First Buying

Congratulations on starting the journey to home ownership. It's an exciting stage in your life, and we're here to help you every step of the way with common-sense advice and information. Whether you're preparing financially, searching for the right lender, going through the mortgage process, or looking for savings, you'll find help here. Working out how much you can afford to pay is a vital part of your home buying strategy. It gives you a clear indication of your house price range and the size of mortgage your budget can handle.

The general rule is that your household expenses should not add up to more than 40% of your household income, before taxes. Household expenses typically include property taxes, heating costs, mortgage payments and condominium fees as well as any payments on outstanding loans, leases and credit card balances. Your household income includes your salary and any other income you declare.

We have several calculators to help calculate what you can afford. This calculator will also help you estimate the size of your mortgage and your monthly mortgage payments. This section explains why it's important to have a written, detailed budget. It helps you pay attention to how you spend.

Why budget

A budget helps you:
Prepare for large expenses.

Many people pay for car insurance every six months. If you prepare for that expense by saving part of the money each month, you won't need to panic when the bill comes.
See when items cost too much.

When you pay attention to your expenses, you may be surprised to find how much you're paying for items that aren't that important to you.
Take control of your financial future.

Having a solid budget allows you to control your finances, rather than letting them control you. Budgeting forces you to look at your financial situation the way it really is. Then you can make the best decisions for your future.

Why budget to buy a home

Here's why:
Budgeting helps you save for your down payment and up-front costs. If you stick to a budget, you can save the money needed for your down payment and costs such as closing costs and emergency reserves - much sooner. Also, you can make sure you save enough to cover the many expenses facing a new home owner, including moving, utility hook-ups, tools, maintenance supplies, window coverings, etc.
Budgeting strengthens your mortgage application. Lenders like people who budget. By establishing a regular savings pattern in a savings account, you make your loan application stronger and increase the chances of having your mortgage loan approved.
Why budget once you own a home

Budgeting shouldn't stop when you move into your new home. It's an important part of successful home ownership after you've moved in.

Here's why:
You need money for when things break down. There's no landlord to call when problems arise. If your hot water heater fails, you need emergency funds set aside to repair or replace it. Replacing a hot water heater can cost $500. A new roof could be more than $2,000. A new furnace could cost $3,000 or more. A new heat pump or central air conditioning unit could cost more than $1,200. Save now to be ready for these expenses in the years to come.
New types of bills. You may be paying for utilities such as heat and electricity for the first time. If you don't plan enough money to pay these bills when they are due, your service could be cut off.
Avoid buying on impulse. Don't run out and buy that new bedroom furniture. Budgeting helps you avoid the temptation to make major purchases on credit. If you know exactly how much you have to work with each month, you'll be less likely to load yourself up with heavy debt payments that are tough to keep up with. If you must buy something on credit, shop around for the best loan terms. It's usually better to save for major purchases like bedroom suites and entertainment systems instead of charging them. You'll pay less, or you may decide that you'd rather use the savings for something else.
Watch your mail. As a new homeowner, you may receive several offers for new credit cards. This may seem like a great opportunity to buy new things for the house or other items, but be careful. Keep in mind the financial responsibility of purchasing a home, and review your new homeowner's budget. With credit cards, it's easy to build up a large debt quickly. Most credit cards charge interest for any outstanding balance at the end of the billing period, and that can be expensive, too. If you need a credit card for emergencies, there are cards that require full payment at the end of each billing cycle. This eliminates the cost of interest payments, prevents you from buying something you can't really afford, and ensures good credit standing without a credit balance.