29 Oct

Part Two: So You Think You Want to Own a House?

General

Posted by: Robert McCaw

Digging into your financials

In the first part of this blog series, I gave an overview of key factors to understand before taking the plunge into home ownership. The next important topic is fully analyzing your financial situation and crunching the numbers.

Things you will need to look at;

1. What are your current expenses?

Begin by writing out all the items you spend your money on in a month. This will help work out a budget allowing you to determine how much you can put down on a house. As you dig deeper into your financials you may discover that buying a house is not in the budget at the moment.

2. What are your monthly debt payments?

Calculate how much money goes towards paying off debt each month. This kind of information is required during the actual home buying process so it’s best for you to start early. This includes looking into all outstanding loans, credit cards, and other lines of credit.

3. What are your spending limits in terms of purchasing a home?

This will be determined from the total cost of expenses, your monthly debt payments and overall lifestyle. You are able to gauge the amount of money you will spend on your home but don’t forget to add in all the miscellaneous costs associated with ownership. This calculation will answer the question – “how much can we afford when shopping for a home?”

Things to consider when purchasing a house;

  • In relation to your monthly income, how much are your monthly house expenses?
  • How much debt will you have to pay off each month combined with house expenses?
  • Can you afford the initial down payment?

What is mortgage loan insurance?

This type of insurance is set in place to protect mortgage lenders against fraud, default and allows buyers to purchase homes with lower down payments such as 5% with similar interest rates to other buyers with a down payment value of 20%.

Analyzing the calculations

With all the numbers crunched what are they telling you? If the numbers aren’t looking good it would be smart to wait and start paying off some debt before committing to house payments. Also, cut expenses where ever possible, especially when saving for your down payment.

If your calculations were positive than it’s time for the next step in the process; a credit report. This will help you get approved for a mortgage. After that is the fun part, choosing your home; but that’s for another blog post.

Stay tuned for our next entry on choosing your home.

Interested in buying or want to talk mortgages? Give me a shout at 613 354-9037 for a free mortgage consultation to get you on your way to becoming an official home owner.

 

18 Oct

Part One: So You Think You Want to Own a House?

General

Posted by: Robert McCaw

Here’s what you need to know

It’s everyone’s dream to purchase that house of your very own, for some this milestone comes when you get married and some wait until they have a few kids roaming around. Whenever you decide to take the plunge from renting to buying there can be some challenges and frustrations that come with it.

mortgages_debt_kingston_toronto_mortgage_agent

One of the best things to do when contemplating a new home purchase is to become familiar with how the entire process works. This will provide an inside look and keep you on the right track in terms of financial decisions.

Ask yourself these questions before jumping into the unknowns of home ownership;

Firstly, can you afford it?

  • Check into your all your financial records
  • Access your full money situation (you don’t want any surprises!)
  • Research professionals who can help you on your home buying journey(realtor, mortgage agent, lawyer)

Do you know the differences between renting and buying?

  • When renting, any problems fall on the landlord but as a home owner, you are the landlord!
  • You can’t predict the future with your job, family or expenses; determine if you can make the long-term commitment of a house purchase.

Can you afford the responsibilities of owning a house?

  • Paying your mortgage is obviously a must
  • Any necessary renovations or repairs that need to be taken care of
  • We all know that things break so general upkeep and maintenance of the property is also essential

Final Word

Purchasing a house is extremely personal and different from buyer to buyer, what worked for your friends that just bought their first home might not work for you. It’s important to get the right kind of professional help from someone who knows the ropes, understanding your current situation and the marketplace.

Stay tuned for my next post taking a more in depth look at accessing your financial situation before buying a house.

Interested in buying and want to talk mortgages? Give me a shout at 613 354-9037 for a free mortgage consultation to get you on your way to becoming official home owners.