Buying your first home is a big step. When you are ready to buy your first home, it is wise to work with an experienced professional to guide you through the process and help you to qualify for a first time home buyer loan. When you meet with a mortgage broker, you will then have a good idea of where you are financially and what it takes to qualify for a mortgage. If you aren’t sure, don’t hesitate to call us – we are always happy to help first time home buyers get on the path to home ownership! Contact us to get started getting your first time home buyer loan.

Here are some things to think about before meeting with a mortgage broker to start the pre-approval process.

Do You Have Savings Set Aside?

When purchasing a home, a downpayment is required. This is a percentage of the overall price of the home you are purchasing and is deducted from the total mortgage amount. A minimum downpayment of 5% is required. For example, if the purchase price of your home is $300,000, you will need a minimum downpayment of $15,000.

If you haven’t started saving, it is still worth your time to talk to a mortgage broker and see what other options are available to you.

In addition to your downpayment, you should have around $2000 set aside for closing costs (inspection, lawyer).

Can You Afford the Monthly Costs?

Buying a home means no more rent! But remember home ownership means replacing rent costs with a mortgage payment, homeowner’s insurance, property taxes, and utilities. Do some research to get a general idea of what those costs will be. Do you have room for these costs with your income and spending habits?

Could You Be Denied for a Mortgage?

There are some circumstances can cause your lender to decline your first time home buyer loan. Here are the top reasons for a lender to decline your application for a mortgage:

• too much debt
• credit issues
• low income

If you don’t meet the mark, your lender may be able to give you some alternative options, some of which include:

• requesting a larger down payment
• requiring a cosigner
• approving you for a lower home loan amount

What Information Do You Need to Meet with a Mortgage Broker?

Any lender will want to be sure that you’ll be able to pay the loan you’re requesting. To find out if you are eligible, the lender or broker will analyze your monthly costs and total debt obligation based on your financial records.

Mortgage lenders will look at a variety of pieces of information such as your:

• income before tax
• total debts
• monthly expenses
• credit score
• employment history

Get Pre-Approved for a First Time Home Buyer Loan

Ready to buy your first home? Need a first time home buyer loan?  Contact us for guidance on how to secure your first time home buyer loan today.

Handling a first-time home buyer mortgage is challenging for most home buyers. The lengthy paperwork, financial terms, and math quickly get to your head and become confusing. Arming yourself with adequate knowledge makes it easier to understand the first-time home buyer process. If you think you’re ready to apply for a first-time home buyer mortgage in the Edmonton area, call our mortgage broker for expert advise or read on to learn more.

Prequalification 

Before getting your first-time home buyer mortgage, you will need to go through a prequalification process. Mortgage brokers check your creditworthiness, income, debts, and assets to calculate how much you will be approved for.

Pre-Approval 

Pre-approval confirms the first-time home buyer mortgage you qualify for. Your mortgage broker reviews your application and evaluates your finances including your credit. If you pre-qualify for a first-time home buyer loan, at this stage, your broker will obtain a mortgage rate-hold for you protecting current rates while you are shopping for your home.

Representation 

You may be far out of your element when handling your first-time home buyer mortgage. It will help if you have assistance from professionals that can ease the burden and make it easier for you to navigate the home buying process.

Consider partnering with a mortgage broker to be sure you are presented with first-time home buyer mortgage options. Brokers have access to several lenders and can negotiate a suitable plan on your behalf. Also, brokers can help you break down the paperwork needed for your pre-approval.

Planning: Needs Vs. Wants 

Having a vision for your home makes it easier for you to find an ideal home that meets your needs and wants. Create two separate lists indicating your needs and wants for your first home. The needs list includes all the requirements the house must have depending on your needs—for example, the size, kitchen, utilities, and the number of bedrooms.

The wants list indicates items that you would like but can live without, such as a den, pool, a large yard, and a community centre. Once you have your first-time home buyer mortgage, you can then find a home that ticks off items on your list but stays within your financial bracket.

Be Thorough

 
You can never be too careful when planning for your first-time home buyer mortgage. Every coin counts, and it should be a goal to maximize everything you spend. Have a professional home inspector check the property.

Get Professional Support with Your First-Time Home Buyer Mortgage 

Buying your first home can certainly be overwhelming, but you don’t have to go through it alone. Talking to a mortgage broker ensures that you find an affordable mortgage and find a suitable home in the Edmonton area. Reach out to Jamie at Jamie Arthurs Mortgages for assistance today.

As a first-time homebuyer, you need to come up with a minimum 5% down payment. A down payment is the percentage of the home’s purchase price that you pay upfront before financing the balance. Saving up for a mortgage down payment requires long term planning. Here are some of the tips you can use to save up for a mortgage down payment before applying for a first-time home buyer loan. Call us to get started today!

Reduce Your Debt

You cannot save money if you have to pay it off elsewhere. In addition, first-time home buyer loan lenders may refuse to qualify you for a loan if you have too much debt. Start paying off existing loans and credit card debts. It also goes without saying that you should avoid accumulating more debt.

You can use the snowball method, where you pay off your debts from the smallest to the largest, and continually gain the momentum to kick off all your debts. Alternatively, you can utilize the avalanche method, where you pay off the debt with the largest balance and interest rate first and move slowly towards the lowest amount.

Downsize as Much as Possible

A first-time home buyer loan is a huge investment. It’s important to eliminate as many unnecessary expenses as possible, to prepare for your new living situation. There are several ways to cut back on spending including:

Eliminating or cutting off subscriptions. Sit down and review your Netflix, Disney+, meal kit, gym, journals, and any other paid subscriptions you have and cut off what you don’t need.

Cut back or find cheaper mobile and internet plans.

Reduce your AC and heating expenses.

Eliminate leisurely spending in restaurants, hotels, and travelling.

In short, find cheaper ways of doing things where possible and your savings will reap the benefits.

Put Your Savings in Tax-Free Accounts

Don’t lose your down payment money as you save it. Review your savings account and check if you get taxed for your savings. If yes, find a tax-free account for your down-payment.

Take Advantage of Government Programs

The government has several programs that make it easier for you to afford your down payment and first-time home buyer loan. The most widely used of these programs is the Home Buyer’s Plan (HBP). The HBP allows you to take out up to $35,000 from your registered retirement savings plans (RRSPs) for your down payment without penalty. You can only withdraw as much as you have saved and you will need to pay the amount back into your RRSPs via monthly RRSP contributions over a 15-year period. With the HBP, you are essentially borrowing your own money without interest. This can be an excellent solution for many first-time home buyers. A mortgage broker will help you understand if this is a suitable option for you.

Ask for Assistance from the Experts

A little assistance and financial planning with Jamie Arthurs Mortgages can help you plan for your down payment and secure your first-time home buyer loan. Reach out to Jamie Arthurs with Dominion Lending Centres in Edmonton for assistance today.

The costs of buying your first home can quickly add up, making it difficult for you to own your own home. Fortunately, federal government programs such as the First-Time Home Buyer Incentive (FTHBI) can make it easier for some to purchase their first home. FTHBI can potentially help you qualify for a first-time home buyer loan by matching your down payment contribution to a maximum of 10% of the home’s price. Call us today to get started on your path to homeownership.

What Is FTHBI?

The FTHBI lowers the cost of buying your first home by sharing the cost of your down payment. By so doing, the incentive reduces your monthly mortgage payments which helps some to qualify for a mortgage that they may not have without the incentive.

The incentive works as a shared equity mortgage. When you sell your home or finish paying off the mortgage, you pay back the 5%-10% loaned to you based off the current market value at that time. You do have options to pay it back sooner. A mortgage broker will help guide you through this process.

The FTHBI offers:

• 5% of the home’s price for the purchase of a resale home.
• 5% or 10% of the home’s price for a newly constructed home.

Example 

Let’s say the price at the point of buying your first home is $300,000. FTHBI offers 5% or $15,000. If your home’s value decreases to $200,000, you pay back $10,000. However, if the value of your home’s value rises to $400,000 by the time you pay back the incentive, you pay back $20,000.

Do You Qualify for the FTHBI?

The FTHBI is for you if you’re buying your first home. You are considered a first-time home buyer if:

• You have never purchased a home before.
• You have not occupied the home you and your spouse or common-law partner owned within the last four years.
• You’ve had a breakdown of your marriage or common-law partnership.
• You are a Canadian citizen, a permanent resident in Canada, or a non-permanent resident with authorization to work in Canada.

If you meet the criteria above, you still need to cover the checklist below.

• Your qualifying income should be less than $120,000. The qualifying income is your wages, money from investments, and rental incomes.
• You should have the minimum down payment. The minimum down payment is 5% for homes below $500,000 in value and 10% for any amount above $500,000. However, the total amount of down payment, including the FTHBI, should be less than 20% of the house’s purchase price. Because the FTHBI only applied to homes where the down payment is less than 20%, it means that you need CHMC mortgage default insurance when buying your first home.
• The FTHBI caps borrowing at four times your qualifying income. As earlier mentioned, the maximum qualifying income is $120,000 which means that the maximum amount you can get from the incentive is $480,000.

Should You Consider Buying Your First Home With FTHBI?

If you need assistance understanding and applying for the FTHBI, look no further than Jamie Arthurs Mortgages. I am more than happy to help you apply and find lenders when buying your first home in Edmonton. Contact us today.

When you decide to purchase your first home, you’ll want to know all your financing options for a first-time home buyer loan. Usually, you’ll approach a bank or a mortgage broker. Here are several things to keep in mind when hunting for your first-time home buyer loan. Call me today to help simplify the process.

Types of Mortgages

You can either get a fixed rate or a variable rate mortgage. In a fixed-rate mortgage, the interest rates are fixed for the duration of the mortgage. The main advantage of fixed-rate mortgages is that they protect you from sudden and significant increases in interest rates. The disadvantage is that when the interest rates are high it’s harder to afford the payments.

Variable-rate mortgages or adjustable-rate mortgages change the interest rates depending on the lender’s prime rate. The interest rate on a variable-rate loan can be lower than the rate on a fixed-rate mortgage. However, as time passes, the rate can rise or decrease. While you may enjoy low interest rates in some seasons, it’s uncertain how long you can enjoy the advantage before you start paying high amounts.

Down Payment

To qualify for a first-time home buyer loan, you have to pay a down payment. A down payment is an amount you pay upfront when buying a house before the lender provides financing for the remaining balance of the purchase. The down payment and the mortgage together represent the total value of the home you wish to purchase.

Down payments are usually a percentage of the property’s value and the minimum down payment is 5% of the purchase price. For example, for a home worth $400,000, a 5% down payment is $20,000.

CMHC Insurance

If you have a minimum down payment below 20% of the purchase price, you’re required to have CMHC insurance or the equivalent insurance from one of its competitors. This is a mortgage default insurance that protects the lender in case you default on your mortgage.

This insurance premium is calculated as a percentage based on the size of your original down payment. This amount will be added as a lump sum onto your mortgage balance and is included in your amortized payment for your first-time home buyer loan.

Grants and Incentives

Sometimes, your first-time home buyer loan may be inadequate to cover all the costs of purchasing a home. The Canadian government has grants and incentives you can use to reduce the cost of home buying.

Apply Your First-Time Home Buyer Loan Today

Finding the right mortgage terms, dealing with paperwork, and finalizing your payments are long processes that require guidance from an experienced mortgage broker. Connect with a mortgage mentor from Dominion Lending Centres in Edmonton for more information on first-time home buyer loans. Call me today!

Qualifying for your first-time home buyer mortgage is a critical part of the homeownership process. You need to provide several documents to your mortgage broker and lender. Read on for a comprehensive list of the documents you will need to get a first-time home buyer mortgage. Contact us to learn more.

Documents for Your Down Payment

A down payment is essential when applying for a first-time home buyer mortgage. The down payment from your own resources shows the lender you are committed to paying back your first-time home buyer mortgage.

Savings

Canada’s Anti Money Laundering Act requires all down payment funds to be documented. Be prepared to show 90 days of bank statements/investment statements to prove you have accumulated your down payment over time.

A 90-day Statement for RRSP or Investments

As above, 90-day investment statements show the source of your down payment. Plan to withdraw funds from your Registered Retirement Savings Plan (RRSP) or an investment 10-15 days before you take possession.

Gift Letter

If one of your family members decides to gift your down payment, your broker will provide you with the appropriate gift letter to be signed by all parties. The bank will also require confirmation that the gifted funds have been deposited into your bank account.

Different processes and documents will apply depending on the source of your funds. Contact your mortgage broker to find out which documentation will be required for your unique situation.

Documents for Your Income

If you’re employed, you need to provide these documents:

• Pay stubs to show your current salary or hourly wage rate as well as your Year-to-Date (YTD) income.
• A letter of employment to confirm your start date and guaranteed income.
• T4s or Notice of Assessments.

If you’re self-employed, you need to provide the following documents:

• Articles of incorporation (if applicable)
• Full T1-Generals and Notice of Assessments for the last two years
• Business financials for the past two years

Documents for Your Credit

Your credit rating affects the type of first-time home buyer mortgage you qualify for. As a general rule of thumb, the higher the score, the better! First, obtain a copy of your credit report and fix any errors that may affect your first-time home buyer mortgage application. Second, look at your credit, including credit cards, secured and unsecured loans, auto loans, bills, and student loans. As you look at your credit, remember to also look into other debts such a spousal and child support if applicable.

How Dominion Lending Centres Can Help

Qualifying for a first-time home buyer mortgage requires documentation that shows your credit status, your down payment, and income. With the help of a qualified mortgage broker, you can compile all necessary documents and make adjustments before seeking lenders. Contact us today for direct assistance with your first-time home buyer mortgage.

The first-time homeowner buying process is exhilarating. It’s fun to dream about your dream home and new life, but sometimes, you may get wound up in the fantasies and make mistakes. Unfortunately, when it comes to decisions as significant as mortgages, mistakes can cost you hundreds of dollars.

However, there’s no need to panic. If you’re in the first-time homeowner buying process, here are several mistakes you should avoid. Contact me to learn more.

Buying Outside Your Budget

Browsing through house listings and imagining yourself in beautiful and extravagant spaces can swoop you into more debt than you can handle. This is why you need to manage your expectations for the first-time homeowner buying process. Start by getting pre-approval before you begin house-hunting.

A mortgage pre-approval weighs your debts, income, assets, and credit report, and tells you how much you qualify for, your mortgage interest rates, and how much you’re likely to pay per month. With a budget in mind, your first-time homeowner buying process can continue with an achievable goal. Being house-broke and living your preferred lifestyle do not always go hand-in-hand.

Using All Your Savings on the Down Payment

While you can spend your maximum mortgage amount on your house, you may end up stretching yourself too thin. Remember to consider additional costs such as property taxes, mortgage insurance, home inspections costs, utilities, repairs, upgrades, and closing costs. These additional costs can consume up to 2% of your house price.

Leaving some cash aside for extra expenses helps you stay within budget and enjoy the first-time homeowner buying process. Contact your Dominion mortgage broker to determine how much you may spend on extra costs.

Choosing Aesthetics over Function

It’s easy to fall in love with the appeal, paint, character, and overall appearance of a home, especially if it meets your design needs. While you should find beauty in your home, it’s crucial to dig beyond the visible surfaces.

Skipping Your Home Inspection

Some houses may deceive you through cosmetic updates such as renovated kitchens and wooden floors, only for you to discover leaking roofs, cracked foundations, and leaking pipes later on. These updates can run up your housing costs and ruin your first-time homeowner buying process.

To improve your first-time homeowner buying process, ask questions such as:

• What are the statuses of the roof and supporting system?
• What are the conditions of the basement and the foundation?
• How old are the utility systems? (Water, HVAC, security, and electricity)

An inspection report is the best way to verify the condition of a house you wish to purchase and give you value for your money. Don’t ruin your first-time homeowner buying process by skipping this step. Discovering problems in the house before finalizing a contract protects you from hazardous and costly elements. No matter how alluring it may be, never skip a home inspection.

How a Mortgage Broker Can Help

When buying a home for the first time, seeking an expert’s advice can save you money and time. With Dominion Lending Centres, you can find an experienced mortgage broker to lead you through your first-time homeowner buying process. Contact us today to find your dream home.

What will the real estate industry look like in 2021?

If there is one word that defines life in 2021, that word is change. How much and for how long is uncertain. And while some changes may be temporary, many may be here to stay.

How will all of this change impact the real estate industry? Some key trends have emerged that bear closer scrutiny.

Residential Real Estate

With more and more people working from home and the potential of many continuing to do so in a post-pandemic world, there is an increased need for more space. Enter suburbanization. Residents living in major urban centers are steadily moving to suburbia. Will suburbs become 18-hour cities? Who knows? One thing is certain, living cheek to jowl with thousands of other people is no longer a viable option for many.

Office Space

For a while now, open-concept office space was the trend. That trend is now dead. While it allowed companies to downsize to smaller properties since less space was needed, after COVID-19, once workers begin to return to the office, we may see a return to traditional working spaces and the need for larger office buildings to accommodate them.

Retail Space

Bricks and mortar businesses have been hit hard and have seen a sharp decline in sales. Many big-name brands that previously anchored large retail spaces have permanently shut their doors. What does this mean for shopping malls? Will they survive? Experts suggest that to do so, they will have to be creative and embrace change. Think more medical clinics and multi-family residential homes rather than clothing stores with multi-user fitting rooms.

Proptech (Property Technology)

The real estate industry was on the brink of widely embracing proptech before the pandemic hit. That acceptance has accelerated like a rocket. In order to stay engaged with customers, service their needs and remain in business, companies have been forced to innovate in order to survive. This embrace of innovation will help to stabilize many sectors once the pandemic is behind us.

Written by FCT

Buying your first home is a substantial financial investment. For this reason, it’s essential to arm yourself with adequate information and a solid plan to help you balance your debt, income, and expenses. Contact us to learn more.

Here are a few tips you should know before applying for a first-time home buyer loan.

Saving a Down Payment

If you’re buying a home, focus your efforts on saving a minimum of 5% of the home’s price. Making a larger down payment lowers the loan amount you need to pay and will also decrease your monthly payments.

With a down payment of less than 20%, your first-time home buyer loan will require mortgage default insurance, which will be factored into the loan amount. Having 20% or more down payment saves you from paying default mortgage insurance.

Passing the Mortgage Stress Test

A stress test helps you determine how much you can afford when your circumstances change. What happens if you lose your income? What happens when the interest rates increase? The stress test also helps lenders determine if you can afford to pay off your first-time home buyer loan at a higher rate than you would pay.

Usually, being able to pay at least 2% above your contracted rate is sufficient to prove that you can afford your mortgage. Your income should be high enough, or your debts should be low enough to enable you to qualify for your first-time home buyer loan.

Whether you pay mortgage insurance or not, the stress test applies. Therefore, taking the time to analyze the mortgage you can afford with and without your current income is essential.

Timing Your Application for the First-Time Home Buyer Loan

As soon as you have decided you want to purchase your first home, talk to a mortgage broker and get pre-qualified. Your broker will let you know if there are any obstacles you need to overcome before you can get approved for a mortgage. It is never too soon to take a quick look at your financial picture to make sure that home ownership is in your future.

Applying for a Mortgage when You are Self-Employed

Whether you are incorporated or a sole proprietor, expect to provide extra documentation when applying for a mortgage. All lenders within Alberta require that your income taxes are filed and up to date. Any other bookkeeping or documentation should be readily available.

Getting Your First-Time Home Buyer Loan

It’s advisable to consult a Dominion mortgage broker to help you review your financial situation. With the right analysis, you can plan your first-time home buyer loan, and ensure that you tick off all boxes with your lender in Edmonton. Book your appointment with us today! 

When buying a home for the first time, seeking the counsel and help of an experienced mortgage broker is critical. A mortgage broker specializing in first-time home buyers can help you negotiate a mortgage, find the right home within your budget, and avoid any unnecessary delays or complications. This process helps set expectations.

In this post, we explores some of the expectations a first-time home buyer may have and the reality of the situations we experience. You can then use the information to prepare adequately and qualify for a first-time home buyer mortgage.  Contact us to learn more.

Expectation: I have sufficient funds for the down payment.

Reality: Like most first-time home buyers, you’ve probably been saving up for your down payment for several years. Unfortunately, you may fail to qualify for a suitable first-time home buyer mortgage because your down payment isn’t sufficient. Your savings may also fail to cover the down payment for your dream home.

Generally, you’re required to have a minimum of 5% of the home’s price as the down payment for homes below $500,000. However, having a 20% down payment also prevents you from needing default mortgage insurance.

Expectation: The down payment is all I need to get my dream house!

Reality: Besides the down payment on the new home, you also need to consider additional costs such as:

• Lawyer fees
• Appraisal charges
• Inspection costs
• Moving costs

If you’re trying to get your first-time home buyer mortgage, remember to add 1-1.5% of the home’s price to cover additional costs.

Expectation: It costs the same to rent and own a home.

Reality: If you’re moving from a rental apartment and are ready to apply for your first-time home buyer mortgage, remember that your expense structure will change. Once you clear the immediate expenses, you still need to factor in recurring expenses such as property taxes, insurance on the mortgage, utility payments, repairs, etc.

It’s best first to analyze your budget and consider how additional expenses may strain your income. This can help you decide if you’re ready for homeownership or if you should save more.

Expectation: I can use the mortgage money for whatever I want.

Reality: Mortgage funds can only be used to purchase the house. You cannot borrow more than 95% of the purchase price. You cannot consolidate debt. You cannot borrow more money to complete undocumented renovations.

Setting Your Expectations with a Mortgage Broker

With a qualified mortgage broker from Jamie Arthurs Mortgages, you can plan for your first home and avoid nasty surprises. We can also help you qualify for a first-time home buyer mortgage in Edmonton. Contact us today for more information.