Learn to Budget Your Own Purchase
So you have decided to take the big step and want to own a home!?
You will be surprised how many clients I meet up with who have already found a property they want to purchase and never even done their budget. When I ask them if they have reviewed a budget, I get a very common look ….. which can be easily summarized by this 🙁 It is extremely important to understand the responsibilities of being a home owner and how your life WILL CHANGE.
Where to begin…… This is usually my first question and I find it is a good way to get you thinking about your new budget.
1) Are You Renting ? How much are you paying in rent?
– Are you struggling just paying rent? If so, owing a home will be an even greater struggle
2) Are You Saving Money ? How much are you saving per month?
– If the answer to either of those questions are $0 = you are most likely about to be in for a big shock.
– 99.9% of the time, owning a home will take up more of your monthly income then renting.
– However, part of the monthly payments will be going towards the equity in your home (in a way you are still saving) just not into your saving account.
3) Consider the Intangibles – you will have added cost like, Property Taxes, Strata fees / Maintenance, Heat etc…
– All monthly cost that you most likely did not have to worry about when renting.
4) Set Your Budget – never ever.. ask what you qualify for and take that mortgage.
– The bank has a basic calculation for income to debt, which does not consider a person’s lifestyle.
– If you are the type of person that does not like to travel, prefers eating at home vs. eating at restaurants, and does not go out much, you can definitely take on a larger mortgage then a person that travels, has dependents and more monthly responsibilities.
5) Conclusion – Budgeting and understanding home ownership responsibilities is extremely important and does take time (more time then a quick article to explain).
– You should definitely review this with a mortgage planner to ensure you are ready to own your own home.
CHARITY – facebook.com/MortgageForACause