There are two percentages banks and
credit unions use — 32 and 40. Generally,
a maximum of 32 per cent of your gross
income should go toward housing costs,
including mortgage payments, property
tax and utilities, with a maximum of 40
per cent of your gross income going
toward paying your overall debt.
However, Nurse cautions that those are
simply guidelines.
"You may qualify for a certain amount
based on the guidelines, but it's really
important to know and be realistic about
where you spend your money because
everyone is different."
While everyone would love to get their
perfect dream home right off the hop,
that isn't a realistic option for most
first-time buyers. Nurse suggests a more
modest approach.
"I think it's smart to start off the old-fashioned
way with a starter home," she says. "Start
with something smaller and invest your
sweat equity in it. If you buy something a
little bit smaller and you're able to do some
renovations and put some work into it, that
really bumps up that equity so that when
you do want to go and buy that bigger home
you've actually increased your equity."
Home buyers who plan to make a down
payment of less than 20 per cent for an
insured mortgage through Canada Mortgage
and Housing Corp. (CMHC), Genworth or
Canada Guaranty can apply for an interest-
free form of shared equity mortgage through
the federal First-Time Home Buyer Incentive
Program. Incentives of five or 10 per cent
can be used to reduce monthly mortgage
payments by increasing down payments and
must be paid back after 25 years or when the
property is sold.
TAKING THE PLUNGE
— Cont'd from page 11
Cont'd on page 14
START WITH SOMETHING
SMALLER AND INVEST
YOUR SWEAT EQUITY IN IT.
MORTGAGES
PAY
REPORTS
INTEREST
ADVICE
RATES
LOANS
12 Parade of Homes fall 2019
