Purchasing your home is one of the biggest and most important decisions that you can make. Tammy Wandzura a Trusted Saskatoon Mortgage broker and the team at Elite Mortgage Choice believe that buying a home should also be an exciting experience with little to NO stress. By trusting your Mortgage Broker, you are ensuring that any stress you may have had in previous encounters can be eliminated!
Tammy truly believes that all you should have to worry about is opening the door to your new home for the very first time. In her latest mortgage article, Trusted Saskatoon Mortgage Broker, Tammy Wandzura discusses why you should hold off on buying that new car if you are looking to buy a home.
1st Time HomeBuyer- Hold Off Buying The New Car!
Thinking of starting the house hunting process?? Did you know that a vehicle payment can significantly affect your ability to qualify for a mortgage? Buy The House and THEN The Car " Tammy Wandzura
Federal mortgage guidelines require that your income can handle all of your debts (that you currently have) PLUS the new mortgage payment, property taxes and heat payment. The NEW mortgage rules are more strict and rigid than ever - and require you to be very conscious of what your debt load looks like.
If you have a car payment of $500/month - that is $500 a month less that can go towards your mortgage payment and expenses. If you have a BIWEEKLY car payment (a biweekly payment comes out of your account every 2 weeks) you make a payment 26 times in a year. If your car payment is $200 biweekly - that does not mean you are paying $400/month... it means you are paying $433.33/month. This is the number the mortgage company will use when calculating your debt.
1. If you have a car payment of $433/month AND assuming you have good to great credit
- Income is $50,000/year
- Max Purchase Price $180,000
- 5% down = $9,000.00
2. IF you do NOT have a car payment (same good credit, same income)
- Max Purchase Price $225,000
- 5% down = $11,250.00
That is a $45,000 difference in borrowing power and may allow you to purchase the type of home in the neighbourhood you are hoping to live in! After you have taken possession of your home - you can easily qualify for a Car Loan with a number of banks or dealerships. Qualifying for a home (mortgage) is a very different process with much stricter rules.
Keep In Mind:
Even with strong income, depending on the area you wish to buy a home - a vehicle payment can seriously and negatively affect your ability to qualify for the house you want to buy.
Buy the house and THEN the car!! Spread the word and tell your friends. Many FIRST TIME HOME BUYERS do NOT know this!
You're paid off "middle of the road" vehicle is not looking so bad now, is it??
Call Tammy Wandzura today at 933.3386 for all of your Saskatoon mortgage needs OR visit www.elitemortgagechoice.com she is a Trusted SASKATOON MORTGAGE BROKER!