January 4, 2010
Looking to Buy a new Home - Determine what you can afford
As the holidays come to a close, folks begin to look ahead and review whether or not this is the year to buy their first home or make a move.
One of the most important numbers to look at is what you can or want to afford. There is no sense in looking at homes outside of your price range, so determining this number is a great first step in the process.
There are two parts to this question. What will the banks and institutions be willing to lend and what are you willing to pay on a monthly basis towards your mortgage. It all depends on your needs, values and lifestyle.
Two great calculators to get you started are:
To get a general sense of what you can afford you can check out the Mortgage Affordability Calculator on the Canada Mortgage and Housing Corporation Site (CMHC).
To play with variations of rates and downpayment see the TD Canada Trust Mortgage Calculator.
One word of caution that I emphasis with all of my clients. Rates are currently at historic lows so plan ahead. The rates will most likely be higher in 5 years so don't max yourself out on current rates. Check out the calculators based on rates 1 or 2 points higher to make sure you are not putting yourself in a difficult position when it comes time to renew your mortgage.
If you are looking to buy a home in the coming months give me a call and I will help explain the current market, connect you with a mortgage broker if you do not have one, and review homes in your area to help you find the perfect one for you.
It can sometimes feel overwhelming to buy, especially your first home, but I will walk you through the process and ensure you have the right information to help you make the best decisions for you.
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