At Walker Real Estate, we’re passionate about education and helping our clients navigate their Kelowna housing needs. We’ve discussed today’s topic in the past, but we’re going to look at it from a slightly different angle – this is the skinny on calculating how much mortgage you can truly afford…
Buyers need to realize that banks/lenders are businesses. Outside of being legally above board, they do not owe you anything. They will lend you as much money as they believe you will be able to pay back. Take this to heart and remember it. Just because you can lend a certain amount, it doesn’t mean you should. It is your responsibility (not your lender’s) to make sure you still have money left over to save for retirement, top up the college fund for the kids etc. after your monthly payment has been made.
I think we’ve all heard the term ‘house poor’, and that is something you want to avoid at all costs. With pensions dwindling, you need to make sure you’re saving for the future. You also need to make sure you’re saving for housing repairs and upgrades as well. Of course, property can make a fantastic investment vehicle too, but you don’t want to be putting all of your income into your home. It’s a very risky strategy that will leave you walking a financial tightrope.
Of course, how much you can afford is a deeply personal topic, but the accepted wisdom is to limit your housing expenses at around 30% of your take home income. Be realistic though, your income today, may not be your income tomorrow. Have a considered think on what your true income situation is, and base your mortgage decisions around that.
There are also mortgage calculators available to help with your deliberations. The mortgage broker in our office, John Antle, has one which you can use HERE.
If you’ve been pre-approved, that’s fantastic – congratulations! We hope we’ll have the opportunity to help you on your Kelowna real estate journey, but please remember; just because you have been pre-approved for a certain amount doesn’t you should borrow that sum. It’s up to you to be responsible.
And, let’s end with a fun fact: did you know “mort gage” literally translates as “death pledge” in French? Needless to say they’re not called mortgages by the banks and lenders in France!
If you have any questions about the Kelowna real estate market, please do not hesitate to contact us. We would be delighted to assist you.