How Can A Mortgage Brokerage Help You Get Your First Home?
Getting ready to buy your first home is such an exciting time. Down payments, credit scores, amortization, new home buyers have a lot to think about. A mortgage brokerage can help you to buy your first home the right way and save money in the process. Remember that this is a huge commitment and a somewhat time-consuming process. Working with a mortgage brokerage can simplify the home buying process.
What Do You Know About Mortgages?
First and foremost, you’ll need to learn a lot about mortgages before you dive in. From the simple things such as the difference between a fixed and variable rate mortgage to more complex terms such as amortization. A mortgage brokerage will break it down for you to help you understand how mortgages work.
What Type of Home Would You Like to Buy?
Have you been saving for years in order to have a large enough down payment to buy your dream home? Would you like to take a mortgage as a self-employed individual? Do you have bad credit or need debt consolidation to manage your outstanding balances? A mortgage brokerage will discuss with you to better understand your unique financial situation. They will take the necessary time to know your story, goals and help you make the right steps to achieve it.
What Can You Afford?
It is important for the mortgage brokerage to understand your affordability. It’s the only way they can help you find a home that you can afford. Work around your budget by eliminating your monthly expenses and desired savings. The remainder is what you can afford to pay for a mortgage. You can use a mortgage calculator to determine how much you can afford after making a particular down payment size.
Do You Have Any Down Payment?
If you have not saved your down payment yet, you can start by building a plan to save depending on the type of property you want to own. There are various ways to get capital that will cover for your down payment:
- RRSPs can be used by first time home buyers for a mortgage down payment
- TFSAs can be cashed out to pay for a mortgage down payment
- Employee Share Purchase Plans can be used to cover for a down payment
The Government of Canada has also put in place many mechanisms to support home buyers. For instance, if you buy a house in Ontario, you can get a tax rebate. You may also get up to $5k in tax credits if you haven’t owned a home for 4 years.
What Does Your Credit Report Say?
Lenders will do a credit bureau check view your credit rating/score as a guide on how you have been paying down previous or existing debt. A mortgage professional can pull your credit bureau to better understand your credit payment history and use this information to position you to lenders for your first mortgage.
If you are interested in learning more or have any questions about this article, please don’t hesitate to contact me directly and I would be happy to answer any questions you may have.
Patrick Palmer: The Mortgage Cat
Licensed Mortgage Agent (Lic.#16000311)
South Oakville Centre, 1515 Rebecca Street, Unit c33, Oakville, ON L6L 5G8