Home Buyers

Three Tips to Get You On Your Way

1. How much can I afford to pay for a house?

Before you start shopping, find out “how much house you can buy” by getting pre-qualfied. You will need to gather the following information:

  • Letters from your employers that state your annual base employment income, your employment start dates and your jobs or positions;
  • An estimate of the down payment funds that you will apply to the purchase (i.e. equity from the sale of your present home, cash in savings/chequing accounts, Canada Savings Bonds, guaranteed investment certificates, inheritances, gifts, RRSPs, investments, etc.);
  • A comfortable level of “shelter cost” is to allow a maximum of 35% of your gross annual income for principal, interest, property taxes, home heating and condominium maintenance fees if applicable. All of your other monthly obligations, plus the “shelter cost”, shouldn’t exceed 42% of your gross annual income.

2. What type of house should I buy?

Make a list of your “needs and wants”. The “needs” are “must-haves”. The “wants” are optional.

  • How many bedrooms do you need for you and your family?
  • How many washrooms do you require?
  • Do you have time to cut grass, plant flowers and remove snow from driveways?
  • Do you need a large principal room for the family to use?
  • Can you convert an unfinished basement into useful space?
  • Where do you want the laundry room to be located?
  • Do you need a lot of closet and storage space?
  • Do you need a garage?
  • Do you need a play room for your children?
  • Do you want lots of space around you?

3. Where should I buy a house?

Location, location, location… Small town, city or in the country? Established area or new sub-division? Near a lake or a river or on a hilltop?

  • Do you need to be close to public transit?
  • Do you need to be close to schools and parks?
  • Do you need to be close to your work place?
  • Do you need to be within walking distance to shops and places of worship?
  • Do you mind driving long distances?