Struggling to get that 20 percent down payment? Tired of paying rent or living with your parents?
20% down payment is required for most residential property purchases in the Toronto and the Greater Toronto Area.
If you have kept a good credit score and have a decent salary, you may be able to purchase your first home with the help of your bank. However, if you are self employed, you will not qualify for high ratio mortgage insurance.
The Canadian government encourages home ownership. Which is why a lot of tools and assistance to help first time home buyers.
You can ask your mortgage agent about a High-Ratio Insured Mortgage from the Canada Mortgage and Housing Corporation (CMHC), Genworth Finacial Canada, or AIG. There is an extra fee of around 3.35 percent on your total loan. However this fee will be spread out over the total number of years. If you are a first time home buyer, you may also be able to put down 5% down payment with the CMHC program. Given that you could pay all the other fees such as property taxes, maintenance fees, and utilities.
The two high ratio insures also won’t allow you to spend 32 percent of your gross income on home or condo related costs, and more than 40 percent of your total household income on debt and housing cost combined. A good rule of thumb is not to spend more than 30 percent of your gross income on home related items.
First time home buyers can also take advantage of taxing rebate.
- Up to $4,475 for Toronto Land Transfer Tax
- Up to $4,000 for Ontario Land Transfer Tax
To find out more on first time home buyer’s incentives.
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