One of the first questions you may ask yourself is “How much can I afford?” Read the following mortgage tips before you set out to find the home of your dreams:
Consider your Annual Household Income
Consider any income changes that may impact your ability to make your payments. For example, if there are currently two major income sources within your household, would you still be able to afford your mortgage if there was only one annual household income? What if one adult decides to go back to school or if you plan on having children in the next couple of years? Consider all factors before taking the decision.
Consider your Down Payment
You are required to have at least a 5% down payment when buying a house. The size of your down payment is one factor in determining the size of mortgage you can afford.
Consider your Debt
One of the important factors to take into account is the amount of debt you currently have. The lower your debt-to-income ratio is, the more money you will have to put towards your mortgage. In addition, your debt level will also help to determine how large of a mortgage you will qualify for.
Consider your Amortization
You will probably want to apply for a mortgage with a longer amortization period, if trying to keep your mortgage payments low in order to fit them into your budget. However, if you don’t mind a somewhat larger regular mortgage payment to save money on interest, you may want to consider a shorter amortization period.
Consider Closing Costs
Closing costs are often overlooked expenses and they will definitely play a factor in determining how much money you can afford as a down payment.
Consider Additional Expenses
There are a few additional expenses that may impact how much money you have to put towards your mortgage each month. Expenses like property taxes, homeowner’s insurance and even home maintenance or strata fees should be factored in before making your final decision. These costs are often overlooked but should be considered before settling on your new home or investment.
MLS.ca or REALTOR.ca don’t give you the necessary details for you to make an informed and accurate decision. Our agent can provide you with documented information on recently sold properties, as well as complete data on active and expired listings. Our professional interpretation of the data will allow you to choose the right house at the right price. You will benefit from our experience and expertise at this most crucial stage of the buying process.