What Can You Afford? What to Consider When Calculating a New Home’s Affordability.
Before you start looking for a home, the first step is to determine how much you can afford. You can use a home affordability calculator to add up all your costs and measure whether you can actually afford a home in your desired budget.
Calculating a Home's Affordability Means Fully Understanding the Costs Associated with New Homeownership
- Upfront costs - your initial down payment, feature and finishes upgrades, closing costs and any applicable taxes.
- Rolling costs – ongoing costs such as mortgage payments, taxes, utilities, insurance, condominium fees (if applicable) and general maintenance
What are you currently spending on a monthly basis and can you afford the new costs of a new home?
As you prepare for homeownership, it’s important to get a good handle on your household budget. This includes household and entertainment expenses as well as your short and long-term loans and debts. By having a clear understanding of these costs and obligations, you’ll be able to keep your finances in check so that you can put money aside for your down payment, upgrades and closing costs - all things you’ll need to have in order when you apply for a mortgage