The Gist:

Initially, buyers usually feel intimidated about the pre-approval process, but there’s really no reason to be.

• The first step is figuring out what you would want to spend each month. The pre-approval process does not take into account expenses such as travel, recreation, savings goals, etc.

• Since the pandemic, people have spent more time than ever in their homes, and are finding that they’re needing more space or a better layout. Their current homes are set up to live out of, not live in.

• The stress test, while usually an annoying pre-requisite to getting approved for a mortgage, is actually now more important than ever. Someone can afford a mortgage fairly easily on a 1.5% interest rate, but we know these current rates will not last forever. In 5 years when it’s time to renew your mortgage, you may be S.O.L. if the interest rate goes up and you couldn’t pass the stress test.

CMHC First Time Home Buyers Incentive is an incentive that allows the government to help first time home buyers out with their downpayment, giving them more purchase power

• If you make $80,000 a year, you can buy a house work 4x that annual income = $320,000

• With this incentive, the government will help new homeowners with 5% of the value of a resale home to put towards downpayment ($16,000), or 10% of a new build ($32,000).

• The catch is that the government will ride the highs and lows of the housing market with you, and you will have to repay that 5-10% of the houses current value (at the time) either at time of resale or 25 years later— Whichever comes first.

The Takeaway: You can’t lose by knowing more. Ani can get you pre-approved in about 24 hours, and even if you do not qualify for what you want, coming up with a plan with your lender is the best way to achieve your homeownership goals.

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