The idea of getting a mortgage cannot come soon enough for some and pose as a daunting challenge for others.
Scott Grattidge, a mortgage specialist for the Cochrane and Calgary region, advises those thinking of buying a home to weigh several factors before taking the plunge, as it’s not always the best move in every financial situation.
“You want to have some skin in the game and put some money down,” suggested Grattidge, saying that for many who are looking for long-term housing, buying ‘usually makes sense,’ while for short-term housing, renting may be the best option.
The amount saved for a down payment can often make a significant difference in how much one ultimately pays for their new home.
Grattidge said a five per cent down payment is the minimum anyone looking to get a mortgage should aim to save, but that a desirable goal would be 20 per cent, which would result in the buyer not having to pay the Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance premium.
CMHC insurance charges are based on what percentage a buyer can put down on their new home, varying from 2.7 per cent on a five per cent down payment, two per cent with 10 per cent down and so on, until reaching the 20 per cent down goal.
“We’re looking at slow, tempered growth,” Grattidge said of what he believes the future housing market in Alberta will hold.
Grattidge also said that he feels Cochrane offers a ‘pretty balanced market supply,’ in that development is doing a good job at keeping pace with the community’s growing population.
As for those who feel they would not be able to afford a mortgage, Grattidge said the local Family and Community Support Services (FCSS) provides programs approved through CMHC to help qualified applicants get money for a down payment.
“Go and meet with a professional and get a mortgage education,” suggests Grattidge, who said there are often two types of potential buyer; those who mistakenly think they cannot afford a home, and the other side of the coin; people who aim way too high for their income.
