Whether you're buying commercial or residential real estate, a Torrance factory or a Brampton condominium, you can't do it on your own. You need the assistance of a bank to finance such a large purchase, but the bank isn't going to do your budgeting for you. They might not approve you if you ask for too much, but it's up to you to figure out exactly how much you can afford to pay for a mortgage and therefore what price you can afford to pay for a house.

Most people are no great shakes at math, so the kind of accounting work that needs to be done to figure out mortgage payment is beyond the average home buyer. However, to give you a ballpark idea of whether you can afford to buy a second home in Grand Harbour, Toronto, we'll give you a few figures to play with. First: that you should save up approximately 20% of the purchase price of the home as your down payment. Second: that you shouldn't be paying more than 30% of your income for your mortgage.

Therefore, if you have saved up $50,000 and you and your spouse earn about $5,000 per month with your incomes combined, your ballpark budget for a home that you could tell your Mississauga real estate agent to look for would be about $250,000. At the bank, you would negotiate with your loan officer so that the length of the repayment term and the interest rate on your mortgage would put your monthly payments at no more than $1,500.

This is just a ballpark figure, however. If you want a more accurate guesstimate that will help out your budget, many banks and mortgage lenders have online tools known as mortgage calculators that will do the math for you. All you have to do is input certain values, such as your income or preference for the Kitchener Waterloo real estate listings. The tool will do the rest, automatically comparing the interest rates offered by banks to get you a deal.

However, you need to be careful when using mortgage calculators. A tool offered by the Toronto Dominion bank will probably be preloaded with figures that will help you find the best mortgage rate Toronto, not in Torrance, California. So when you're looking for property in Torrance (or anywhere else) make sure to find a local calculator. You can find some specific to Torrance online at www.stratisfinancial.com/calculators.