House financing - what does the house really cost?
House financing is one of the most important steps on the way to a dream home. For the preparation of a financing plan equity, maximum loan amount, construction costs and subsidies must be known. Only then can different offers be compared to determine the best financing option.
Planning a house financing First, a detailed overview of the available financial resources should be prepared. These include both monthly income, as well as expenses and living expenses. Subsequently, the maximum loan amount can be calculated.
Calculate maximum loan amount
The maximum loan amount is calculated from the maximum monthly loan installment. To determine this rate, you have to sum up all the monthly income and expenditure. Also, expenses that are paid only at the end of the year, should be considered. In addition, it is recommended to make reserves for emergencies.
Current revenues and costs:
- Secure income (salary, child benefit, etc.)
- Rent expenses/Income
- Electricity, water and gas
- Internet and telephone connection
- Cost of living (food, clothing, insurance, etc.)
If the monthly revenues and costs are known, they should be summed up to one year. Subsequently, all amounts to be paid annually are added together. Now it is known what sum is left per year and the maximum loan amount can be easily calculated.
Maximum loan amount: (Sum per year in CAD * 100) / (Percentage interest + repayment installment) * Interest and repayment installments add up to the overall rate and depend on the type of funding and the terms.
Calculate house construction costs
To estimate the monthly installments, the total cost of building a home must be known. These include the house price, the cost of the property and all incidental costs. Details about the house do not have to be known at first. It is important to determine the financial framework for the construction project. You can always contact Fibo and speak to an expert to find out.
Incidental costs incurred when buying land, during the construction preparation, during and after the construction phase. They include reports, insurance, development costs, taxes and many other costs. The exact estimation is often difficult. One should not underestimate the additional costs. On average, they make up about 15-20% of the total costs.
Construction Financing calculator Finance calculators can be used to determine the monthly total rates for a home loan. For the calculation the price for house and property, as well as the additional costs are needed. In addition, equity and planned own work must be known.
Equity is money that is not provided by a bank, but comes from its own assets. This includes saved money and securities, but also real estate ownership and own contribution to building a house. Generally, the more available equity, the better the terms of financing.
Equity at a glance: - Cash - Securities (stocks, bonds, fund shares, etc.) - Fixed-term and overnight money and savings accounts - Building society deposits - Property ownership - Payments from life insurance - Own contribution
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