October 15th 2024
With the first in a series of Bank of Canada rate drops having begun in June, many individuals are looking at the housing market with renewed vigor.
If you are someone who is considering entering the housing market this summer, there are a few things you should keep in mind:
Determine Your Budget: Download my app from Google Play or the Apple iStore to help you calculate mortgage payments, affordability, the income required to qualify, and even estimate your closing costs! It also allows you to connect directly with me through the app so that I can answer any questions you have right in the palm of your hand.
Save For a Down Payment: Your typical down payment should be at least 5% of the purchase price, though 20% down is preferable as anything below that requires default insurance. Your down payment can be done through your own savings account or RRSP’s.
• Thanks to the Federal Government’s Home Buyer’s Plan, first-time homebuyers can leverage up to $60,000 from their RRSPs (maximum of $120,000 for a couple).
• PRO TIP: The First Home Savings Account (FHSA) is specifically designed to help first-time homebuyers save for their down payment without having to pay taxes on the interest earned on their savings.
Take Advantage of First-Time Buyer Programs: Did you know? First-time home buyers are eligible for an exemption, reducing the amount of property transfer tax paid, depending on the property's value.
• PRO TIP: In addition, Ontario, British Columbia, Prince Edward Island, and the City of Toronto offer land transfer tax rebates for first-time homebuyers.
Get Pre-Approved: This means that a lender has stated (in writing) that you qualify for a mortgage and what amount, based on submitted documentation of your current income and credit history. A pre-approval usually specifies a term, interest rate, and mortgage amount and is typically valid for a brief period, assuming various conditions are met.
There are a few benefits to pre-approval such as: