Funding tools

Several tools can help you assess your financial situation and thus realize your dream of becoming a homeowner.

Borrowing capacity and prearranged mortgage loan
When you start looking for a property, it is to your advantage to know your borrowing capacity. This way, you will know which type of property to turn to during your research. A good way to do this is to get a prearranged mortgage before you even find your property. With a pre-arranged mortgage, you'll know how much you can borrow, the interest rate and the amount of each payment. Thus, you will be looking for a property within your means.

Mortgage default insurance
Do you dream of buying a property, but you have less than 20% of the purchase price for the down payment? Never mind! Mortgage default insurance could help you make that dream a reality... Typically lenders these days require mortgage default insurance when the borrower pays less than 20% of the purchase price of the property.

Mortgage loan insurance applies to various types of new or existing properties. It should also be kept in mind that the smaller the down payment, the higher the mortgage payments and the total cost of the purchase will be. students. Mortgage default insurance is offered in Canada by Canada Mortgage and Housing Corporation (CMHC) and GenworthFinancial Canada.

The Home Buyers' Plan
The Home Buyers' Plan (HBP) is a government program that allows any buyer to use their savings paid into an RRSP to finance the purchase of a property without having to pay tax on the withdrawal. The funds withdrawn must be returned to the RRSP within the time frame set by the program.

Neither the buyer nor the spouse must have owned a home that has served as their principal residence during the five years preceding the withdrawal request. In addition, the buyer must have entered into a written agreement for the purchase or construction of a property (promise to purchase or preliminary contract) before being able to withdraw the funds from the RRSP. For detailed eligibility requirements, contact the Canada Revenue Agency or your financial institution.

SOURCE: CENTRIS.CA