First Time Homebuyer Seminar

September 19th

Presented by

Brad Compton

What Does It Take to Own a Home

This presentation will review:

• Why use a Mortgage Consultant• Your credit – what you need to know• Home purchase process• Government programs and tax credits• Refinance – what to look out for• How to pay down your mortgage faster

Why Should I Use A Mortgage Broker?

A Mortgage Broker will:

• Canvass over 50 lenders to ensure the client gets the best mortgage rate and terms available

• Educate the client on their available options making sure they are part of the decision process

• Simplify the mortgage process from start to finish by liaising with the lender and handling all document requirements

• 24/7 availability and continuous service after the mortgage closes

• Protect your credit• Credit counseling and access to lending sources specializing

in clients with unique requirements

The 5 C’s Of Credit

Character – Your credit worthiness is based on your Stability and Net Worth

Capacity – Are you able to cover your current debts along with the added expense of owning your own home?

Credit – A good credit history demonstrates your ability to repay an outstanding debt

Collateral – How much is your property worth?

Capital – How much of your own equity will you have in your property?

Know Your Score

35%

30%15%

10%

10%

Payment History Amount Owed Length of CreditNew Credit Types of Credit

The Home buying Process

Step 1 – Mortgage pre-approval

Step 2 – Shopping for your home

Step 3 – Mortgage approval

Step 4 – Subject removal

Step 5 – Legal process

Purchase Scenarios

Own Your Home Sooner

A couple strategies to pay down your mortgage quicker and own your home sooner!

– Make bi-weekly or weekly payments– Put extra money toward the mortgage when you can afford it

Monthly Bi-weekly Lump Sum* Both$250,000 $250,000 $250,000 $250,0003.85% 3.85% 3.85% 3.85%

$1,294 $1,294 $1,294 $1,29425 yrs 21 yrs /10

mths23 yrs/7 mths 20 yrs/7 mths

* Assumes lump sum payment of $2,000 per year

Things You Should Know

First Time Homebuyers Program – Each applicant can withdraw up to $25,000 from their RSP to use toward the purchase of a home ($50,000 in total).

Land Transfer Tax Rebates– First time homebuyers will receive a refund of their provincial land transfer tax up to a maximum house value of $227K. The Toronto land transfer tax will be refunded up to a max house price of $400K.

Minimum Downpayment– Minimum of 5% required for the purchase of a property.

Mortgage Insurance– All mortgages with less than 20% equity must be insured.

Things You Should Know

First Time Homebuyer Tax Credit– First time homebuyers are eligible for an income tax credit of 15% of their closing costs up to a maximum of $750.

New Home GST Rebate– Buyers of a new home can apply to get a 36% GST rebate to a maximum of $6,300. Note, most new home builders include the GST in the purchase price and therefore the purchaser would not be eligible for the rebate.

Home Renovation Tax Credit– Home owners are eligible for up to a 15% tax credit on eligible home improvement expenses of a minimum of $1K to a max of $10K in 2009.

Things You Should Know

Information Required Before Closing– Lawyer’s information– Void cheque– Proof of income (job letter, recent pay-stub, business license, T1 General, Notice of assessment)– Proof of down payment (3 month’s worth of bank/investment statements, gift letter)– Appraisal (if not a CMHC insured mortgage)

The High Cost of RentingCan You Afford It?

Monthly Rental

$900 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000

1st year $10,800 $12,000 $14,400 $16,800 $19,200 $21,600 $24,000

2nd year $22,032 $24,480 $29,376 $34,272 $39,168 $44,064 $48,960

3rd year $33,713 $37,459 $44,951 $52,443 $59,935 $67,427 $74,918

4th year $45,862 $50,958 $61,149 $71,341 $81,532 $91,724 $101,915

5th year $58,496 $64,996 $77,995 $90,994 $103,993 $116,993 $129,992

6th year $71,636 $79,596 $95,515 $111,434 $127,353 $143,272 $159,191

7th year $85,302 $94,780 $113,735 $132,691 $151,647 $170,603 $189,559

8th year $99,514 $110,571 $132,685 $154,799 $176,913 $199,027 $221,141

9th year $114,294 $126,994 $152,392 $177,791 $203,190 $228,588 $253,987

TOTAL $129,666 $144,073 $172,888 $201,703 $230,517 $259,332 $288,147

Any Questions?

Brad ComptonMortgage Consultant

Telephone: (416) 671-2183E-mail: bradcompton@invis.ca

www.YourLowMortgage.ca