It's no secret investing in an Altadore-Garrison home is a decision that will impact a family for years to come, and being able to pay for what is needed must be considered first and foremost when developing a home buying budget. Use these tips to create a workable financial plan before buying a home in Canada.
Calculate a Realistic Price Range
Nothing can drain away the joy and security of homeownership like falling behind on payments and other obligations that accompany it. Setting a realistic range of mortgage payments one can afford while balancing lifestyle needs and other bills can be the difference in success or failure financially. Use a free mortgage calculator online to get an idea of what you can handle, and don't forget to consider other home-related costs beyond purchase price such as:
- Home taxes and property insurance.
- Transfer taxes, legal fees, and closing costs.
- Mortgage insurance (if required).
- Home repairs and maintenance.
- Utilities and home services.
Sock Back Funds for a Down Payment
Most buyers try to save at least 20 percent to put down on a home to ensure lower payments and to secure lower interest rates. However, Canadian homebuyers with good credit and financial stability can often get into a home with 5 percent or more down. In these cases, buyers may be required to hold mortgage insurance if they pay less of a down payment than with a conventional mortgage.
Individuals just starting over in Canada may need as much as a 35 percent down payment, especially with no solid employment history in the country. It is highly recommended newcomers seek the council of a mortgage specialist for guidance concerning their best options when creating a home buying budget.
Evaluate Mortgage Options in Canada
There are quite a few mortgage options ranging from adjustable-rate loans to those with a fixed-rate that never change and several possibilities in between. Alternative types of loans are often available for first-time buyers, veterans, seniors, and those on a fixed income. Again, talking to a mortgage specialist is the best way to explore and evaluate these options with clarity.
Obtain Mortgage Pre-Approval
With a good idea of how much a mortgage should be before home shopping, it's highly recommended to also proceed with getting pre-approval from a reputable lender. Mortgage pre-approval means the bank has committed to loaning funds as long as set conditions are met concerning the property being purchased.
While buyers are under no obligation to utilize this line of potential credit, home sellers often show preference to home shoppers with pre-approval in place. Many lenders allow for an interest rate to be locked in for a set period after pre-approval has been authorized, leaving buyers a few months to shop around.
Secure the Services of a Real Estate Agent
Home shopping without an experienced real estate agent can lead to overpaying along with experiencing a good bit of frustration. Choose a local agent familiar with the area, community real estate trends, and who has connections with the right people to help streamline the entire home buying process. They have a knack for helping shoppers evaluate their lifestyle needs along with budget to ensure the ideal home is found at the right price.
Armed with these tips for home buying in Canada, sticking with the budget will be much easier. Shoppers can skip checking out houses above the budget and truly concentrate on homes they can truly afford.