figuring out financing

Buying a home is one of the largest and most important purchases you’ll ever make! That’s why it’s important to make sure you have the right financing package in place, tailored to meet your personal needs and financial situation. Whether you are new to home ownership or have owned a home before, our lending associates will help you determine the terms best suited to your individual situation. We’re here to help at every step along the way, from pre-qualifying you for specific mortgage amounts to actually pre-arranging your mortgage. We will advise you on down payment and legal requirements, options, what to look for in a purchase, and much more. And the best part? The advice is free!

 

Mortgage pre-approval

 

One of the most common questions people ask when they start looking for a new home is, ‘how do I know what I can afford?’ One of the best ways to answer this question before you begin shopping is by getting pre-approved for a mortgage.

 

To get pre-approved, one of our lending associates will sit down with you to evaluate your finances and determine the size of mortgage you can financially manage. While getting pre-approved is not required, it is often recommended, as it will make your home buying process much easier.

 

The advantages to a mortgage pre-approval are:

 

  • Ease of mind in knowing your financing is already in place.
  • Ability to negotiate a price that fits within your budget.
  • More appealing to sellers.
  • Faster closing period.

Home price factors

 

household income 5% down payment maximum home price
$25,000 $3,000 $60,000
$30,000 $3,900 $78,000
$35,000 $4,800 $96,000
$40,000 $5,700 $114,000
$45,000 $6,600 $132,000
$50,000 $7,500 $150,000
$60,000 $9,300 $186,000
$70,000 $11,050 $221,000
$80,000 $12,500 $250,000
$90,000 $14,400 $288,000
$100,000 $16,275 $325,000

 

household income 10% down payment maximum home price
$25,000 $6,300 $63,000
$30,000 $8,200 $82,000
$35,000 $10,100 $101,000
$40,000 $12,000 $120,000
$45,000 $13,900 $139,000
$50,000 $15,800 $158,000
$60,000 $19,600 $196,000
$70,000 $23,400 $234,000
$80,000 $27,200 $272,000
$90,000 $31,000 $310,000
$100,000 $34,800 $348,000

 

household income 25% down payment maximum home price
$25,000 $18,900 $75,600
$30,000 $24,700 $98,800
$35,000 $30,300 $121,200
$40,000 $36,000 $144,000
$45,000 $41,700 $166,800
$50,000 $47,400 $189,600
$60,000 $58,800 $235,200
$70,000 $70,100 $280,400
$80,000 $81,500 $326,000
$90,000 $92,800 $371,200
$100,000 $104,300 $417,200

 

* Figures are rounded to the nearest $100. This table assumes a mortgage interest rate of 8%, average tax and heating costs in Canada, and the mortgage an average Canadian would qualify for based on a 32% debt service ratio.

 

© Home Buying Step by Step > Step 2 – Are you financially ready? CMHC-SCHL, Canada, 2010