How much morgtage should I go for?

Question

I want to get a few opinions on what size of a mortgage i should get based on my options.

-Ottawa area, Canada.
-I will have a 20% down payment of whatever I get.
-I make 50,000 a year (4,100/month) right now, just graduated from university with a BA in Economics.
-I have no loans.
-I'm 24.
-The interest rates will be going up after spring in Canada so maybe locking in on something larger now might be the best option in the long run.
-I have excellent co-signers.
-My car payments are low

My goal would be to buy a home for 370-400k, which would mean I would have about 70-80k+ down payment. This would mean based on an interest rate of about 4.5% 35 year mortgage it would be about 1550/month plus taxes and bills. I figure my bill's/income ratio is fine at my age considering in the long run I should potentially increase my income.

I wanted to get peoples thoughts on this.
Thank you

Answer 1

Rule of Thumb: You can AFFORD a house NOT more than 2.5 times annual income, stretched to 3 times at Most.
Rule of Thumb: Not more than 1/4 of monthly income for mortgage payment (PITI), not more than 1/3 with utilities added in.
Putting 20% down is GREAT, it avoids extra cost of PMI and means you have some equity in your new home. You have positioned yourself well to buy with low debt and good savings for down payment. However, some lenders require 2 year job history, along with good credit rating, adequate income (see rule of thumb), sufficient down payment. Standard mortgages are 25-30 year. Locks on interest rates are good for finite period of time, generally 30-90 days ONLY. Longer your amortization, the MORE you're paying in interest.

Source(s):

real estate investor

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