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Make sure you buy a home that you can afford.
Home buyers need to be realistic about their housing budgets.
The size of the mortgage you obtain, the interest rate and the
amortization period will directly impact your monthly mortgage
payments. As a general rule, your mortgage payments and property
taxes should not exceed 25 per cent to 30 per cent of your pre-tax
income. When budgeting, plan for other home-related costs such
as utilities, insurance, maintenance, and taxes. Mortgage planning
tools are available online to help Canadians manage their loans.
Look for the best mortgage options
Find out who is offering the best mortgage terms and interest.
If you understand the various rates and terms available you
can determine the option that works best for your needs. Understand
the implications of variable versus fixed interest rates.
Build a monthly housing budget
Do you know where your money goes on a monthly basis? Once you
are in your home, you should develop a budget to track your
expenses, including all home-related items such as utilities,
property insurance, taxes and a reserve for maintenance. Make
sure to leave some room for unexpected expenses.
Insurance options
Think about protecting your investment. In addition to basic
home/fire and title insurance, there are life insurance and
mortgage life insurance options available so that the loss of
a loved one doesn't create financial instability. Some organizations
also offer mortgage insurance for disability, critical illness
or loss of employment. The cost of these options should be included
in your debt servicing calculations.
In the event you encounter financial hardship during the life
of your mortgage, Genworth Financial Canada (formerly GE Mortgage
Insurance Canada) has a proven default management program to
help provide temporary financial assistance for qualifying borrowers.
To access this program, consumers should contact their lending
institution immediately and ask about Genworth's Default Management
program.
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