How Much Should I Spend?
How much will it really cost?
Purchasing a home is a big decision, and is likely the biggest purchase you will make during your lifetime!
You have to consider not only the purchase price of the home, but also ongoing fees. Some commonly overlooked fees when calculating affordability are: property taxes, heating, electricity, condo costs (if applicable) as well as maintenance for fixing anything that goes wrong in the home. Most of these are not big costs, but they can add up quickly. Don’t forget to consider these when you are budgeting for your purchase.
The upfront cost for purchasing a home doesn’t only include your down payment. Other fees include: lawyer fees, closing costs, and land transfer fees.
Don’t forget the moving expenses! Do you need to rent a truck, or movers to move? Will you need additional furniture, that new TV or appliances? Many people forget about these when budgeting for a home. Keep these in mind when planning for a down payment or cash flow.
Don’t assume that the listed price is the sale price. Most sellers list at a bit higher price than they are willing to settle on. As your relator, I can help you determine the true value and help you make an offer that will get you in your new home.
How much can I afford?
Most lenders advise that you spend no more than 32% of your monthly gross income on your housing. Generally, this means that your mortgage principal and interest, taxes, heating expenses and half of the condo fees (if applicable) should not exceed more than 32% of your gross household income. In addition, if you have any other debt such as a car loan, credit card debt, line of credit, etc., the total payments for these plus your housing expenses should not exceed 40% of your gross income. Many major banks have tools on their websites to help you calculate how much of a house you can afford. Visit your favorite banks site to check your affordability. Remember though, these are guidelines. It does not guarantee that any bank will give you the loan for that amount.
With this knowledge, you should get pre-approved for a mortgage. This involves going to a bank or mortgage broker and speaking to them to see how much they will approve you for. The pre-approval is good for a short period of time usually 60-90 days, but generally guarantees the rates in effect at the time of the approval. The advantage is that if the rates go up, you are still guaranteed the rate you were quoted, and if they go down, most lenders will lower your rate as well. It’s a win-win situation and you have a realistic idea of your budget.
Today many people choose to go through mortgage broker rather than banks directly. Mortgage brokers deal with many lending institutions and can generally offer you the best deal they have available to them. They can also access many lenders that an individual may not have access to. Also remember, in order to get approved, most lenders will do a credit check on you. Each credit check lowers your overall credit score, so you want to keep these checks to a minimum.
Finding a realtor that understands your needs is very important. You want to find someone who has your interests in mind and someone you can trust. I will listen to your needs and search for properties that meet your criteria. Finding the home is just one step. You also want someone with the knowledge and expertise of current market values to ensure you are getting good value for your money. I will work closely with you from beginning to the end. My job is not finished until you can call your new house your new home.
I am not satisfied with my service until you are.
Let’s find your dream home!
I am here to help guide you along the process of finding the right home for you. I am just a phone or email away. Contact me and I will work with you to make your dream a reality.