Given the restrictions on mortgage financing, which also limits the access to home ownership, many families feel obligated to postpone their plans for buying their property. How about buying a smaller house instead? Times have changed, you know.
In the past, living in a smaller home was too often perceived as some sort of failure. Social success was determined by the size of your home. Big house, lavish lifestyle, large budget. The size of the home sometimes exceeded the family’s needs.
[caption id="attachment_15280" align="aligncenter" width="600"]
The whole world is joining together now to fight the rapid change in climate. Consequently, owning a home that suits your exact needs is perceived as an Eco-friendly gesture.
However, for many families, the restrictions to home ownership prevents them from even buying a property that fits their needs. What to do? Postpone the purchase? Not necessarily.[……]
It’s usually best to find a balance between paying your mortgage and contributing to your RRSP. Here’s why.
In a perfect world, paying off your mortgage before contributing to your RRSP would be a good thing to do. But that would call for extreme discipline.
After your last mortgage payment, you would have to keep putting the same monthly amount aside for your retirement. That’s not very realistic.
[caption id="attachment_13184" align="aligncenter" width="580"]
Another possibility is to make substantial contributions to your RRSP before buying a home. However, a home is more than a financial investment; it’s a life choice that you don’t want to put off for too long. The RRSP that you started early could help make you a homeowner more quickly through the Home Buyers’ Plan.
That’s why it’s usually best to find a balance between paying your mortgage and contributing to your RRSP, even when RRSP returns are lower than mortgage interest rates.[……]
One morning like any other, when you aren’t expecting anyone, there comes a knock at the door. It’s a bailiff who hands you a repossession notice from a financial institution for defaulting on your mortgage payments. But you already paid off your mortgage a few years ago. They must have the wrong person, right? Nope–the title on your home has been stolen.
Title theft, a type of mortgage fraud, isn’t common–but it’s been on the rise in recent years. It starts with stealing your identity. Fraudsters create fake documents so they can take over the title on your property and then remortgage your house or sell it and, in any case, make off with the proceeds.[……]
[caption id="attachment_272" align="alignright" width="345" caption="Source: iStockphoto LP"]
The purchase of a first home requires some thought and above all, planning. You can enhance your chances of success.
1. Calculate your borrowing capacity
Estimate how much National Bank could give you to buy your property.
Your National Bank advisor can help you calculate your borrowing capacity by reviewing your financial situation.