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
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)