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This is an exciting time for first time home buyers! There are many things you need to know to get you started down the road to owning your own home. You should never enter the market with more questions than answers, so here are some answers to the most frequently asked questions concerning purchasing a home for the first time. Many first time home buyers want to know what it takes to obtain a mortgage under their name for the first time. In most cases, you must be employed full-time or have some kind of stable income that you can prove. Or self employed for more than 2 years with proof of one of the following: two years worth of T1Generals, business licenses, or articles of incorporation. You have the option of filling out a mortgage pre approval application, which is highly encouraged, especially for first time mortgage acquisition. A good credit rating is encouraged, especially in obtaining a good interest rate, and you must be able to provide a down-payment. The question that instantly follows is what down-payments constitute. You could use a Registered Retirement Savings Plan (RRPS) up to $20,000 for a down-payment tax free! If you repay it within 15 years from the time withdrawn, thus it will not be subjected to income tax. If you have accumulated savings to prepare for this purchase, those funds could also be used. A down-payment for a mortgage could vary from 0% down up to 25% plus, which rates and fees differ depending on the down-payment.

The legal costs involved with obtaining a mortgage in Canada are usually between $600 and $1,000. Insurance and sometimes the cost of an appraisal go into it as well. First time home buyers who get everything that has been requested by the lender to them in a timely fashion could experience a transaction that is complete in a mere two weeks! Getting pre approved before you purchase a home is recommended as it will save you time and limit discouragement. Your qualification depends on the exact criteria of the lender. Looking into the federal institution known as CMHC (Canada Mortgage and Housing Corporation), G.E (Genworth Financial) or AIG (American International Group) can help you lower your down-payment requirements.

Many first time home buyers wonder how mortgage brokers can get them a better deal than the bank. Brokers tend to have no overhead fees and are strictly in the business of lending money to cover mortgages, allowing them to deliver better deals to their clients. Furthermore, Mortgage Brokers have access to array of 70 plus lenders to shop for the best rate and product that suits the clients financial needs. While banking institutions often have much higher overhead fees, such as branch cost, mortgage agent cost, advertising cost etc which those cost will be clawed back by the client through either rate or product limitations. Even though a Mortgage Broker works with these lenders, and places clients mortgage within their books, they are not employed by the financial institutions' or banks; they are hired by the client who is giving them the business. Thus, a Mortgage Broker works on behalf of the client, not the lender! More an above, on those who have bad credit or have filed for bankruptcy in the past, mortgage brokers often have much more resources to finance any credit situation vs. a bank would turn them down without any options. For answers to more of your home owner questions, please contact us today.

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