With rising real estate prices, high inflation and rising mortgage rates, one might think that buying your first property has become mission impossible. This is not the case! However, you have to help yourself and know how to go about it, which is why these eight strategies can make it easier to reach your goal.
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1) YOUR CREDIT REPORT
To qualify, the bank consults your Equifax or TransUnion file.
A point system indicates in this file your behavior with regard to your debts and all your financial commitments.
At 650 or more, your score gives you access to advantageous mortgage rates.
At less than 650, it will be more difficult to borrow.
Correct any errors if necessary. Time is your best ally: improving your credit rating is a reflection of good payment habits.
Pay ruby on the nail and stay disciplined.
2) YOUR ABD/ATD
These two rates are assessed when qualifying your file for prequalification.
It validates your gross amortization report of your debt related to the sum of the mortgage loan, taxes and heating divided by your gross income (ABD), while the ATD adds to the sum your other debts and financial commitments.
So do not ask for a loan to the maximum of your abilities: keep some leeway for the unexpected.
This works in your favor and gives you peace of mind.
3) THE LOCATION OF YOUR PURCHASE
As much as possible, choose a sector allowing a choice among a few municipalities that can meet your needs: distance from work to home, costs and travel times, services nearby, tranquility of the neighborhood, in town or in the countryside, style and quality of life.
Also think about resale advantages: personalizing your choices too much could make it more difficult to resell and obtain a satisfactory price.
4) YOUR INVESTMENT HORIZON / PURCHASE
What are your housing needs? What type of property are you interested in? When do you want to buy?
Planning your approach over time gives you the leeway you need to properly prepare your file in order to qualify for a loan, to adjust your plan if necessary to raise a sufficient down payment and to familiarize yourself with all the aspects to understand. to go through this process.
5) YOUR DOWN PAYMENT
The source of your down payment is important and will be analyzed.
It’s not enough to have a certain amount at your disposal. Did you spare him?
This again demonstrates your ability to commit and pay.
It is possible to use part of a donation thanks to the help of relatives.
Your RRSPs can also be used with a HBP.
6) PREQUALIFICATION AND RESERVATION AT AN ADVANTAGEOUS RATE
Before you start your research, book an advantageous mortgage rate with your financial institution, then do business with a mortgage broker.
He or she will be able to get you the best possible conditions according to your file.
Then, have your loan file prequalified: you will be taken seriously during your research with a clear budget in mind.
7) THE VALUE OF THE PROPERTY AND YOUR NEEDS
What is the market value and municipal value of your property?
They are two distinct values and it is essential that you can pay the right price.
Above all, do not buy a property to show off: respect your needs and your capacity instead of prioritizing looks and luxury.
8) YOUR INCOME
Are your sources of income sufficient and stable to allow you a first real estate purchase? Where do they come from?
A stable employer for several years works in your favor as well as a job as an employee rather than being self-employed.
Although you can still buy without these conditions, the process may be more difficult or delayed.
Tips
Present a balanced case
Having cash in the bank and some reasonable debt gives you more leeway.
Make sure you have good borrowing capacity
Better employment, more savings, or finishing paying off other debts always work in your favor.
Consider buying with rental income
Rental income is added to your borrowing capacity. This facilitates access to property, and the value of your investment increases tenfold.