A Beginner’s Guide To Buying A New Property From An Accounting Perspective
If you’re planning to buy a home soon, it’s essential to weigh up your options carefully and not jump into a mortgage that could adversely affect your financial position for decades. However, in the excitement to secure the keys to a new home, many home seekers sign on the dotted line immediately after speaking to a mortgage broker.
The reality is that mortgages can affect your monthly disposable income considerably, and there are significant tax implications to comprehend. Therefore, it’s essential to consider proper financial planning before moving forward.
So, to assist you with a road map to purchase the home of your dreams, Account on Fullerton has put together a Beginner’s Guide to buying a new property from an accounting perspective. Through this guide, you will feel confident about saving money with your mortgage.
Talk to a tax professional: Speak to a tax accountant well versed in financial planning as they will offer unbiased feedback on how to maintain a healthy cash flow while securing a mortgage. It will help you make informed investment decisions for your family in the short and long term.
Shop for your mortgage with banks: While banks provide limited in-house instruments compared to private lenders, there is strong governance in place to ensure that the products offered are legitimate and steps are taken to ensure you can afford to pay back the mortgage. Keep in mind that banks have different rates, so compare them to find a suitable one for your unique situation.
Watch interest rates closely: Interest rates are continuously changing, so it’s important to check them regularly to secure the best rate. Even a small percentage difference can significantly alter your mortgage repayments.
Check penalties for early payments: As you progress in your career and your financial situation improves, you may feel it’s best to pay off the mortgage quicker to save money. However, many banks have steep fees for closing a mortgage before the amortization period. Make sure you read the fine print.
Advice From The Pros
Understand the amortization period: Firstly, we suggest that you pay bi-weekly, which can save you more than five years of payments over a twenty-year amortization. Secondly, we recommend that you never opt for an amortization period higher than twenty years, as banks do what benefits them the most, which means securing the highest interest.
At Account on Fullerton, our goal is to exceed your expectations. As the go-to experts in North Bay, Ontario, for all your accounting needs, you can feel confident about planning the purchase of a new home with us. Since 1997, we’ve specialized in offering quality accounting, bookkeeping, and tax services. We also offer meticulous financial planning to our clients.
We serve clients across North Bay, Kipawa, Bonfield, Marten River, Mattawa, French River, Temagami, and the surrounding areas.