So, you’ve finally decided to buy a home. Now what you need to ask yourself is: are you financially ready to buy?
Check out these formulas to calculate the size of your loan and evaluate your current financial situation.
You will need to know what your Net Worth is, that way you can discuss your financial situation with your mortgage lender.
What is a Net Worth, you ask?
<< Your net worth is the amount left over once you’ve subtracted your total liabilities from your total assets.>>
It gives you a clear picture of your current financial situation, and it also shows you how much you can afford to put as a down payment.
Get a Mortgage Pre-Approval
Once you feel that you are ready to obtain a mortgage, you may choose a lender to get you pre-approved.
The lender will look at your finances to determine the amount of mortgage you can afford. Once that is established, the lender will supply you with a written confirmation for fixed interest rate good for a specific period of time.
Certain buyers only get a pre-approval until they have found the property they want to buy. It is very important to know how much you’re elegible for BEFORE the home search, as it makes the home-hunt experience much easier and less time-consuming because you have a good price range in mind.
Some of the things you will need to have with you the first time you meet with a lender are:
- Your personal information, including identification such as your driver’s license
- Jod details; confirmation of salary in the form of a letter from your employer
- Your sources of income
- Information and details on all bank accounts, loans and other debts
- Proof of financial assets
- Source and amount of down payment and deposit
- Proof of source of funds for the closing costs (these are usually between 1.5% and 4% of the purchase price)
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Posted by: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 
Buying a house is not that easy, we really need to think about it, save more money for it because it is one of the biggest investment we will ever make.