The Time To Buy Is Now

2010/03/28 Originally published in the Vernon Morning Star

            If you are holding back and still paying rent, this is the time to "move on".  Five percent down payments are still allowed.  Interest rates are at an historic low.  Prices in our area have not yet started to rise.  Selection of homes is good, although I do see early signs of lack of availability in certain price ranges and certain types of housing.  That factor is usually the first sign that price increases could soon follow.  Canada's economy is showing steady signs of growth.  In my opinion, this is an ideal time to buy real estate.

            If you are buying your first home, you can withdraw up to $25,000 from your RRSP to use as a down payment.  That amount is equal to 5 percent down on a $500,000 purchase.  In our area $500,000 buys a lot of house! Probably more than you need.  You can buy a good home for much less and therefore you could elect to take less out of your RRSP.  Of course, you will have to pay back your RRSP over time to use this program.  If you buy a home at $425,000 or less and it is your first home, you are not required to pay the property transfer tax.  Considering that tax is 1% on the first $200,000 and 2% on the balance, it means a considerable saving to the first time home buyer.

            Some lenders will even provide you with the down payment.  In return they loan to you at the posted rate (today that is 5.25%) or a little more and lock you into your mortgage for 5, sometimes 7 years.  Prices don't need to rise much at all, over those 5 to 7 years, to more than pay you back.  Paying rent for that same time period is simply money gone with nothing to show for it.

            This would be the time to either call the banker who knows you best or your chosen Realtor®.  Your Realtor® can provide a list of lenders and/or mortgage brokers whom they know to be good at what they do.

            This spring could well be a narrow window of opportunity.  It may be best to act now, rather than hesitate and later wish you had.

Jane Field works with RE/MAX Vernon. Jane has over 30 years experience in the Real Estate business. To suggest topics for future articles or to ask Jane questions, email or call 503-3755.

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