Home Buying Simplified FAQ

Following up on the previous post of Home Buying Simplified, here is PART 1 of the FAQ (Frequently Asked Questions) series. Any comments, suggestions or questions can be directed to my email: asharpal.singh@century.ca 

Question: What is Best Price of this house?          

Answer:  The best price of a house depends on a lot of factors like lot size, location, house type, upgrades, age, market conditions, etc. And this best price can be calculated using a Comparative Market Analysis and comparing the property in detail to similar homes SOLD and FOR SALE in the immediate locality.

Question: How much downpayment should I make?

Answer: The Canada Mortgage and Housing Corporation has currently set 5% minimum down payment for Single-family and two-unit dwellings and 10% minimum down payment for Three or four-unit dwellings. Also in case you are making downpayment less than 20% of the total Loan Amount, then CMHC High-ratio mortgage conditions apply including a compulsory insurance premium on the mortgage.

Question:  Why I need good credit score for mortgage approval?

Answer: A credit score is a relative number in credit report showing the good or bad standing of your credit and is based on the number of accounts you have and you’re past payment history. Lenders use this score to determine the eligibility for approval. This Credit report can be obtained from Equifax Canada Inc. or TransUnion of Canada.

Question: What rebates are available for first time home buyers?

Answer: First Home buyers can avail the benefit of a variety of rebates like Land Transfer Tax Rebate, a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009, an extended withdrawal limit of $25,000 from RRSP, etc.