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
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
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
. 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.