Not only our prices low, but current interest rates on mortgages are still historically low, Mr. Charbonneau says. A review of interest rates at CanadaMortgage.com
shows five-year close rates range from 5.25 to 6.85%, compared with more than 8% in 2000.
There's also plenty to choose from. Annual listings growth is still outpacing sales in 22 of 25 major markets across the country, and the ratio of new listings to sales remains near a nine-year high, Robert Kavcic, economic analyst at BMO Nesbitt Burns Inc., writes in a research note.
According to Nancy Ball, a top realtor for her Brokerage, "Buyers have enough time to decide what is best as the prices have stabilized when compared to two years ago."
The low-down on down payments
You'll need at least 20% of the value of the home to have an uninsured mortgage.
Alternatively, you pay a fee of up to 3.1% of the mortgage as an insurance premium and get a high-ratio mortgage that lets you borrow up to 95% of the value of your home.
Banks also offer 0% down mortgages, a practice that encourages homeownership but doesn't support healthy saving habits. 0% down mortgages are frightening. Buyers in this category can't sustain any downward price movement in their home value because there's no equity," says Mr. Charbonneau.
The RRSP borrowing quick fix
The RRSP Home Buyers Plan lets you borrow up to $20,000 tax free from your RRSP to put towards your down payment. You'll then have 15 years to repay the funds into your RRSP. But, in a market that's been badly beaten up in recent months, the value of your RRSP Portfolio may have dwindled dramatically.
"Selling at a time like this isn't recommended. Hang in there," says Mr. Charbonneau.
If you kept the $20,000 in your RRSP for 15 years earning an 8.5% in compound interest annually, it would be worth over $67,000. With housing prices appreciating at about 6%, based on history, you might lose out on greater potential returns in your RRSP portfolio.
The simplest way to save is to have money automatically withdrawn from your bank account on payday and transferred into a GIC or high interest savings account. Starting in 2009, you'll be able to open a tax-free savings account which will allow you to grow your money tax-free. This account is going to be helpful for short-term down-payment savings, and you can put any type of investment inside the plan.
Everything is negotiable-the house price, real estate fees and mortgage interest rates. Shop around to get competitive rates on both realtors and mortgages. If you prefer one bank or broker over another, present a competing offer and ask them to match it. Ms. Ball recommends getting a preapproved mortgage through a qualified mortgage broker or financial institution. And when you bid on a house, it's best to put forth an offer with as few conditions as possible and have a strong deposit ready to put towards the down payment, such as $5,000 or more, Ms. Ball suggests.
"Your offer will be taken more seriously," she says.
Author of: Rich By Thirty: A Young Adult's Guide to Financial Success