How to Set a Budget When Buying Your New Home

When you start the process of buying a home, you’ll quickly realize that there is nothing cheap about it. With the down payment, home appraisal, closing costs, and home inspection, it can be easy to drain your savings before you even get the keys to your new home.

Such expenses can be difficult for new home buyers to control, but by educating yourself, you can avoid some common mistakes and potentially save yourself a lot of money.

Some mistakes all new home buyers should avoid, include:

• Overspending and failing to set (and stick to) a budget
• Not visiting the property multiple times
• Skipping the home inspection
• Not working with a real estate agent

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Nestled in Calgary's Southwest Community of West Springs, the Rise at West Grove Estates offers new and luxurious semi-estate homes for you and your family. The planned green spaces established community, and proximity to a wide number of amenities means that you and your family can enjoy uncompromising value and a high quality of living.

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4 Easy Tips to Set a Budget For Your New Home

A new home is one of the largest purchases you will make and first-time home buyers often tend to shop on what the mortgage lender says they can afford, not taking into account any other expenses. This will set you up for financial hardship, and even potential foreclosure, if you can’t afford your monthly payments.

To help you avoid such pitfalls, here are some simple and easy tips to follow when setting a budget for your new home:

1. Follow The 25% Rule

To get started, you must calculate just how much home you can afford and the easiest way to do this is to follow the 25% rule. This says that your mortgage should NOT be more than 25% of your monthly income.

If you have any other debts, add them to the mortgage payment to determine how much house you can afford.

2. Add Expenses Beyond the Mortgage Into the Equation

Getting pre-approved for a home loan is a critical first step in buying a new home, but it is only one consideration. If you’re a new home buyer, you must figure out all the costs associated with homeownership, both upfront and overtime, to determine just how much house you can afford. Remember that your home mortgage isn’t the only recurring expense. There is also:

• Homeowner’s insurance
• Utilities and maintenance costs
• Heating, cooling, water bills
• Entertainment costs
• Any other unexpected repairs that catch homeowners off guard

All of these costs must be included when you are setting a budget to determine how much home you can afford. Why? These expenses can add greatly to your monthly costs, making a home that seems affordable on paper, pricey in reality.

5 THINGS TO CONSIDER BEFORE BUYING YOUR NEW HOME

3. Be Realistic About The Property You Choose

It’s natural for first time home buyers to have a lot of wants and often, these desires exceed what you can actually handle. For example, a huge fixer-up is really cheap until you start having to renovate every room in the house.

When you are considering the affordability of a home, look at the state and size of the property and remember, large isn’t always good, especially if the maintenance costs and heating/cooling bills will break your budget.

4. The Down Payment Should Dictate Your Purchase

In order to avoid private mortgage insurance (PMI), you have to put down at least 20% on your home purchase. If the down payment is lower than that, then your mortgage payment can go up by even 1.2% of the loan amount.

Remember that the more of a down payment you can afford, the less interest you’ll pay over the life of a loan and the smaller your monthly mortgage payment will be and the sooner you’ll see a return on your investment.

The Rise at Westgrove Estates

The Rise at West Grove Estates comes with eight beautiful landscaped parks and over seven acres of green space. Every new home is within walking distance of a playground, soccer field, naturally landscaped parks and access to over 800 km of regional pathways. Each home has been carefully designed, with attention to exterior detail and luxurious craftsmanship, specifically for you by our builder partners, Brookfield Residential and Cedarglen Homes.

View our Lot Map and choose your new home today!

To find out more about how we can help you find your Calgary dream home at The Rise at Westgrove Estates in West Springs, come see our show homes at 106 W Grove Way SW, Calgary, AB T3H 0S2

Alternatively, you can call us at (403) 814-0177 or fill in our online contact form.