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If you’re buying a home for the first time, there are a number of programs and opportunities you can take advantage of. The process can be daunting, but we’re here to explain every step and ensure you understand your options.
How do I get a mortgage as a first-time homebuyer?
Minimum down payments on houses vary from 5%-20% depending on the purchase price of the home. As a first-time homebuyer, you will likely be buying property of a lower value, meaning your minimum down payment will be at the lower end of the range.
We can help you determine the mortgage amount and best interest rate you qualify for. Then, we can facilitate a pre-approval so you can make informed decisions when house hunting.
Government credits, rebates and incentives
There are a number of government programs in Canada to help first-time homebuyers get into the housing market. We can help you navigate these programs and take advantage of the ones that apply to you.
Frequently Asked Questions
If you are self-employed, you declare your earnings in a different way than typical mortgage applications. Therefore, your mortgage requirements are a bit different. Some factors a lender may look for include:
- Great credit
- Reasonable income stated
- Minimum of 5% of your down payment must come from your own resources
- Proof that no income taxes are owing
- Additional requirements may apply
Assessing different lenders can be overwhelming. It’s important to think critically and plan for the short- and long-term. You may see an ultra low interest rate advertised online, but the mortgage that comes with it may have higher penalties or restrictions that cost you more in the long run. Consulting a mortgage broker is the best way to ensure you are finding the best offer available without getting locked into something that doesn’t support your financial goals.
A pre-approved mortgage is a solid idea of the maximum amount of mortgage that you qualify for, along with an interest rate guarantee from a lender for a specified period of time (usually 60 to 120 days). It’s usually one of the first steps a home buyer should take when looking for a home or property.
A pre-approval does not absolutely guarantee that you’ll receive the funds (as the final amount may be subject to conditions), but it’s a very good indicator of the maximum amount you should consider when looking to purchase.
Your pre-approval process requires that you provide financial and credit score information in order to determine what size of loan you’re eligible for, based on lender and government requirements and regulations. And, your down payment will be factored into the amount.
Most realtors prefer that you have a pre-approved mortgage in place before they take you out looking for a home or property. That way, they know they’re showing you the right properties within your affordable price range.
Please see our residential mortgage service for details on securing a mortgage.
Am I ready to buy a home?
Buying your first home is a big decision! Here’s how you know you’re ready:
You have access to enough savings or other funds to make a down payment
You have a stable source of income that will allow you to make monthly payments
You have contingency plans in place in case you lose your source of income or experience a financial emergency
You have enough financial security to pay for unexpected repairs/maintenance as needed
You are prepared to take care of a home of your own
Why should I buy instead of renting?
There are many benefits to buying your own home, but there are also risks involved if you rush into the decision.
Benefits of buying your first home:
Build equity by paying off your own mortgage rather than someone else’s
Take advantage of government incentives and programs for first-time homebuyers
Enjoy housing stability
Open up an opportunity to rent your place out when you no longer live there
Risks to consider:
A down payment is a significant up-front cost
Owning a home can result in ongoing, often unexpected costs (e.g. replacing a water heater or other appliances)
Finding the right mortgage, lender and house can be a stressful, time-consuming process
Why work with a mortgage broker to get a second mortgage?
A broker understands the ins and outs of the local market, interest rates and current mortgage trends, meaning you can sleep easy knowing that you didn’t miss out on a better option
Peace of mind
Buying a home is one of the biggest decisions you will ever make. Working with someone you can trust to help you navigate the process lets you rest assured you are making the best possible choices for the short- and long-term.
Understand all your options
A mortgage broker can listen to your needs and help you properly assess all available options to achieve your homeownership goals.
Don’t miss out on the home of your dreams! Get pre-approved for a stress free home purchase.
Consider options outside of traditional loans.
If you’re unable to secure a mortgage through the usual means, a private lender may be an option.
Save money for what matters most.
Renegotiate your mortgage at renewal to lower your payments and spend more on the things you love.