When working with prospective homeowners to help them secure the first mortgage of their dreams, I do the hard work to ensure optimal results. Securing the lowest possible interest rates, with a term that is sensible for their time and budgetary needs, is of critical importance. However, if someone is looking into a first mortgage, there are several things they can do in advance to streamline this process – not to mention save further.
Let’s explore them in more detail together.
The down-payment, a lump sum paid to the seller once the deal on the home is closed, can significantly reduce your overall mortgage costs. I always say that it’s better to pay as much off this way as possible, but not everyone is in as ideal of a situation financially. Therefore, take a look at the minimum down – what you must pay in order to get the property. Do you have enough saved for it? Or, perhaps you need to wait a few more months to ensure you are financially stable.
Don’t rush this sort of thing. If you can comfortably pay off the minimum down right now and make regular monthly mortgage payments without worry, then great. That’s the position you want to be in, and again, I’d recommend increasing your down-payment beyond the minimum if you can afford it. This makes your offer not only more enticing to sellers, but you’ll have less of the total home cost to mortgage, which translates to less interest paid in the long run.
Getting preapproved by a recognized financial institution is important – it demonstrates trust in the borrower based on their credit score, employment status and annual earnings, and more. High-risk borrowing isn’t fun for anyone involved, so preapproval acts as a sort of vetting process to ensure the arrangement is solid and sensible.
Let’s say that you’re interested in a home that costs over $500,000, but your combined household income totals only around $70,000. While finding an ideal home for less can be a challenge, it’s unlikely that most banks would preapprove you for that much after comparing it against your income. Even if your credit score and other parameters are in good standing, you need to be able to realistically pay off every mortgage installment. I can, of course, assist you with getting preapproved for the amount you want, but be sure to work out whether the overall cost of the home is feasible in relation to your earnings.
Property fees, utility bills, maintenance expenses – paying for your first home isn’t only about the mortgage. Property ownership of any kind involves long-term costs, so let me help you check and recheck your overall costs of such an investment. That way, we can make sound decisions together on what price range and home type are best suited to your needs and budget. For example, owning a condo may come with sticker shock if you haven’t accounted for group fees, utilities or otherwise!
The government wants more people to buy than to rent, and that’s why kickbacks for first-time home buyers exist. In Ontario, for instance, there are benefits such as the Home Buyers’ Tax Credit of around $750, the Home Buyers’ Plan (HBP) that allows you to borrow against your RRSPs at a tax-free rate for the down-payment, and others such as eco-friendly and renovation credits for new builds.
If you’d like a hand with figuring out which mortgage is safe, comfortable and hassle-free for your needs and budget, I’m happy to assist. With plenty of lender connections including with major financial institutions, over 15 years of industry experience and having funded well over 2,200 mortgages, I’m here to eliminate guesswork and deliver peace of mind.
Let’s get in touch with one another and help you secure a mortgage that works for you.