Buying your first home is a very exciting time but it can also seem overwhelming. With a flood of information online, it can get to be confusing very quickly. At Westoba, we can simplify the process and work with you to help make your largest financial decision the right one!
There is a lot you need to know when buying your first home! Besides the down payment, there are additional costs involved, including:
- Mortgage Insurance: If you have less than 20% down, mortgage insurance is required.
- Closing costs: This includes land transfer tax, legal fees, property tax adjustment, interest adjustment, home inspection, and appraisal fees (if applicable).
- Moving/cleaning costs
- Furniture, appliances, décor (all the things that make a house a home) Ongoing costs like property taxes, home insurance, utilities, maintenance/repairs.
Let’s debunk some common myths about mortgages:
That is incorrect. A pre-approved amount is the maximum you can get for a mortgage, doesn’t mean its guaranteed. During this process, your lender verifies your financial information and obtains your credit bureau report. However, getting pre-approved is still beneficial because:
- You save time looking only at houses that you can afford.
- You have an idea of what your monthly mortgage payments.
- You know how much you need for your down payment.
- We can hold your rate for 90 days while you shop for your home.
“Getting pre-approved for a mortgage is like having a roadmap to your dream home. It not only saves you time but also gives you a clear picture of your financial obligations,” says Tracy Houck, Senior Financial Consultant with Westoba. “It’s a smart move.”
That is incorrect. You are required to have at least 5% of the purchase price for the down payment. If you have less than 20% for your down payment, your mortgage is considered high-ratio and will require mortgage default insurance. We work with two partners to offer you high-ratio mortgage options.
- Canada Mortgage and Housing Corporation
- Sagen (Formerly Genworth Canada)
There is a program from the Government of Canada called the First-Time Home Buyer Incentive. This program will lend you 5% of the value of your first home purchase or 10% for a build, towards your down payment. Learn more here.
While you can technically do so, ending your mortgage term prematurely may result in a penalty. We understand that life can change quickly, and sometimes a move is part of that change. Ask your Financial Consultant for more information.
That is incorrect. You can use up to $35,000 from your RRSP to purchase your first home. The Government of Canada offers The Home Buyers’ Plan, which allows first-time home buyers to access their RRSP funds. Some things to consider: The funds must be repaid to your RRSP within 15 years, starting the second year after withdrawal of funds.
There are eligibility requirements. Learn more here.
No, that’s incorrect. Just because you make a lot of money doesn’t automatically qualify you. You still need to go through the approval process. Westoba will look at your overall Financial Status, which includes five different factors.
No, to qualify for a mortgage, your lender will consider five factors.
- Assets and Liabilities
- Employment History
- Credit History
- Value of property you want to buy
“Having a high income is a great starting point, but lenders look at various factors to assess your mortgage eligibility. It’s important to present a strong overall financial profile,” says Tracy.
It is essential to make sure you buy a property you can afford without overpaying for the property you desire.
Buying your first home with Westoba
At Westoba, we want to make your journey to homeownership as smooth as possible. That’s why we offer tools and services tailored to Gen Z’ers like you:
- Mortgage Matchmaker Quiz: Take our quick three-minute quiz to kickstart your path to finding the right home. Once completed, we’ll send the results straight to your email. It’s a fun and easy way to get started!
- Advanced Mortgage Calculator: Wondering what you can afford? Our free calculator can give you an idea of the total monthly cost. It’s a handy tool that helps you determine a budget and narrow down your options.
- Rate Lock: We understand that finding your dream home takes time. That’s why we can hold your rate for 90 days while you shop around. It gives you the flexibility to explore without worrying about sudden rate changes.
- Expert Guidance: Our team of mortgage experts are here to support you throughout the entire purchasing process. We’ll provide you with the knowledge and insights you need to make an informed decision. We want your first home to be a place you can enjoy for years to come!
So, whether you’re saving up for a down payment, navigating the pre-approval process, or considering using your RRSP, Westoba has you covered. We believe that by dispelling these mortgage myths, we can empower you to make confident choices about your financial future.