You may be wondering how easy it is to buy a home following the recent economic downturn across the world. The answer may be more straightforward than you realize. With the right resources and guidance, almost anyone can purchase a home in Canada. Here are the factors that matter the most when buying a home.
Credit Score
Unless you’re paying for the house in full, you’ll need to pay close attention to your credit score. All lenders in Canada require a minimum score of 600. Pay down as much of your debt as possible, including student and auto loans, before applying. Try to increase your score above 600 to secure the best rates for your new home. The higher the credit score, the better deal you’ll receive.
Down Payment
While your credit score is an essential part of buying a home in Canada, you can get around this requirement if you have a minimum 600 rating and a large down payment. Most lenders require a minimum of 20% of the purchase price down.
If you have excellent credit, you can get away with a lower down payment. Additionally, if you meet certain income and buyer conditions, you may qualify for government rebates or grants. A mortgage company can help you locate these and apply them to your downpayment to secure a lower interest rate.
Income
As you guess, a reliable income is essential for securing a home loan with a low-interest rate. Lenders look at your average earnings over a few years and how you spend your money. When you own instead of rent, there are many other associated costs.
The bank or mortgage broker wants to see that you can afford to make the changes if your roof needs repairs. Caring for your home is an integral part of your property value. If you’re self-employed, this may be more difficult than reporting income with wages from an employer. An experienced financing company can guide you through these steps.
Local Housing Market
No matter how good your credit score is or how much of a down payment you have, the local housing market plays a large role in securing your future home. For example, if it’s a buyer’s market, there’s plenty of homes available, and sellers compete for homebuyers. On the other hand, a hot market that everyone wants to live in can be difficult to purchase.
In these situations, there are more buyers than homes. The best way to counter a seller’s market is with a mortgage pre-approval. Good for 160 days, once you find the house of your dreams, you can quickly scoop it up while other buyers are still waiting on the bank.
It’s understandable if some of these factors are confusing. Contact Altrua Financial today for help buying your first home or upgrading your current residence. We’ll guide you through the steps necessary to make an informed decision and quickly get you into a new house.
