The decision to purchase a home is probably the most expensive one you'll ever make and can be rather daunting. Since emotions can run high, it's important to go into the process with your eyes wide open. Being well-informed is the best way to ensure the process goes as smoothly as possible and ensures fewer disappointments along the way.

Do your research and seek good advice before you even begin looking for a home. Home location, floor plan, room sizes and other amenities are all important factors to consider when making an offer to purchase a home. But none of these are as important as knowing how much you can put down, how much you can finance and how much house you can actually afford.

Before you do anything else you should visit a mortgage specialist who can help you navigate the waters of home financing and guide you toward the options that will best meet your needs. Your mortgage consultant will guide you through the pre-qualification process to determine a price range you can afford. They will need your credit history and information about your income, monthly expenses and existing debts, like outstanding loans or credit cards and other information. It can be a very sobering process! By using a mortgage consultant, you'll only have to go through the process once, instead of having to re-do the experience with a half dozen banks!

Even if you don't have a large sum of money to use for a down payment, there are some creative ways to come by the funds needed. You may qualify for a low down payment home loan. Some of the factors used to determine eligibility for one of these loans include a good credit history, adequate income to pay the mortgage payment monthly and appraisal value of the house you plan to purchase. Depending on the loan, other requirements must be met as well so it's important to confer with your mortgage consultant regarding this and other options.

The Canada Mortgage and Housing Corporation allows for a minimum down payment of only 5% of the purchase price of a home with the mortgage term of up to 35 years. Another money saver is the opportunity for a full or partial exemption of Property Transfer Tax (PTT) available for first time home-buyers depending on the house value and other criteria.

First time home buyers (and an eligible spouse) can each withdraw up to $20,000 tax-free (total of $40,000) from a Registered Retirement Savings Plan (RRSP) account to use as a down payment for a home. Your mortgage specialist will be familiar with the requirements for these and other programs that may be beneficial to you.

A loan or gift from a family member or other individual may be allowed in order to provide you with sufficient funds for a down payment. This option, including loan/gift amount allowed will vary and depends upon the type of loan for which you are applying.

Another way to assist you in meeting your monthly mortgage payment is to buy a home with a built-in "mortgage helper." That might include an in-law suite, two master bedrooms, or other floor plan that would facilitate your renting out part of your home. It is important to be sure your neighborhood is zoned to allow this type of arrangement.

Buying a home is much more complicated than it might seem at first glance. Before you even visit the first house, you need to be sure you are well-informed and well-educated about how your resources line up with your wants and desires. You need a home purchase team to advocate and assist you throughout the home buying process. A good mortgage broker will be able to recommend a real estate agent, an attorney, an insurance agent and other professionals for your home purchase team.

Let the Averbach Mortgage team advise you and lead you through the first-time home buying process. We've done it hundreds of times, understand the pitfalls and work hard to get you the best mortgage possible!

Refinancing..

There are many reasons you may decide to refinance your mortgage. Whether you desire to use the equity in your home or apply for a new mortgage to consolidate debt, remodel or upgrade your home, reduce your current mortgage interest rate, or some other purpose, you have many options to consider and compare.

Before you decide which method you will use to refinance your mortgage, you will want to compare each method against the cost of "doing nothing." In other words, make sure you'll reap an actual benefit large enough to justify your decision to refinance.

If you have enough equity earned in your current home, you may decide to borrow against the equity to pay for remodeling or upgrading your current home or pay off high interest debt like credit cards or other loans, or use the money for a down payment on an investment property or for a business start-up.

If your original mortgage terms included a high interest rate, you may decide to refinance your mortgage to get a new mortgage with a lower interest rate or other advantageous terms and borrow enough additional to pay off high interest debt.

Refinancing an existing loan can have some drawbacks as well. Some loans have prepayment or early payoff penalties that can be rather substantial. Sometimes lenders will allow you to include the penalty amount in your new loan. If you refinance using the same lender, they may even waive the penalty altogether. It never hurts to ask!

Your decision to refinance may be influenced by your belief that mortgage rates will increase or decrease in the near future. If you have observed rates have been on the decline, you may want to switch from a fixed rate to a variable rate mortgage loan with an interest rate cap. If rates have been going up, you may feel more comfortable switching from a variable rate to a fixed rate.

If the purpose of your decision to refinance your mortgage is to make home renovations or upgrade, remember if you're making the improvements to increase future market value of your home, the more recent the renovation, the highest return on investment you'll receive. Kitchens, bathrooms and outdoor living areas like decks or sunrooms yield the greatest rate of return on your investment. Keep in mind the other houses in your price range. You don't want to make such dramatic improvements that you price your home out of the market!

In any case, before you decide to cash out your existing equity or refinance your mortgage, it's a good idea to consult a mortgage expert to help you weigh the pros and cons of each option.

The Averbach Mortgages team of professional consultants will give you honest advice and will help you find the best mortgage for your needs.