First-Time Home Buyer
With mortgage rates at historic lows, there’s never been a better time to buy your first home.
Let a Mortgage Centre Specialist help you understand the options available to you at this important stage in your life.
Take comfort knowing that a Mortgage Centre Specialist will provide you with all the information, sound advice, and assistance you need, every step of the way.
Below is a list of items that can help you understand and plan for what may be your largest purchase ever. If there’s anything you’re unsure about, please don’t hesitate to talk to your local Mortgage Centre Specialist. We’re prepared to do what we can to help make things proceed smoothly, quickly and effortlessly!
First time home buyer tips
- Choosing a Realtor: The right realtor can help ensure you get the right house at the right price. You want a real estate agent whose attitude and availability inspire your trust. Start by seeing who’s most active in your neighbourhood. Some good questions to ask include qualifications, whether they are a full-time realtor or if it is just a side job, their track record (recent properties sold, testimonials, etc.), the estimated length of time for search, price negotiation strategies and expectations for home viewings.
- Making House Hunting Fun: Take the guesswork out of shopping for a home by taking advantage of professional resources available to guide you through the many choices available when purchasing your first home such as CMHC, the Canadian Bankers’ Association, the Ontario Real Estate Association, the Home Builders’ Association, etc.
- Affordability and Financing: Talk with your Mortgage Centre Specialist to review your current income and expenses. We’ll help you take into account how your new mortgage may change your monthly expenses. Securing a pre-approved mortgage with a lender that checks your credit rating will allow you to get an idea about how much mortgage you may qualify for, so you can have a price range in mind when you look at different properties.
- Selecting the Right Mortgage: Discuss your goals with your mortgage professional to determine the best fit for your mortgage type, whether closed or open, short term or long term, fixed rate or variable rate, your mortgage professional can help you determine the best product to fit your needs.
- Applying For Your Mortgage: When you’re ready to apply for your mortgage, you will need the following items: a copy of the accepted Offer To Purchase and land survey, copy of the real estate listing for existing homes, salary letter from your employer (self-employed buyers may require financial statements for the past three years as well as personal income tax returns), confirmation that your down payment came from your own resources (e.g. bank statements or a gift letter), a list of all your assets and debts along with account numbers, condominium financial statements (if applicable).
If you are buying a home to be constructed, bring a picture of the property, a copy of the building plans and specifications, the land survey, plus your agreement with the builder.
- Before You Sign the Offer: Select a lawyer as you’d select a real estate agent; seek competitive fees, excellent service, knowledge, and approachability – in other words, value. Involve your lawyer before you sign the offer, which becomes a legal Agreement of Purchase and Sale once you and the seller sign it. Have your lawyer read the document carefully and review it with you.
Once it’s signed and accepted, your lawyer will order a series of searches from various municipal offices to ensure that the vendors haven’t been sued, that they’ve paid all of their property taxes and major utility bills, and that there are no outstanding mortgages or liens on the property once you become the owner.
Your lawyer will also draft a series of closing documents and review the closing documents drafted by the vendor’s lawyer.
- Before Closing: A few days before closing, you’ll visit your lawyer’s office to sign the closing documents. Bring a certified cheque for the balance of the closing funds, because the lawyer pays the relevant parties on your behalf. Part of that amount covers the lawyer’s fee and disbursement costs. The lawyer obtains the mortgage funds directly from the lender funding your mortgage.
- On Closing Day: Your lawyer will close the transaction with the vendor’s lawyer. At this time, the balance of the purchase price will be exchanged for the keys to your home and closing documents will be exchanged. Your lawyer will register the deed or title transfer and the mortgage. Finally, you pick up the keys to your new home!
- After Closing: Your lawyer will send you a reporting letter and copies of all the documents you signed including the deed, the mortgage, and the survey, as well as a summary of the flow of funds. Be sure to keep these important records in a secure location.
- Mortgage Life Insurance: It’s a sound idea to seriously consider mortgage life insurance. Generally, the cost is low and can be incorporated into your mortgage payments. In the event of death, terminal illness, or permanent disability, your balance will be paid in full (because details vary among financial institutions, it’s a good idea to read the policy carefully). Quotes are available with each approved mortgage.
- Prepayment Privileges: Financial institutions vary in their prepayment privileges, which let you pay down your mortgage faster. Your Mortgage Centre Specialist can discuss your prepayment options with you, based on the mortgage you select. The longer the amortization period (the time it takes to pay off a mortgage), the more interest you’ll end up paying. Amortization periods usually range from 5 to 25 years. Weekly or biweekly instead of monthly payments could shave a considerable amount on your overall mortgage interest payments, depending on current interest rates.