Doing your HOMEwork

For many people, buying their first home will likely be the first major financial expenditure of their lives. And, while it can be daunting, it need not be overwhelming.

There is a whole houseful of factors to consider when buying a home — everything from mortgage rates to amortization periods to legal fees. The major issue, of course, is financial. The federal and provincial governments offer some income tax benefits to firsttime buyers, including a $5,000 tax credit and the Home Buyers’ Plan (HBP). Under the HBP, Canadians can withdraw up to $25,000 in a calendar year from their registered retirement savings plans (RRSPs) to buy or build a qualifying home for themselves or for a related person with a disability. More information is available at www.cra-arc.gc.ca/ hbp/. And the Canada Mortgage and Housing Corporation (CMHC) offers numerous tips for first-time buyers, including handy worksheets to chart your needs, on its website at www.cmhc-schl.gc.ca/en/co/buho/.

Pat Dell, co-owner of Verico Crown Mortgage Services says prospective buyers can overcome the fear of buying a home for the first time by having all the facts and documents available right at the outset. She advises first timers to ensure they are pre-approved for a mortgage before they start looking, and work with a REALTOR® rather than trying to buy on their own. “First time home buyers for sure should use a REALTOR®; find one that you feel comfortable with and talk to them. Let them do their job,” she says.

She also advises potential firsttime buyers do their homework, and lists the information that the lender will need, including credit standing, confirmation of employment, amount of down payment and where it is coming from, and overall debts. “Make sure you’ve got everything before you put the offer in,” she says, adding that people who are in business for themselves, like mortgage brokers and writers, need even more paperwork. “You have to have that paperwork ready, because that’s what the lender’s going to ask. It’s not just the lender, it’s the insurer,” Dell says. And don’t forget the additional costs involved, such as lawyers’ and land titles fees.

And, again like doing something one has never done before, it’s always a good idea to have some expert advice. New home buyers and home-buying veterans alike can benefit from the help of mortgage brokers to help them find the mortgage that best suits their needs. Using an expert can not only take the headaches out of arranging for a mortgage, it can also save money. The ability to shop around can help keep the interest rate low — as much as one and a half per cent less than the rates offered by the banks. Accessing the expertise of a licensed mortgage broker can take a lot of the stress out of the process, and at no cost to the client, as their fees are paid by the lender.

With a large supply of properties available for sale and interest rates under three per cent for a five-year mortgage, now is a good time to invest in a home. As Dell points out: “There is a saying that dirt is a good investment.” And, that’s good news for prospective first time home buyers looking to hit pay dirt.

First time home buyers for sure should use a REALTOR®; find one that you feel comfortable with and talk to them. Let them do their job. PAT DELL, VERICO CROWN MORTGAGE SERVICES