If you’ve recently gotten engaged, married or are planning a wedding, there’s a good chance you and your significant other are also preparing for the purchase of your first home together. This is an exciting time in your life, and maybe even a little scary, particularly for first-time buyers. Fortunately, there is a wealth of information available at your fingertips to help you make an informed decision.
As with any large purchase, a little planning and research can go a long way to help you turn your dream of home ownership into reality. A good place to start is with the Financial Consumer Agency of Canada (FCAC), an independent government agency that has lots of helpful information and tools. Here’s a snapshot to get you started:
The Mortgages 101 section of the website defines key terms that anyone planning on buying a home needs to understand, such as down payment, amortization period and term. It explains in clear language how interest rates, payment frequency and other fees will affect the monthly payments and total cost of home ownership. It also outlines the many other fees that you may have to pay, such as mortgage default insurance, land transfer taxes and moving costs.
See what you can afford: FCAC’s interactive mortgage calculator tool will calculate the monthly payments for any given mortgage amount (loan), and the mortgage qualifier tool will show you how much financial institutions will lend you, given your income and circumstances.
Next, you can turn to the interactive budget calculator to see how large a monthly mortgage payment you can afford. By showing you where your money goes and where you can trim your spending, this tool will help you to save a larger down payment and make sure you can meet the regular mortgage payments.
Check your credit report: Before you start shopping for a mortgage, order a copy of your credit report to make sure it does not contain any errors. This is a snapshot of your financial history. A potential lender will look at a copy of your report before approving you for a mortgage. The Agency’s publication Understanding your Credit Report and Credit Score explains how to obtain and understand your credit report and score.
Once you know how much you can afford and how much the mortgage, fees, and insurance will cost, the FCAC’s Mortgages 101 will guide you through the home purchase process.
You can find all these resources and information online at fcac.gc.ca.
Source: Financial Consumer Agency of Canada (FCAC)