Are you financially ready to buy a house?
How can you know if you are financially ready to become a homeowner?
This step guides you through some simple calculations to figure out your current financial situation, and the maximum home price that you should consider.
How Much are You Spending Now?
Calculate Your Household Expenses
Start figuring out your financial readiness by evaluating your present household budget. How much are you spending each month? Knowing exactly how much, will give you a better idea about whether you can afford to become a homeowner.
The Current Household Budget worksheet helps you take a realistic look at your current monthly expenses.
Or, you may also use the CMHC Household Budget Calculator to complete your current household budget now.
Calculate Your Monthly Debt Payments
Do you know how much debt you are carrying? You need this information to figure out whether you are financially ready for homeownership. If you decide to buy a home, mortgage lenders will ask for this information.
Use the form below to determine your current monthly debt payments. Fill in all the figures that apply to you, and then press the Calculate button. When you have finished, print the form. If you cannot print, write down the total on a sheet of paper.
Calculate Your Total Monthly Expenses
Your total monthly expenses are your household expenses plus your debt payments. To calculate your monthly expenses, add the total from the Current Household Budget as Homeowner to the total from Monthly Debt Payments form, using the form below.
(Total from Current Household Budget)
(Total from Monthly Debt Payments form)
Next is to determine How much you can afford??
Full article from CMHC Website: Step 2: Are you Financially Ready?