Is now the right time to buy your first home?
Higher interest rates have been linked to real estate prices coming down in many parts of the country. Are you thinking about buying your first home? Ask yourself these questions to help you figure out if it’s the right time for you:
Do you have enough money saved for a down payment? Depending on the cost of the home, you will need a down payment of 5-20 percent of the purchase price. You’ll have to pay for mortgage default insurance through the Canada Mortgage and Housing Corporation or other mortgage insurer if you put down less than 20 percent.
Can you afford the mortgage payments? To qualify for a mortgage loan at a bank, you’ll need to pass a stress test. This tool is like the stress test banks use. You can enter your income, the cost of your mortgage and other expenses to determine if you can afford the mortgage.
Is your job secure so you can keep paying the mortgage? Do you work in an industry that could be affected by a recession? Do you have transferable skills if you lose your job?
Is your credit score high enough to get a good interest rate? Credit scores from 660 to 900 are generally considered good, very good, or excellent. A higher credit score can help you secure a lower interest rate.
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