How many times have you heard this statement……Buying your first home is probably one of the biggest financial transactions you'll make in your lifetime.
Well, it's true. Before you go out and fall in love with that perfect house, make sure you can afford it. There is nothing worse than finding the perfect house, and then finding out from the bank that they won't give you a big enough mortgage to buy the house of your dreams.
Here are the areas you should have answers for before you go house hunting.
Rent versus Buy
1) compare monthly rental versus monthly mortgage payments;
2) compare the cost of renting to the after-tax cost of owning; and
3) see how rent increases, price appreciation and down payment adjustments can affect your decision.
How much house can I afford?
Use the Home Affordability calculator to determine your price range, and the size of mortgage you need, before shopping for a home. This important step will help you avoid unnecessary frustration by focusing on homes in your price range.
Why should I get a pre-approved mortgage?
There are 2 main reasons for getting pre-approved.
1)You will know exactly how much you can afford, and just as importantly…
2)You can negotiate the best price because the seller knows you are serious and you have the resources in hand to make the deal. And if you see a house for $250,000, but are only approved for $225,000, you may get the house for $225,000 because the seller knows that's all you have, and he may wish to sell quickly instead of holding out for a higher price later.
