(NC)-Buying a home can be a challenging journey at the best of times ? especially for a first-time homebuyer. Before you begin, the mortgage team at ResMor Trust has the following tips to help make your dream of home ownership a success:
Save for a minimum 5% down payment
Starting October 15, 2008, new lending rules require all homebuyers to make a minimum 5% down payment on the purchase of a home. This down payment is required to qualify for mortgage insurance ? needed for all homebuyers borrowing money from a financial institution with less than a 20% deposit. You will also want to put money aside to cover closing costs including legal fees, moving and other expenses.
Consider how long you want to carry a mortgage
Under the same lending rules, the federal government is reducing the maximum amortization period to 35 years from 40 years for insured mortgages. This 5-year reduction in amortization length only minimally impacts monthly carrying costs: the difference between a $200,000 mortgage at 6% interest amortized over 35 years, as opposed to over 40 years, is $41 per month.
Maintain a good credit score
Your credit score is a number that represents the information found in a borrower's credit history - the higher the number, the more choice you will have when shopping for a mortgage. Contact your mortgage broker or financial institution to find out more about your credit score and how it could influence your ability to purchase a home.
Negotiate flexible payment terms
There are many factors to consider when negotiating a mortgage. While a good rate is important, you will want to consider the terms and service your lender can offer. Flexible payment terms can be helpful for a new homebuyer ? especially if you hope to pay off your mortgage quickly. Some mortgage products are more flexible than others and a mortgage broker can help you find the right product for your needs.
For more information or to find a mortgage broker near you, visit www.resmor.com.
- News Canada