What You’ll Need to Budget for Your New Home

Buying a new home is one of the most exciting – and intimidating – processes of your life. It’s arguably one of the biggest financial commitments you’ll ever make in your lifetime, so having a concrete plan is of the utmost importance to making sure you have what it takes to keep your feet underneath you.
 
Planning your budget is where you should be starting, followed closely by asking yourself personal questions that will allow you to make better choices so you don’t end up over-thinking, and over-budgeting.
 
You’ll need to form a consistent pattern of your monthly financial commitments, entertainment costs, how much you’ll be able to dedicate to savings, personal costs, food and utilities, etc. Once you’ve got your expenses and goals down on paper, you can begin to start budgeting for your home purchase.
 
Your budget should begin with a trip to your mortgage broker. Your mortgage specialist can help you to come up with a budget that includes all of the costs of home ownership that you wouldn’t always pay attention to; things like home insurance, condo fees (where applicable), utilities, renovations and maintenance, property taxes, your new mortgage, land transfer taxes, and hidden fees that often catch new home-buyers by surprise, like legal fees for closing costs.
 
Make note of which monthly fees you can reduce, or will not have once you purchase a home – like current rental fees, which will cancel out when you purchase your home.
 
Consider making use of an online cash flow calculator, so you’re up-to-speed when you go to see your financial representative.
 
Next, come up with a timeline so you can set some financial goals for yourself. If you have a partner, this makes things easier because you have someone to collaborate with, and motivate each other to stay on task. A goal of 6-months to one year is a good starting point.
 
Discuss what type of a mortgage you qualify for, and make sure your monthly payments coincide with your mortgage calculator — you don’t want to begin your journey by looking at houses you can’t afford, and you certainly don’t want to purchase more home than you can handle.
 
Next, hire a real estate agent. For the price of commission, they’re well worth the additional cost. Real estate agents know the market inside and out, and can coach you on which neighbourhoods or municipalities may have lower municipal taxes, property tax payments, cheaper home insurance, etc. Having an expert on your side will make you confident in your choices, and help to make the transaction smooth and hassle-free.
 
Ask your realtor about comparable prices, neighbourhood trends, and housing market conditions – you may find that it benefits you to wait to make your decision, or that the perfect time to strike is right now.
 
Your budget should take into consideration the reasons why you’re interested in buying a house. Maybe you want to start building some equity, or you’re expecting a child in the near future, or you’re planning for an older relative to move in with you – whatever the reasons, you’ll need to consider how these factors impact your budget, cash flow, and the type of housing you’re considering.
 
Once you’ve made the decision to pursue purchasing a home, the budgeting phase is crucially important. While not the most exciting part of the process, ensuring that you have a plan in place will help you to stay on track, make sound financial and personal decisions, as well as help to eliminate any surprise fees, costs, and speed bumps along the way.
 
Remember, buying a home should be fun and enjoyable, so making sure the grunt work is taken care of up front is key to making sure you enjoy the process, are able to stay calm, and can make the best decisions you’re capable of making.
 
Happy house-hunting!