Purchasing a new home is one of the biggest investments you’ll ever make. Before making an offer, make sure you’re ready to take on all the financial and emotional responsibilities.
To help you make an informed decision, ask yourself the following questions (Courtesy of CMHC):
Are you Financially Ready?
To avoid unpleasant surprises down the road, take time now to calculate your net worth, current household budget and monthly debt payments. This information can help you assess your current financial situation and decide how much house you can afford. As a general rule, your monthly housing costs (including mortgage principal and interest, taxes and heating) shouldn’t add up to more than 32% of your gross household monthly income. In addition, your entire monthly debt load shouldn’t be more than 40% of your monthly income.
How much will your home actually cost?
You need to take into account all the costs related with home ownership, including up-front costs like mortgage loan insurance premiums, appraisal and home inspection fees, legal fees, moving expenses and a down payment, as well as ongoing costs like maintenance and repairs, emergency savings, and condo or strata fees.
What Kind of Mortgage is Right for you?
Depending on the size of your down payment, you may have either a conventional or high ratio mortgage. You also need to choose the term and amortization period for your mortgage, work out a payment schedule, decide whether you prefer a closed or open mortgage, and choose between a fixed, variable or adjustable interest rate.
To make these decisions easier, it’s a good idea to select a lender and get pre-approved for a mortgage before you begin your home hunt.
Warm Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Mississauag, L5M 7A1
Ph: 905-828-3434
Email: zeenia@zeeniakola.com
Website: www.zeeniakola.com
or
http://www.zeeniakola.com/AgentProfile/contactme.cfm
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