First Time Buyer

newcondos4.jpgAs a first time buyer you need to find out how much mortgage you can be approved. Do you have a credit problem that will affect your loan application? You have to decide where you want to buy and what type of home your want to live in.

If you are interested in buying an eco-friendly and energy efficient home you can find out more information on CMHC’s “green home incentive”. The Government of Canada has 2 home purchase programs that help a first time buyer purchasing a home. You should find out if you are eligible to take advantage of these 2 programs, namely:

a) Property Transfer Tax Exemption
b) Home Buyer’s Plan – using your RRSP for down payment

Some of the issues to consider by a first time buyer are:

1). How much mortgage? You need to find out how much mortgage financing you required. In addition to your down payment, you have to budget for expenditures on home furnishing, repairs, replacement of appliances, renovation, etc.

2). How much down payment do you have? The more down payment you can provide, the less you need to borrow for your mortgage. You may use your RRSP savings as down payment for your home. As a first time buyer your can withdraw up to $20,000 (or $40,000 per couple) tax free from your RRSP account.

3). High ratio mortgages. If you qualified can buy a home with as little as 5% or 0% down payment. If your down payment is less than 20% of the purchase price, you are required to buy a mortgage insurance. Click here for CMHC’s website on buying a home.

4). Pre-approval. When you are pre-approved, you know exactly what your price range, how much to borrow, the interest rate and your monthly payment. Pre-approval also helps in guaranteeing your mortgage rate for 90 days or 120 days depending on which bank.

Finalizing your mortgage

Once you have an accepted offer on the home you wanted to purchase, your mortgage application can be put in motion. When your mortgage is approved, you will get a bank commitment confirming the interest rate and mortgage terms of your loan. There are mortgage loan conditions you need to fulfill before your lawyer receives the mortgage loan documents for signing.

You lawyer will receive the mortgage fund from your bank, and together with your down payment, your home purchase transaction can then be completed.

If you like to meet me to discuss your situation, kindly contact me (Elsie Tse) at 604-716-3369 or Email Me.

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