Designing a Mortgage That's Right For You!
Struggling to secure a mortgage or need a financial boost? Consider bringing in a co-signer. Dive deeper into this and other home-buying tactics.
The down payment, the upfront amount paid when acquiring a property, plays a pivotal role in a Canadian's journey to home ownership. This sum is deducted from the home's total cost and isn't part of the mortgage. Naturally, a heftier down payment is advantageous-it accelerates mortgage repayment, reduces long-term interest, and potentially unlocks pricier properties.
Mortgage insurance can significantly inflate home ownership costs, ranging from 0.6% to 4.5% of the mortgage based on the down payment size. If you opt to include the insurance premium in your mortgage instead of an upfront payment, you'll accrue interest. Hence, striving for a 20% down payment to sidestep these additional expenses is advisable.
For young, single, or self-employed individuals, securing a mortgage can be daunting. If you're struggling to get approval or desire a more substantial loan, ponder over roping in a family member, like a parent, as a co-signer.
While a co-signer vouches for the borrower without owning the property, a co-borrower is both a stakeholder and a borrower. Typically, spouses act as co-borrowers, but parents can also join their adult children in this capacity.
Some first-time buyers contemplate co-owning a home with friends or family. Pooling resources can amplify borrowing power. However, it's essential to anticipate potential challenges, like disagreements on selling or financial hardships. It's not a sitcom setup, and it's not for everyone. If you're considering this route, consult financial experts and legal professionals.
In the current dynamic housing market, there's no one-size-fits-all approach to home buying. Many are harnessing a mix of financial tools, like FHSAs and FTHBIs, to make their dream a reality. Regardless of whether you opt for a co-signer or tread solo, the joy of holding your first home's keys is unparalleled!
If you have any questions at all please reach out and I would be more than happy to assist.
For more information contact us, the Mortgage Designers, Your Victoria BC Mortgage Brokers of Choice today!