Tips for Renters that want to Buy

Posted by | May 31, 2012 | Mortgages | No Comments

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

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