As your real estate broker I have knowledge of the financing process and can help you to evaluate your financial situation and introduce you to experienced finance professionals who will work with you to make your dream of becoming a homeowner a reality.
Borrowing Capacity and Preauthorized Mortgages
When you start looking for a property, it’s in your best interest to determine your borrowing capacity. A pre-approved mortgage is clearly your first step. A pre-approved mortgage will allow you to:
- Determine your buying power
- Protect you from interest rate increases usually up to 120 days
- Strengthen your position in negotiations with sellers and instill confidence as you can demonstrate that you already qualify for a mortgage loan
Mortgage Loan Insurance
You dream of buying property but you don’t have enough for a down payment? Not a problem! Mortgage loan insurance can help make your dream a reality. In general, lenders require you to get mortgage loan insurance when you have put down less than 20% of the property’s sale price.
Mortgage loan insurance is applicable to various new or existing properties. Also, bear in mind that a modest down payment means a higher mortgage payment and in the end, a greater total cost. InCanada, mortgage loan insurance is available through Canada Mortgage and Housing Corporation (CMHC) and Genworth Financial Canada.
The Home Buyer’s Plan
The Home Buyer’s Plan is a government program that allows buyers to withdraw money from their RRSP, without paying tax on withdrawal, in order to purchase a home. Funds withdrawn must be paid back into the RRSP within a fixed time limit.
To qualify, neither you nor your spouse may have owned a home that was used as a principal place of residence during the five years prior to your withdrawal request. In addition, you must have entered into a written agreement for the purchase or construction of a property (promise to purchase or preliminary contract) before being able to withdraw funds from your RRSP.
For further information on the government assistance programs visit the Canada Revenue Agency website at www.cra.gc.ca. or contact us and we’ll be pleased to advise you how to make your dream home a reality