Buying my first home

Home ownership is an important financial goal for many Canadians.  Our home is our castle, a place where friends and family can gather and a place where we can find a few moments of solitude.  Our home can say a lot about us - who we are and who we want to be.  And, for most of us, our home is our largest asset.

Because of the significant part that our home plays in our lives – both emotionally and financially, it’s important to find the financial tools and strategies that will help achieve the goal of home ownership.  We can help.

Saving for a down payment
To qualify for a mortgage loan in Canada, you’ll need to be able to contribute at least five per cent of the purchase value of the home – your down payment.  Depending on where you live, five per cent can represent a fairly large sum.  This is why it’s important to begin saving as soon as you can.  There are a few different saving strategies that you may wish to consider:

Tax-free savings accounts  (TFSA)
Tax-free savings accounts allow you to save up to $10,000  per year.  With these accounts, you don’t pay tax on interest earned and withdrawals are also tax-free.

Registered Retirement Savings Plans  (RRSP)
Canada’s Home Buyer’s Plan allows you to withdraw money from your RRSP to use as a down payment towards your home purchase.  This strategy could allow you to generate annual tax refunds for contributions and save for your down payment at the same time.

Non-registered accounts
If you prefer to keep your down-payment savings separate from your retirement and tax-free savings, you may also consider putting money away in a high-interest savings account or guaranteed investment certificate (GIC).

Getting a mortgage
When you’re ready to take the plunge, you’ll likely need to find a mortgage.  Here are just a few of the things you should consider when choosing  a mortgage:

  • How much can I afford?  While the temptation may be to choose the largest house you can afford, remember to think about the size of your payments and how interest rates may change in the future.  Also, remember that the size of your down payment relative to the purchase price will also impact the amount you’ll need to pay for mortgage insurance.
  • When do I want to be debt-free?  While debt-freedom may seem a long-way off, the decisions you make today will have a large impact on when you may be debt-free.  You may wish to plan extra mortgage payments into your budget to save interest?
  • How does my mortgage fit into my broader financial plan?  Since your mortgage is likely the biggest financial obligation you’ll ever take on, it’s important to ensure it’s taken into account when you’re developing plans for things like retirement savings, education savings and insurance.

The importance of financial advice
The best time to create a financial plan is when you’re just starting out in life.  Your financial advisor can help you integrate debt management into a broader financial plan so that you can make your money work harder and achieve your financial goals.  If you don't have a financial advisor, we can help you get the professional advice you need to make well-informed choices about your financial future. Find a financial advisor .

Mortgage advice
If it's mortgage advice you're looking for, call 1-844-239-4677 and speak to one of our Manulife Bank representatives who will help find the mortgage product that's right for you.

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