Before looking at houses, and even before choosing the neighbourhood you would like to live in, you should first determine how much you can afford or are willing to pay. This determination takes into consideration your monthly income and your monthly costs, and any other monthly debt relative to the price of the home.

"How much can I afford?"

In today's market, many mortgagors are willing to lend more money than some homebuyers are comfortable borrowing. Your bank or broker will determine the size of the loan you are eligible for, but you must decide what you are comfortable repaying.

Some lenders or mortgage brokers offer a pre-approved guarantee. It's a good idea to verify that your guarantee specifies both the principal amount, repayment terms, and interest rate of the loan. Many lenders will guarantee their rate for up to 120 days. Most pre-approved mortgages have some conditions. For example, you may be required to provide letters of employment, to allow verification that your credit history is solid, and to show that your downpayment reflects personal equity.

First Time Homeowner RRSP

Funds may be withdrawn tax free from your RRSP savings and used toward the downpayment of your first home. The maximum RRSP withdrawal under this program is $20,000 per person, and you must meet the following criteria:

1. Married couples are considered first time buyers if neither has owned a principal residence in the last five years.
   Note: Buyers may currently own or may have previously owned investment property. In certain cases, only one spouse may qualify.
   
2. Cannot have participated in the Plan previously. This program can only be used once, (some exceptions apply).
3. You must be a resident of Canada although you do not need to be a Canadian citizen to participate.
4. The home is located in Canada and is also the principal place of residence.
   You must repay your RRSP withdrawal over a period of 15 years with minimum payment of 1/15 of the total amount withdrawn.

Note: Canadian federal and provincial home ownership programs are constantly being revised to reflect changing economic conditions. For this reason, we cannot guarantee the accuracy of this information. Please seek adequate verification.

Pre-approved Mortgages

A Pre-approved mortgage is a 'conditional' approval of your mortgage request. Your pre-approval should be a written contract signed by the lending institution describing the amount of the loan as well as the rate of interest you will be charged. In a volatile interest market, it is great to have a guaranteed rate. If the rates go up, you are guaranteed the rate on your pre-approval. If they go down, you receive the lowest rate at closing. Most banks will guarantee rates for 60 - 120 days. Click Here to visit our Mortgage Centre!

Important facts about pre-approved mortgage guarantees:

• This is a guaranteed commitment from the bank to you, but not from you to the bank; you are free to entertain offers from other lending institutions.
  
• These offers commitments come with conditions: you may be required to allow verification of your credit rating, to procure letters of employment, and to produce independent real estate appraisals. Always read the fine print!
  
• All pre-approved mortgages have expiry dates.

Basement Apartments
• Extra income can help carry Mortgage payments
• CMHC Mortgage requires a Legally approval
• Most lenders add 1/2 point over posted rates for partial rental units.
• Ask Elspeth and Pat for requirements of Legally approved apartments