First Time Buyers
As a first time buyer, you're
likely to have many questions about selecting, financing and buying
your first home. How do we start looking for a home? How much money
will we require to purchase the home? How much will the mortgage
payments be each month and can we afford it? How does the home
buying process work and what can we expect along the way? These are
just a few of the questions you're bound to have at the beginning of
your exciting journey to buying your very first home!
A RE/MAX Sales Associate can
provide the answers to your questions and walk you through the
entire process, from viewing potential homes to making an offer to
setting up mortgage financing. Although buying your first home can
be overwhelming, you can be confident that your RE/MAX Sales
Associate will be available to help you every step of the way.
RE/MAX can make buying your first home simple and straightforward,
eliminating any confusion and doubt and allowing you the opportunity
to enjoy your first home, worry-free.
Just a 5% Down Payment?
The following is an excerpt from the Canada
Mortgage and Housing Corporation website under the topic of
"Mortgage Loan Insurance":
Get into your home sooner. Mortgage
Loan Insurance helps you do it. Put as little as 5% down.
When you need a mortgage loan that
is more than 75% of the purchase price of your home, mortgage loan
insurance is required. It protects the lender and, by law, most
Canadian lending institutions require it.
Having mortgage loan insurance
means that if you, the borrower; default on your mortgage, the
lender is paid back by the insurer - CMHC or a private company1.
With the risk of losing their money removed, lenders have the
confidence to make mortgage loans of up to 95% of the purchase price
of the home (subject to price ceilings).
That means your down payment can be
as little as 5% of the house price. With mortgage loan insurance,
many Canadians who might be unable to obtain a 25% down payment can
still buy a home.
What does mortgage loan
There are two components: an application fee and an insurance
premium. The application fee typically ranges from $75.00 to $235.00
and mortgage loan insurance premiums range from 0.5%-3.75% of the
amount of your loan (additional charges may apply), depending on the
size of the loan and the value of your home. The premium can be
added to your mortgage loan and paid off as part of your regular
mortgage payments, or paid off in a lump sum at the time of purchase
to save interest charges on the premium itself..
Where can mortgage loan
insurance be obtained?
See your lender, who can obtain mortgage loan insurance from CMHC or
CMHC will insure mortgages of up to
95% of the home's purchase price or the market value of the
property, whichever is less. (Restrictions may apply. Contact your
Both new and resale homes are
eligible. Here are some of the criteria that must be met:
The home must be in Canada and must
be your principal residence. Housing payments, including principal,
interest, property taxes, heating (P.I.T.H.), the annual site lease
in the case of leasehold tenure and 50% of applicable condominium
fees, can't be more than 32% of your gross household income (GDS
Your total debt load can't be more
than 40% of your gross household income (TDS ratio). Other criteria
apply and are subject to change. For details, please contact CMHC or
your local lender.
Right now, 3 million Canadians own
homes with insured mortgages.
Ruth and Sidney lived in a rented
Revelstoke home for seven years. When the landlord decided to sell
the home, he offered the couple the first opportunity to buy it.
While his price was fair, Ruth and Sidney didn't have a 25% down
payment saved, so they couldn't qualify for a conventional mortgage.
While looking for other options,
they found they could be eligible for mortgage loan insurance that
would allow them to buy with as little as 5% down.
1 It should be noted
that the protection provided to the lender by the insurer does not
relieve the borrower(s) of the obligations under his/her mortgage