Align Your Future Purchase Price With Your Stated Income

I hope you've been enjoying the past few posts! As you continue to consider whether or not Rent to Own is right for you, I've put together another tip for you:

Align future purchase price with your stated income

The house you’re buying should be line not only with the income you earn, but also the income CRA has on file for you. Make sure you know exactly what income you need to claim on your tax returns to support the future purchase price of the home. Be careful not to fall in love with a house that is out of your budget based on your stated income. Sure, you can pick up extra hours or take on extra jobs to find additional money for rent, maintenance, and the eventual downpayment. In reality, you may be setting yourself up for failure. Lenders use specific formulas to determine whether you will qualify for a mortgage.

Your stated income is very important in this calculation. How long you have had your job and the probability of you keeping it comes into question as well. Besides, spending too much on a house could leave you with little money for other goals in life, such as retirement, college funds, and vacations. Before beginning your house hunt, first determine what you can afford. You can also go online and check out the house affordability calculators that most banks offer on their websites. Or, get some professional advice. A mortgage broker will be able to offer you a wealth of information based on your specific situation and current lending criteria. Not working with a mortgage broker? Reach out and I'll send you some options to explore.

Interested in chatting about this or any other aspect of rent to own? Reach out and set up a call today!