Homebuyers want to take advantage of today’s low rate environment but it’s
hard to sort through all of the options out there and get the right combination
of mortgage features, privileges and rate that is best matched to their needs.
The right mortgage goes beyond just the rate--it’s important to also consider
term, prepayment options, refinancing penalties, restrictions, and fees.
Good planning for the purchase of a new home is also essential,
especially for first-time homebuyers who may be tempted to over-stretch their capacity. Work with a mortgage broker to build your home buying budget that
includes considerations of your lifestyle, closing costs, and home ownership
costs beyond the monthly mortgage payment. Having a realistic budget to start
will bring you confidence, knowing that you are not overextending yourself.
As for the all-important downpayment, there
are a few options to consider for first-time homebuyers who may have smaller
amounts to start:
- The Home Buyers' Plan
(HBP) - first-time homebuyers can withdraw individually
$25,000 or $50,000 with a spouse tax-free from their RRSPs, provided they
adhere to the repayment plan.
- Gifted downpayment from
a parent or blood relative – can be a source of funds as long as the homebuyer
receives in writing that they are not required to pay the money back at
any time.
- Start off small – the
dream house may be priced too high, so a starter home might be the right
option for a first-time homebuyer. A smaller home or maybe a house just
outside of the expensive area will help get a foot in the door. The
homebuyer can take advantage of the low mortgage rates to pay off the home
quicker and use the equity from the first home to buy the dream home later.
Mortgage brokers can also provide strategies that will help you pay the mortgage off
faster and shave thousands off interest costs. For instance, your broker may advise you
to set your payments now at rates that could be expected at your renewal date
so you pay down more principal and don’t experience payment shock should rates
be higher at renewal.
There’s so much to consider.
Professional advice can get you into the market to start your wealth building
with smart debt and can save you thousands over the course of your mortgage.
Call us today at 416-275-9284 for all your residential and commercial mortgage needs
1 comment:
It is certainly crucial that you first evaluate whether you can really pay for the mortgage or not as it is a long-term and hefty amount of debt. Some people forget to consider the financial responsibilities associated with homeownership and that could spell trouble.
Regards,
David from gethomeloans.co.za
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