Written by: Jennifer Sullivan | Member Advice Specialist | Parkhill Branch
Are you considering buying your first home? Do you feel like you have a lot of questions and are unsure about how to navigate the mortgage and home financing process?
Mainstreet advisors are experts in providing you with mortgage advice and can help walk you through this exciting time and the necessary steps when purchasing your first home.
Here are a few important first steps when considering buying your first home.
Down payment and closing costs
In Canada, your down payment must be between 5-20% of the home’s total purchase price. If you have saved 20% or more you can avoid paying mortgage default insurance. Any down-payment under 20% is subject to taxable lender protection insurance. Premiums are based on both the down payment and the size of the mortgage. Note: If your down payment has been gifted, it must be accompanied by a letter stating that.
Another item to consider as a first-time homebuyer is government programs that are available to assist with your down payment. The Home Buyers Plan (HBP) allows you to access funds from your Registered Retirement Savings Plan (RRSP) to put towards the purchase of your first home. There is also the First Time Home Buyers Incentive which offers 5 or 10% of the home’s purchase price as an addition to your down-payment. If you are interested in any government programs we can discuss this together at your mortgage appointment.
With saving funds for your home purchase in mind, don’t forget to budget and save for added closing costs. Closing costs are not a factor that initially comes to mind as a first-time homebuyer. These costs include legal fees for your lawyer, title insurance, taxes, inspections, and appraisals. Closing costs can quickly add up, so make sure to include this in your savings plan.
A great first step on your journey to preparing to buy your first home is to speak to a Mainstreet mortgage expert by booking an appointment online, visiting a branch, or speaking to a Member Experience Centre (MEC) representative. Gather your supporting documents and bring them to your meeting. Together we’ll discuss your home-buying goal, review your financial background/credit, and determine the best price range for your income and budget that suits your needs. After the pre-approval meeting, it’s happy house-hunting! Don’t fear your Mainstreet mortgage, a financial expert will be by your side from start to finish, available for questions as you need us by email, phone, or in person.
As first-time home buyers we know this can be an overwhelming experience, don’t be afraid to ask questions or seek advice. All of us at Mainstreet Credit Union are here to help our members and you realize your home-buying dream.