By Jennifer Lynn Walker

There are many tools available to help you evaluate your financial situation and make your dream of becoming an owner come true.

Borrowing Capacity and Preauthorized Mortgages

When you start to look for a property, it is in your best interest to determine your borrowing capacity. That way, you know what type of property to lean towards during your search. One approach is to get a preauthorized mortgage before even finding your property. Thanks to a preauthorized mortgage, you already know how much you can borrow; your interest rate and he amount of each payment. You will be able to find a property that matches our means.

Mortgage Loan Insurance
You dream of buying property but you don’t have enough for a down payment? Not a problem! Mortgage loan insurance can help make your dram a reality. In general today, lenders require you to get mortgage loan insurance when you have put down less then 20% of the property’s sale price. Mortgage loan insurance is applicable to various new or existing properties.Also bear in mind that having a modest down payment means a higher mortgage payment and in the end, a greater total cost. In Canada, mortgage loan insurance is available through Canada Mortgage and Housing Corporation (CMHC) and Genworth Financial Canada.

The Home Buyers’ Plan
The Home Buyers’ Pl an is a government program that allows buyers to withdraw savings from an RRSP to purchase property without having to pay tax on the withdrawal. Funds withdrawn must be paid back into the RRSP within a time limit fixed by the program.

Neither the buyers nor their spouse or common-law partner can have been owner of a property serving as their main residence during the five years preceding he request for withdrawal. In addition, buyers must have finalized a written agreement for the purchase or construction of a property (offer to purchase or preliminary contract) before being entitled to withdraw the funds from the RRSP. For further information about eligibility, contact the Canada Revenue Agency or your financial institution.