BUYING YOUR FIRST HOME

GUIDE TO FINDING YOUR COMFORT ZONE

OWNING A HOME SHOULDN'T MAKE YOU CASH POOR

Buying your own property is one of the most satisfying investments you will ever make. Owning your own home brings a sense of security, but that security can be compromised if you end up financially strapped. Think big, but get there one step at a time.

DARE TO DREAM

A new home is a long-term commitment. People tend to make significant improvements to their property over the years, so choose your new home carefully.

HOWEVER, REMEMBER YOUR EVERY DAY REALITIES

Regardless of what you want tomorrow, you've got to be able to cover your costs today. Outside of a few exceptions, your monthly costs should not exceed 30-40 percent of your gross salary.

WHERE IS YOUR COMFORT ZONE?

MAKING THE RIGHT DEPOSIT

For most home purchases a deposit of ten percent is a good place to start. A larger deposit will reduce the size of your mortgage and may reduce your monthly payments. Your goal should be making the largest down payment possible, while maintaining additional savings and investments.

To determine the deposit range that is right for you, calculate your net worth, (which is the surplus left over after you subtract all your liabilities from your assets). We would suggest that you place no more than 75 percent of that surplus as your deposit.

ADDING IT ALL UP

The following are two first-home buying scenarios of typical patterns we have observed.

	BUYER 1	BUYER 2

Annual household income	$ 40,000.00	$ 75,000.00
Monthly utility costs	$ 250.00	$ 300.00
Condo fees	$ 0.00	$ 200.00
Monthly payments on other loans, credit cards etc.	$ 100.00	$ 100.00
Total Monthly costs (35% gross income)	$ 1,167.00	$ 2,188.00
Mortgage interest rate	9%	9%
Mortgage period (years)	25	25
Monthly mortgage payment	$ 817.00	$ 1,588.00
Mortgage	$ 97,000.00	$ 189,000.00
Deposit (10%)	$ 10,780.00	$ 21,000.00
Value of home and onetime costs	$ 107,780.00	$ 210,000.00

Note: These are simplified examples only based on sample data. (US dollars)

HOW YOUR SAGICOR PRODUCER CAN HELP

This might all seem a bit daunting to the first time home buyer, but your Sagicor Producer can help you find your comfort zone with the help of our products. We can help you get the sound advice you need to make you an informed shopper.
Call 1-888-SAGICOR now, and get started on building your dream.