Two things that play a major role in determining affordability are the size of the down payment, and the amount and length of the mortgage. It is generally recommended that you make the largest down payment you can afford up front. This will reduce the total amount of your mortgage, and reduce your monthly payments.
Your monthly payments will include the principal and interest on the mortgage, property taxes and homeowner's insurance. When determining your home purchasing budget, you should consider all of the factors that will make up your monthly payment and try not to spend beyond your means.
Determining accurate monthly costs and expenses can be rather confusing, so I always recommend that you speak to an independent Mortgage Broker when you are in the initial planning stages of purchasing your home. They can help determine what you can reasonably afford, and get you pre-approved for your mortgage.
Want to get a more accurate idea of how much you can afford? Try one of these Mortgage Affordability Calculators for a quick estimate.
It's important to determine your mortgage options before you start looking for homes. There's nothing more frustrating than falling in love with a home, only to find out you can't afford it. Your Lender will look at your income, expenses and debt to determine how much they will lend you. Combine that amount with the money you have for a down payment, and that’s your budget. Know how much you can borrow, so you don’t waste time looking at properties you can’t afford.
Pre-approval of a mortgage is when your Lender has reviewed all your financial information and has determined the maximum amount of money you can borrow. In most cases, the Lender will guarantee the current interest rate for 60 - 90 days so you don’t have to worry about rising interest rates while shopping for a home. You will also have an edge when you make an offer, because the seller knows you’re more likely to get a loan.
Working with a qualified, independent Mortgage Broker can help you secure the best available rate for your loan. Since Mortgage Broker's aren't affiliated with any specific lender, they can work in your best interest with various competing lenders to get you the best rate.
Mortgages are available through a number of financial institutions; your bank is only one option. Shop around for competitive rates and options. Mortgage Brokers offer a wide range of mortgage products and home financing solutions. Whether you're buying your first home, considering a renovation, or looking into your next purchase, Mortgage Brokers have the options, choice and flexibility to meet your specific needs. Once you have selected your lender, you will need to provide your financial information.
Your Lender will want the following:
• Personal information such as number of dependents and marital status
• Details of employment, including a letter from your employer verifying your salary
• Banking and investment information
• Details of your assets (i.e. vehicle, other property)
• Information on loans and other liabilities
• Permission to do a credit check.
Once your application is complete, you will know how much you can borrow and you will be ready to start searching for a home.
If you are curious to hear more about us and what we can offer, don't hesitate to get in touch. We try to take care of all of the detailed and long processes and making home buying or selling super easy!
If you are curious to hear more about us and what we can offer, don't hesitate to get in touch. We try to take care of all of the detailed and long processes and making home buying or selling super easy! Send us your brief and learn how we work.