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A good number crunch increases confidence

Canwest News Service 
Published: Saturday, April 05, 2008

Is homeownership right for you? Canada Mortgage and Housing Corp. suggests you ask yourself the following questions before you begin your home search:

- Are you ready to make the move from renter to homeowner? If you would like some stability, are interested in performing or overseeing home maintenance and repairs, and if you are willing to invest some or all of your savings into your home instead of in vacations, retirement or a business, then homeownership may be right for you.

- Are you financially ready to buy a house? To avoid any unpleasant surprises, calculate your net worth, current household budget and any monthly debt payments you already make. This information can help you evaluate your current financial situation and your maximum price. Your monthly housing costs (including mortgage principal and interest, taxes and heating) shouldn't add up to more than 32% of your gross household monthly income. Also, your entire monthly debt load shouldn't be more than 40% of your monthly income.

- How much will your home actually cost?

Once you've figured out the price range you can afford, take into account the other costs: mortgage loan insurance premiums, appraisal and home inspection fees, legal fees, moving expenses and a down payment, as well as ongoing costs such as taxes, maintenance and repair costs and condo fees.

- What kind of mortgage is right for you?

Depending on the size of your down payment, you may have a conventional or high-ratio mortgage. You will also need to choose the term and amortization period, work out a payment schedule, decide on a closed or open mortgage, and choose between a fixed, variable or adjustable interest rate.

-For more information on buying a home, visit cmhc.ca or call 1-800-668-2642.

Posted on Wednesday, April 9, 2008 at 06:04PM by Registered CommenterElaine in | CommentsPost a Comment | References1 Reference

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