How to Budget for Buying a Home in Vaughan
Oct 17, 2022 / Buying
Building out a home budget involves planning for more than just the house itself. After you’ve moved in there will be plenty of ongoing expenses you’ll need to be ready for.
As a top GTA real estate team who have helped countless buyers find their dream homes, we’ve got a few tips for building a complete and effective budget that can help you find an amazing home without overspending.
Are you looking to build out a complete home budget? Be aware – there are more costs than just what you see on the price tag. Start here: What are the Costs of Buying a Home in the GTA?
What’s in a Budget?
Every buyer will need to make their own custom budget that accounts for unique personal factors and any special “must haves” on their home wishlist. That said, there are a few major items that all Vaughan home buyers can expect to budget for, such as
- A down payment
- Closing costs
- Monthly mortgage payments
- Mortgage insurance
- Home insurance
- Repairs and upgrades
- Utilities
- Land transfer tax
- Annual property taxes
Buying a home in Vaughan for the first time? Find out what you can expect from the process with these helpful blog posts.
- How to buy a Home in Greater Toronto
- Essential Tips for First-Time Home Buyers
- 5 Mistakes First-Time Home Buyers Make
Know What Kind of Home You Need
Before you know how much you can afford to spend, it’s important to determine what kind of home you actually need. Like anywhere in the Greater Toronto Area, homes in Vaughan can vary dramatically in price.
There’s a good chance that you already know what kind of home you’re looking for. Whether it’s a compact condo, townhouse, or sizable detached house, setting your parameters will be an important part of creating an effective budget. The great thing about Vaughan is that no matter what kind of home (or community) you would like to live in, you’ll have plenty of options.
Find Your Starting Point
Unfortunately, homes aren’t cheap. But that doesn’t mean you can’t find something great at your price point. The best place to start when building out a rough home budget is having an honest look at your personal finances.
Consider your current income and lifestyle. After covering everyday expenses, how much do you have left at the end of each month to put towards housing? Remember, it’s recommended that you contribute no more than 32% of your total income to housing costs. While it may seem tempting to stretch your income in order to buy a more expensive home, it’s important to leave a healthy buffer for other costs.
Next, have a look at any long-standing factors of your financial health. Consider any investments, savings, or existing debts you may have. While these items don’t always come up in your everyday spending, they can potentially impact your home purchase.
Even if you’re no stranger to the home-buying process, it doesn’t hurt to brush up on your knowledge before you buy again. Check out these blog posts to learn more.
Getting Pre-Approved for a Mortgage
If you’re preparing to buy a home, it’s a good idea to get pre-approved for a mortgage before you start shopping around. While not required, it can give you a strong idea of where to set your budget and make the actual buying process easier. After you’ve determined the maximum amount of lending you qualify for, you’ll be able to budget with greater confidence.
Getting pre-approved for a mortgage can also assist in narrowing down your home search and help you avoid falling in love with homes outside of your price range. This step is also free of any costs or commitment – there’s practically no reason not to get pre-approved!
Steer Clear of Hidden Costs
Your home will be one of the most important investments of your lifetime and is not something to rush into. Unfortunately, in certain market conditions, buyers can occasionally feel pressured or hurried during the house-hunting process.
This can lead to new homeowners experiencing “buyer’s remorse” and racking up costly expenses from selling their recently-purchased home and buying another.
Fortunately, our Buy Back Guarantee, also known as our Love It or Leave It Guarantee, eliminates this danger for buyers. If you work with the Lino Arci Team as a buyer and are unhappy with your new home, we will buy it back from you up to one year later. Alternatively, our team will assist you with reselling your home for free.
Ready to buy your dream home? Work with the #1 real estate team in Vaughan to maximize your budget and find a great place! Call us today!
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