Plenty of professional help available on mortgage questions
When saving for a down payment and arranging for financing, the key is to plan, plan and then plan some more. Develop a monthly savings plan to accumulate principal for a down payment. First-time home buyers should be aware of Revenue Canada’s Home Buyers’ Plan, a program that allows a withdrawal of up to $20,000 from your RRSPs tax-free to be used to purchase a qualifying home. Under the plan, joint purchasers can each withdraw $20,000 so up to $40,000 may be available as a downpayment.
And, of course, there are mortgage factors to consider. In most regions, homebuyers must pay at least five per cent of the total home purchase price as a downpayment. Homebuyers who pay the minimum price most often qualify for a “highratio mortgage,” which requires an insurance premium to protect the lender from default. A down payment of at least 25 per cent of the price of a home qualifies for a conventional mortgage, which does not require insurance. There are numerous tools available to help buyers navigate the financing maze.