Options for Financing a Home

Posted by Gurpreet Ghatehora on Saturday, May 24th, 2014 at 9:14am.

Not many people can afford to outright purchase a home, which means financing a home is common place. Everyone finances their home, the only part that differs is how much of the home gets financed. In Canada first time home buyers are allowed to put down only 5% of the total value of the home as a down payment, meaning they need to finance 95%. If it is not your first home purchase, the banks require at least 20% be put down, allowing for 80% to be financed.
Financing Options
There are a few ways you can go about financing a home purchase. Most people choose to go through their bank, particularly if they have a good relationship with them and a variety of other products, such as RRSP’s, car loans or lines of credit. For all intents and purposes, it just makes everything easier and more organized. That is not say, however, that the bank is your only option, or your best one. Do your due diligence as a consumer and take a look at current interest rates offered by all the banks. You may find a great rate that you can lock-in for a period, elsewhere.
There are also mortgage brokers, like insurance brokers, who do the research and shopping for you. Financing a home is a big deal and an important step in most people’s lives, talking to an expert on the topic isn’t a bad idea and brokers don’t have a vested interest in any particular institution.
You can also try an independent mortgage lending company which will not be affiliated with any of the banks. They may be able to offer you better rates, but if you go this route, be sure you are aware of what everyone else is offering too. As an independent lender, they have no reason to inform you if there are better rates at other institutions.

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