Blog > First Time Buyer

So ya wanna buy a home? But this is your first time and you have spent time reading blogs that are old and you are not sure what still applies? Everyones situation is slightly different so what’s important is that you know the basics. Then you reach out to a kick ass mortgage company that can help you with your specific needs and explain everything to you in a way that makes sense. (top secret I may know a company that can help you) So lets break this down for you quickly.

There are 4 main topics you want to understand when you are a first time buyer

  1. Credit-Make sure you understand your credit. Borrow money and pay people back on time and you will have good credit. Pay them back on time most of the time and you will have average credit and never pay them back ever and you should probably just google rental properties. You need to have good credit or it doesn’t matter how much you make lenders will not want to lend to you. Awesome enough for you we will give you your credit score and explain what is on it for you.
  2. Income – you have to be making money for a bank to feel confident that you will pay them back. What income we can use for you depends on many factors. How do you get paid salary hourly commission, how long have you been there, what type of industry, etc. We will let you know exactly what lenders will except what and they are not all the same which is why as a first time buyer you are wanting a specialist to give you the highest pre-approval amount and highest odds of approval.
  3. Down Payment – You must put down at least 5% if the home you are buying is going to be your primary residence. Now this down payment must be provable to make sure we are not drug lords or laundering money but many forms of this are acceptable. Borrowed, gifted, Savings, Investments, Sale of assets, just to name a few. Documentation on down payment can be very tedious but we are here to help and will make sure we get you through it with the least amount of paid possible.
  4. The Insurers – If you don’t put down 20% you must get one of 3 insurers (CMHC, Genworth or Canada Guarantee) to approve your file. This is default insurance for the lender that they so graciously pass on to you. You don’t have to pay it out of pocket they will add it to the mortgage for you but you are still paying it over time inside of your mortgage. If you happen to walk away from your mortgage the insurers will make sure the bank doesn’t lose any money which has allowed the banks to lend to us without needing a lot down. Without 20% down the lender requires an insurer approval before they will give their own approval. This is the rule for all Canadian lenders. So very important you want to make sure you work with a specialist because if all three of these guys decline you won’t get a mortgage anywhere until something in your situation changes and you can try again. So best to make sure you work with someone that knows the rules and specializes in mortgages.

Now that is the quick version of the big 4 things to understand to get a mortgage. There are other smaller topics that we can walk through with you if they become applicable to your own personal purchase. If you feel you have good credit, have a job, have a down payment or want to look at borrowing a down payment then you are ready to fill out an application so we can take you through the process of getting pre-approved. We look forward to working with you!

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