August 28, 2015
Newcomers to Canada can get help with buying a home
Buying your first home is an important goal for many Canadian families. For newcomers to the country, it can also represent an important step in becoming established in Canada.
By KEVIN LUTZ
For most of us, buying a home is the single largest investment we will ever make. Given the costs of home ownership in Canada, it is common for many first-time home buyers to borrow money to finance their purchase.
To make it easier to achieve your home-ownership goal, most major banks have mortgage options specially designed for newcomers to Canada. If you have lived in Canada for less than five years, you can usually take advantage of these benefits, which include things like relaxed credit history and income requirements.
Saving for your down payment
In Canada, you need a down payment of at least five per cent to purchase a home. However, making as large a down payment as possible could help lower your regular mortgage payments and make it easier to qualify under newcomer lending programs.
To help you save for your down payment, you can set up an automatic savings plan, save money in a Tax-Free Savings Account and take advantage of the RRSP Home Buyers’ Plan.
Other costs to consider
Remember, there’s more to buying a home than just the purchase price. You will also need to consider and budget for closing costs such as a home inspection, legal fees, land transfer and property taxes, property insurance, heating and hydro and potentially home maintenance and repairs.
Ready to buy? Get a pre-approved
Before you start looking for your first home in Canada, you should know the maximum amount of money you can borrow for your mortgage. This will help you set a realistic purchase price range and balance your home ownership dreams with your lifestyle needs.
With a mortgage pre-approval, there’s no obligation or cost to you. You will know how much you can afford to borrow and a guaranteed interest rate will be set up for 120 days. Additionally, when you have a pre-approved mortgage, you know the bank has made an actual commitment (subject to conditions such as a property valuation) to lend you the money required to purchase your home.
Kevin Lutz is RBC
Regional Sales Manager,