3 Creative Ways to Purchase Your First Home
Does the rising cost of homeownership have you discouraged? How can you afford to buy a home in these pricier housing markets, especially when coming up with the minimum 5% down can be challenging?
Do not fear… we have a few creative ways to get you into the housing market!
1. Mortgage Helper
A mortgage helper is a rental suite where the income can be put towards your mortgage payments. The main point is to help you pay off your mortgage. “Having a rental income from a basement suite can often help offset the costs of the mortgage allowing for more flexibility with your purchase.” Says Kristin Major, a Financial Advisor at Prospera Credit Union. “They are also often used to help those who need a little bit more income to afford a house in a slightly more expensive area.”
2. Gift from Parents or Grandparents
Gifting from parents or grandparents is becoming super common these days and one of the ways that folks are entering into the housing markets. “Receive your inheritance early!” says Major. “With the help of a gifted down payment you may lessen your mortgage and ultimately your mortgage payment.” The gift of a down payment is a great way to get your foot in the homeowner’s door.
Lenders will generally accept a gift from a family member as an acceptable down payment provided the donor signs a letter stating it is a true gift, not a loan.
3. Look in less desirable neighbourhoods
One well-known real-estate adage is one you should not forget: "buy the worst house in the best neighborhood." It's all about having an eye for the nearby up-and-coming area or next hot spot. “All of our mortgages at Prospera are portable, meaning you can transfer your mortgage to a new property at any time, provided it is within our market area.” Major explains. “Knowing this option provides homeowners with flexibility and future cost savings. Your first home might not be your dream home, but getting into the market early allows you to start building equity sooner!”
Looking to purchase your first home and need some advice? Prospera can help. Check out our website and our easy “Click to Chat” feature for details, and talk to a Financial Advisor today.
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