Anyone who has been working toward building their savings to meet the minimum requirement for a down payment on a house in Canada dodged a bullet yesterday.
On February 16, 2010, Finance Minister, Jim Flaherty announced new rules concerning obtaining a mortgage for property, and refinancing property in Canada. In case you haven't heard about the changes, here's a link to the story from CBC News.
The rule that wasn't changed, has many home-buyer hopefuls breathing a sigh of relief today. To date, the minimum down payment required to obtain a mortgage for a home in Canada, has been %5 of the purchase price. Before Christmas of 2009, there had been much speculation, as Jim Flaherty had hinted at the possibility of increasing the minimum to "something higher." Many had guessed that the "something higher" might, in fact be 10% of the purchase price, which is no small change, when you're working hard to pay the bills, and still have something left to put toward savings.
Your Down Payment is one thing -- Your Credit Rating is Another. Lenders consider your credit history when determining whether to approve your application for a mortgage.
Here are 4 Things to Keep in Mind While You're Saving Up Your Down Payment for Your Home:
1. It never hurts to know what your Credit Score is right from the start. Anyone can find out what their credit score is. And it's a good idea to check into it, to make sure the items on your credit history are accurate.
2. While you're working hard to put away savings for your down payment, this is the time to build upon your credit history. If you have perfect credit, keep it that way. If you're credit could use some improvement, use this time to build it up. Make sure you meet all the requirements of your current financial contracts. That is -- pay your bills. On time. Every time. Even if you can only make the miniumum payment, make sure those payments are paid on time.
3. Get in touch with a Mortgage Professional to learn what you need to know to plan for your home purchase. Very often, people are afraid to speak with Realtors or Mortgage Professionals "too early in the game." It can really help to get some professional advice right from the beginning, so you can avoid making mistakes that could cost you money in the long run.
4. Once you have your down payment, and you have a pre-approval for a mortgage... don't rack up more debt. If you buy a shiny new car to match your shiny new house... you may be in for an unpleasent surprize when it comes time to close on your home purchase.
I need to put a disclaimer here: I am not a Mortgage Professional, and I'm definitely not providing advice as such. I'm a Realtor®, just passing on a little common sense that may help more buyers be better prepared when working toward purchasing a home.
If you'd like to learn some of the best ways to prepare for your home purchase, you'll have an opportunity in Calgary on March 25, 2010.
Cory Lewis of Jencor Mortgage Corporation and I will be hosting a FREE SEMINAR for First Time Home Buyers Here are the details:
Thursday March 25, 2010 at 7:00pm
Jencor Mortgage Corporation
305, 1822 10th Avenue SW. Calgary, Alberta
Admission is Free, but seating is Limited, to be sure to Register Early, to reserve your seat.
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