Your guide to what you can afford when buying a home

September 3rd, 2013 by

Understand what’s involved before jumping into home ownership

 
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The key thing to consider when purchasing a home is making sure that you can comfortably afford the mortgage payment and other monthly expenses.

Your guide to what you can afford when buying a home

  • Prepare a budget

Prepare a budget.  Make a detailed list of your current monthly expenses. Add everything up and then subtract this amount from your monthly take home amount. This will give you a clear idea of how much you can truly afford for a mortgage payment each month.

  • Mortgage payments

The size of your mortgage payments will depend on your down payment, the  amortization period (i.e. 25 years), the term (fixed rate, variable rate) and your payment schedule (weekly, bi-weekly or monthly).

  • Down payment

The first thing you will need is a down payment. The more money you put down, the less interest you will pay over the life of your mortgage. The minimum mortgage down payment amount that is typically required in Canada is 5%. In order to put less than 20% down, mortgage default insurance is required.

  • Pre-approval

Before you start house hunting, visit an accredited mortgage professional. They will look at your finances and determine the amount of mortgage they are willing to provide to you.

Source: Golden Girl Finance

 

I am a passionate and dedicated mortgage professional, devoted to enabling my clients to obtain the best mortgage products and interest rates for their needs.