When buying a home for the first time, it is important to understand what size mortgage you may be eligible for. This can vary depending on a number of factors, including your earnings, savings for a down payment, and expenses. Knowing how much you can spend on a home before starting your search can be very helpful.
While online calculators can provide an estimate of how much you can borrow, they may not take into account all of the factors that can affect your eligibility. Working with a broker, who has experience and knowledge of underwriting guidelines, can help ensure that you get the best possible terms for your situation.
Many first-time home buyers may consider dealing directly with banks to get a better deal on their mortgage, but this may not always be the case. Banks will typically only offer their own products, which may not be the best fit for your needs. A broker, on the other hand, works with multiple banks and can provide you with a comparison report of multiple options that are tailored to your needs.
When it comes to down payments, the general rule is that you will need 5% of the first $500,000 and an additional 10% for anything greater. However, it is important to note that down payments can come from a variety of sources, such as savings, inheritances, gifts, and even RRSPs (for first-time buyers).
It is important to understand the difference between a deposit and a down payment. A deposit is simply a show of good faith in your intention to purchase the property and is held by your solicitor. It is usually included in the down payment, so if your down payment is $60,000, and you provide a $30,000 deposit, you would only need to provide a further $30,000 down payment.
The process of getting approved for a mortgage can vary, but working with a broker can make the process simpler and more efficient.
You can apply now, provide some initial information and within 48 hours, receive a pre-approval!
Our in-house software will also provide you with a report identifying the best lender options for your circumstances. The report will also allow you to fill in your purchase price, down payment, and any taxes or fees before confirming your approval.
First-time buyers will receive up to a $4,000 tax credit at closing. If you are not a first-time home buyer, you will not get this credit.
Depending on the region, this is around 8%, but only if your down payment is less than 20%
This fee can differ depending on the solicitor, but you should budget for at least $2,000.
It is important to have a professional inspect the home you are interested in purchasing to identify any potential issues.
Ranging from $300 - 600. It is often worth paying for a full survey here. Spending an additional $300 at this point could save you thousands by highlighting any problems with the property. The amount you pay here will directly correlate to the depth and quality of the inspection, as well as the tools available. This can include thermal imaging or moisture detectors used to identify less obvious problems.
Ranging from $300-500. Usually only required with a down payment of 20% or more. Initially, we’ll aim for approval based on an online valuation ($99). This is normally accepted but, if not, a full appraisal will be needed. Some providers will include this cost in their solution (which we’ll identify in your comparison report), but this can result in a higher interest rate, costing you money in the long term.
When purchasing a home, there are many other considerations to take into account beyond just the mortgage and down payment.
These are the additional costs associated with buying a home and can include things such as appraisal fees, title insurance, and legal fees.
Be sure to research the property taxes for the area you are interested in purchasing a home in.
You will need to purchase homeowner's insurance to protect your home and personal belongings.
Don't forget to factor in the cost of moving your belongings to your new home.
It's also good to think about what type of home you are looking for, whether it's a single-family home, a townhouse, a condo, or a co-op. Each type of home comes with different features and benefits, and it's important to find one that aligns with your lifestyle, budget, and long-term goals.
It's important to have a clear understanding of your financial situation, including your current income and expenses, as well as your credit score and debt-to-income ratio. These factors will play a role in determining the size of the mortgage you qualify for, as well as the interest rate you will be offered.
Buying a home for the first time can be a complex process, but with the right information and guidance, it can also be a smooth and exciting experience-especially when you’re working with the right professionals.
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