Budgeting for first-time home buyers

New home buyers are often so focused on getting that first mortgage that budgeting is sometimes overlooked. Many first time buyers are excited and forget to take into account the costs that are associated with buying a new home, so they stretch themselves too financially thin. It is extremely important to work out the costs involved in buying and owning a house and to calculate what you can realistically afford to spend on your new home.

Our experienced mortgage brokers can advise you and help you create an effective budget that will enable you to get the best Canadian Mortgage that suits your needs. By accessing our vast network of lenders, we will get you the best quote to meet your needs and your budget.

For first time home buyers, the following costs should be considered when creating an effective budget:

• Deposit - ensure you can meet the costs required for a down payment. The deposit can be a gift, personal funds, or borrowed. Also, at a slightly higher interest rate and depending on your credit history, no deposit may be necessary.
• Disbursements - take in to account various fees including legal, inspection, taxes, registration, insurance and appraisal fees.
• Mortgage insurance - consider mortgage insurance if you take out a high ratio mortgage of 75% or more of the property value. Insurance premiums can be added to your loan, but you may have to pay application fees. (See: Partners in Planning)
• House and content insurance - plan to protect your possessions and your new home investment.
• Moving costs - ensure you can cover moving expenses as they can add up quickly. Take all the likely scenarios and details into account.
• Utility bills - anticipate connection fees as well as monthly and quarterly bills for your utilities. This might be a new expense for those who have been previously renting and were not responsible for utility payments.
• Maintenance and renovation - plan for unexpected costs associated with unforeseen repairs and renovations in your new home. Unexpected leaks and breakdowns need to be considered as possible occurrences.
• Miscellaneous living costs - account for other bills, groceries, furniture, household accessories, and even vehicle costs.

Our professional mortgage brokers are trained to assess your details and give professional advice regarding how much you might be able to borrow based on your budget, your income, and your possible monthly repayment. We want to help prevent new home buyers from stretching their resources too far so they can find a mortgage they are comfortable with and one that they can afford without becoming house-poor.