Unless you're a turtle, you don't want your home to be a big weight on your back.
But for many people, the thought of buying a home is just that, a weight. Where to look? What to look for? How much to pay? The considerations go on and on.
You can take much of the anxiety out of the process by doing some homework first. A great place to start is figuring out just how much you can afford. After all, answering that question will help you focus on your realistic options.
First, get a fix on your net worth. That's the difference between your assets (what you own -- things such as savings accounts and bank deposits, stocks, bonds, vehicles) and your liabilities (what you owe, such as loans, credit card balances, unpaid bills, existing mortgage and so on.)
You'll need this information when visiting your financial institution to discuss a mortgage, and to help you assess how much you have available for your down payment and initial costs.
When you look at what you can afford, don't just consider the purchase price. There are all sorts of extras including the inspection fee, appraisal fee, legal fees, closing costs, property insurance, and moving costs.
It all adds up, perhaps tacking on two per cent or more to the price of the home.
Then there are the financial obligations that you must be prepared to assume on an ongoing basis: monthly mortgage payment; property/school taxes; utilities and ongoing maintenance. With a new home, you may also have landscaping costs including new fencing and decks as well as driveway repairs, etc.
However, when buying a new home, many builders provide assistance for the legal costs of registering the mortgage.
They can also have the appraisal fee paid for and can include some of your extras, such as driveways, fencing and decks. All this could save you much of those closing costs.
Opinions expressed in this article are those of the writer only. Any rates or amounts cited were correct at the time of submission. Bill McFarlane is senior sales manager, builders markets For RBC Royal Bank.
