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Today: 17.01.2018 - 21:51:41
   Canada Mortgage Hub Discussion Board -> Mortgage Rates Canada -> How can someone realistically save the 5% needed for a downpayment on a home when they are paying a high rent?
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osora

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How can someone realistically save the 5% needed for a downpayment on a home when they are paying a high rent?
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Post # 1.

prt_alien

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Keep in mind, that most mortgages would have a payment higher than $1300.So, if you can't pay $1300 AND save money, you might not be able to afford a home, especially considering you'd be responsible for maintenance, upkeep, repairs, etc...Either find a way to make more money, or cut your expenses.
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rbaasiri

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I'm sorry about your situation, but if you are struggling to pay the rent, then you are going to struggle to pay a mortgage, too. Plus, there are all sorts of unexpected repair costs that could come up -- the furnace, the water pipes, or the hot water heater. If they break in your apartment, the landlord takes care of it, right? That said, try to take a longer view. Start an automatic savings plan at your bank or through your workplace. As that money accumulates, it will be earning interest, which will get you closer to your goal of owning a house.
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ortopedica

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Not an easy thing to do for sure. Make sure you pay off all your outstanding bills and then starts living frugally. Cut down your living expenses by turning off lights when not needed, keeping the temperature at a lower rate, etc. Make yourself a budget, allowing a certain $ amount for your house fund, and then stick to it. Buy nothing on credit. Be prepared to live meekly. If you are childless, then try taking on extra work, either by moonlighting or at your present position. Try walking to work if that's possible. Plan your meals in advance, taking advantage of specials at your grocer. Don't buy any food stuff at a convenience store, they are always more expensive. These are just a few hints, try talking to an older relative or a budget councillor. It will no doubt be a long hard road but with determination you can do it. Good Luck!
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partwolf

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I think you are paying alot for your rent. If you really want a house, why not try renting a smaller place, where everything is included in the rent price(utilities). I live in Toronto, and it is expensive here to rent places too but there are lots of apartments for 2 or 3 bedrooms you can get for much less than what you are paying now.Live below your means for a while (a year or two), until you save enough money. Cut back on expenses, find some extra work you can do on the side, and put all your money into a high interest savings account like ING Direct or PC Financial. You will have to sacrifice something in order to obtain your goal of buying a house.
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nobuhisa

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I am a mortgage broker in edmonton, alberta. I find 100%financing for people with past credit issues. The credit problems you have had in the past, have you paid them off? The "B" lenders will not give you 100% financing if you have unpaid collections. Also there's a charity that I work with here's the website, www.nestbuilders.ca, they will give qualified buyers a free gift of the 5% down. So you may be able to get the down payment for free. You can contact me at www.albertamortgageguy.com if you have any questions. But basically if you have paid your past debts, you can find financing. The "B" lenders will take on more risk but will charge higher interest.Good luck
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ostros

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It is possible to take out a second loan for the down payment, usually at a higher interest rate. You can do it if you are desperate.
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nikeguy999

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You mentioned Past Credit Issues - How long have you been paying timely? Are the issues taken care of now? Past means past, as long as you have re-established your credit, and your middle score is 600-620 (used to be 580, but lenders are tightening up BIG time, with forclosures, etc) Than you could get a 100 percent 1 loan or a 80/20 (depends on rates, based on yoru credit scores. the 80/20 is a blended rate vs the 1 loan at 100 percent).For Canada try this web site out: Or put in key words like "Canada First time home buyer" Canada Morgage FinancingSomething to that effect._http://www.tdcanadatrust.com/mortgages/b…BUT becareful having eveyone pull your credit (ok)Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) FHA/VA approved too. If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home &/or refinancing, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.Other things to consider - Decide on HOW much you want to spend on a Mortgage. Take your income, and divide by 45 percent (50 percent if going sub-prime. FHA is 43 percent for your total Debit to Income Ratio (DTI). Anything that is on your crredit that you are paying on is included into your DTI, along with your mortgage payment, Home Owners Insurance and Property taxes. (HO and Property taes based on a monthly percent, take the year premium and divide by 12)For Instance:When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok - Just depends on your credit. You could get a lower interest rate or it could be higher - it is all based on credit. It is up the Lender what they offer you. It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realtor, and the seller has to pay the realtor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far?? You may find a For Sale By Owner, they are sometimes more willing to help you with closing cost(s) associated with your loan, since there is no realtor fees. The Loan Process can be fun - at least I love being a Broker, getting to help my clients is rewarding to me. Find a Broker who cares and will go over the full loan process with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process.
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