Before you enter bidding wars, research the mortgages offered around Barrie as well as your budget so you know what you can afford.

 

 

A pre-approved mortgage is the next step. This means talking to a lender and determining the maximum mortgage amount that you are eligible for, based on your income, down payment, credit rating, debt, and other factors.

 

Pre-approval locks your lender into an agreed amount and interest rate (if fixed) for a set amount of time. You can house hunt knowing that you have two or three months to find a house and take advantage of the interest rate. If it goes up, your lender is still locked into the lower rate for your deal. If it goes down, you should have access to the new, lower rate.

 

 

If you’re a first time buyer, the government of Canada has made it easier for you to find the down payment for your first home. Before you browse mortgages in Barrie, check to see if you qualify for the Home Buyers' Plan (HBP). The plan lets you withdraw money from your RRSP to use toward your down payment. There’s no tax penalty for taking out the money as long as you repay it within 15 years.

 

You can use up to $25,000 towards your down payment. Your spouse or partner can also take the same amount out of his or her own RRSP, giving you a total of $50,000 toward your down payment. The amount has to be paid back, starting a year after the withdrawal. Underpaying one year will result in the funds being taxed as income for that year.

 

 

First-time buyers aren’t the only ones searching for mortgages. If you’ve been paying your mortgage for years and need an influx of cash, you may qualify for a second or third mortgage on your home. The amount that you qualify for depends on the amount of equity you’ve built in your home—that’s the difference between what you owe on your mortgage and the current market value for your home.

 

There are many reasons for taking out a second or third mortgage on your home. You may be facing the cost of university for one or more of your children or a large bill for taxes in arrears. You may want to consolidate debt at a lower interest rate. The interest rate available on a mortgage is far lower than the rate on credit cards and store cards.

 

Another way to access cash or change your payments is to refinance your mortgage. This can help you get a lower interest rate or lower monthly payments. Always discuss your options with an experienced lender since there may be penalties for refinancing a mortgage. If you signed your mortgage when rates were high, the money you save on interest may make refinancing your mortgage worthwhile.

 

Before you start searching for your Barrie dream home or a second mortgage on the home you already have, research mortgages and determine what you can afford so there are no surprises when you approach lenders for your mortgage.