Wednesday, 12 December 2012
Before starting to search for your dream home, it is extremely important to know what you can realistically afford. It is too easy to get caught in a cycle of disappointment when you're finding properties you love, but that don't fit your budget. Additionally, you need to make the distinction between what you will be approved for versus your budget. Acquiring a mortgage for a lower amount than a lender will allow will not only make budgeting easier, it will also give you the opportunity to pay it off faster.
The recent reduction of the maximum amortization period on insured mortgages from 30 to 25 years has had a dual effect. While it has increased the amount of a monthly mortgage payment on any given mortgage, it has also allowed home owners to reduce their mortgages at a faster pace, which shouldn't break the bank if you have budgeted correctly. Colette Delaney, Executive Vice-President of Mortgage Lending, Insurance and Deposit Products at CIBC says, "Your mortgage payments should fit your life - you shouldn't have to fit your life into a mortgage payment."
Finally, before diving in to your house hunt, talk to a Mortgage Broker and obtain a pre-approval. Securing a pre-approval not only gives you an idea of what your mortgage rate and payments will be, but will make the process much smoother when you finally do find your first home. It gives you time to iron out any potential issues that may come up when securing financing and take care of them before you make an offer.
Click here for the full article from Moneyville.