've had your offer accepted on a house and applied for a loan, don't make the mistake of making big purchases while the loan is pending approval. Your credit will be run again closer to the closing date on the home, and if the lender sees a lot of purchases, they may see you as a risk and not approve the loan. You may have your best financial interests in mind by taking advantage of a big sale for home improvement items, but it can be detrimental to your loan being approved.

For more information, contact a company like Cornerstone Residential Mortgage.