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Real Estate - Tips For The First-Time Home Buyer

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					                                                 Presented by Daniel Toriola


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                                           Quick Tips For The First-Time Homebuyer
                                                               By News Canada



  Quick Tips For The First-Time Homebuyer
 by: News Canada

(NC)—Buying your first home is an exciting new experience. Attending Open Houses, putting in an
offer to buy and decorating your new home to suit your style is all part of the excitement. All the
decisions that need to be made can also make you feel nervous. Here are a few tips that can help out
the anxious first-time homebuyer.

How much can I afford?

There are two things to consider when determining how much home you can afford. How much do you
have for your downpayment? What amount can you afford as a monthly payment while still enjoying
life? . To help you answer these questions, you can either call your financial institution, visit their
website or go to your branch and talk to your personal banker.

To shop for a home with confidence, you can obtain a pre-approval certificate from your Financial
Institution. This document will tell you how much of a mortgage you can afford.

How Much Do I Need for my Downpayment?

You can buy a home for as little as 5% of the purchase price. However, any mortgage with a
downpayment of less that 25% has to be insured by a third party such as the Canada Mortgage and
Housing Corporation (CMHC). The amount of your downpayment will determine whether you need to
insure your mortgage or not. Conventional Mortgage – a mortgage where you have at least 25% of
the purchase price High-Ratio Mortgage – a mortgage where you have less than 25% of the purchase
price

Your insurance premium will depend on the amount you are borrowing and on the percentage of your
downpayment amount. Premiums usually vary between 1.25% and 3.75%.

How Can I Save for a Downpayment

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There are a few different methods that can be used when saving for your downpayment Setting
money aside each month just as if you had to make a monthly payment Opening a RRSP investment
account. If you are a first-time homebuyer you and your spouse can use up to $20,000 each towards
your dowpayment without tax implications as long as you repay the amount within 15 years. A cash
gift from a parent or relative. ("gift" means its non-repayable)

Should I Be Aware of Any Additional Costs?

Your mortgage will cover off the purchase price of your home, however there are other costs
associated with buying a home. These are called hidden or closing costs and can usually amount to
1.5% to 3.5% of the total cost of your home. Here are a few examples of the hidden costs of home
ownership and the costs associated with each.

Appraisal fee $150 – $200

Home inspection fee $300

Property survey $750 – $1,000

Land transfer tax $2,000

Legal fees $1,300 – 2,500

Sales tax 7%

Title insurance $250

Home Insurance $450/year

Also, don't forget to consider general expenses such as moving and home decorating costs.

Do you dream about owning your own home? CIBC has now made it easier for those entering the new
world of home ownership. They have formed a partnership with Canadian Mortgage and Housing
Corporation (CMHC) to provide valuable and informative services for the first-time homebuyer. For
more information about finding out how much you can afford, setting up an RRSP, or simply reviewing
your mortgage options, contact your CIBC personal banker or call 1 800 465-CIBC (2422).

- News Canada




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                 Buying A Home For 1st Time Home Buyers - Frequently Asked Questions
                                                                By CL Haehl



 First time homebuyers are faced with a myriad of questions about the process of buying and financing
their first home. Luckily, there are countless programs available to first time homebuyers to help them
realize their dream of owning a home.

What is The Definition of a First Time Borrower? You may be surprised to find out that a first time
homebuyer is almost always defined as someone who has not owned a home in the past three years.
Even if you owned a home for twenty years, if you sold it four years ago and haven't owned a home
since then, you are considered to be a first time homebuyer.

How Much Do I Need To Put Down? Many first time homebuyer programs are designed to allow you to
put down as little money as possible for a down payment. There are conforming programs such as "My
Community" that require the buyer to contribute only $500 of his or her money towards the purchase of
a home. Even closing costs can be financed into the loan!

What Does My Credit Score Need To Be? For borrowers with credit scores considered average or
better (620+), there are programs that will let you finance 103% or even 107% of the purchase price of
a home. The remaining 3% or 7% can go towards closings costs such as processing fees, title fees
and even opening an escrow account for taxes and insurance.

What If I Have Credit Problems? For those with less-than-perfect credit or income that is difficult to
document, lenders have programs available that allow 100% financing, usually down to credit scores of
580. Even with lower credit scores (or no credit), a good mortgage broker can help you creatively
finance the purchase of your new home, especially if the seller is willing to help with closing costs or by
holding a second mortgage.

http://mortgagesanity.com/2007/02/06/mtg-lenders/ - We maintain a list of recommended lenders
online that is frequently updated. These lenders are excellent for first time home buyers to apply with.




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                                             Presented by Daniel Toriola




Related eBooks:

Buying A Home For 1st Time Home Buyers - Frequently Asked Questions
Be Wary of Toronto Mortgage Scams
Federal Housing Tax Credit of 2009 Can Save You Money
The Trick to Secured Loans
Purchasing A Home

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