How to Determine How Much House You Can Afford in Mississauga's Real Estate Market
Thursday Mar 30th, 2023
When buying a home in Mississauga's competitive real estate market, knowing how much house you can afford can be challenging. Before you even start the house hunt, you need a clear understanding of your budget; otherwise, you will spend time looking at property listings over and above your price range. If that happens, it is hard to see past the disappointment once you realize your expensive dream home is out of reach.
Understanding Housing Affordability in Mississauga
To get an idea of what you can afford, you will need to take the following into account:
1. Your down payment
2. Your household income
3. Your current debts (liabilities) and your monthly payments associated with those debts
4. Your estimated monthly housing-related costs, like your mortgage payment, property taxes, insurance, utilities, maintenance, etc.
5. Your anticipated closing costs and other one-time costs, like lawyer fees, taxes and moving expenses
6. Your current spending practices
Essentially, you have to look closely at all your expenses – because, no matter what, you still have to put food on your table, clothes on your back, gas in your car and have a little leftover for fun. And let's not forget to put money aside for emergencies and savings.
Real Estate Homebuying Calculators
On my website, I provide four helpful homebuying calculators to help my clients understand how much house they can afford:
This online tool helps homebuyers estimate their mortgage payments. By inputting the home's price, down payment, interest rate and amortization period, clients can calculate their monthly mortgage payment and even see the impact of prepaying on their loan.
CMHC Insurance Calculator
The Canada Mortgage and Housing Corporation (CMHC) insurance calculator provides an easy-to-use tool to calculate the insurance premiums that may be required for a mortgage loan. By entering the down payment amount, purchase price and other related information, the calculator helps homebuyers estimate the cost of mortgage loan insurance provided by the CMHC.
Land Transfer Tax Calculator
This easy-to-use tool provides accurate calculations based on the current municipal and provincial Land Transfer Tax rates. It helps homebuyers and investors budget for their next residential or commercial property transaction.
Mortgage Affordability Calculator
This mortgage affordability calculator assists with determining how much house homebuyers can afford. Buyers gain a better picture of affordability before starting their home search by considering the down payment, household income, current debts and estimated monthly housing-related costs.
Sound Real Estate Advice in Mississauga
These online tools are a great place to start when determining mortgage affordability. There are several other factors that lenders consider, as well. Meeting with a mortgage broker or financial institution before starting your home search and getting pre-approved for a loan is in your best interest.
As an experienced realtor in Mississauga, I have established relationships with many trusted mortgage lenders across Southern Ontario. These professionals provide my clients with the best advice and guidance for a positive homebuying experience.
To learn more about getting approved for a mortgage in Mississauga, contact me, Deborah Clerk, at Keller Williams Real Estate Associates, Brokerage, to get started.