First Time Home Buyer

• You will typically need to provide proof of income
• Have a relatively good credit rating. If you have a poor credit rating don’t worry we can help you.
• Verifiable down payment.
• You must fill out a pre-approval form on this site.

What can I use as a down payment

• You can use money from your RRSP (provided you are buying your first home)
• You can use a money gift from immediate family.
• Accumulated savings
• Some lenders will accept borrowed money for a down payment as long as your Gross Debt service Ratio’s and Total Debt Service Ratio’s are in line. Don’t worry that is our job to figure this out!!

What are the costs associated with getting a mortgage?

• There are legal costs that have to be paid which are typically between $600 & $1000 that are charged by the lawyer.
• You have to have fire insurance
• In some cases an appraisal is required on the property which costs around $400.

Do I need a pre-approval?

• This is probably a good idea. This way you can get an idea on what you can afford. Having a pre-approval will allow you to lock in your interest rate for up to 120 days. Contact us for a pre-approval by filling out a mortgage application. Don’t worry; you do not have to commit to anything.

How much can I qualify for?

• This will depend on your income and your current debt load. Contact us and we can help you work out the numbers.
• Why would I work with a Mortgage Broker/Agent?
• A Mortgage Broker/Agent works for you, not the lender. We have access to all lenders across Canada, which will allow us to negotiate better rates for you than you could get on your own.
• If you are Business For Self (self-employed) than you should work with us as we have special relationships with lenders that deal specifically with you.
• How much do I have to pay the Mortgage Broker/Agent?
• Nothing. The lender who funds the mortgage pays mortgage professionals. If you have challenged credit there may be a fee charged depending how difficult it is to get you the money. We are here to work for you to get you what you need. Give us a try. We will do our best for you.

Buying a home is a big financial commitment, and if you are renting perhaps it’s time to make a commitment to homeownership. Here are some common questions that many renters may be asking themselves about homeownership.

Q. How much house could my rent buy?
A. If you are paying $1,250 in rent each month, you could be carrying a mortgage of $189,061. If you are paying $1,500, that is potentially a mortgage of $238,080. Paying rent of over $1,750 each month? You could be paying off a mortgage of $297,098. We are currently experiencing historically low mortgage rates. You also have the benefit of accessing longer-amortization mortgages that lower your monthly payment. (all of these examples are based on the combination: a 5.3% rate and 35-year amortization, 5% flex down-payment plus 3.5% insurance premium, property taxes and heat of $285 per month)

Q. Can I really buy a house with little money down?
A. You can buy a home with 5% down and use some of the flexible options to obtain the down-payment, for example, from gifts, through borrowing or cash-back incentives.

Q. If I am self-employed, do I have to prove my income to get a mortgage?
A. No, not in today’s mortgage world. You can now qualify based on the income that you say you earn. This kind of mortgage is know as “stated income”  because the lender takes into account the income you state, and not the income you can prove. The income should be reasonable and the lender may want proof of your self-employment and may require up to 10% down-payment.

Q. Are there extra costs to consider?
A. Yes, you need to consider land transfer tax, property taxes, the cost of utilities, furnishings for your home and any needed repairs. If you are concerned with these extra costs, cash back mortgages can offer some needed up-front cash.

Q. Where do I start?
A. Talk to a mortgage agent from homerate.ca. Why? A mortgage broker/aent deals with over 50 lending institutions, including major banks, credit unions, trusts  and other national and regional lenders, which means that they can put significant negotiating power behind finding the best mortgage to fit your specific situation. This service costs you nothing (OAC). Instead, the lender selected pays compensation for the services and solutions provided. And since a mortgage broker’s business is built primarily through referrals from satisfied customers, your positive mortgage experience is essential.

Using your RRSP to become a first-time homebuyer.

If you have not purchased your first home and you have been putting money away into your RRSP, you can have that elusive down-payment for your first home> Your RRSP can help you make your dreams come true. Under the Home Buyer’s Plan, you can tap your RRSP and borrow from yourself tax-free to help with your home purchase. You then pay yourself back later.

Of course, your RRSP savings are always accessible (it is your money after all), but when funds are withdrawn, they are taxable in the year of withdrawal unless you comply with certain rules – and being a first-time homebuyer is one of them. You can withdraw up to $20,000, and if your spouse qualifies as a first-time homebuyer, he or she will be able to with draw an additional $20,000. Between the two of you – you could put down a downpayment of $40,000.

Here’s how it works: you enter into an agreement to buy or build a home before making a withdrawl. If must be for your principal residence (no rental properties), and to qualify as a “first-time homebuyer”, you cannot have owned a home for four full calendar years. If your spouse did own a home within tht period, you can still withdraw as long as the home was not your principal residence while you were married or living common law. If addition, you must withdraw no later than 30 days after the closing date.

After you make a withdraw, you must close on your home by October 1 of the year that follows the withdraw, a requirment tht can be extended under certain conditions. Almost any kind of home will qualify – single family, semi-detached, condo, under construction – as long as it is in Canada. Your mortgage professional from HomeRate.Ca can give you more details.

The Home Buyer’s Plan is one of the most attractive federal programs available to Canadian homebuyers. After all, saving up for a downpayment takes time and can be a real challenge when  you have so many other expenses. But the Home Buyer’s Plan lets you mesh your RRSP strategy with your homebuying plans. A solid downpayment is one factor lenders look for when assessing risk.

Keep in mind that for your own good and to meet the program’s requirements -  you are expected to pay yourself back. Repayment begins the second year following the year of withdraw. So if you withdraw in 2009 starting in 2011, or in effect, by the RRSP deadline of that year (i.e. March 1, 2012). You have up to 15 years to repay, and each annual repayment must be at least one-fifteenth of the withdrawn amount.

If you want more detailed information on the program, get a copy of Canada Revenue Agency’s booklet RC4135 – Home Buyer’s Plan (HBP), which is available on their website at www.cra-arc.gc.ca. Also look for Form T1036, the required form for requesting a withdrawl.

If you are thinking about buying that first home make sure that you are working with a mortgage agent from HomeRate.Ca and start asking some questions. We deal with over 50 lending institutions, and can help you compare mortgages from the banks as well as non-traditional lenders. We do not work for the lenders, our advice is free, and there is no obligation.