What is your budget?

Before starting the purchase of a property, it is always important to know the maximum budget you are going to use in the acquisition of a new property. We’ll have to set a realistic budget taking into account your lifestyle and your goals. The purpose of this exercise is to set a reasonable purchase price. In this way, the sampling of your search will be more accurate and you’ll avoid exposing yourself to a temptation of an overpriced property to your means.

– Calculating your monthly housing budget

Your monthly housing budget is the amount you have to live, finance and heat your future property, once you’ve faced all your other obligations. For this exercise, you can use more current data that does not change when you become the owner of your new home: your net family income, your debts and expenses.

The difference between your net family income and your monthly expenses is your monthly housing budget. This amount should be sufficient to cover the repayment of your mortgage, tax, heating and 50% of condo fees if applicable.

IMPORTANT

Remember that a budget is useful insofar as it is realistic. It is thanks to him that you can determine the limits of your mortgage. Just before this place looking for your new home, it is best to meet your mortgage broker who can then make a pre-approval, defining your borrowing capacity.

– What amount of financing you need?

To determine the amount you need to borrow, you must know the purchase price of the building and the total expenses you will assume. You must provide several expenses when buying a house. The estimation of this expenses is required to determine the amount you need to borrow to finance the purchase of your new home.

– The downpayment

A higher downpayment means that the monthly installments for repaying the mortgage loan will be reduced. Furthermore, up to 20% less funds of the purchase price will be provided by CMHC or GE Mortgage Insurance Canada. In this case, it will provide an insurance premium based on a percentage of the loan that will be added to the loan amount and a 9% tax on such insurance, payable when signing with the notary.

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