Financing for First Time Homeowners in Ontario

Buying a home is a big investment. It's also one that can appreciate in value over time. This allows you to gain equity, which can provide financial security for your future. You don't get this kind of security with renting. All the money you spend on rent is going into someone else's pocket. When you own a home, that money goes back into your own pocket to help increase your personal wealth. Who wouldn't prefer to buy a home? 

Before you can buy a home, however, there are a few hurdles you must clear. The first is a down payment. Remember, the more you put down on your house, the smaller your mortgage payments will be and the less money you'll need to borrow. This will save you a significant amount in interest over the life of the mortgage. You must have at least 20 percent of the total price of the home available to put into your down payment. This is set into law by Canada, and you'll find this to be the requirement in every province. The only exception to the 20 percent down payment rule is if you purchase mortgage default insurance for your home. This gives the lender assurance that the mortgage loan will be paid back, even if it's not by you. 

Once you've gathered your down payment or purchased mortgage default insurance, you must get pre-approved for a mortgage. Some homeowners will not let you even look at the inside of their house unless you are pre-approved. Shop around at different banks and mortgage lending companies before making your decision on which one to use. You may be able to get a lower interest rate this way. You should always work with the company that offers you the lowest interest rate, as your monthly payments will be less and you'll pay back less money over the life of the loan. A lower interest rate means big savings for your monthly budget, and allows you and your family to enjoy the good life that home ownership brings.