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First-Time Home Buyer
Applying For Your First Home Loan
Buying your first home is a special experience, and, in Canada, there are many programs and incentives in place to help make it as affordable as possible. Don’t worry, though: you don’t have to navigate the process alone. Using a mortgage agent is the best way to make sure you’re taking advantage of the system to set you up for success. If you’re ready to chat, I’m just a call or click away. If you’re here to learn more about what you should know as a first-time home buyer, keep reading below.
What Should I Have Prepared Before Applying For A Mortgage?
First things first: you need to be prepared for the process. Buying a home isn’t like any other kind of purchase you’ll ever make. It’s intensive, detailed, and demanding — but the payoff is worth it. To get ahead, I recommend the following steps before you apply for a mortgage:
1. Save Up A Down Payment
This is the most important step prior to applying for a mortgage (or even looking for a home). Down payments are a non-negotiable, although how much you’ll have to put down is flexible. The standard for most lenders is 20% of the home’s value, but through the Canadian Mortgage and Housing Corporation (CMHC), you may be eligible for mortgage loan insurance. This allows you to put down as little as 5% down, although conditions apply.
2. Verify And Strengthen Your Credit Score
Credit score, combined with income, is a major factor in calculating how much you’ll be allowed to borrow for your home loan. If you haven’t checked your credit score recently, now’s the time to do it. If your score is low, focus on paying off existing debts, such as credit cards, school loans, car loans, and lines of credit. Having over-leveraged credit will limit your ability to borrow money and may require you to have a co-signer to secure financing.
3. Have Extra Money Set Aside For Closing Costs
So, you’ve saved a down payment — but have you saved extra to cover closing costs on your home? Things like land transfer tax, appraisal fees, HST, legal fees, and various other one-time expenses can add up to 1.5–4% of your purchase price. You’ll need to factor those costs in when saving up for a home, as the sale is contingent on those fees being paid.
What Incentives And Rebates Can I Take Advantage Of?
While buying your first home is expensive, there are various programs offered by the Canadian government to help offset and lower the associated costs.
The Home Buyers’ Plan
Do you have a registered retirement savings plan (RRSP)? The Home Buyers’ Plan allows you to withdraw up to $60,000 from your RRSP — tax-free — in order to buy or build a qualifying home.
GST/HST New Housing Rebate
For those buying a newly-built home, the GST/HST New Housing Rebate allows eligible buyers to receive a rebate for part of the HST you paid on the purchase price or cost of building.
Home Buyers' Amount
It’s possible to claim up to $10,000 for the purchase of a qualifying home through the Home Buyers' Amount — assuming you and the home meet the criteria.
Why Choose A Mortgage Agent Vs A Big Bank?
Big banks are great for personal finances, but mortgage agents do one thing and one thing only: work hard to get you the best mortgage rate. Canadian mortgage brokers have access to a wide selection of mortgage lenders, which means that, in many cases, mortgage broker rates are lower than bank mortgage rates. It doesn’t stop at low rates, though. There are many more reasons why a mortgage agent is the best choice for your mortgage — find out what else sets us apart.
Contact Me
The Best Mortgage Rates Are Here
Do you have questions about your mortgage eligibility? Or, maybe you’re ready to apply for a mortgage or get a mortgage quote? Contact me anytime via call, text, or contact form. Find out why so many people trust mortgage agents to handle their home loans.