Many Renters dream of taking the money they spend on rent and using it for mortgage payments. But there is a lot more to to buying and owning a home than just paying mortgage. There are real estate and legal fees, home inspection and moving costs, property taxes, utilities and interest rates.
One of the best ways to determine if you can realistically afford to buy a home is to sit down and crunch the numbers.
Instead of using a hand-held calculator or a pen and paper, you can check out the new on-line Rent or Buy calculator at www.ic.gc.ca/oca/rentorbuy It is FREE and it gives you an instant snapshot of your potential as a home buyer.
Developed by Industry Canada, the calculator asks you to enter current financial information (such as savings you might have, the cost of your rent and utilities, the interest rate you might get on a mortgage) and the calculator does the rest for you.
It shows you the maximum house price you can afford, the down payment needed, your closing costs, and how much money you will need to cover all your monthly expenses, including mortgage payments, property taxes and utilities.
The web page also has links to other Government of Canada tips and resources on buying or renting a home and mortgages.
Another important aspect of renting is ensuring you have what is called “Tenant’s Insurance”. This not only covers your belongings in the event of a fire or other calamity, but it also insures that you are not left on the hook for damages if you cause a flood by overfilling the tub and it affects your neighbour or damages the building in any way. For more information on Tenant’s Insurance, please visit the Insurance Bureau of Canada’s website here.
So if you have done your homework with the above tool, and find that you CAN indeed afford to buy a home ~ then give me a call and let’s get started on getting you and your family INTO your first home!