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3 Things to Consider When House Shopping

When considering your options for which home you are going to purchase it’s important to keep a few things in mind.

1. Stick to your budget

You’ve likely gotten a pre-approved amount that you can spend and you’re excited to start looking in that price range. Often time, your mortgage broker has given you the maximum purchase price amount so you know what you can spend up to. When some hear a certain number, they think that’s the amount they need to spend.

What buyers don’t realize is that when you’re shopping at your max, little things like your property tax amount and heating calculation costs may put you over what you’re qualified for, which results in you either having to put more of a down payment or not being able to buy the home after all.

It’s a good idea to set your budget below what your maximum allowable amount is so that there’s room for just in case property taxes are  higher than what’s expected.

2. Purchase Plus Improvements

Sometimes, when purchasing your first home, it can be challenging to find a home that is exactly what you need. Luckily, there’s a program where you can have the mortgage funds cover up to 95% of the cost of renovations. In order to get mortgage proceeds to cover the cost of the renovations, the improvements need to increase the value of the home.

Putting in an income suite can be included in the renos, however the potential income generated from those future suites cannot be used to qualify.

All of the improvements would need to be in a quote with all of the costs prior to getting a mortgage approval. The improvements would also need to be self-funded prior to completion. Once your renos are complete, you will get those funds after an inspection, showing that the work in the quote has been completed.

3. Rental Income Suites

Some homes have existing basement suites that can help generate income to help offset your mortgage and other expenses. You may hear about homes having “legal” suites or “not legal” suites. This refers to whether they conform to zoning by-laws or not. Lenders will still use rental income to qualify from basement suites that are “not legal” or “non-conforming” as long as they have their own kitchen, bathroom, and separate entrance.

If you have any questions regarding which homes you may qualify for, feel free to contact Rose Blankenagel at anytime.

-Real Mortgage Advice