Finding Out How Much You Can Afford
One of the most important steps, before going out to look at homes, is to find out home much you can afford to spend and what you are comfortable paying. It is key to find a Mortgage Specialist, through a bank or brokerage, that you feel comfortable with and that has the ability to access different lending options. When meeting with your Mortgage Specialist for the first time it is important to have specific information with you in relation to your employment, wage(s) earned, T4 information, assets, expenses and SIN. A credit check is a necessary step to perform through the Mortgage Specialist so you can be pre-approved for a specific amount of money. Being “pre-qualified” is not the same as being “pre-approved”. Pre-qualified is usually just a quick look of what you could afford based on your income and expenses without actually getting into the credit side of things, usually you can do this yourself online with a Mortgage Calculator. Being pre-approved with a credit check gives you an accurate affordability figure to base what you should be seeing with your Realtor.
When you are pre-approved through the Mortgage Specialist you will not only be given a number on what you can afford but you will also be given a Mortgage Interest Rate that you will be charged. The interest rate you get will be based on many different factors, such as the current prime rate, your credit score and your down payment amount. This interest rate is usually “locked-in” for you and will be honoured by the financial institution for a period of approximately 90-120 days.
It is important to keep in mind when purchasing a home that just because you have been approved of some much for the mortgage doesn’t mean you have to spend that much money. You need to consider all of the other costs associated with having a home such as property taxes, utilities, home improvements, lawyer fees for closing, land-transfer tax, renovations, appliances etc. You do not want to become “house poor” and over exceed what you are comfortable paying.
For more information about finding out what you can afford or to get a list of exceptional Mortgage Specialists in the area please give HomeLife Emerald Realty Ltd. Brokerage a call at 705-424-0770.
Broker of Record/Owner