Test drive before you buy your new home.
It is always interesting how much home buyers think they can afford for a mortgage payment. If someone is paying $2000 for rent and is having difficulty saving for a down payment this is a great opportunity to review with your independent mortgage broker. Then best to test drive before you buy your new home.
The only way to know for sure what you can afford is to review your budget in detail and then see what you can actually set aside for a mortgage payment each month.
For example, if you want to buy a $500,000 home and have the minimum 5% down payment ($25,000) the estimated mortgage payment will be $2500 plus $350 strata and $150 per taxes each month for a total of $3000. If you are currently paying $2000 for rent then set an additional $1000 per month aside in savings to reflect the total of $3000 per month. After 6 months you will have a better idea on how your lifestyle can handle the increase in monthly costs – and you will have an additional $6,000 in savings!
If you think you need more time to reset your spending habits and manage the shift in monthly costs then keep going for another 3-6 months with the program to test drive before you buy your new home.
If you are worried about interest rates you can always secure a rate hold for 120 days along the way. Once you are ready to buy you have a rate and payment in mind and how much you can qualify for on a mortgage.
I am happy to help discuss your options and to set up the plan to test drive before you buy.