Crossing the Threshold: BMO Offers Tips and Advice for the First Time Homebuyer
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 02/22/12 -- Traditionally, spring marks the busiest period of time for housing market activity in Canada. With the thaw only weeks away, BMO Bank of Montreal offers first-time homebuyers strategies for finding their ideal home while keeping financial priorities in check.
Buying a home can be the largest and most important financial decision one can make, so it is important to be aware of all the factors that go into making a responsible purchasing decision.
"The first step is figuring out how much you can afford to spend on homeownership, which means an honest assessment of the household balance sheet," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "Once you have a clear idea of where you stand financially, you can then make a responsible decision of what you can afford, including your down payment, monthly mortgage costs and other expenses like utility costs and property taxes."
BMO offers the following tips for Canadians looking to buy a home.
Making an affordability assessment
Ms. Parsons noted that there are two rules of thumb first time homebuyers can use to determine what they can afford.
"First of all, housing costs, including mortgage payments, utilities and taxes, should not take up more than one-third of your income. In addition to this, servicing your overall debt, including loans, credit card payments and lines of credit, should not account for more than 40 per cent. If you can land safely within these parameters, than homeownership is an affordable and realistic option."
Coming up with the down payment
The bigger the down payment you come up with, the less interest you'll pay over the life of your mortgage. To increase your down payment, consider using funds from your RRSP. As a first time homebuyer, you're eligible to withdraw up to $25,000 tax-free from your RRSP to add to your down payment. Your spouse or partner can do the same, for a combined total of $50,000. You have 60 days after the second year of withdrawal to begin repayment and no taxes are payable if you repay the total amount within 15 years. Short-term investments vehicles, such as a Tax-Free Savings Account (TFSA), can also help grow your savings faster by tax-sheltering funds.
Choosing the right mortgage for you
Your mortgage needs to fit in with the rest of your financial priorities - which could mean increased flexibility or security. Consider the following when choosing your mortgage:
Applying for pre-approval
A pre-arranged mortgage establishes the amount you can reasonably afford to pay for your first home. Consider the following benefits to getting pre-approved:
Contacts:
Media Contacts:
Jessica Park, Toronto
(416) 867-3996
Sarah Bensadoun, Montreal
(514) 877-8224
Laurie Grant, Vancouver
(604) 665-7596
Internet:
Twitter: (at)BMOmedia
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Datum: 22.02.2012 - 11:00 Uhr
Sprache: Deutsch
News-ID 117104
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contact information:
Town:
TORONTO, ONTARIO
Kategorie:
Commercial & Investment Banking
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"Crossing the Threshold: BMO Offers Tips and Advice for the First Time Homebuyer"
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