The problem with most renters is not the ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a downpayment on something more permanent. But saving for this lump sum doesn’t have to be as difficult as you might think.
Consider the following 6 important points:
1) You can buy a home with much less down than you think.
There are usually special provincial or federal government programs (such as RRSP and 1st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. It’s our business to stay informed and knowledgeable in this important area, and we’ll gladly explain existing programs to help you understand your options.
2) You may be able to get your lender to help you with your down payment and closing costs.
Even if you do not have enough cash for a down payment, if you are debt-free, and own an asset free and clear (such as a car for example), your lending institution may be able to lend you the down payment for your home by securing against this asset.
3) You may be able to find a seller to help you buy and finance your home.
Some sellers may be willing to hold a second mortgage for you as a “vendor take-back”. In this case, the seller becomes your lending institution. Instead of paying this seller a lump-sum full amount for his or her home, you would pay monthly mortgage installments.
4) You may be able to create a cash down payment without actually going into debt.
By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a down-payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.
5) You can buy a home even if you have problems with your credit rating.
If you can come up with more than the minimum down-payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a vendor take-back mortgage could also help you in this situation.
6) You can, and should, get preapproved for a home loan before you go looking for a home.
Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage brokers can obtain written preapproval for you at no cost.
