Three important considerations before getting a mortgage

Canada, 26th January: Are you looking for getting a home mortgage and want to know the vital things to be considered before going ahead with this? Let us find out in this article---

Becoming a home owner is, undoubtedly, an important decision for many of us.

And this involves putting a large part of our savings for getting the home of our dreams. Apart from the savings, we also have to apply for a mortgage in order to pay for the purchase of our home.

But, before you proceed with getting a home mortgage, consider the following points---

•Know your budget---Any prospective home buyer must have clarity about his financial position. Only then can he take a right decision as to whether he can afford a particular house or not. This includes analyzing your incomes and expenditures for each month. This can help you in knowing the amount available for mortgage payments.

The financial institution, for e.g., a bank looks at the income of the concerned prospective homebuyer before giving a pre-approval. A couple can look forward to buying a house that costs around 3.4 times their pay.

• Affordability factor—While knowing whether any prospective homebuyer can afford the home or not, make sure that all debts( don’t forget to include the new home mortgage) should not exceed 40 percent of the total salary.

•See your credit report—You must not forget to check your credit status before proceeding with your mortgage loan. Your credit report will be checked by a financial institution like a bank to know your creditworthiness. Remember, your credit report is a vital document that will help in knowing whether your loan amount will be given an approval by the money lending institution or not. Make sure to review the report in order to see if the report has any negative listings.

• Location of the house to be bought—Any prospective homebuyer must decide the location where he wants to buy his new home. Whether he wants to have his house near the city, near schools etc. In fact, this is the first and foremost factor for any homebuyer, says regional sales manager at TD Canada Trust, Linda Dupont.