First Time Home Buyers
Buying Your First Home
If you’ve decided to take the plunge, you now need to start by figuring out what you can afford. Fortunately, there are all kinds of calculators and tools available. A mortgage professional is a great alternative to traditional banks and can help you find the best rate in the market, as well as save you time by doing the leg work for you!
Mortgage Pre-Qualification
Once you have your down payment and are ready to realize the dream of owning your first home, you must get pre-qualified!
This process provides you with an estimate of how much you can afford based on your own report of your financial situation. The benefit of this is that it sets the baseline for a realistic price range and allows you to start looking for that perfect home within your means! Now this process is not a mortgage approval, or even a pre-approval but it helps to establish your budget. You must supply an overview of your financial history (income, assets, debt and credit score) but the real requirements come with the pre-approval process where you submit your actual documentation.
We're Connected To Build a Strong Team For You
It is VERY important to be surrounded by a reputable team of professionals: a realtor, lawyer, home inspector, home insurance company/broker, moving company, etc. Buying your first home with us on your side can make this a fun and exciting experience. Having a seamless flow is what we are after and are very successful! We will guide you through the many steps towards buying your first home and make sure that nothing gets forgotten along the way.
Choice
Since we work with many lenders, we offer the choice, convenience, and counsel that you deserve to make your first time home buying experience easy and rewarding.
The Down Payment
Regardless of whether you choose a mortgage professional or traditional bank, the first step begins with your down payment.
The minimum down payment on any mortgage in Canada is 5 percent but putting down more is beneficial whenever possible as it will lower the amount being borrowed. However, if you can only afford the minimum that is perfectly okay! Just remember, if you are putting down less than 20 per cent to purchase your home, default insurance will be mandatory to protect the investment.
Ideally, individuals looking to purchase their first home will have built up a nest egg of savings that they can apply towards a down payment. However, we know this is not possible for everyone so if you don’t have it all saved, don’t worry! Besides being a vital savings plan for retirement, RRSPs can be a great resource for first-time home buyers and can be cashed in up to $35,000 individually towards a down payment. In fact, most mortgage professionals will tell you nearly half of all first-time buyers use their RRSPs to help with the payment. Those first-time buyers who choose this option will have 15 years to pay it back and can defer these payments for up to two years if necessary. Always remember though, deferring a payment can increase the time to pay off the loan and you will still owe the full amount!
Another option for securing your down payment is a gift from an immediate family member, typically a parent. All that is required for this is a signed Gift Letter from the parent (or family member providing the funds) which states that the money does not have to be repaid and a snapshot showing that the gifted funds have been transferred.
Land Transfer Tax Credit
First-time home buyers may be eligible to receive a credit of $4,000 on land transfer tax. This is very significant savings on closing costs. Contact us for further details.
First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive helps qualified first-time home buyers reduce their monthly mortgage carrying costs without adding to their financial burden. To qualify, you need to have the minimum down payment (savings or gifted), qualifying income of no more than $120,000 and the max purchase price is 4 times the qualifying income plus the down payment. Once you’ve determined that you meet the criteria, you can apply for a 5% or 10% shared equity mortgage with the Government of Canada. Find out more and get the documents to apply at www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive.