Budgets, Pre-Approvals, and Mortgages – Oh my!
One of the first things new home buyers need to consider is their financial readiness to purchase. You have to consider not only what you’d LIKE to spend but how much you HAVE to spend. The Canadian Mortgage and Housing Corporation (Canada’s national housing agency) has a fantastic website for homebuyers – questions to ask yourself regarding whether homeownership is right for you, information about the buying process, and also plenty of tools to help you determine if you are financially ready to purchase your new home.
Once you’ve determined that you are ready to buy a new home, it’s recommended to get a pre-approved mortgage before you start shopping. Working with your lender, you will take a look at your finances (income, debt, assets, etc.) and they will let you know what amount of mortgage you can afford. While a pre-approval is not a guarantee for mortgage approval, it can help in your new home search by narrowing down your shopping budget.
Your lender can also help you decide between the different mortgage options: amortization period, mortgage term, fixed or variable, open or closed. With so many things to consider, getting information from your local expert is extremely important.
Also, be sure to speak with your lender about programs that are available to you – for instance, the Home Buyers’ Plan, if you are eligible, allows you to withdraw funds from your RRSPs to buy a new home.
Location, Location, Location
Location is one of the most important considerations when purchasing a home. The location of your new home influences its value (and cost) but also your lifestyle. Some things to consider when choosing the location of your new home include:
- How far is your new home from your work? Will the commute have an effect on your budget?
- Are you looking for a community in the suburbs, city, or country? How will the size of your lot affect your lifestyle?
- What schools are available in the area for your children?
- Which amenities are most important to your family? Are they readily available in your new community?
What’s your type?
Deciding the type of home that best suits your needs is also among the most important things to consider. While budget plays a large role in determining the type of home you can buy, your lifestyle and needs should also be considered. Bungalow or two-storey? Single family detached, semi-detached, or townhouse? Freehold or condo? Our sales agents are happy to chat about the pros and cons of all of the many types of homes we offer. Feel free to contact us for help deciding which new home is best for you.
All the bells and whistles
In order to find a house that will best suit you and your family, your wants and needs should be clearly defined. Some needs (current and future) to consider include:
- How many bedrooms and bathrooms do you need?
- How many parking spaces will you need? Covered?
- Will stairs be problematic due to mobility concerns?
- Do you need a nanny or in-law suite?
- Is a separate space needed for a home office or home schooling?
Some wants can be almost as highly prioritized as needs and can include things such as:
- Size of lot to accommodate a pet, hobby, or future pool
- Storage space in the home or garage
- Separate dining space for family meals
- Kitchen layouts – breakfast nook, work island, island with seating
Once you’ve taken the first steps, researching your financial situation, investigating mortgage options, and identifying what you want and need in your home, it’s time to start shopping! Click here to get your new home search started.
The comments found on this page do not constitute legal and/or financial advice and are for informational purposes only.