Buying your dream home could turn out to be a very stressful as well as overwhelming experience when you are a first-time buyer. There are usually too many things that have to be put into consideration and all of them at the same time. To begin with, you have to be ready to make a huge investment so you have to be sure you can shoulder the financial burden for the duration required.
You can assess your financial situation by considering your personal net-worth, your monthly allowances, and your total debt. Your new worth is what you will need when applying for the mortgage. You should also take your current credit portfolios into account so you can determine how you will be able to pay for your home every month.
Fixed rate home mortgage- This is the type of mortgage that means the interest rate will not change the entire term
Variable rate mortgage- Also known as adjustable rate mortgage and the interest rate follows the movements as well as changes in prime rates by the ICICI Bank Canada
Conventional home mortgage– This type can be equivalent to but does not exceed80% of the value or purchased real estate property
High-Ration home mortgage– This type requires a minimum down payment that is equivalent to at least 5% of the appraised value of the property. With this type of mortgage, it must be insured with a Canada Mortgage and Housing Corporation.
No-down-payment home mortgage– If you are a first-time buyer, you can buy a home without any down payment. The CMHC or other lending institutions offer this no- money down option. This option is only available to home buyers who meet the mini mom 600 Beacon score. These home buyers only need to raise an amount equivalent to 1.5% of the price of the property for the mortgage brokers of Toronto
Homebuyers Plan- Under this plan, as a first-time buyer, you can withdraw a maximum amount of $20,000 from your Registered Retirement Savings Plan. A unique feature of this rates is the fact that it is tax-free. You and your spouse, if you have any, can apply separately for you to get double that amount. You can them use that money to use as a down payment for the property you intend to purchase.
Before you make a final decision on the method, you will use, it is very important that you consider other intangibles. For example, you should consider the mortgages plans that allow you to either suspend or defer payment for an agreed amount of time. This is to give you some elbow time to manage your finances during emergencies. You could also get help from a mortgage expert so they can tell you all your options.
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