There are not that many options for debt consolidation when buying a house and here are the ones available to the average consumer:
- You must make a plan to put a down payment.
- Buying a home without a down payment.
- Consolidate with a down payment
- If your down payment is 5% only, it is also possible to make a mortgage with a cash back (4 or 5% depending on your credit).
- The minimum down payment to get the lowest rate usually is 5% of your purchase, but if your down payment is greater, you can use a portion of the down payment to pay off debts. This is also possible if the down payment comes from your RRSP (RAP).
- If you cannot afford the down payment, then the bank will lend you 100% of the money needed to purchase the home, although 100% mortgages are very risky for banks.
- The interest rate would be slightly higher than the rate
- The property must be situated in a big city (more than 25 000 inhabitants)
- The credit report must be above average to very good (score 680 +) and active during the last two years.
- Customers must be employed in the same position for at least two consequent years.
Saving for a home is the biggest first step that people need to take when preparing to purchase a new house. The best way to go is to save at least 10% or maybe even up to 20% of the purchase price of the home which will be put down as down payment. A solid down payment of anything above 15% can save up to 100 dollars or even more on each payment for your mortgage. To assist with saving for your new home, it can be helpful to set up a long term budget with a certain amount which will be automatically deducted monthly from your account.
Last but not least this is the only product of this kind available in Quebec to residents that would require debt consolidation when buying a house.