News from Canada's Mortgage Experts

Affording vs. Qualifying...know the difference with your mortgage.

Most first time home buyers who walk into a bank wanting to know how much of a mortgage they can actually afford typically are given the answer to the question, “how much of a mortgage do I qualify for?” Make sure you get the facts your bank won’t tell you. When your bank provides you with the mortgage amount that you “qualify for” ask yourself if after you pay your monthly mortgage payments will you have enough left over to pay your other monthly expenses:

1. Car loans (not including gas, maintenance, insurance)
2. Student loans
3. Credit cards
4. Monthly living costs (food, clothing, extracurricular activities)
5. Vacations
6. Entertainment
7. And anything else that supports your lifestyle

Knowing the difference between what you can afford and what you qualify for could save you thousands of dollars every year and more importantly keep you from potentially ending up in a financial mess, consumed by mounds of debt.

Remember this simple fact, just because you qualify for a mortgage doesn’t necessarily mean you can afford it. Contrary to what most banks want you to believe, your house is not an ATM machine. Doing so will make the purchase of your first home a more pleasurable and stress free experience.