1. Leave some wiggle room
Line up your pay cheque and compare it to your total costs. Make sure that you have enough left over for new furniture, repairs and costs of living. Do a spending analysis to see what the total costs of home ownership would be relative to your lifestyle and build that into your plan (i.e. if you enjoy eating out or going to the gym).
2. The power of the pre-approval and stress test
Make sure you have your financing in order before you start your search – it will show sellers and real estate agents that you’re serious. Mortgage pre-approvals have no obligation and help lock in your interest rate. Work with a professional mortgage specialist to test your mortgage for potential mortgage rate and cost increases to make sure you can handle it.
3. Don’t overbuy
Be realistic in choosing a home that’s within your means and make concessions on what you’re looking for. Set aside a budget for ongoing home maintenance and potential cost increases (for utilities, taxes and fees). Online tools and calculators can help you plan your budget.
4. Look at payment flexibility
Look at a mortgage that provides you with the option of doubling up your mortgage payment or putting down a lump sum payment once a year. Doubling up your mortgage payment just once per year can save you tens of thousands in interest costs and take years off your mortgage amortization period.
5. Don’t forget closing costs
Closing costs are typically one to two per cent of your final purchase price. Build this into your budget along with the cost of new appliances, utility and cable hookup and moving costs.
For more information call Soho Properties at 604-649-1494 and talk to one of our Sales Associates.Posted by Shaz Karim on June 21st, 2011