Mortgage The Right Planning Can Make You Feel Right At Home

2017-03-16   minute read

Naida Kornuta

Lifestyle Debt

Congratulations! You’ve found your perfect home and qualified for a mortgage. The big work is done now. Or is it? Many people do not realize it, but home ownership goes beyond just your mortgage and there are many things to consider before you put an offer on that property. A very important first step is to do a comprehensive review of your budget. Consider any outstanding consumer debt payments you may have to determine if a new mortgage payment and taxes are financially manageable.

Study the area that your desired property is in. Is there an image that you may want to maintain? Are there new cars in the driveways and are the lawns perfectly manicured? Try to bear in mind that keeping up with this image will cost you and you need to be financially prepared if you want to upgrade in any way.

Consider the following:

You’re going from an 800 square foot apartment to a 1,400 square foot bungalow. Your current furniture is either too old to bother moving or will not fit in with the style of your new home. And perfect timing – you found a great deal for a new sofa, loveseat and recliner with no payments for two years! Wait! Don’t be so quick to jump on this ‘great deal.’ Consider the consequences. When the first payment is required, the furniture will be two years old and may already be showing wear. Read the contract before you sign as you may be faced with large interest payments if you are not in a position to pay off the financing prior to the two year term ending.

A larger home also means higher utility bills - more space to heat, more water to use, more electricity to run. Will this fit within your budget?

With low interest rates, you may not consider paying down your mortgage sooner. In fact, this may be the best time to focus on debt repayment. If your mortgage arrangement allows for double-up payments or annual lump sum reductions of principal, it makes a huge difference in the long term. Getting ahead with your mortgage payments prepares you for potential interest rates increases.

Never get so busy making a living that you forget to make a life. This includes working in order to have a house. Your home is where memories are made and should be a place of comfort, not stress. Before you put an offer on property, consider the whole picture that comes with home ownership.

If it is still feasible to make that offer, congratulations and good luck! If you are already in your first home and are experiencing financial difficulties due to the unforeseen expenses, you’re certainly not alone and help is available. Contact a Licensed Insolvency Trustee at MNP Ltd. for a free, confidential, no-obligation financial consultation. Together we can discuss your options so you can make a fully informed decision as to what is the best route forward for you and your home.

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