Planning and adhering to a budget is one of the most challenging tasks for people when it comes to their personal finances. Knowing what you can reasonably afford each month becomes even more crucial when you’re purchasing your first house because it’s probably the biggest purchase you’ve ever made. If you are currently renting, a smart place to start is by asking yourself, “If I’m paying $1,500 in rent, is it realistic to start paying $2,350 for a mortgage?”
New Property = New Expenses.
Owning a home entails additional monthly costs than just your new (and potentially higher) mortgage payment. You should also consider the ongoing costs of:
· Property Taxes
· Homeowner Insurance
· Maintenance and Repair
· Utilities and Municipal Services
· Strata Fees
While your landlord may have rolled some of these costs into your rent, you will now be fully responsible for making the payments or having emergency funds on hand. Each of these
expenses should be included in your homeowner’s budget so that you have a complete view of your new financial situation. Working with a realtor can enable you to obtain current prices for the house you’re interested in, allowing you to use correct figures in your budget. Additionally, there will be some large one-time charges, such as the closing costs of your purchase, the property transfer tax, and any furnishings or appliances you’ll need for your new house.
Your Total Debt Load
You should now ask yourself, “How will this impact all the other debt I’m carrying?” after determining how much of a jump-up in rent you can afford. The priority might be to examine those bills and determine if you can pay them off more quickly if you have other debts that will be delayed because you took on a mortgage. Being a homeowner is expensive, as you can see from the list above, so you want to be in the greatest circumstances possible when you take on this duty. After all, you want to enjoy your house, and not worry about paying the bills.
Our free handbook for first-time home buyers is brimming with knowledge and advice you can use right away, whether you want to sharpen your budgeting techniques or proceed to the next stage in buying your first house.
Auxilium Mortgage Corporation is based in Victoria, BC, and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals. If you’re ready to start your first home-buying experience, contact us today for a free consultation with one of our mortgage specialists: call Toll-Free 1-855-590-6520 or visit us at 307 Goldstream Avenue during regular business hours. We can also arrange an appointment for evenings or weekends to work with you.