Owning real estate is truly an amazing experience and opportunity. For most people it’s their largest investment as well as a place where memories are formed. Even though the Toronto market is very competitive I always encourage my clients to buy within a range that feels most comfortable for them. Since most pre-approvals are much higher than what clients feel comfortable spending, I always suggest creating a budget. Here are the steps to create your housing budget;
- Itemize everything that you spend money on weekly, monthly and even on a yearly basis.
- Speak with the mortgage broker to determine what the monthly payments would be at a particular purchase price.
- Calculate that into your monthly budget to see how it work. Keep in mind there are also property taxes, condo fees (if applicable) and utilities.
I generally also suggest that clients put aside a certain amount monthly into a forced “house savings” to cover off any maintenance which could arise unexpectedly. Some people might find, that given today’s market conditions that they will need to push themselves a bit which might mean cutting back in other areas of your life. The good news is that this will likely only be temporary and the benefit is you are investing in yourself.
I have created a working budget for my clients to enter in all their data. If you would like a copy of it, please ask. I am happy to email it.
Next, let’s look at making an offer and if you need a lawyer for this process.