Questions Asked by Homebuyers

For all single family properties that will be occupied by the owner, the minimum down payment is 5% of the purchase price. This is not just for first time buyers; it applies to all home buyers. Under new policies, the down payment can be borrowed as well, as long as the buyer qualifies under his TDS ratios.

From 3 to 4 times your combined annual gross income will give you a ball park value. So, for couples, if one partner makes $40,000 and the other makes $35,000, then their maximum mortgage is between $225,000 and $300,000. Other financial obligations, like credit card debt and car loans, will possibly reduce the maximum mortgage you can afford. It is best to get pre-approved by a mortgage specialist.

Provided that you are a first time home buyer, you can withdraw up to $20,000 from your RRSP and use it for down payment and other closing costs to buy a resale or new home without having to pay tax. You will have to repay that money within 15 years (a minimum of 1/15th per year). If your spouse qualifies, then he/she can also use RRSPs for the purchase.

The giver has to be an immediate relative and the money must be a genuine gift; that is, the money doesn't have to be repaid. The Lender must receive verification of the monies prior to applying for CMHC financing. However, under new guidelines, one can borrow money for the down payment as long as the borrower's Gross Debt Service Ratio and Total Debt Service Ratio fall within the requirements by CMHC.

By getting pre-approved by a mortgage specialist you will receive a guaranteed rate for a mortgage; in addition, you will know the maximum amount of mortgage that you can receive. The pre-approval is not a mortgage; it is only a guarantee by the lender to give you a certain mortgage amount at a certain interest rate. Once a property is found, the lender must still approve the property. A pre-approved mortgage allows the buyer to look with confidence in a certain price range. This avoids the problem of finding the perfect house in the wrong price range.

Here are some additional costs on closing: lawyer fee & disbursements, appraisal fees, home inspection cost, survey or title insurance, high ratio mortgage insurance premium, moving expenses, land transfer tax, pre-paid property tax or utilities adjustments.

Most monthly expenses will remain constant from month to month but some will change with the seasons. Here are some common expenses: property tax, home insurance, utility bills (heat, gas, electricity, water, cable, telephone), and maintenance costs.