It is no secret that buying a house is a big financial responsibility. The initial costs of buying a home are expensive, but so are the long-term costs of owning one. You need to make sure you are prepared for the financial burden, or you could end up buying a house you can’t afford.

Here are some tips on how you can financially prepare to own a house:

1. Get a deeper understanding of your financial health first.

Are you at a place where you can carry the financial burden of a mortgage? It’s important to understand your debt-to-income ratio, incoming and outgoing money, and many other factors. Know how much money is coming in every month and understand what your financial obligations are. Do you still have other debts? What about your monthly living expenses?

Use a mortgage payment calculator in Burnaby to know how much house you can afford. The total cost of acquiring a home should be no more than 30-35% of the buyer’s gross monthly income.

2. Improve your credit score.

Banks use credit score to determine how qualified a buyer is for a mortgage. If you have a low credit score, you might not be able to qualify for a mortgage, or you might not get the mortgage rate you prefer. It’s a good idea to check your credit score first. This will also let you see if there are errors. You will have time to improve the score first before purchasing a house.

3. Make sure you save enough for closing costs and down payment.

You need to save 5% of the purchase price of a house. However, if you can offer more down payment, that will reduce your monthly mortgage and will also help reduce loan insurance costs. Save up to 20% of the purchase price.

4. Build your emergency fund first.

It’s hard to deal with the costs of emergency repairs when you already have a house. Those can cost thousands of dollars. You don’t want to spend your savings on these emergency situations. Having an emergency fund as a fallback in case you need to fund repairs can really help. It will also give you peace of mind in case you are doing a rebuilding and renovation project.

Use a mortgage payment calculator in Burnaby to determine how much you will pay in case you purchase a house. The mortgage payment calculator in Burnaby will give you a better financial picture of owning the house. You can check out Brandon Gee-Moore Personal Real Estate Corporation for a mortgage payment calculator.