When you prepare a budget, you’ll know what resources you can allocate to mortgage payments, living expenses and other financial situations. Everyone involved in financial decisions should also be involved. Your Realtor can assist you in helping you establish a budget, review financial qualification guidelines established by financial institutions, and even suggest some ways to obtain financing, either through traditional lenders, or another institution.
You’ll need a down payment. This can be as little as 5% of the purchase price. However, this type of purchase requires a high-ratio mortgage and insurance. Fortunately, Canada Mortgage and Housing Corporation helps Canadians purchase their first home this way, through a federal insurance program. Your Realtor can provide details on this program.
Collect the following to prepare your plan:
Subtract expenses from income. Could remaining funds be directed towards a mortgage, debts or additional savings? How will a home purchase fit into your budget? Also consider items like insurance, taxes, repairs and maintenance.
How much house you can afford to buy depends on two things:.
Purchasing a home involves one-time costs and monthly expenses. The largest one-time cost is the down payment. It usually represents between 5-25% of the total price of the property. In addition to the actual purchase price, there are a number of other expenses that you might be expected to pay for. These are listed below:
Typical One-Time Expenses
Mortgage Application and Appraisal Fee At time of application
Appraisal Fee At inspection
Property Inspection (optional) Closing
Legal Fees Closing
Legal Disbursements Closing
Deed and/or mortgage registration Closing
(sometimes provided by seller) Closing
Land Transfer, Deed Tax or Property
Purchase Tax (in Quebec within
3 months following signing) Closing
Mortgage Interest Adjustment and
Take Over Fee (if applicable) Closing
Adjustments for Fuel, Taxes, etc. Closing
(and application fee if applicable) Closing
Home and Property Insurance Closing and on-going
Connection charges for utilities
such as gas, water and electricity Date of move
Moving Expenses Date of move
Other costs may include landscaping, redecorating, furnishings, appliances and repairs.
Typical monthly Expenses
Mortgage payments,maintenance, insurance, condo fees, property taxes and utilities.