So after a few years of hard work, you’ve graduated, you’ve found a good, stable job, and now you’re ready to take the next big step in your life: you want to buy a new home. What should you start with? What do you need to do? How much can you afford to spend? For which maximum amount of mortgage loan are you eligible? Can the government help you? Here are some questions we hope to answer.
What you need to know
First of all, you need to know everything about mortgages. A mortgage is a loan granted to you by a bank or other financial institution that will have to be repaid during a specific period (for example 15 or 25 years). This loan is secured against the home equity of the property you buy.
Your qualification will depend on your income/expense ratio, your first payment, your credit rating, and your credit history.
What happens if you do not have a credit history? We believe that in this situation, you should start building a good credit record before applying for your mortgage; however, a co-signer can help you get the loan you want if your credit history is non-existent.
Generally, you will need at least 5% to make your first purchase. There are many sources from which you can get this amount. Usually, these are savings, however, programs like the Home Buyers’ Plan (HBP) are designed specifically to help Canadians purchase their first home.
The Canadian Home Ownership Plan (HBP)
The Canadian government has established a Home Ownership Plan to encourage individuals who buy a home for the first time. Someone can withdraw up to $ 25,000 from their non-taxable RRSP with a refund of 1/15 of the total withdrawal amount after a 2-year grace period. This money can be used for a down payment or to buy property. This is an excellent tool for recent graduates.
The next thing you should consider is how mortgage payments will affect your monthly budget.
Note: It is considered healthy by our specialists to keep your total debt payments below 42% of your annual gross income (including housing costs such as taxes and heating).
A mortgage broker
Your mortgage rate and the amount of your mortgage will help you determine how much you pay each month. We recommend that you consult a mortgage broker so that you can benefit from lower interest rates and you can access more products and promotions that are not necessarily published by banks.
As a recent graduate, you will find that speaking with a knowledgeable mortgage specialist will open the door to other options. They can use their expertise and experience to negotiate a better loan with a better rate for you- www.loans-payday.online payday loans percentage rate.
Of course, for the busy and newly graduated college student, having a mortgage broker doing the work for him can indeed seem very tempting.