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How Much House Can You
Afford?
By Ann Smith,
Broker
Do your homework! You may have
gotten tired of hearing that phrase while in school, but when buying or
selling a home, being prepared can have a huge impact on your financial
future.
If you’re purchasing a new home, know what price you can afford. If selling
your home, know what it’s worth in today’s market. Be honest with yourself
– purchase and live within your financial means.
Purchasing: What can you afford?
This may depend on whether you’re trying to become a new home owner or
already have a home with a built-in investment.
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Many banks or mortgage
companies have online calculators that take into account your income,
debts, and down payment amount, among other factors, to determine how
much of a home you can afford.
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Consider a mortgage broker
who reviews various mortgage providers for the best rate for your
financial situation.
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When moving from renter to
home owner keep other expenses in mind, such as heat, water, hydro,
property taxes, renovations, and other home-related expenses.
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When setting up your home
there are additional costs to consider including legal fees, moving
expenses, utilities, cable and telephone hook-ups, plus the time required
to be at home for the service/delivery personnel to show up.
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Mortgages come in various
forms: open, closed, variable, et al; be sure you get the best version to
match your lifestyle with consideration to the long term financial
investment.
Selling: What is your house
worth?
The key to answering this question is to look at house prices in the
current market, which may be very different than when you first purchased
the property.
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A good real estate agent
will tour your home and then compare it to other homes that have recently
sold in the area.
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Most grocery stores have
“houses for sale” magazines available for free; review these to become
familiar with neighbourhood house prices.
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Most real estate companies
and/or agents have their own Web sites that help you become familiar with
prices in the area and understand your home’s value.
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Although your renovations
may have been costly, they may not add the same amount to the value of
the home – kitchens and bathrooms are best value adders; hot tubs are
not.
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Remember that your personal
attachment should not come into play when valuating your home. New owners
are not concerned about how many family Christmases you’ve hosted since
you bought the house.
Back to Archive
Ann
Smith, Broker
Your Real
Estate Consultant…For Life! |
