Tips for Renters that want to Buy

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Are you paying off your landlord’s mortgage?? You want to buy but don’t know where to start and probably don’t have enough for a down payment??

If you’re thinking about take the leap into home ownership as a first time buyer it’s a great time to do it — interest rates are low, home prices are stabilizing and the economy is turning around. But you’re new to this and are not quite sure if you qualify or even if you have enough money for a down payment. It’s probably less than you think.

All you need to get into your home is 5% of the purchase price of the home as a down payment. Ideally, you’ve saved the down payment in a savings account or have an RRSP which you can withdraw up to $25,000 with no penalty. But if neither of those works for you don’t worry there are still a few options.

Consider these:

  • Your parents or a close family member gifts you the down payment
  • Get a 5% cashback mortgage to use for your down payment
  • You can borrow the down payment from a line of credit – the payment gets factored into your debt service ratio
  • If you have a large credit limit you can get a cash advance on your credit card. Once again the payment will be factored into your monthly debt service.
  • You can ask a friend or a family member to guarantee the mortgage.
  • If you have some funds saved but not enough, you qualify for 2% or 3% cashback mortgage to get you up to the 5% you need.

Whether you’re ready to make the next step or want to get set up with a plan on how you’re going to own your first home please feel free to give me a call I’ll be happy to answer all your questions.

Mortgage Alliance – Sarah Park

New Rules Governing Canada Back Mortgage Insurance

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This morning, Federal Finance Minister, Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010.

Consumers will have to qualify on 5 year Rates regardless of the actual term and rate consumers chose.

Maximum loan to value on refinance has been reduced to 90% from its current 95%.

Maximum loan of value on non owner occupied properties reduced to 80%.

A Quick Guide to Canadian Mortgages

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Kamloops Mortgage Services

There are several different types of Canadian mortgages including the second mortgage in which borrowers may be able to avoid having to pay high premiums on their mortgage. Such a mortgage is also useful in taking equity out of your home which can then help you to affect consolidation of debts.

The criteria used for obtaining second mortgages are negotiable and not quite as stringent as you would find when applying for a bank mortgage.

Another one of the more useful types of Canadian mortgages, equity financing is a good option for those home-buyers that can only pay twenty-five percent down payment and who have good credit. Equity mortgages are even given without income confirmation. In addition, this type of Canadian mortgage is ideally suited for people that are self employed and who have good credit. All they will need to pay is fifteen percent down payment and show their current tax returns and also prove that they do not owe any taxes.

Another form of Canadian mortgages, the construction mortgage is often overlooked because obtaining such a mortgage often takes a lot of time which is not acceptable to many people. However, if you deal with a broker who knows how to get you a construction mortgage in quick time, this Canadian mortgage type can prove to be very useful.

The big Canadian banks will offer construction mortgages but they only offer such mortgages to those people that can show having personal equity in a construction project. This is why you need to ask a broker to find you a lender who specializes in giving construction mortgages to everyone and on more reasonable terms.

To qualify for different types of Canadian mortgages you will need to use a calculation to see how well you will be able to afford to maintain your repayments on a mortgage. Typically this will involve calculating based on the valuation or the purchase price, whichever is lower. For people that are employed they must provide proof of income including the previous three month’s pay checks, latest P60 and/or reference from your employer and you may also have to show your previous six month’s bank account statements.

In order to qualify for the different types of Canadian mortgages you will need to use calculations that can help determine whether you can afford the repayments. In addition, as an employee you will need to provide certain documentation including previous three month’s paychecks while as a self-employed person you will need to show a different set of documents including three previous years of audited accounts.