Buying your first home is very exciting stage in one’s life. Along with the excitement there can be stress about how things will work. With property value increases in recent years, owning a home is not only a personal thing, but also a fantastic investment. As a first time homebuyer you will have a long list of questions and thoughts on where to get started. Our business model is to be your advisor. With our long standing expertise in Ontario mortgages, PrestoMortgages is here to guide you through this journey.
Doing your homework
Ownership is a journey in itself. And like all journeys you must prepare for it. The first step is to make sure that you have the financial strength. This is the test to make sure you are comfortable to afford your own home.
Because we are in the unique situation of brokerage and lender, we can work with you to make sure you get the funds you need to afford your first home. We can determine the mortgage payments that are comfortable for your first purchase and back your mortgage into this figure.
Use our tools to get a sense of where you are at
Put the down payment together!
Once you’ve decided on the path to home ownership, it is important to start planning your savings for the down payment. There are many steps you can take to grow your savings. Plan out your monthly expenses and contribute to RRSP and TFSA in order to build assets.
There are different types of mortgages that will require different down payments. A conventional mortgage requires 20% of the down payment and has fixed or variable terms for the interest rate. Conventional mortgages are less expensive because there isn’t insurance required against default from insurers such as CHMC or Genworth. We can also make a 5% down payment work for you with insurance if you would rather use the savings for renovations and building up your new home.
RRSPs are another fantastic tool to help for your down payment. You can advance a down payment by borrowing from your registered retirement savings plan. The Federal government allows first time homebuyers to borrow up to $25,000 from their RRSP to fund a down payment. This loan is tax free and needs to be paid in 15 years so you have plenty of time to make it back up.
PrestoMortgages can help with your down payment if you have difficulties managing a down payment for the house you want. We have many flexible options to choose from.