Unexpected Housing Costs can bite into your budget

Posted by Joe Quirk
When looking to buy, many homebuyers look at space, neighbourhood and nearby schools. But can you actually afford that home and any unexpected costs? “You should always plan for extra and unforeseen costs when you buy a home, so it’s important to strike a balance between having a nice property and maintaining a lifestyle that you’re comfortable with,” says Marcia Moffat, RBC head of home  equity financing. How much would your current mortgage  payment have to increase before you start to  become concerned? An RBC Home Ownership poll showed that 18 per cent of Canadian homeowners felt they were at their mortgage limit and rising costs (due to increasing mortgage rates or housing prices) was the number-one concern  for Canadian homebuyers. Here are three tips to help you budget before buying a home: 1. Leave wiggle room Compare your pay cheque to your total costs. Make sure that you have enough left over for new furniture and costs of living. Include lifestyle considerations to make sure that you aren’t leaving yourself house-poor. 2. Cover all the angles Consult with a mortgage specialist to determine the total costs of home ownership, conduct a spending analysis and build that into your plan. 3. Look to the future Prepare for affordability down the road by stress-testing your mortgage for future rate increases with the help of a specialist. This will give you a better idea of what’s affordable now and in the future. NC
	Categories: Finance