" Can we afford it ? " That's the first thought that comes to mind when shopping for your next dream home. Fortunately, it's an easy question to answer if you consider your lifestyle,financial goals, expenses and mortgage eligibility.
There is more to life then just paying the mortgage and other living expenses. Hobbies,entertainment,vacations,family adventures are also important. Don't be house poor. Think of your "lifestyle" as another expense.
Your home is not just a place to live...it is also an investment. Make sure it fits with your OVERALL investment plan which may include RRSP,RESP,Cash, other Real Estate and Emergency Money.
The mortgage isn't your only home expense. You must also calculate insurance, utilities,taxes, maintenance and other costs.
Be careful ! Banks make more money when you pay more interest. Therefore, they want to get you approved for the highest amount possible. Remember, that although you may qualify for a $400,000 mortgage, you may not want that high of debt. It will depend on your lifestyle,financial goals and home expenses.
In closing , I know that when I FIRST meet with potential buyers...home affordability is like a jigsaw puzzle. However, once I am able to go over some of the above items , the buyer begins to get a clearer picture of what they can afford.
I hope that I was able to shed some light on YOUR situation as well.
Till next time ...stay well.