FIRST TIME HOME BUYERS

We specialize in helping first-time buyers! It wasn't that long ago that each of us —Ryan & Brit, Tyler, and Jenn— were all first-time buyers too! We've been in your shoes (and made a few mistakes along the way LOL), so you don't have to...

Rest assured, we're here to provide you with the right information, solid advice, and help you need, every step of the way.

Here are a few key points to consider as you plan for what could be your largest purchase ever. If you have any questions, please don't hesitate to reach out. We're always here and ready to assist you in making the process smooth, quick, and effortless.

Affordability and Financing

Let's connect at a convenient time (Book a call HERE) to review your finances  and get a head-start on your mortgage application (Start an application HERE). We'll help you understand how your new mortgage might affect your monthly expenses and guide you through the process from start to finish.

Having us secure a pre-approved mortgage and holding a rate with a lender will give you an idea of your qualifying amount, helping you set a price range for property viewing. This also offers peace of mind with a rate secured for up to 120 days while you search for the right home.

As part of our process, we'll also create a detailed spreadsheet just for you. This will detail all home purchase costs and monthly expenses. This handy tool will help you quickly determine if a property fits your budget and needs while you shop.

Selecting the Right Mortgage

Some of the choices involved in selecting the right mortgage include:

• Conventional vs. High-Ratio/Insured Mortgages:
  • High-Ratio/Insured Mortgage: This type of mortgage is for homebuyers who have a down payment of less than 20% of the purchase price. It is called "default insured" because it is backed by mortgage default insurance, usually provided by CMHC, Genworth, or Canada Guaranty. This insurance protects the lender in case the borrower defaults on the loan.
  • Conventional Mortgage: A conventional mortgage is for homebuyers who have a down payment of 20% or more of the purchase price. Because the loan-to-value ratio is lower (less than 80%), these mortgages do not require mortgage default insurance. They often offer more flexibility in terms and qualifying criteria.
• Closed vs. Open Mortgages:
  • Closed Mortgage: A closed mortgage typically has a lower interest rate compared to an open mortgage. However, it also has limitations, such as restrictions on prepayments (or penalties for prepayment) and limited flexibility in terms of refinancing or transferring the mortgage before the term ends.
  • Open Mortgage: An open mortgage has a higher interest rate than a closed mortgage but offers more flexibility. Borrowers can make prepayments without penalty and have the option to refinance or transfer the mortgage before the term ends without incurring extra fees.
• Short Term vs. Long Term Mortgages:
  • Short Term Mortgage: Short-term mortgages typically have lower interest rates than long-term mortgages. They are suitable for borrowers who expect interest rates to decrease in the future or for those who plan to move or refinance in the short term.
  • Long Term Mortgage: Long-term mortgages offer stability in payments and are suitable for borrowers who prefer predictable payments over an extended period. They are also a good choice when current interest rates are low and are expected to rise in the future.
• Fixed Rate vs. Variable Rate Mortgages:
  • Fixed Rate Mortgage: With a fixed-rate mortgage, the interest rate remains the same for the entire term of the mortgage, providing predictable payments. This type of mortgage is ideal for borrowers who prefer stability and easy budgeting.
  • Variable Rate Mortgage: A variable rate mortgage has an interest rate that can change periodically based on changes to the lender's prime rate. These mortgages often start with lower rates than fixed-rate mortgages but can fluctuate, affecting the borrower's payments.
• Other Options:
  • Hybrid Mortgages: Hybrid mortgages combine features of both fixed-rate and variable-rate mortgages. For example, a borrower may have a fixed rate for a certain period and then switch to a variable rate for the remainder of the term.
  • Mortgages with HELOC: Some mortgages offer a Home Equity Line of Credit (HELOC) component, allowing homeowners to access equity in their home for purposes such as renovations, investments, or emergencies without having to break the mortgage.

Mortgage Life & Disability Insurance

It's a good 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.

Mortgage Features

Every financial institution have different features and terms to go with their mortgages. We're here to  help you understand things like your prepayment options, portability, refinancing, and other perks/features - based on the mortgage/lender we've helped you choose. They're all unique and we are experts at deciphering the 'fine print'! 

Options like allowing for weekly or biweekly instead of monthly payments could shave a considerable amount off your overall mortgage interest. In addition to this, we'll discuss the options to increase your payments, and how to make lump sums to pay off your mortgage more quickly along the way. 

Some other features to consider/ask about include portability, which may help reduce the costs to break your mortgage if you sell your original home and purchase a new one. The ability to refinance with the same lender can be a big benefit in certain situations, and reduce future mortgage costs (saving you $$$). You may also want to consider whether, if you sell your home, your existing mortgage may be assumed by a buyer. These things are not all equal from one lender to the next, so it's important to know what your lender/product offers. 

You've Found the Right Home - Now What?!?! - A Checklist

Once you've found the right home and made an offer, we'll work on adding/updating information as needed to secure a final mortgage approval. Some of the things we might need to add/update include:

• A copy of your new Offer To Purchase and MLS listing. We often get this straight from your realtor, to make things easier.
• Updated income confirmation, like more recent paystubs, tax returns, etc. - As needed.
• Confirmation of your down payment amount and source (e.g. Recent bank statements, Gift letters, etc).
• Updated lists of assets and debts since we last chatted.

Together we'll select the lender & mortgage that's right for you, obtain a firm mortgage approval, and work to satisfy all the lender's conditions. We'll do all this quickly and efficiently because we've done all the planning ahead of time! Just remember, once you and your realtor have made written up that accepted offer - contact us right away so we can be ready to dive right in; Time is of the essence!

Choosing a Realtor

Choosing the right realtor can help ensure you get the right house at the right price. Start by seeing who's most active in your neighbourhood. Work with someone you relate to, with whom you have some chemistry, and who offers excellent service and value. If you need a hand or a recommendation just let us know - we're happy to help out here too.

Making Home Hunting Fun

There's no shortage of information available to help you make an informed purchase decision. Lenders, as well as CMHC, Sagen, the Canadian Bankers' Association, the Association of Interior Realtors, and the Canadian Home Builders' Association, among others, have information to make home hunting stress-free and fun. Visit their websites (links above) for more information.

Before Closing:

Select a lawyer the same way you'd choose a real estate agent: seek competitive fees, excellent service, knowledge, and approachability - in other words, value. We've got lots of preferred partners in different areas of the province and are always happy to get you connected with the right lawyer or notary for your needs,

Consider involving your lawyer around the same time you sign your offer, because this becomes a legal Agreement of Purchase and Sale once you and the seller sign it. Your lawyer can review the document carefully and review it with you. Once it's signed and accepted, your lawyer might also suggest 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  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.

Your lender and lawyer will coordinate and draft the appropriate documents. Your lawyer should disclose whether he/she is representing the lender as well (they often are). Your lawyer will also notify the city/district offices that you will be the new owner as of the closing day, so that those accounts get moved over.

A few days before closing, you'll visit your lawyer's office to sign the closing documents. Bring a bank draft for the balance of the closing funds, because the lawyer pays the relevant parties on your behalf - they'll remind you exactly how much to bring before your meeting. Part of that amount covers the lawyer's fee and disbursement costs. The lawyer will also request/receive the mortgage funds directly from your 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 should send you a reporting letter and copies of the documents you signed. Our team will do the same; We like to make sure you get copies of everything we sign together. Keep these important records somewhere safe, you never know when you might need them again. 

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