Despite Rates, now is a great time to buy in Cranbrook BC

Now is a great time to buy a home for a number of reasons. Despite higher interest rates, housing prices are actually decreasing, which means that your monthly mortgage payments will be lower in most cases. This is a great opportunity to get a good deal on a home and start building equity.

One of the biggest factors that determines how much you can afford to pay for a home is your income. Generally speaking, lenders want to see that your mortgage payments will be no more than 39% of your gross monthly income. This is known as the "debt-to-income ratio."

Let's look at an example to see how this works in practice.

Example:

• Entry-level home: $234,900

• Middle-range home: $585,000

• High-end home: $949,000

To qualify for a mortgage on an entry-level home, you would need to have an annual income of at least $65,000. Based on a 4.89% interest rate and a 25-year mortgage, your monthly payments would be about $1,335. In May of 2022 your payment would have been $1263 with a listing price of $270,000.

To qualify for a mortgage on a middle-range home, you would need to have an annual income of at least $135,000. Based on a 4.89% interest rate and a 25-year mortgage, your monthly payments would be about $3,300. In may of 2022 your payment would have been $3100 with a listing price of $672,550.

To qualify for a mortgage on a high-end home, you would need to have an annual income of at l east $180,000. Based on a 4.89% interest rate and a 25-year mortgage, your monthly payments would be about $5,266. In May of 2022 your payment would have been $3,886 with a listing price of $1,100,00.

While the new interest rates are alarming, the drop in housing prices are keeping payments in line with where they were. With a variable rate mortgage you may end up saving money should rates return to lower levels as the total paid for the home is lower.

So there you have it, while the media may want to sow fear, now is a great time to buy a home because housing prices have decreased slightly, which means that your monthly mortgage payments will be lower. While you will need to have a certain level of income to qualify for a mortgage, there are options available to help make homeownership a reality for you.