Now you're ready to start shopping around for the right loan. A first-time home buyer with a steady job and good credit can put down as little as 3%. Some brokers will even allow buyers to get a loan to cover the 3% down payment. But the more money you can gather for a down payment, the more options you will have when borrowing.
Fixed Rate Mortgages (FRM):
A mortgage loan that has an interest rate that remains constant throughout the life of the loan, so that the amount you pay each month remains the same over the entire mortgage term, typically 15, 20 or 30 years.
Adjustable-Rate Mortgages (ARM):
In an adjustable-rate mortgage, the interest rate can move up or down in accordance to current market interest rates. There is usually an introductory discounted rate, lower than fixed rates. Depending on the type of ARM, the first adjustment period can last for a period of one, three, five, seven, or 10 years before a change in rates occurs. Most ARMs adjust every year until the loan is fully paid.
Interest-Only Mortgages:
In an interest-only mortgage, the borrower only pays interest (plus property taxes and homeowners insurance) on the loan. This usually results in a lower monthly mortgage payment. The borrower does have the ability to pay extra towards the principle.
Balloon Loans:
Balloon loans are either not amortized or partially amortized short-term loans that become due in a period of usually three, five, seven, 10, or 15 years in one, large payment.
First-Time Buyer Programs:
Many brokers offer affordable mortgage choices geared toward the first-time home buyer. First-time buyer programs can help borrowers who do not have a lot of money saved for the down payment and closing costs, have a poor credit history or no history at all, have quite a bit of long-term debt, or have an unstable income.
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5 comments:
Good start for your blog! Are you familiar with capital gain taxes, etc.? I would have some questions on that topic ...
Thank you! Yes, I do have some knowledge in capital gain taxes.
cool ... here it goes:
my friend bought a 16 acres land 2.5 years ago to build a house. Never built and just sold it for 40K profit. So I don't think it qualifies for principal residence. He did put a lot of work into it himself (clearing trees, etc.) but since that's not paid labour, can that go towards the adjusted cost base? What are the general tax implications of selling that land? How to declare and calculate how much tax is owed to the government?
thanks, any help or pointers to reference information would be appreciated!
Excellent question! I think we both have the same friend ;-)
Through some research I was able to come to a conclusion that it does seem like they will need to pay Capital Gains (If indeed it is not their primary residence) as shown under “summary” here: http://www.cra-arc.gc.ca/E/pub/tp/it120r6/it120r6-e.html#table. It also seems that they can declare expenses for work done on the property, as stated on page 7 “Outlays and expenses”: http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-06e.pdf. The site also provides explanations about Capital Gains in detail.
Good luck!
That's really a nice post. The information you have provide regarding mortgage is great and for first time buyers is really very helpful Thanks and keep sharing your post.
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