Buying your first home

(NC)—There's nothing quite like owning your own home – getting to know your neighbours, decorating your home and creating a place that you can call your own. But owning a home is not quite as simple as finding the right home in the right neighbourhood; your financial situation can be an important factor in the type of home you can afford. For example, you will need to determine how much you have available for a down payment, and, based on your budget, what mortgage payment you can comfortably carry. By answering these questions, you will be able to make a smart and informed decision before you buy the home that is right for you.

One of the most common first-time home buyer questions is affordability. Here are four ways to help make your home buying experience smooth and straightforward:

1. Understand Your Financial Situation: Your financial needs will change and evolve throughout your life. Working with a trained professional to understand your current financial situation and your future goals can help you assess what type of home you can afford.

2. Ask About Your Credit History: A credit rating is a measure of how dependable you are in repaying your debts. A good credit rating goes a long way in helping you obtain credit and determine the interest rate you will receive. For example, if you pay your bills on time, or if you repay a loan, you will be in good standing with the credit bureau. So, when it's time to borrow, a lending institution will know that you are credit worthy. For more information on your credit history, contact TransUnion or Equifax Canada and get your credit report free of charge by mail.

3. Get Pre-Approved: By getting pre-approved, you will know how much home you can afford which will allow you to shop with confidence within your price range and prove to sellers you are a serious buyer. Plus, obtaining a pre-approval is absolutely free.

4. Ask About Extended Amortization: The extended amortization feature is available on most mortgage products. The feature provides home buyers the flexibility of lowering their mortgage payments by spreading them over a longer period of time helping ease budget and cash flow issues. But keep in mind by extending your amortization you will increase the amount of interest that makes up your mortgage payment. Given this, it is important to choose a mortgage that allows you to increase your payments and make lump sum payments when you can. Currently, most financial institutions are offering up to 35 year amortization periods.

Keep these important points in mind to help you find the house you love at a price you can afford. For more information or assistance with your mortgage needs, visit your nearest CIBC branch, call 1 800 465-CIBC (2422) or visit www.cibc.com/mortgages.

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Carol Ireland

Carol Ireland

Sales Representative
CENTURY 21 Millennium Inc., Brokerage*
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