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How to Finance a Condo in Montreal

Financing Montreal condos is so much easier than most people think. Options are provided to first-time homeowners, which include financing, loan insurance, and even subsidies. Most privately developed condos only require a minimal down-payment and there are different ways you can finance your first condo. These options, however, highly depend on your profile.

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Option 1: Apply for mortgage loans from banks

Banks remain as one of the top financing institutions you can turn to when purchasing a condo. Generally, you can choose from the two different types of mortgages when applying for bank financing. A fixed rate mortgage is beneficial if you prefer a locked-in interest rate that is applicable to your entire term. On the other hand, a variable rate mortgage may potentially help you save more because it may be able to give you the lowest interest rate – although there is no guarantee it will remain the same throughout the duration of your loan.

It is also recommended to check different options for down-payments. For instance, banks may offer you conventional mortgage, which would require you to pay 20% of the total contract price of your condo. Moreover, you may also opt to ask for an insured mortgage with low down-payment. This means you can avail of a low down-payment of around 5% as long as it is insured.

Option 2: Check your options with Canada Mortgage and Housing Corporation (CMHC).

Apply for a financial aid or loan insurance from the Canada Mortgage and Housing Corporation (CMHC). The organization also aids in financing the condos up to 95% of the total contract price of the unit. Based on your own financial capabilities, they can help you calculate the maximum price you can actually afford. Moreover, they can likewise educate you whether a high-ratio or conventional mortgage suits your finances best.

Option 3: You may apply for subsidies from OMHM for a socialized condominium

The Office municipal d’habitation de Montréal (OMHM) was established back in 2002 as a result of the mergers of 15 housing departments of Montreal. If you opt to apply for one of their programs, expect to pay around 25% of your total household income, while the group subsidizes the rest. In order to benefit from the financing program of the group, you must prove that you are eligible. Here are the basic requirements:

• You must either be a Canadian citizen or a permanent resident in Canada

• You have lived in the Communauté métropolitaine de Montréal (CMM) for at least 12 months

• For single individuals, the total annual income must not exceed $27,500

• For couple, the total annual income must not exceed $27,500

Note that in-housing financing is also an option, which allows potential condo owners to loan directly from the private developers. However, it is always advisable to go the extra mile and research about the property’s energy rating, property taxes, required repairs, and utility costs. By doing so, you will be able to judge better whether the financing schemes you have researched are truly worth the try.

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