HOW MUCH CAN YOU PAY?

Review your income

Once the choice of the type of house has been made, the next step is to know how much you want to spend. You will need to review your income, your savings, as well as your monthly overhead and other expenses. Even before choosing your house, a bank pre-approval is an important step in your purchasing process, especially before other potential buyers, as well as it also provides guarantees to the seller regarding your financial capacity. Mortgage pre-approval defines the amount you can spend depending on your income. Before applying for a loan, ask several banks for a simulation of your case.

The price you can pay will depend on several factors, including:

• Your gross income
• Your financial means for the down payment, deeds, registrations, and mandatory taxes
• Your banking history
• The type of loan
• Updated interest rates
• Your debt service-to-income ratio (DSTI)

One of the means that banks use to assess how much you can spend is the proportion between your income and your expenses (your debt service-to-income ratio — DSTI). Every buyer is unique, and a financial professional will help you find this figure.

Always remember that a long search for cheaper houses, within what you can afford, is better than committing to payments that are too high for your income level.