top of page
Search
  • Writer's pictureLex Oswin

Homeowners: Let's pay it forward


LET’S PAY IT FORWARD

For many of you reading this, you already have a mortgage (a home).  But for others, which may include your friends and family, they can only hope to be where you are someday! 


Please share this with those that may need some help navigating the recent challenges of buying a home!


WHAT DO I NEED FOR A DOWN PAYMENT?

Unless you’re one of the lucky few to be able to buy a home outright most homebuyers have to think about what their source of down payment will look like.  The higher the down payment, the lower the mortgage and the mortgage payments.  But with rising house prices, those down payment amounts are larger than expected for some.  Being a first time homebuyer does give you some unique options, but it still requires some focused planning.

The first step is to find out what you qualify for (both purchase price and mortgage amount), and then you’ll have the answer to the amount of down payment required.

Talk to me about where you are now, and we can break those numbers down.

 

COMMON SOURCES OF A DOWN PAYMENT

The most common sources of down payments come from the following.  Note that as of 2024, there have been some additions, and adjustments to what the government programs look like:

  • Registered Retirement Savings Plans (HBP): The federal government now allows first-time homebuyers to use up to $60,000 in RRSPs per person.  In 2009, the limit was $25,000. In 2019, it was increased to $35,000. Five years later, we’re now at $60,000.  (question is, how many first time buyers (average age 34-37) have accumulated that in their RSP’s?

  • Regular savings: If you’ve pinched your pennies and have enough saved from work bonuses and tax refunds, you can use this money for your down payment. The new vehicles for these savings accounts include FHSA and TFSA’s…bottom line, they all require contributions, and grow over time – some with tax saving benefits.

  • Gifts from family: A large percentage of first-time buyers had their parents, grandparents or other family members gift them money for a down payment. If this something you have access to, it may get you over the finish line of buying a home.  There may be other options such as “cosigning”, which can, in some cases, replace the cash requirement to qualify for a mortgage!  (ask me how!)


BORROWING FOR A DOWN PAYMENT

The borrowed down payment offered by the major mortgage insurers, allows first-time buyers to borrow money from an unsecured loan or line of credit for their down payment. As with all things that may seem good on paper, you must read the fine print….or talk to your mortgage broker!


If you’re borrowing funds, this debt payment must be included in your qualifying ratios.  The insurance premium is also slightly higher.  This is where a mortgage broker can play with the math to see if it can work and recommend professionals who put these types of loans together.  For some, who meet these requirements, it can be a way into a tough market!

 

WHAT METHOD IS BEST FOR YOU?

If you are thinking about buying now, or in the future, it’s never too soon to start asking questions. I can help you filter through the options and come up with a plan to get you into homeownership…for the first time or otherwise!

 

HEY, EXISTING HOMEOWNER…

If you are already there, that’s a hurdle you cleared likely at a pretty great interest rate!  Keep in mind that 74% of Canadians with a residential mortgage are renewing in the next 18 months! If that’s you, let’s talk!


The benefit we have is that home values have increased, so we can potentially use the equity in your home to give you some breathing room. Perhaps pay off some debts or re-amortize to reduce your overall payment with the higher interest rate environment.

 

I’m always here to chat and work through the scenarios with you.  Call or email any questions you have!

 

Your trusted broker,



3 views0 comments

Comments


bottom of page