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First-time buyers make the jump
Wednesday, March 31st, 2010
By Derek Sankey, Canwest News Service
By Derek Sankey, Canwest News Service
Nicole Dyck rented with friends and dreamed of buying her own home until the day it suddenly seemed right to make her move.
“Living with two boys motivates you to buy your own place and not have to clean up after anyone else,” says Ms. Dyck, a 27-year-old call centre worker with Fortis Alberta. “I just wanted to have my own place and my own space.”
Last May, she bought a duplex in a condo complex in Airdrie, a bedroom community of Calgary, just as rates were at 30-year lows and affordability was returning to real estate markets across Canada.
“It was a big deal,” Ms. Dyck says. “I was just excited to have my own place and have enough income coming in to be able to do that.”
Like many first-time home-buyers, she admits she didn’t know much about mortgage rules at first and learned the ropes from her parents.
She was also typical in being determined to get into home ownership whatever the rules or market conditions. “Everyone always just said it’s never a bad time to buy a home.”
Many first-time buyers are also looking to pay off their mortgages faster.
A Harris/Decima survey found 74% of Canadians looking to purchase their first home are considering an amortization of 25 years or less.
“We’ve always believed that clients should set their payments higher anyways,” says Laura Parsons, Calgary area manager of business development for the Bank of Montreal.
There are several ways first-time buyers can help make the process more affordable, such as the First-time Home Buyer’s Plan. It allows buyers to use as much as $25,000 from their RRSP toward a down payment on a qualifying home, which is repaid over time.
“The First-time Home Buyer’s program is probably one of the most under-utilized programs,” Ms. Parsons says.
There is also the First-time Home Buyers’ tax credit worth up to $750 in 2009 and subsequent years.
If a couple is getting married, they can funnel gifts of money through their RRSP to use toward the purchase of a home.
Most lenders adopted stricter lending criteria prior to the introduction of new rules by the federal government on high ratio mortgages — those with less than 20% down are subject to stricter conditions and insurance through Canada Mortgage and Housing Corp. (CMHC).
It’s now generally standard for all mortgage qualifications to be based on a five-year, fixed-rate mortgage, Ms. Parsons says.
“It’s not that rates are going to skyrocket, but a mortgage is a longtime event,” she says. “We don’t want to see them in a predicament if interest rates go up.”
“Living with two boys motivates you to buy your own place and not have to clean up after anyone else,” says Ms. Dyck, a 27-year-old call centre worker with Fortis Alberta. “I just wanted to have my own place and my own space.”
Last May, she bought a duplex in a condo complex in Airdrie, a bedroom community of Calgary, just as rates were at 30-year lows and affordability was returning to real estate markets across Canada.
“It was a big deal,” Ms. Dyck says. “I was just excited to have my own place and have enough income coming in to be able to do that.”
Like many first-time home-buyers, she admits she didn’t know much about mortgage rules at first and learned the ropes from her parents.
She was also typical in being determined to get into home ownership whatever the rules or market conditions. “Everyone always just said it’s never a bad time to buy a home.”
Many first-time buyers are also looking to pay off their mortgages faster.
A Harris/Decima survey found 74% of Canadians looking to purchase their first home are considering an amortization of 25 years or less.
“We’ve always believed that clients should set their payments higher anyways,” says Laura Parsons, Calgary area manager of business development for the Bank of Montreal.
There are several ways first-time buyers can help make the process more affordable, such as the First-time Home Buyer’s Plan. It allows buyers to use as much as $25,000 from their RRSP toward a down payment on a qualifying home, which is repaid over time.
“The First-time Home Buyer’s program is probably one of the most under-utilized programs,” Ms. Parsons says.
There is also the First-time Home Buyers’ tax credit worth up to $750 in 2009 and subsequent years.
If a couple is getting married, they can funnel gifts of money through their RRSP to use toward the purchase of a home.
Most lenders adopted stricter lending criteria prior to the introduction of new rules by the federal government on high ratio mortgages — those with less than 20% down are subject to stricter conditions and insurance through Canada Mortgage and Housing Corp. (CMHC).
It’s now generally standard for all mortgage qualifications to be based on a five-year, fixed-rate mortgage, Ms. Parsons says.
“It’s not that rates are going to skyrocket, but a mortgage is a longtime event,” she says. “We don’t want to see them in a predicament if interest rates go up.”
