Offers fee discounts, insurance incentives in new mortgage offer

No matter how far into the future homeownership may be, there are some important things to keep in mind for those considering the purchase of a home.

According to Christopher Samuels, branch manager, Scotiabank Centre, persons should also make informed, cautious decisions by researching the mortgage process, ideal neighbourhoods, and confirming their budget before they begin their home search.

“The transition from renting to buying is a big step and there are many moving parts along the way,” the Scotiabank manager noted during a recent Scotiabank LIVE Webinar Series, “while the journey can be an empowering process, it is important to “do your homework” to help manage your expectations”.

Affordability

Currently, Scotiabank offers up to 95 per cent financing for prospective mortgagors, with joint financing available from the National Housing Trust (NHT).

“The more funds you can accumulate towards your down payment, the better. We encourage our customers to work towards having as large a down payment as possible as this reduces the amount that they will have to pay on a monthly basis,” Samuels said.

A good ‘rule of thumb’ that Samuels shared for persons considering the affordability of a mortgage is that not more than 50 per cent of what a potential mortgagor earns should go towards servicing their debt.

“All liabilities, including pre-existing loans, are calculated along with the proposed mortgage facility. Once this falls below 50 per cent then it is more likely that the Bank will extend an offer to the potential mortgagor,” he pointed out.

To also ensure a smooth transition during the application process, Samuels said customers must maintain an excellent credit history.

“If you have any debt now, irrespective of the institution it’s with, especially during this pandemic, servicing your debt is absolutely important,” he urged.

Homeowner expectations

Another major consideration that persons can anticipate, as they transition from renting to buying, Samuels said, is the associated costs. For renters, typically costs and fees are monthly rent, a security deposit, and any utilities.

As a homeowner, in addition to a monthly mortgage payment, there are property taxes, mortgage insurance, and all other fees associated with the upkeep of the residence. These must be considered as part of the long-term financial planning process for home buyers.

Preparing financially

In closing, Samuels emphasised that preparation is the most important part of the process and that persons should not wait until they identify a house they want to begin preparing for home-ownership.”

At Scotiabank, he said, “we work with all our customers, and we offer solutions to help customers attain their goals. Simple products such as an automated savings plan are very useful when saving for a house deposit or other financial goals”.

Samuels said persons should be patient throughout the process, and stay in touch with their mortgage banker. He also advised customers to seek out the help of a real estate professional they can trust to guide them through the process.

Interested persons can visit jm.scotiabank.com/yourhome to get more information on special deals being offered by Scotiabank which now include interest rates as low as 6.99 per cent free insurance with BCIC, up to a maximum of two per cent of the mortgage amount and 50 per cent discount on bank processing fees.

“These deals can be welcomed ‘sweeteners’ for prepared buyers,” Samuels noted.