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Buying A House Of Your Own

We 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 discovered 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 currently paying.

Making 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.

For 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.
  • The 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 stage.
  • The 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.
  • The 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.

When 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 such as:

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.