Financing Your Windsor Home Purchase

The home you buy in Windsor is likely to be the largest and most expensive purchase you make in your life, a step that precious few people would be able to make if they had to pay for it out of pocket. Fortunately, there are copious numbers of banks and lenders right here in Windsor who are willing to assist you in the purchase of a home in exchange for a fee in the form of interest. If you're thinking of purchasing a home in the near future, this article should help you take stock of your finances and investigate the loan possibilities available to you.

If this is to be your first home, you may be unsure as to whether you can afford to buy a home right now. Conventional wisdom and a consensus of financial planners agree that you should have at least 10% and preferably more like 20% of the purchase price saved up already to act as a down payment. The larger your down payment, the less you will end up paying in interest, so if you have it, use it. Many banks and mortgage lenders will not accept your application if you have less than this amount saved up.

If you don't have much in your savings account, there are some lenders who will accept you without a down payment, but they generally charge ridiculously high interest, so you'll pay dearly for your impatience. Instead, consider withdrawing some of the money from your RRSPs under the federal government's Buyer's Plan. It is tax free and you can withdraw up to $20,000 per person (that's $40,000 if you and your significant other do it together).

When you take out a mortgage you'll be paying back the loan in monthly installments, much like paying rent on your old apartment, but this time there's an end in sight after which you'll own the home free and clear. Though it may be tempting to take out a larger loan in order to afford a larger house, you won't have much money left in your budget for important things like insurance and groceries. Therefore, the maximum you should agree to in monthly payments is one third of your combined income - call it 30% of what you and your significant other make together.

There are dozens of banks and lenders in town who offer mortgages, so make sure to shop around to get the best deal. Interest rates may be higher or lower, fixed or variable, payment schedules fixed or flexible, and terms can be long, short, or flexible, so compare all the institutions that have pre-approved you to see which suits you best. The best interest rates will go to applicants who have good credit histories, stable jobs, and sizeable down payments.