Things to Consider When Selling Up

"KNOW YOUR FINANCES"

Your Mortgage:

1. Get an accurate picture of your financial situation - how much more of a mortgage payment can you comfortably afford.
2. Be realistic about what you can sell your house for and what portion of the proceeds you'll have available for your next home.
3. Get pre-approved for a loan, then you'll know, before you house hunt, what range to be looking in.
4. There are two important factors you will want to consider when selecting a Home Loan:   (A) How long you intend to own this home, and (B) whether your home is expected to increase, decrease or stay the same for the duration of time you own that home.

Your Property Taxes:

You can certainly use the amount that the seller of a home is currently paying as a guideline to determine what you will be paying in property taxes. However, remember that taxes are normally assessed upwards as each year goes by, so make certain you allow for potential increase in your long term financial calculations. You can easily find the tax amount a seller is currently paying on their Multiple Listing Agreement.

Your Utilities:

Don't forget to factor in items such as Hydro, Gas and Water into your financial painting. However, until you know the property you're going to buy, it's difficult to get an accurate picture of the cost for these utilities. You can ask the current homeowner to provide you some details of these costs, but these numbers are merely a guideline. For example, if the current owners are an older couple who travel a great deal of time, and use few utilities, their bills will not truly reflect what a typical family of four people would use year round. What you can do is use percentages as way to calculate your utility costs: For example, if you're planning on moving into a new home that is approximately 25% larger than your current home, then estimate your utility bills to be 25% higher than their current rates. Remember, if you are moving from an old home with energy inefficiencies, into a newer more efficient house, that new home may not cost you more, even though it's larger.

Maintaining Your New Home:

Even if you're not buying a "fixer-upper", you are probably going to spend more on maintenance, especially when you first move in - there's always something that we want to change.  There's a general rule you can use to calculate what you "may" spend: Multiply the purchase price of your new home by 1%, or 1.30% for older homes. So if you're purchasing a newer property for $300,000, then you may want to allocate $3,000 in funds for unexpected expenses.