Find out how much you can afford

Before you start looking for your new home, figuring out your budget is the first and most essential step in buying a home. It's probably the most expensive thing you'll ever buy, and there are lots of expenses you might not even know about. Some of them include:

Cost of buying a home:                                                   

One Time Costs: * Down payment  * Legal fees  * Title insurance  * Inspection fees  * Property Transfer Taxes
 Monthly Costs: * Mortgage   * Utilities     * Maintenance     * Insurance     * Property taxes

Mortgage: Determine how much a bank will lend you. The first step in determining how much a bank will lend you is to understand how much you can afford each month. This is determined by using two lending principals.

1- Gross Debt Service Ratio (GDS): Your monthly housing cost should not exceed 32% of your gross monthly family income.

2- Total Debt Service Ratio (TDS): Your monthly housing cost and payments on all of your other debts (including loans, credit card and lease payments) should not exceed 40% of your gross monthly income.

If you need help understanding those two principles, please call me (416-890-2331) and I will explain step by step how to estimate your (GDS) and (TDS)

 

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