Balance is a key word to remember when looking to purchase a home. Not only do you have to consider things like the features you would like in a house, what size or the location, you also have to consider what you can afford. Here are some tips to help you come up with a budget that is right for you:
Find out what your options are – when you are preparing to go house hunting, you think along the lines of what suits not only your current needs, but also you lifestyle. The same applies to your mortgage. A little bit of research will go a long way in helping you calculate a budget that is right for you. For example, do you know what the difference between a fixed and variable rate mortgage is? Which one would be better for you? Also think about what amortization period would best suit your individual situation. Knowing in advance about payment options will also help you when it comes time to deciding on a mortgage.
Run the numbers – look at your finances and decide what you can afford. There are many online calculators available that can help you determine your price range. By using a calculator, you will be able to factor in your income, the size of your down payment and look at various mortgage options as well as payment plans. Budget in hand; you will be able to confidently view houses that you know fit into your home-owning plans.
Get pre-approved – this will actually give you more buying power! You will know the maximum financing that is available to you. You will also be aware of your offer’s ultimate ceiling and can shop around and bid accordingly. This is especially important if a bidding war is involved! (The Accredited Mortgage Professionals at VERICO One Link can provide you with a pre-approval certificate (subject only to appraisal or CMHC approval). If you provide your Realtor with a copy of this certificate to present to the vendor, this can strengthen your offer.)