Parade of Homes

36 Parade of Homes FALL 2016 "It protects the buyer's best interest and the seller knows there is an actual approval in place," he says. once you've determined the size of your down payment, you'll need to specify an amortiza- tion period, which is the number of years you'll take to pay off your mortgage. The maximum is 25 years, and the amortization period will help determine the amount of your mortgage pay- ments, which you may choose to make month- ly, semi-monthly, bi-weekly or weekly. "First-time home buyers may want to start with a lower payment so they can understand what the costs are in home ownership, but amortiza- tion can be adjusted downward at a later date," denysuik says. other costs to consider include legal fees, land transfer taxes, property insurance, administrative fees, moving expenses and items like furniture and appliances. If your down payment is less than 20% of the purchase price of the home, you'll also need to buy Canada Mortgage and Housing Corpora- tion (CMHC) mortgage insurance, which pro- tects lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% on a home costing $500,000 or less. CMHC also recommends that buyers address on- going expenses, includ- ing PITH — principal, interest, property taxes and heating — the annual site lease in the case of leasehold tenure and 50% of applicable condo- minium fees. These expenses should not exceed 32% of your gross monthly household income, and CMHC recommends that your entire debt load — PITH plus any payments you make on credit cards, car loans and other debts — should not exceed 40% of your gross monthly income. Banks and credit unions typically provide mortgage calcula- tors on their websites to give buyers an idea of how much they can expect to pay on a monthly, weekly or bi-weekly basis. CMHC also offers the ready set Home mobile app, which helps home buyers figure out how much they can afford to spend, as well as keep track of all the details during the process. Anyone can download the app for free at the Apple App store, google Play or BlackBerry App World. MoneY Mat ters Cont'd from page 34 'First-time he buyers may want to start with a lower payment so they can understand what the costs are in he ownership, but amortization can be adjusted downward at a later date'

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