Buying a home is an exciting time. You get to look at different homes, check out different neighbourhoods, get to decide what colours to paint the walls – but there’s a lot that has to happen first before that sold sign goes up on the front lawn. Before you even begin to start looking at a new house, the first question you should be asking yourself is: “how much mortgage can I afford”. But how do you even figure that out? I’m here to answer that question for you!
Let’s break it down
To decide how much you can afford in terms of a mortgage, you will first need to review how much you are currently spending and how much debt you have. There are tons of sources online, including the calculator tools on my website, that will tell you how much of a mortgage you can (roughly) afford and they will ask you questions such as:
- What’s your annual income before taxes?
- What’s your co-applicant’s annual income before taxes?
- What are your current living costs (condo fees, monthly payments, rent payments, bill payments, etc.)?
- How much debt do you have (credit, current mortgage, car payments, school loans, etc.)?
- How much do you have saved for a down payment?
All these together will be factored in to tell you how much you can afford in a mortgage and will better help you create a budget for yourself when it comes to your house hunt.
Why should you stay within your mortgage budget?
Without properly budgeting or calculating your total monthly/annual payments, you may accidentally find yourself blowing your budget and not being able to afford gas for your car or having enough money to pay the grocery bill. That is why you never start shopping for a house before you’ve set a budget.
When you shop before budgeting, you may find yourself falling in love with a house that’s way out of your price range. It happens. The wraparound porch, the fancy walkway, the cathedral ceilings… We all want a place that’s amazing but, it’s important that it’s within your budget so you can not only buy it but, live your life comfortably in it too.
Don’t forget to get pre-approved first
To save yourself some dream house heartbreak, get pre-approved first for the mortgage you need by coming to see me, Darren Robinson, your friendly local mortgage broker! I can do all the calculating for you and help you set a realistic budget as well as getting approved for the mortgage you need to call that dream home your very own. By getting pre-approved by me, you can feel confident knowing you have an accurate budget and a strong financial backbone going into one of the biggest investments you will make in your entire life. Give me a call at (705) 315-0516 to set a virtual meeting today to crunch the numbers and create your budget in as little as 30 minutes.