One of the best decisions a person can make is to get a mortgage. With the different choices and decisions required in each step of the process, receiving the correct advice can have a significant financial impact. It’s advisable to seek a pre-approved mortgage before shopping for a home. This step will allow the borrower to establish a purchase limit. With an idea of how much a borrower is pre-approved, this will help to narrow down the home to search. Many lenders within Canada are ready to assist the borrower in the pre-approval process and also assist in locking in the best mortgage rates available.
What can I afford?
Figure out how much you can afford before you begin looking for a home. The most important part of the home buying process is to save for a down payment; the size of the down payment can also impact the amount for the mortgage you will qualify for. The minimum down payment required in Canada is 5% on the first $500,000 of the home price and 10% on size exceeding $500,000- $1 million. And a minimum of 20% down payment for a home priced above $1 million. A buyer is required to buy a default mortgage insurance if the down payment is less than 20% of the cost of the home. For buyers who can put down more than 20% of the down payment, they qualify to get a conventional mortgage product from their lender.