Homebuying Step by Step: Your Guide to Buying a Home in Canada
Calculation 4: How will your budget look as a homeowner? (And will you still meet the affordability guidelines?) Now that you have an idea of what a house costs and you know your current financial situation, return to Calculations 1 and 2 and complete the “Future” section (column 2) in the workbook. Be sure to include every expense you can think of. If in doubt, it’s better to include too much than not enough.
Use the Household budget worksheet in Step 2 of the workbook.
If your monthly housing costs are over 32% and your debt load would be more than 40% of your gross income, you may have trouble qualifying for a mortgage.
What should you do next? If you can afford the home you want, you are ready for Step 3. If you think you’ll have trouble making mortgage payments or you’re concerned about your finances, you can still make changes.
Meet with a credit counsellor or your lender and make plans to improve your financial situation or your credit score
Look at your current budget to see where you can spend less or save more
Pay off some loans or other debts
Save for a few more years for a larger down payment
Lower your price range for a home
Remember, your first home doesn’t have to be your dream home. A few changes in your monthly budget or your expectations can go a long way toward making your dream of homeownership a reality.
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