First Time Home Buying

Everything you need to know when buying your first home

We understand that buying a home for the first time is stressful. 


Though it may be an exciting time, buying a home for the first time can be stressful and sometimes confusing. 

 

You may have heard many different and conflicting things from family or friends. However, they’re not experts, and you want to find out the facts of the matter. 

 

Where can you get these facts and, crucially, whose advice can be trusted?

 

We are impartial and don’t profit from advising you to choose options that may not suit you. For this reason, we hope that you are able to trust the information in this first time home buyer guide and find some of the answers you may be looking for so that you can proceed with confidence.


Guide to buying your first home / FAQ:

  • What is the first thing I need to do?

    A good starting point is understanding what size mortgage you may be eligible for. This can vary depending on a number of factors; your earnings, your savings (for a downpayment), and your expenses. It helps to know how much you are going to be able to spend before you start looking for that dream home! 


  • Am I limited to what the online calculators tell me I can borrow?

    Though certain rules can make it harder to qualify more recently, we can help. We are able to utilize our experience as brokers, and understanding of the underwriting guidelines, to ensure that we find you the best possible terms for your situation. 

  • Can I get a better deal by dealing directly with banks?

    Not necessarily.

     

    As a broker, we regularly work with all banks and can provide their information in your mortgage comparison report. 

     

    Banks will only offer you the products they have available, which may not be the best for you. It may be that there are alternative products or solutions available that are a better fit for you. We can make sure that you are presented with multiple options that are tailored to your needs. 

     

    It may be difficult to get an appointment, or even to speak to an expert as these are bank staff who will be paid whether you choose their products or not. They often have arduous processes that need a lot of time and input from you. 

     

    As your broker, we are different. We offer a simple and efficient online process and will spend as much time with you as is needed to ensure that you understand what the best options for you will be, and why. 


  • How much will I need for a downpayment?

    You will need to have 5% of the first $500,000, and an additional 10% for anything greater. It is sometimes thought that after your first home, you would need 20%, but this is not true. 

     

    Down payments can come from your savings, inheritance, it can be gifted, and up to $35,000 from RRSPs (for first-time buyers). It is even still possible for this to be borrowed (from a loan or line of credit).

  • How is a deposit different from 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. 

     

    This deposit would normally be 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. 

     

    Deposits can vary depending on the region, and are negotiable, but in some areas the deposit amount may be a fixed percentage of the sale price. 


  • What is the process? How long will it take for me to be approved?

    Just click ‘get started’ on our site to start the process. Initially, we will need some information from you, and this will only take a few minutes.

     

    We’ll get started right away and aim to respond to you within 48 hours with your pre-approval. Thanks to our in-house software, we will also be able to provide you with a report identifying the best lender options for your circumstances. 

     

    Your report will also let you fill in your purchase price, down payment and any taxes of fees before allowing you to confirm your approval. 

     

    All this without even needing to leave the sofa!

    In addition to your report, we’ll also provide a tailored video related to your pre-approval. We’ll explain any of the provided resources and let you know what the next steps are for your purchase.


  • When should I make an offer?

    Once you’ve found your new home, you’ll make an offer to the sellers via your realtor. Having already received your pre-approval, you can be confident that everything can move smoothly once your offer is accepted. 

  • Should I add any conditions to my offer?

    We’ll work with you and your realtor to ensure that you are protected, but also not to overcomplicate the offer and make it any less attractive to the seller.

     

    By including supporting documentation with your pre-approval, you will be able to waive any financing conditions, making your offer more favourable than others. 


  • What costs are involved?

    We’ll identify your specific costs in your comparison report, but typical costs can include:

     

    1) Land Transfer Tax 

    First-time buyers will receive up to a $4,000 tax credit at closing. 

     

    2) PST on CMHC insurance (mortgage default insurance). Depending on the region, this is around 8%, but only if your down payment is less than 20%

     

    3) Solicitor Fees

    This fee can differ depending on the solicitor, but you should budget for at least $2,000.

     

    4) Property Inspection

    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. 

     

    5) Appraisal

    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.


  • If my parents own their property and co-sign, will I lose my First Time Buyer Tax Credit?

    No, the contract can be structured in a way that your parents technically own only 1% of the property, and you own the other 99%. This means that you will have access to 99% of the tax credit for first-time buyers. 

  • Am I still eligible for land transfer tax credit if my spouse owns another property?

    Unfortunately not. Though your name may not be on the title, you are not classed as a first-time buyer if you are living in an owned matrimonial home.

  • Once I’ve been issued a pre-approval, how long does it last?

    When you receive the pre-approval, the rates will be held by lenders for up to 120 days. The pre-approval will remain valid during this time as long as the details of your application do not change.

     

    If there are any changes to your circumstances, you should let your broker know immediately.


  • What criteria need to be met to be classed as a first-time buyer and use my RRSPs?

    You must not have lived in a property that was owned by you or your spouse or common-law partner within the previous four years.

     

    All applicants are able to use up to $35,000 of their RRSPs. This can be used against any of the costs associated with the purchase, including taxes, fees, or even furnishings. You are not required to use this specifically for a down payment. 

     

    Any RRSP contributions are required to have been in RRSP for at least 90 days in order to be withdrawn under the HBP; otherwise, they cannot be deducted from any year. 

     

    It is also possible to make a withdrawal from your RRSP for up to 30 days past the completion of your purchase. Regardless of when it is completed, you can only withdraw from RRSP once.

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