Tips on Buying a Home While

Tips on Buying a Home While Interest Rates are Rising

Recent interest rate hikes equate to needing a higher annual income to qualify for the same mortgage amount as a mere six months ago. A typical home buyer with a $100,000 household income at the beginning of the year would qualify for around a $525,000 purchase with a 20% down payment. Right now that amount has dropped down to a purchase of $450,000 with increased interest rates and qualifi cation rates. So what can a new homebuyer do?

Put more money down. Cut down on discretionary spending or ask your folks for help with a gifted down payment. Take money from your savings, investments or RRSP. Insured high-ratio mortgages typically carry a lower interest rate vs a higher-rate conventional mortgage. This can mean that you qualify for a mortgaged amount with lower monthly payments.

Look at government subsidies and incentives for homebuyers.

Improve your credit score. A higher credit score is easier to qualify with, and can sometimes get you a better rate. payments and allow you to qualify for a higher mortgage amount

Minimize your overall debt. If you want to go out and buy a fancy new car then do it after your home purchase. It’s much smarter to invest in appreciating assets than depreciating assets.

Put a little sweat equity into it. Buy something with “good bones” and a smart layout. You can always paint yourself, replace cabinet doors, add a garage or develop the basement later.

Buy with someone else. Pick carefully and make sure it’s a good fi t, but buying your fi rst home with someone else can put you into homeownership much earlier than if you wait to do it on your own.

Look for the deals. A good real estate agent can advise you on where and how to fi nd good value. Consider talking to your accountant, fi nancial advisor, mortgage broker and real estate agent fi rst to make sure these things are done properly and fall under the rules of the CRA and your chosen lender.

Apply for a variable rate vs the higher fi xed rate (higher qualifi cation rate for fi xed rates).

Take a longer amortization period. Amortizing your mortgage over a longer period will reduce your monthly For more information on buying or selling your next home on the Sunshine Coast contact Russ Qureshi at 604 741-7119 or Jon McRae at 604 740-6263