Whether you have been looking for an apartment to buy for 6 months or you want to build , you will at one time or another ask yourself the question of financing . And the sooner the better! Rkenney Law provides an update on how to set up a mortgage, the traps to avoid, the advice to follow, the different types of mortgage.
You will necessarily have to think about:
Before committing or simply looking for real estate, it is useful to know your debt capacity .
The amount that you can allocate each month to repay your loan must meet 2 requirements:
- this monthly payment must be acceptable to your banker (s) and it is generally lower than you thought ...
- this reimbursement must leave you enough to live on and you must plan your future "new" charges.
Sometimes they are able to actually lower their rates to keep (or acquire) you as a customer. Everything will actually depend on your profile (income, household composition, savings, mode of consumption, etc.). The best rates are offered only to the customer whom the bank thinks will be of good value to them.
To get started check the following points:
Once this assessment has been carried out, you must make an estimate of your debt capacity as will be perceived by your banker. The total of the mortgage loans you are going to take out and your fixed charges must not exceed 33% of your total income . This is not an absolute rule. Indeed, the borrowing capacities for a household with 2 children and earning US $ 2,500 are not the same as for a single person earning US $ 4,500 per month.
| 33% of|
| Remains to live|
| Remains to live|
|Example 1||4||$ 2,500||$ 825||$ 1675||$ 418|
|Example 2||1||$ 4,500||$ 1,485||$ 3,015||$ 3,015|
|Example 3||3||$ 5,000||$ 1650||$ 3350||$ 1116|
As indicated in the table above, it is important to check what is left to live for each person in the household after the repayment of the loans.
In example 1 (2 parents and 2 children) there is only 418 us dollars left per person for food, clothing, outings, vacations. This situation is not sustainable over time, yet with a debt of 33%.
In example 2 of the bachelor he has 3015 us dollars left for his current expenses !!! Suffice to say that he could largely have a debt of more than 40% ...
In Example 3, there is also a margin of flexibility possible. With 1116 us dollars per person the debt could be higher.
If you exceed this amount, you will still find banks to lend you, but usually at a higher rate. Do not forget that by becoming an owner you will have new charges to which you were not used such as property tax , co-ownership charges , "compulsory" work (cleaning, heating to change, defective electrical system. ..). Some charges such as EDF are likely to increase significantly if, for example, you move from an apartment to a house, or from geothermal collective heating to fully electric heating.
Example of a budget for obtaining a mortgage
(you can also consult your last account statements to verify that there are no other fixed charges).
|TOTAL||A + B = Z||C + D + E + F + G + H = X|