all need a place to live in. Some people rent a home; others buy one.
If you've decided to stop paying rent and buy your first home, you're not alone.
With interest rates at their lowest in decades, many people have
that they can afford to buy a house. In most cases, mortgage payments
can be comparable or even significantly lower to the rent they are
the decision to become a homeowner is good decision since buying a home is
a great investment in your future. Choosing a home to buy starts with
your needs and desires and should process logically until you find
something you can afford. We think this web site will help you
bring into balance some of the many factors to consider when deciding
how best to meet your needs through home ownership.
many people, it's no problem to keep up the bi-weekly or monthly mortgage payments and other costs
associated with home ownership. But what usually holds first time buyers back is
the initial down payment required to obtain a mortgage and other costs
associated with purchasing a home, such as legal fees, disbursements
and land transfer taxes.
What are Your Housing Needs and How Much You Can Afford?
There are three factors to consider before setting off to find a new home:
1. Stage of life.
2. What you can afford.
3. Whether you should buy or rent.
Generally speaking there are three stages of development for a family or for a group of people living together.
first stage: In the first stage are people under 35 years of age. They
have rapidly changing needs. The size of families usually increases
requiring larger or different accommodations. Income earners often
switch jobs and explore different employment options and sometimes this
means a move to another city. Single people, too, tend to move around
at this stage of life. Most home owners buy their first house at this
second stage; In the second stage are people between 35 and 55 years of
age. In this stage, life becomes more stable. Income earners usually
secure jobs and the family size remains the same. Families and
individuals at this stage tend to stay put.
third stage: In the third stage are people over 55 years of age. They
tend to be even more stable. Family income earners rarely change jobs
and their children set out on their own. Families in third stage
usually don't need as much space as before, yet are reluctant to move
because they are comfortable where they are. If they do move, it will
likely be for infirmities, which make home maintenance too hard, or to
accommodate a retirement lifestyle.
hunting for a new home take a good look at your stage, your existing
home and your needs. Knowing up-front what you need and what you want
will help you save time later.
The second thing
you need to determine is how much house can you realistically afford?
It's a good idea to learn how to calculate on your own, but you can ask for
some professional help in this area. A good realtor and mortgage
specialist or mortgage broker are skilled
professionals who can assist you.
Real estate agent knows how to assist you in assessing your housing needs and wants and
can then match them with homes in your price range. As well, he or she will help you understand the process
you will go through as a first time buyer to complete a real estate transaction.
There are ways and government programs available for first time home buyers to help you save money for your
down payment faster. For example, to assist first time homebuyers with
the costs associated with the purchase of a home, the Government of
Canada introduced a First Time Home Buyers Tax Credit in 2009 — a
$5,000 non-refundable income tax credit amount on a qualifying home
acquired after January 27, 2009. For an eligible individual, the credit
will provide up to $750 in federal tax relief starting in 2009.
To provide first-time homebuyers with greater access to their RRSP
savings to purchase or build a home, the Government of Canada has
increased the Home Buyers’ Plan withdrawal limit to $25,000 from
$20,000 per person for withdrawals made after January 27, 2009.
To obtain more information on the First-Time Home Buyers’ Tax Credit
and the Home Buyers’ Plan, call 1-800-O-Canada or click on the link
below to visit the Canada Revenue Agency web site.
We suggest you to take advantage of government programs
Another option you can explore is a high ratio mortgage. Basically there are two types of
mortgage options: conventional mortgages which require a minimum 20%
down payment and high ratio mortgages which are designed for people who
do not have the 20% down payment. A high ratio mortgage requires a
smaller down payment than a conventional mortgage because it is insured
by the CMHC (Canada Mortgage and Housing Corporation) or GE Capital
Mortgage Insurance Company (the only private sector source of mortgage
insurance to lenders in Canada). Mortgage Default Insurance is a great
way for homebuyers to achieve the dream of home ownership without a
large down payment.
Once you know
your price range and have a down payment plan in the works, you can
start working with your professionals to find the “home of your
dreams.” For most people, their first home is more modest than the home of their dreams, but
it is a good start toward new chapter in their life - home ownership.