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(NC)*Near record low interest rates are opening the doors of homeownership for many Canadians. "This may be the perfect time to consider purchasing a home," says Gail Kassie, Director, Mortgages and Home Financing Products, BMO Bank of Montreal. "With the variety of mortgage terms and options available, as well as low interest rates, more people are finding that they can afford to purchase a home." Kassie recommends the following "to do's" for first-time homebuyers:

• Find out how much you can afford, before you begin house hunting, with a pre-arranged mortgage. You can visit with a mortgage expert or try the online tools and applications that many financial institutions offer to help you determine what you can afford and what your monthly payments are likely to be.

• Keep in mind that if your down payment is less than 25 per cent, you need to budget for a one-time premium to insure your mortgage against default. While your down payment can be as low as five per cent, the lower your down payment, the larger the principal amount that you have to borrow and that means a larger overall interest cost. Conversely, the larger your down payment, the less your home will cost you over the life of your mortgage.

• Budget an additional three to four per cent of the price of your home for additional up-front costs such as land survey fees, house inspection fees and land transfer tax.

• Look for flexible mortgage options. For example, the ability to skip a payment or suspend payments for a few months can help you manage your monthly cash flow in an unexpected emergency.

• View your home as an investment. Consider its location and accessibility, the average cost of other homes in the neighborhood, and, if renovations are required, whether or not you're likely to recover the renovation investment if you sell your home in the future.

"A sure way to find the best mortgage is to meet with a mortgage expert," adds Kassie. "That way potential homeowners can review all of their options with an experienced professional and they'll understand exactly what they can afford before they start looking for a home."

Information provided by BMO Bank of Montreal. For more information on or to find out your home financing options drop by any BMO Bank of Montreal branch or visit www.bmo.com/mortgage.

- News Canada