Determine what you can afford
Before you start shopping for a home – and long before you consider putting an offer on one – let us help you determine how much home you can comfortably afford. With a pre-approved mortgage you’ll know the mortgage amount you qualify for and how much it will cost you to carry the mortgage. You’ll also get your interest rate guaranteed for a set period, typically 90 to 120 days.
Downpayment is one of your most important considerations before you look to purchase your new home. If you’re in the “saving up” stage of preparing for home ownership, this is a great time to meet with us so we can discuss your downpayment options. In most cases you want to save five percent of the purchase price, but there are other options which include:
If you have reasonable income security and good credit but are struggling to save up your downpayment, the zero-down mortgage can get you into homeownership much sooner. There are three zero-down mortgage options:
1. Borrowing the downpayment through a loan or unsecured line of credit;
2. Through a cash back mortgage that provides the cash upfront for some or all of the downpayment; or
3. If you can get the downpayment money gifted to you by a parent or other blood relative.
We can outline all of the details that you should be aware of with each option.
RRSP Home Buyer’s Plan
Under the Home Buyers’ Plan, if you are a first-time buyer, you can tap your RRSP and borrow from yourself tax-free to help with your home purchase. You then pay your RRSP back later. You can withdraw up to $25,000, and if your spouse qualifies as a first-time homebuyer, he or she will also be able to withdraw $25,000. For more detailed information on the program, get a copy of Canada Revenue Agency’s booklet RC4135 – Home Buyers’ Plan (HBP), which is available on their web site. Also look for Form T1036, the required form for requesting a withdrawal.
If you have less than a 20% downpayment you will need mortgage insurance, which is added to your mortgage amount.
Build a team of professionals
We’d be happy to help you build a strong away team so that all aspects of your home buying experience are efficient and professional. Your team will include a realtor, lawyer, and a home inspector.
Plan for closing costs
There are additional costs that come with buying a home so you’ll need to have some extra funds set aside to cover these costs. Generally, you can expect to pay between 1.5% and 4% of the home’s selling price in total closing costs. We can outline all of your closing costs so you won’t be caught by surprise.
Beyond the monthly payment
Remember that home ownership involves costs beyond the monthly mortgage payment such at utility bills, insurance, taxes, home upkeep. Get a realistic picture of those annual costs, and imagine that sum on top of your mortgage payment.
When you’re ready, here’s what we’ll need from you!
- Agreement of Purchase and Sale
- MLS Listing
- Contact information for your lawyer: name, address, phone and fax numbers
- 2 pieces of personal identification for all parties involved
- Income and employment verification
- Recent pay stub(s)
- Letter of employment
- Notice of Assessment(s) if self employed (NOAs)
- Proof of Down Payment
- Gift letter with bank statement
- Void cheque
- Copy of home insurance policy
An appraisal of the property may also be ordered.
We look forward to helping you achieve your dream of homeownership!