What to Do Before Signing Mortgages in Burlington

When you’re looking for mortgages in Burlington, Ontario, there’s more to do than just call a lender. You should go into the meeting knowing how much you can afford each month and how much you have as a down payment if it’s your first mortgage.
 

The Home Buyers’ Plan for Canadians

 
Before you start shopping for mortgages in Burlington, you should check to see if you qualify for the government’s Home Buyers' Plan (HBP). This plan for first-time home buyers lets you and your partner withdraw up to $25,000 each from your RRSPs—tax-free. That’s a total of $50,000 that you can put toward a down payment for your Burlington home.
 
You’ll need to repay the money within 15 years after withdrawing it from your RRSP. Your repayments start at the beginning of the second year after your withdrawal. Failure to repay in a given year results in the unpaid funds being added to your income for the year. That means you’ll pay taxes on the money.
 
Consider whether the HBP is the right plan for you. If it will help you reach a down payment of at least 20% of the house’s value, then you can avoid mortgage default insurance. This can save you thousands over the course of your mortgage. However, by taking the money out of your RRSP, you’re missing out on the growth that the money could see if it’s left in your account.

 
Your Mortgage and Refinancing Options

 
If you’re having trouble making your current mortgage payments or paying for your child’s education, you should consider a second or third mortgage on your home. The equity you’ve built up in your Burlington home can help you secure a mortgage with a lower interest rate than many personal loans. It can be a low cost way to consolidate debt, pay for home renovations, pay tax arrears, or find the down payment for a cottage. If you’re carrying a high credit card balance, this may be the right option for you.
 
You may also want to consider if it’s time to refinance your mortgage. Refinancing a mortgage means taking out a new mortgage to pay off the existing one. It can save you money if you get a lower interest rate or a shorter amortization period. You can also use it to increase your cash flow with lower monthly payments or a longer amortization period.
 

Pre-Approval for Your Burlington Mortgage

 
Before you start your house hunt, it’s worth seeking pre-approval from your lender. This lets you know the maximum you can spend on your house so you can stay within your limit.
 
It also locks your lender into the current interest rate. If the rate goes up, you’re protected for two or three months. If it goes down, your lender will likely offer you the lower rate.
 
Before you start exploring mortgages and house hunting in Burlington, it’s important to understand how much you can afford and the difference a higher down payment can make.

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