Edmonton Mortgage Blog
Your Edmonton Mortgage Broker: Natalie Wellings
More house than they need?
October 19, 2016 | Posted by: Natalie Wellings
The 'what if's' in life are something to be considered when purchasing a home. Could you still afford the home if you, or your spouse, lost a job? If one of you became sick? Would you still comfortably make your payment if the interest rate was 4%, or 5%? What about house repairs? Do you have an adequate reserve fund to pay for unexpected costs? I'm not suggesting that we should all live in fear but it is important to make sure you can still afford your life when the worst th...ings happen. This story states that borrowers ideally shouldn't use more than 30% of their gross monthly income on housing. Mortgage lenders, and insurers, routinely allow 39% (if you have great credit) which is much higher than recommended in this story. This couple has a lovely home, but it doesn't sound like they can afford it. Is it more house than what they realistically need? It's never a bad idea to spend less than your maximum pre-approved amount to leave room for the unexpected. Just my two cents!
