Any Canadian financial advisers out there?

[Slimline]

My fiance and I are really hoping to buy a home this year. We are planning to base it off my income which is only 50k. We are not looking for anything big. I went and talked to a couple of banks yesterday and did not really find much out. My issue is I do not have much money saved for a down payment. I have 5000 I can use but that is it so far. I am trying to pound down my line of credit at the moment which is at 11k. I have a good credit score and we are aiming to spend less then 160000.

I understand there are no zero down mortgages available anymore that I am aware of in Canada, but is there any other way I can obtain a mortgage with what little I have for a down payment? I have good credit and other then the LOC I have 3 years left of an ATV payment which is 285 a month. My fiance makes 20k a year however we want to use her income for furnishings etc as well as a buffer for bill payments.

Is my only option to slow my line of credit payments and dump all my available income into a savings account? I have no RRSP's to use for the first time home buyers plan.

Any advice would be helpful. My job is very secure, so long term feasibility is good.

 

[Kntx]

You require a 20% down payment for a conventional mortgage. You can get one with as little as 5% but will be required to purchase insurance. If I were you I'd hunker down and save to increase the amount of money you can put down.

 

[mrrman]

Its a tough market for 1st time buyers as the banks have really tightened up...I am glad that I am not in that situation...gl on your endeavors

 

[Slimline]

As good as it may be financially to have 20% down to avoid CMHC we want to move into a home by the end of this year. Ill pay the insurance, I don't mind.

 

[simpletron]

I dont know about canada, but in the us, the seller can give concessions including cash for closing. when I bought a house last year, I convince the seller/builder to give me 6% towards closing. he was prepare to give 3% to cover closing costs, but I convince him to give the 3% he would have given to my agent if i had one.

also in the us, there is the FHA which allows you to get in for 2.25% down and 1.5% upfront insuarance premium, maybe canada has something similar or can use this.

you are going to need alot of cash at closing, there are closing fees(1-3%), escrow(1%), downpayment(>=5%), and banks like to see a reserve after closing. so just to buy you need at least 7 or 8% of the purchase price, so I would boast savings as much as possible. as long as for mortgage payment(prinpical, interest, taxes, insurance) is less the 28% of gross and mortgage payment plus all other debt minimum payments is less than 36% of gross, then will be no problem with keeping the debt.(the highest I seen for those debt to gross ratios is 31% and 41%)

 

[Slimline]

Originally posted by: simpletron
I dont know about canada, but in the us, the seller can give concessions including cash for closing. when I bought a house last year, I convince the seller/builder to give me 6% towards closing. he was prepare to give 3% to cover closing costs, but I convince him to give the 3% he would have given to my agent if i had one.

also in the us, there is the FHA which allows you to get in for 2.25% down and 1.5% upfront insuarance premium, maybe canada has something similar or can use this.

you are going to need alot of cash at closing, there are closing fees(1-3%), escrow(1%), downpayment(>=5%), and banks like to see a reserve after closing. so just to buy you need at least 7 or 8% of the purchase price, so I would boast savings as much as possible. as long as for mortgage payment(prinpical, interest, taxes, insurance) is less the 28% of gross and mortgage payment plus all other debt minimum payments is less than 36% of gross, then will be no problem with keeping the debt.(the highest I seen for those debt to gross ratios is 31% and 41%)

That was an incredibly helpful post, thankyou. The idea about money towards closing from the seller is genious. I will have to contact my real estate agent and find out if she is good at swinging that. I will start dumping extra money into my savings account and just doubline my minimum on my LOC. We would love to take advantage of the market this year. On my day off next week I think ill drive to Laurentien bank, they seem to have some good promotions.