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What to Do Before Applying for Mortgages in Ajax

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If you’re house hunting or exploring first or second mortgages in Ajax, Ontario, take a good look at your budget and living expenses before signing papers.


Your first step for your first mortgage in Ajax is seeking pre-approval from a lender; this way you know exactly how much you can spend on your home, based on your income, down payment, credit rating, existing debt, and other factors.
Pre-approval also means that your lender has locked into a rate for a fixed amount of time, usually two or three months. If interest rates go up, you will still have access to the lower rate that you were approved at. If it goes down, you should be able to access the new, lower rate.

Home Buyers’ Plan

Before shopping for mortgages in Ajax, check to see if you qualify for the Home Buyers' Plan (HBP). This program lets first-time buyers withdraw money from their RRSPs to use as a down payment for a home—tax free!
You can withdraw up to $25,000 from your RRSP to increase your down payment. If your spouse or partner has an RRSP and withdraws $25,000 as well, this gives you a down payment of $50,000.
The Canada Revenue Agency expects you to start paying back the funds at the beginning of the second year after withdrawal. The full amount must be paid back within 15 years. If you fail to repay the required amount in a given year, it is considered taxable income and you’ll need to pay income tax on the money owed for the year.
Carefully consider the HBP. When you withdraw funds from your RRSP, you’re missing out on the growth that money may see during the repayment time. If that withdrawal helps you increase the down payment to 20% so you can avoid mortgage default insurance, you may save a significant amount of money.

Options for Mortgaging or Refinancing Your Ajax Home

Not everyone searching for a mortgage in Ajax is a first-time buyer. In fact, you may not even be searching for a first mortgage on your home. If you’ve been paying off a mortgage for years but need cash, you may be able to tap into the equity available in your home. That’s the difference between what you owe on your mortgage and what your home is worth in today’s hot real estate market. The way prices have skyrocketed across the GTA, your Ajax home may be worth significantly more than when you bought, possibly giving your hundreds of thousands of dollars worth of equity.
A second or third mortgage is a good way to lower your monthly costs. You can consolidate other debts that are at a higher interest rate, lowering the amount owed. You can also use the money to pay for your child’s education, for a vehicle—even for home renovations that can increase the value of your home even further.
Another common way to change your payments is to refinance your mortgage. This can let you lower your monthly payments, get a lower interest rates, or increase or decrease the amortization length. Your lender may have fees or penalties for refinancing your mortgage so it’s important to talk to an experienced professional. The money you save at a lower interest rate may make it worth paying penalties to refinance.
When shopping for first, second, or third mortgages in Ajax, research what you can afford before calling lenders.


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    By Flux
    Very Helpful financing and lending information!
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