Planning on buying? There are a few things you might consider. The most important factor of all when it comes to home buying Is money. Without proper planning and budgeting, you are making yourself prone to a lot of mistakes that might cost you much more than your budget. Here are a few financial factors that you should consider before attempting to buy a home.
In Fort McMurray, we’ve been in a buyer’s market for some time, which may stick around for a bit. But it’s not the home prices themselves that you should watch out for: what you can afford has changed. With a new mortgage stress test in place, your budget may be reduced by up to 25%:
Because of tighter mortgage lending rules, buyers simply can’t afford to buy the same house as they would have in 2017. This could mean shaving anywhere from 5% to 25% off your maximum house-price budget—although consensus shows it will mean an 18% reduction in your maximum purchase price for one in six borrowers, who put down less than 20%.
One unintended consequence of this forced fiscal responsibility is that more buyers will end up competing for cheaper properties—possibly driving up the prices of condos and townhomes, properties previously considered more affordable. Via moneysense.ca
It is important to budget for the house you’re looking for. You should know how to estimate how much is the price for a house that you want.
Next is the bills. Home buyers often overlook expenses to be made after a house is bought. Maintenance, tax, and other costs add up:
Saving up for a down payment on a house is one of the most drawn out arduous journeys in a young adults life. It’s a road that seemingly has no end. After all, you’re at a stage in your life where money can be easily put to use elsewhere.
The sheer excitement of purchasing a new home can cause you to stretch your budget and overlook certain expenses. When budgeting for your house, any real estate agent or lender will make it clear to include taxes, insurance, interest and of course the principal. However, it’s important you take all costs into account and make sure you don’t bite off more than you can chew; immense stress is not worth a bigger house. Take into account the utilities, renovations and maintenance costs. Even if your home is in tip-top shape, you will learn that things consistently break down and require maintenance.
It’s worth noting that in many ways, the cost of owning a home in Fort McMurray is going up, so expenses are worth looking into.
Lastly, is to check your budget. It seems obvious, but it’s easy to overestimate what your budget allows. This is especially important after mortgage rules were changed last year. A recent post from NLD Info explains the importance of checking your budget:
Checking your budget
Most people are filled with excitement when they are buying a home. You will always have many ideas rushing into your mind as you imagine how you would like your new home to be. This over-excitement can end up clouding your mind. This is something that can make your mind ineffective when you are making some of the critical decisions.
The property chosen should be affordable. You are discouraged from going beyond what you can afford. Some of the useful tools that can help you in checking your budget include the Real Estate’s Calculator. This tool is used for measuring the affordability of property or home. You can use it to know the maximum amount of money that you can spend. A mortgage calculator is another useful tool that you can use. This will help you in calculating the amount of money that you will be paying. Read more at nldb2015.org
It’s much better to keep saving instead for the house you want instead of taking a risk and overspending.