READY TO BUY YOUR FIRST HOME? YOU'RE IN THE RIGHT PLACE.
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MORTGAGE BASICS FOR NEW HOMEOWNERS
First and foremost, meet with a mortgage broker to gain a clear understanding of your financial situation and how it impacts your ability to purchase your first home. If you don’t have one already, instead, we’re happy to refer you to a trusted partner who can guide you through your options.
GATHER YOUR PRE-APPROVAL DOCUMENTS
- Income Qualification: T4s, Paystubs, RRSP, and Your Employment Letter
- Credit Verification: Credit Report, Outstanding Debt, Past Collections etc.
- Government Issued Photo ID: Driver’s License, Passport, Ontario Photo Card, Status Card etc.
- Gift Letter: Obtain this document if a family member plans to contribute to your home purchase
4 THINGS TO AVOID ONCE YOU ARE PRE-APPROVED
- Avoid making any big purchases
- Avoid quitting or changing jobs
- Avoid applying for new credit
- Avoid co-signing on a loan
THE FINE PRINT OF BUYING YOUR FIRST HOME
Government Incentives for First-Time Buyers in Ontario.
HOME BUYER’S PLAN: enables you to withdraw funds from your Registered Retirement Savings Plan (RRSP) to buy or build a home. This program allows you to withdraw up to $35,000 without being taxed. This Plan allows you to pay back the withdrawn funds within a 15 year period.
Source: Canada HBP
HOME BUYER’S TAX CREDIT: enables you to claim up to $5000 for the purchase of a home on your personal tax return for the year of purchase. This helps to cover any closing costs.
Source: Canada HBTC
CANADA’S FIRST TIME HOME BUYING INCENTIVE:
Is a shared-equity mortgage aimed at LOWERING first-time home buyers monthly mortgage payments WITHOUT increasing the amount you need for a down payment.
- The government contributes 5-10% of the purchase price
- The Loan is INTEREST-FREE
- The Loan must be paid in full within 25 years of when the home was purchased and/or when the home is sold.
HOW TO KNOW WHEN YOU’RE READY TO BUY
Points to stay within your comfort zone as a First-Time Home Buyer:
To begin with, aim to keep your monthly mortgage payments below 40% of your household take-home income
Additionally, Save up at least 5% of the purchase price for your down payment
Ideally, you want to try to keep your credit score above 680
Finally, plan to stay in your new home longer than 3 years to cover your upfront costs.
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RE/MAX Realty Services Inc.