How many of you have been to an "Open House"? That is, a property with a sign on the front yard inviting you to view the home that is available for sale. Most buyers will hop in the car, drive into neighbourhoods they are considering to move to and fall into Open Houses without having any idea what the actual house is worth. We suggest that you should begin by researching precisely how much you can afford.
HOW MUCH HOUSE CAN I AFFORD?
Everyone has priorities when it comes to spending money and budgeting. We suggest you review your cash flow. What is your after-tax income: not your gross income. Calculate your monthly after tax income, including wages, bonuses, tips, investment income, and retirement income. Calculate all of your expenses. Compare your savings and expenses with your net income. Is there income left over for a savings plan? Here's a tip: Lenders like to see applicants applying for a loan who show stability by contributing to a savings plan on a regular basis.
We recommend keeping your house payment no higher than 32 percent of your gross income. Housing payment includes mortgage payment (principal and interest), property taxes and homeowners insurance; referred to as PITI. So, if your gross income is $4,000 a month, your monthly housing payment shouldn't be more than $1,280.
visit our Buyer's Calculators at www. or call our office at 905-764-3433 To determine how much home and mortgage you can afford,
GET YOUR CREDIT SCORE
GET A FULL MORTGAGE PRE-APPROVAL
Before you meet with a prospective lender and they check your credit history we suggest you obtain a copy of your credit from a credit bureau. A well known credit bureau is Equifax. You can visit their website, http://www.equifax.ca/ and request a credit report from them. This is an excellent way to know your credit score so that you can improve it if need be.
We suggest you obtain a mortgage pre-approval before you start your search for a new home and we will explain why. In order to apply for a mortgage pre-approval, you must submit proof of your income, your down payment amount, and you must supply your lender authorization to do their own credit bureau check on your portfolio. The lender will look at your finances and perform what's called a GDS-TDS calculation to establish the amount of mortgage you can afford. At that time, the lender will give you a written confirmation or certificate for a fixed interest rate good for a specific period of time.
You may not wish to pursue a mortgage pre-approval until you have found your dream home. Having a full mortgage pre-approval makes the search for your new home much smoother and quicker because you NOW have a realistic price range in mind and you KNOW how much money you have access to so that financing will not be an issue when negotiating your offer. That is were we come in. Call us; any one of our Team members can help you with obtaining a full mortgage pre-approval. Our goal is to make your home buying process as smooth as possible.