APRIL 2008 Article
I FEEL LIKE I’LL NEVER BE A HOMEOWNER
This is a phrase that I have been hearing a lot lately. With the housing market continuing to rise many of us who are homeowners are really excited about all the equity that is being built up in our homes! But of course there is the other side of the pendulum, what about someone who wants to BUY their first home?
First time homebuyers are feeling discouraged when it comes to purchasing their starter home. Fifteen years ago a first time home buyer could get into a nice 900 square foot bungalow for $55,000.00 now that same home is selling upwards of $200,000.00!
One thing that will make you feel hopeful though is the fact that interest rates are continuing to stay at an all time low. As of today you could get a variable rate mortgage of prime -.60%, that equates to a 4.65% interest rate!! That is even lower than the 4.88% that I locked in at 5 years ago. The rates for locking in for a 5 year term are great right now as well.
But do not despair….. just know your options. The days of going in to the bank, having them review your situation, punch in a few numbers and tell you whether or not they can help you, are a thing of the past. There are so many mortgage products available for people. Lenders have come to realize that people’s needs have changed over the years. There are many different types of employment status’; business owners and commissioned salespeople are just a couple to mention. If you fell into this category in the past it may have been difficult to get the best rate or the best mortgage product for your needs, but that isn’t so anymore.
Your credit may be “a little tainted.” If that is the case please don’t let that stop you from inquiring about a mortgage. More and more lenders are willing to help out those with bad credit, there are some guidelines that the lenders will follow so be sure to contact your mortgage professional to help guide you and prepare you.
Perhaps you have not had the opportunity to save up for a down payment. Just recently CMHC has reduced the amount of down payment you need to have to avoid paying mortgage insurance. It used to be 25% but now is 20%, this makes it even more attainable for someone to get into their home with a nice down payment. If you cannot come up with 20% down there are programs that will allow you to put only 5% or 10% down with mortgage insurance. You might even qualify for 100% financing and having the lender borrow you the money for closing costs as well. Remember closing costs will run you about 1.5% of your mortgage amount and you want to show that you have had some good savings habits for the past few months.
Selection of homes for sale is limited in many areas of Canada. You need to speak with a professional realtor who has her finger on the market at all times. You need to be quick when you find the home you want so you want to be sure that you have someone working diligently on your behalf.
So don’t let these few things hold you back from owing your own home. Give me a call, we can talk about your situation and see if there is a way to get you out of renting and into the reality of home ownership!!