Dream House Can Be A Reality
by: News Canada
(NC)—For many Canadians who have only dreamt of buying a home,
it can now become a reality. While the actual dream may differ—a
house with a big back yard for gardening, or a condo in the sky with
a great view of the city—buying any home can be an important
step for couples building a life together, or for singles looking
for a bit of security. Home ownership often represents the largest
investment in their lives, leaving some first-time buyers asking "where
do I begin?"
The best starting point is with your finances. Before you scour
through listings or attend open houses, consider advice from your
financial planner or banking consultant to determine how much you
can borrow and what options are available to you.
A major stumbling block for many first-time buyers is the down payment.
Even though you might feel ready to juggle a mortgage payment and
other monthly bills, your savings account might not be enough to
secure your new home.
Your financial planner can help you find additional sources of cash,
including your RRSP, or provincial savings programs such as the Ontario
Home Ownership Savings Plan. Since conventional mortgages require
a minimum of a 25 per cent down payment, many new homebuyers opt
for a high-ratio mortgage, where they pay a lower percentage of the
purchase price.
One unique financing option, enjoyed in Australia and the UK is
the flexible mortgage account. Combining the homeowner's mortgage,
loans and chequing and savings accounts, it results in lower interest
charges and considerable savings in interest costs. Flexible mortgage
accounts differ from other debt consolidation products in the way
they put the homeowner's income to work.
Every time the homeowner's income is deposited to the account, it
is applied against the outstanding balance of their mortgage until
it is needed for bills and other expenses. Over the years, this flow
of income through the account can save thousands of dollars in interest
cost and pay off the mortgage years sooner than traditionally possible.
Flexible mortgages are popular in Australia,
where approximately one-third of all new home loans are set up
this way. In Canada, Manulife
Bank is the first financial institution to offer such a product—called
Manulife One.
Want to know more?
If you would like to learn more about flexible mortgage accounts,
visit the Manulife One Web site at www.manulifeone.com or call 1-877-626-8111
(1-877-MANU111).
- News Canada
Mortgage
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