Posted: July 10, 2012   By: Melissa

Steps to financing your home

The process of purchasing a home for first time homebuyers can be fairly chaotic and overwhelming. There is typically much to learn, from picking up real estate jargon, to understanding the entire process of securing a dream home, all while fitting it into a budget.

One of the first steps in purchasing a home is to understand the concept of financing. Ask yourselves, “Can I afford a house? How much of my salary can I allocate to a mortgage each month?”

The Real Estate Board of Greater Vancouver published a helpful article about some financing steps, along with some mortgage tips that consumers should take when investing in their first home.

Step 1: Get pre-approved
In other words, this means that a financial lender must approve of a loan to give you before you move onto the next step. Their approval is dependent on your credit and financial history and information that is provided.

Step 2: Where to get pre-approved
Banks and financial institutions are ideal places to go. Don’t jump and agree to the first loan you get approval for. Shop around and determine which institution can offer you the best rates that complement your budget.

Mortgage Tip

• Homebuyers can take up to a maximum of 25 years to amortize their mortgage. However, many prefer to make higher monthly mortgage payments in order to pay off their mortgage quicker (example: 20 years, instead). The benefit of this is to build equity and avoid interest rates otherwise incurred with increased years of payments.

Mortgage Calculator Example

 

If you've been looking into a new apartment or condo and you know the listed price, use this mortgage calculator to determine how much your monthly mortgage payments will be. 

Article source: The Real Estate Board of Greater Vancouver

More blogs on: First Time Buyers, Investing 101