Plenty of pro­fes­sional help avail­able on mort­gage ques­tions

The Telegram (St. John’s) - Home Buyers' Guide - - METRO REGION -

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.

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