PAY
START WITH SOMETHING SMALLER AND INVEST YOUR SWEAT EQUITY IN IT.
TAKING THE PLUNGE — Cont’d from page 11
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.
Cont’d on page 14
12 Parade of Homes fall 2019
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