When people are looking for new houses, most of them make the mistake of going to look at houses before they have calculated what they can afford. Therefore, they fall in love with a house that they cannot afford.
This is a mistake because they will be sad that they could not afford the house that they wanted and when they find a house that they can afford, they will never feel at home. It will not be the house that they wanted so they will never settle there. Those people will probably move around a lot in their lives.
If you are in the position where you want to buy a house and you want to start booking viewings, then the trick is to never see the houses that you can't afford. That way, you will never fall in love with a house that is out of your league.
That may seem a bit brutal, but being disappointed and leaving beyond your means is a bad path to be on. You will end up in debt and you might lose the dream house in the future.
Plan Your Budget
Before you even start looking at homes, you need to plan a budget for your new house. Look at your wage slip and calculate how much you can afford to pay each month.
If you can't afford what you expected, then you should be thinking about downsizing. At first, this does not mean that you should look for a smaller place. It means you should go through everything in your house and if you haven't used something in a year, then you should sell it.
You should save the money that you make on all the junk that is lying around the house and put that towards your deposit. Most companies will require that you have a 10% deposit on the house that you want to buy. If you have more than that then you might be able to get a cheaper mortgage and you can afford the house again.
Therefore, you will have taken the steps that you needed to do, to afford the house of your dreams. And, you will have done it the right way. You haven't gone into debt, or put any financial strain on yourself to do so.
Now, if you have done everything that you can and you still can't afford the mortgage on the house that you want, then you are going to have to look somewhere else and find something cheaper. You should not stretch your finances to try and live in a house that you cannot afford. You will be miserable and that house will become a symbol of a struggle, not a symbol of your happy life.
Mortgage
Before you start looking at homes, a good idea is to make an appointment with a mortgage advisor and see what services that they can offer you. They will work out how much you can afford to pay and hopefully they will leave you some money left over to put into a savings account.
They will need to know how much money you make, and how much you spend on things like food, electricity, entertainment and clothes. A good broker will leave you with enough money to pay for these things. They won't allow you to put all your left over money towards your mortgage payment. You will need money left over to live on.
You will also need to ask them if you can leave some money aside for an emergency. This is so you can plan ahead in case you suffer from an illness in the future and you can't work, or something breaks in the house. If you don't have emergency money, then you will lose the house before you have even bought it, in a way.
Gert Martens is a mortgage associate who works for Dominion Lending Centres. Dominion Lending Centres is a comparison website which lists Canada's largest banks, credit unions, trust companies and financial institutions. They are able to have financial services from the institutions that are only available through the website. Dominion Lending Centres offers a product line that is usually only available to mortgage professionals and their clients. They are well equipped to make sure their customers are able to get the home of their dreams. They can do this through a low interest rate mortgage product line and using the best technology, paired with staff members that are trained to the highest ability. You can visit their website at http://www.gertmartens.ca
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