Buying a house in London, Ontario is not as simple as signing a piece of paper. Even discounting all the work you'll need to do to get your old Windsor real estate sold, you still have a lot of financial legwork to get through before you can even think about closing a sale. This includes making up a detailed budget for your life in your new home and putting in pre-approval applications with lenders so you'll be on solid financial ground when it comes time to sign the deal.

Budget

Your biggest expense in your budget will undoubtedly be the house itself. Houses in London are often considerably less expensive than condos in Mississauga, which you should factor into your calculations. For a one storey home, you're looking at around $217,000. The general rule when it comes to home buying is that you should save 20% of the purchase price as a down payment and not pay more than 30% of your income on mortgage payments.

Though the house will be your biggest expense, it is far from the only expense you need to take into consideration when you are budgeting. You'll also be paying property taxes, which in London are about 1.5% of the home value, which means it will go up when the market recovers. Your insurance (home, car, life, and medical if you have it) need to be included. If you commute to 761 Bay Street for work you'll also need to factor in transit passes or gas for your car. Other things to include: groceries, cable, power, water, and internet.

Mortgage

Many people view applying for a mortgage as a technicality, assuming that because a particular institution approved them for the purchase of their existing place at St Lawrence Market condos that it will be no problem financing their new London home. This is not always the case. A lot can happen in a few years. The bank may have changed their threshold requirements, your finances may have taken a turn for the worse, or both. Therefore it is always important to get pre-approval before you even start looking for a house.

When applying for a mortgage, take the time to investigate multiple institutions to find the mortgage that suits you best. Just because RBC financed your purchase of Newmarket real estate doesn't mean you must continue to use their services. Apply to several banks and lenders. And while doing so, make sure to keep your finances stable. That means no big purchases on credit and no closing out accounts. It also helps to have had the same job for a year so they will have confidence that you can keep it while under obligation to them.