If you’re currently renting in Edmonton, 2011 may be the right year to consider becoming a homeowner. The Canadian Mortgage and Housing Corporation ( CMHC) said Thursday that the vacancy rate for rental apartments will drop to about 3.5 per cent by the fall of 2011 as the economy improves. In response, rents are expected to increase.
A typical two-bedroom unit is expected to rent for nearly $1,035 in 2011, which is an increase of $20 and townhouses have already gone up to $1,127 a month, a $46 increase since October 2009. Along with a hike to monthly rents, landlords will be less likely to offer rental incentives as demand for their units rises, CMHC added.
In comparison, housing prices are still low and expected to remain stable for the better part of next year. Mortgage rates are also anticipated to to remain low making it an ideal time to leave your rent cheque writing days behind you.
So what’s the first step? Talk to a mortgage broker now to find out what may need tweaking with your mortgage application and about various downpayment options available. That way, you’ll be prepared to make the switch when you are tired of increasing rents and decreasing choice in the rental market.
In the meantime, here are the basic requirements of most mortgage lenders :
1) Minimum credit score of 600
2) At least 2 forms of credit reporting for 24 months each to your credit bureau.
3) Qualifying employment should be considered past probation period although there are some exceptions made for this.
4) 5% downpayment, although there is flexibility here – some lenders allow gifted downpayments from family members, borrowed downpayments and in some cases, may even provide or refund your downpayment.
To talk to a mortgage broker about your future as a homeowner, click here.