Frequently Asked Questions

Buying your first home can be an exciting time, but it can also be overwhelming. That’s why it’s important to work recommend, qualified professionals. These real estate pro’s will help you with the process and ensure you’re ready for every step: 

• Ensuring you are ready for homeownership (ex: have you been pre-approved?)
• Explain & budget for the overall cost of homeownership
• Finding the perfect home
• Getting an accepted offer
• Arranging your new mortgage
• Get ready for closing day!

Are you ready to get started? Create your free buyer listing today. This will help sellers and Realtors see if their property is a good fit for you! 

There are a few ways to tell if you are ready to buy your first home. 

1. You’re going to want to create a budget. This will help you understand the overall monthly cost of owning a home. 
2. Do you have a down payment saved? A down payment can come from your own savings, potentially RRSP’s, and / or gifted funds from an immediate family member. It’s always best to confirm your down payment with your mortgage broker, to ensure its an eligible source of down payment. 
3. Have you been pre-qualified or pre-approved? This will help you understand you max purchase price. Also, more and more sellers are requiring written confirmation that you have your financing ducks in a row. 

Upfront Cost

• Down payment
• Property Transfer Tax (if you are not exempt)
• Appraisal fee (if required)
• Legal fees 

Note: These are typically referred to as “closing cost”.

Ongoing Cost

• Principle and interest Payments for your new mortgage
• Municipal Property Taxes
• Heating
• Utilities
• Gas
• Home insurance
• Condo fees (if applicable)
• Ongoing repairs & maintenance of your new home

Be sure to complete this budget sheet to learn about your overall estimated monthly cost. It will include things like childcare and cell phone bills! 

As a first-time home buyer, you are going to want to ensure you have a sufficient down payment before you start shopping for your home. 

Here are some tips!

• If you are purchasing your primary residence, you may be eligible to put as little as 5% down payment
• You may be eligible to use your RRSPs towards your down payment, tax free! 
• You may qualify for a downpayment assistance program, called the First-Time Home Buyers Incentive
• You may be eligible to purchase a home with. gifted down payment from an immediate family member

Did you know?

When purchasing a home for above $500,000 – the rules for minimum down payment change. Anything for $500K and under can be subject to the 5% minimum down payment. But anything in excess over the $500K will require 10%. 

Here’s an example:

Judy & John purchase a home for $650,000.
-The 1st $500K is subject to 5% = $25,000
-The remainder ($150,000) is subject to 10% =  $15,000
-> $25,000 + $15,000 = $40,000 minimum down payment. 

This can have a major impact if you think that the minimum down payment is always 5%. As you can see, thats a difference of $7,500 –

It’s always best to confirm these details with your mortgage broker, to ensure you are prepared for all the cost of buying a home. 

Want to learn more about your max purchase price based on your down payment? Download this free mortgage broker app!

The two sound similar don’t they? Many buyers get them confused. 

Pre-Qualification
In the simplest terms, a pre-qualification is when you run the numbers yourself (like on this free app) or give basic information to a mortgage broker. 

Pre-Approval
A pre-approval is when the mortgage professional physically reviews all the documents of your file. This includes reviewing your income documents, down payment, assets & credit statements. 

Usually people will start with a pre-qualification. This will give you a good idea of some rough numbers on your max purchase price. Once you’re ready to proceed or get more serious about shopping, start the pre-approval process with your mortgage broker. Wait for them to give you the two thumbs up before you start shopping for a home. Pre-approvals are still subject to lender & default insurer approval (if applicable). 

Final Approval
Once you have an accepted offer in place for your new purchase, your Mortgage Broker will submit your application to a lender & default insurer (if applicable) for full approval. At this time, it will be determined if an appraisal is required. Once they issue you a full approval, there will be a list of conditions that you and the Mortgage Broker have to satisfy before removing your financing subject. Once you satisfy everything, your broker will advise you are safe to remove subjects. You’re realtor will help you with the next steps!

Do I need to be pre-approved before I start working with a Realtor?
No, you do not. But most Realtors will recommend that you speak to a mortgage professional before you get started. This will help you shop within your price range. Also, with how competitive the market is now, most sellers are requiring confirmation that you have been pre-approved before they take your offer seriously.

So…no it is not required, but it’s definitely recommended. 

Get an instant Pre-Qualification Certificate -> Click here

Apply for your mortgage online -> Click here

Connect with a Mortgage Broker -> Click here

Ready to start shopping for your home? Find a local Realtor -> Click here

With house prices on the rise, it is becoming more and more common that buyers need to add someone else to the application in order to qualify for their home. 

Co-Signer
When you don’t qualify for the mortgage on your own (due to income and/or debt), this is when a co-signer is added to the application. The co-signers income & debts are added to the application, along with yours, to see if they can increase your borrowing power. 
If approved, the co-signer will be added to your mortgage and the title of the property. They will share an interest in the property with you. This will also reflect on their credit bureau as a debt and can affect their own borrowing power in the future. 

Guarantor
When you don’t qualify for loans due to poor credit, no credit history or lack of assets – this is typically when a guarantor is added to the application. In some cases couples can request one applicant be a guarantor for liability reasons. 

Quick tip: To easily remember this [ If income is required to help you qualify, this is typically a co-signer ]. This is the most common. 

***This is for information purposes only and should be verified by a Mortgage Professional and/ or Lawyer or Notary before making any decisions. 

The Stress Test doesn’t have to be so stressful if you’re prepared for it. 

This was implemented years ago to ensure buyers were being approved at a higher rate, so that in the future if rates increase – you can still afford your payments. 

Currently, the stress test is:

•  5.25% or
• Rate + 2.0%

This means you have to qualify for your mortgage with one of these two options, whichever is higher. 
*Rates are subject to change without notice

You don’t have to pay this rate when your mortgage closes. Your payment will be based on the rate your Mortgage Broker was able to secure for you. 

Yes, it kind of sucks that the stress test reduces the amount you are approved for.

But think of it this way… imagine you were approved at 3.0% and rates increase to 4.0%… Would you be prepared for this increase (could mean an additional hundreds of dollars a month)? With the stress test, you can rest assured that you’ve been approved to afford your payments around 5.25%. So there is some wiggle room there if you come up for your mortgage renewal and the rate is higher than before.

This free mobile app lets you play with the numbers and keeps the Stress Test in mind. 

Let a Mortgage Broker help you -> Find one here