Why is it so important to know how much you can afford to spend on a home?

Two reasons:

First, you don't want to buy a property and then find out, only after you’ve moved in, that you can't financially maintain it. That would mean having to resell it under stressful conditions.

Second, you don't want to settle for a property that's less than ideal, when you really could have afforded the "dream home" you've always wanted.

So how do you figure out how much you can afford to pay for your next home? The first step is to talk to a good REALTOR®. He or she will help you gain a clearer understanding of how much your current home will likely sell for in today's market. That amount, together with other financial resources you might have (such as savings), will determine your down payment. The next thing you’ll need to figure out is your mortgage. Your REALTOR® can help you find a lender who will take a variety of factors into account – income, credit rating, debts, expected down payment, etc. – to calculate the maximum amount of mortgage for which you qualify. 

Say, through the proceeds of the sale of your home combined with your savings, your expected down payment is $500,000. If the lender authorizes a mortgage of $450,000, then you can afford a $950,000 home. Of course, that doesn't mean you'll need to spend that much. In fact, a home that meets your needs in terms of property type, features, and neighbourhood, may in fact cost you less. One thing is for sure. A good REALTOR® can work with whatever amount you can afford and show you homes on the market that most closely meet your needs.

Looking for a good REALTOR®? Call today.


The Greater Vancouver housing market experienced below average home sale totals and a modest decline in home prices in 2012.  Housing prices experienced their peak in May and have gradually declined through the second half of the year by 5.8 per cent.  The 5.8 per cent decline in prices represents the decline in the benchmark price of all residential properties in Greater Vancouver.  It should be noted that some sub markets have out performed others this year.  For example the Vancouver East detached market has actually risen by 1% over the same 12 month period.


There has been hesitation on the part of both Buyers and Sellers in this market which has reflected in lower than average home sales and a gradual decline in housing prices.  I think this trend will continue at least for the next 12 months.  


Sales activity and housing prices continue to vary depending on area so it's important to work with your REALTOR® for expert advise.

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