Want to be a first-time home buyer? Feeling a bit overwhelmed by the process? You're not alone. Buying your first home in Canada may seem more out of reach than a high-rise penthouse condo. Yet, insightful advice — especially on how to save up or plan better — can set you on a level path and put your dream within reach.
Here are some insider tips to help you gain confidence in your home-buying process. These tips are part of a new, comprehensive first-time buyers guide put out by True North Mortgage. It’s full of great info and helpful details, and it’s available for free.
7 First-Time Home-Buying Tips
1. Even a mortgage-rate discount of 0.20% can save you thousands.
Your bank may say they're giving you a discount, but their rates are often higher in the first place. Shopping around is your right as a consumer. But an expert, salaried (non-commissioned) mortgage broker can more easily shop around on your behalf for your best rate. They’ll do the lender-haggling for you (for free) while passing along a rate discount you normally wouldn’t be able to access, to help you save more on your first mortgage.
2. Six federal savings programs and 20+ provincial rebates or tax credits are available across Canada.
There is financial help out there — like the federal government’s First Home Savings Account that can allow you to save money tax-free for your down payment. Plus, rebates may be available in your area to help reduce home-buying costs (every dollar counts!). But there are also eligibility and qualification rules, so ask a mortgage broker or financial advisor about the details.
3. You might only need a 5% down payment.
That can be a big deal if you're having trouble saving up. The minimum down payment amount depends on the home's purchase price — 5% for under $500K and less than 20% for under $1M. Thinking 'smaller' can be a better way to get something you can afford to get your foot in the (real-estate-owning) door.
4. Budget for closing costs, which can be 2% to 4% of the home price.
Be aware that you’ll need to cover closing costs, such as Land Transfer Tax, adjustment costs and lawyer fees, which are over and above your down payment, They can't be added to your mortgage loan, and your purchase deal can fall through if you can't pay them. Again, federal, provincial or municipal rebates may help offset some of these expenses.
5. Your score of 720 in your credit app? That's not the score lenders use.
To approve you for your mortgage, lenders use your FICO score rather than the Pinnacle score you see with Equifax, TransUnion, or some other credit-score app. An expert broker can pass along your FICO score and outline any effect on your mortgage application.
6. Don't cut out the professionals trying to save a buck.
Cheap can be expensive. Finding a good mortgage broker, realtor, and lawyer can help you gain insights and take advantage of experience to save money, time and stress on the right things. Ask around for a good referral, check reviews, and don’t be afraid to ask them questions to ensure a good fit.
7. One financing condition on your purchase offer can save you big.
Even with a pre-approval in hand, your mortgage isn't fully approved until after you've placed a purchase offer. Without a financing condition to protect you — you’ll be in legal and financial peril if you don’t get the loan and you don’t have that cash sitting in your pocket to pay for it (wouldn’t that be nice if you did).
Working with an expert broker can help you determine how much you can afford and how a lender will see your application in light of your financial details.
Don’t give up on your dream of owning a home — help is here (for free).
Bring the dream of owning one step closer (then take the next step, then the next) — with a clear yet detailed guide to help you navigate your process.
True North Mortgage took the time to create over 40 pages full of essential info, tips, and worksheets to help you from beginning to end. There are even QR codes that connect you to more education and tools on their website to keep learning.
It’s free to download on their website: First-Time Home Buyer’s Guide.
If you’d rather talk to someone right away, True North’s highly trained, friendly brokers are standing by to help get your numbers, details, and first-home strategy lined up. Talk to one in your preferred language or call or apply online for fast contact.
Fast, expert mortgage advice can make the difference, saving you money and time. Contact Canada's No. 1 Mortgage Broker today.