5 Ways to Make Home Ownership Happen

Getting into the housing market can be a challenge, but savvy home buyers stay on top of ways to stretch their housing dollar.  The following tips offer good financial solutions for a tight mortgage budget:

1. You can break out of the money-down slump
The biggest barrier to home ownership is saving enough for the down payment. Rules have changed and buyers can put down as little as 5 per cent or even zero down in some cases. Because of the stipulations involved in these kinds of mortgages, it is important for buyers to consult their mortgage professional.

2. Your RRSPs are not just for distant dreams
RRSPs can be accessed in order to fund up to $20,000 of a down payment to buy or build a home.

3. Cash back is an option
With a cash back mortgage the lender will pay a percentage of the amount borrowed “back” to you as a lump sum, which can help with a range of expenses that homebuyers encounter – closing costs, furniture, incidentals arising from moving, and so forth.

4. Get a rate hold
A mortgage consultant can get you a mortgage pre-approval that includes an interest rate hold of up to 120 days.  If fixed mortgage rates rise during the period of your rate hold, you’ll be protected; if they fall, you’ll have access to the lower rate.

5. Debt can be reduced gradually
The traditional 25-year mortgage can now be stretched with a 35 or 40 year amortization.  This allows first-time buyers to access more expensive properties, but they will also have to pay more in interest over the life of the mortgage.  Lump sum payments or increasing monthly payments down the road will lessen the total amount of interest paid.