First-Time Homebuyer
Is it time to purchase your first home?
We are your trusted advisor throughout your first home-buying process. We will answer all those questions you have and help ensure that everything goes smoothly from start to closing on time.
WHAT DO YOU NEED TO KNOW?
AFFORDABLE PAYMENTS
The AG Mortgage Team is always available to help you find the best mortgage for your needs. We will explore all your options to find a mortgage payment solution that works perfectly for you and won’t add any stress on top of your monthly payments.
CLOSING COSTS
You must always be aware of the potential costs. We take into consideration closing costs so that they do not become an unexpected burden.
FIXED OR VARIABLE INTEREST RATE
One of the biggest considerations when taking out a home mortgage is choosing a fixed or variable interest rate.
With a fixed-rate mortgage, your monthly payment will stay the same for the length of your loan, even if market interest rates rise.
With a variable-rate mortgage, your monthly payment will fluctuate and market rates within our prime interest rates. However, it may offer the potential for lower interest payments if rates fall.
As a result, choosing between them depends on your personal and financial situation, and we will help you make the right decision.
THE BENEFIT OF GETTING PRE-APPROVED
One of the benefits of getting a pre-approval for a mortgage is that it gives homebuyers a transparent understanding of their budget. With a pre-approval, homebuyers know precisely how much they have to spend, which can help them narrow their search to homes within their budget. Additionally, pre-approval often makes home sellers more willing to accept an offer from a homebuyer, as it shows that the buyer is serious about purchasing the home.
FIRST-TIME HOMEBUYER PROCESS – IMPORTANT ELEMENTS
PRE-APPROVAL IS NOT A FULL APPROVAL
It’s easy for first-time homebuyers to misunderstand a pre-approval as a full approval during applying for a pre-approval. It’s not an approval or full validation of their ability and qualification for the mortgage they are applying towards, rather it’s an estimate based on information provided with your application process. A pre-approval is a great way to understand which loans you’re eligible for and your estimated budget, but it doesn’t guarantee that the bank will approve anything.
INSPECTION & APPRAISAL
As a homebuyer, it is important to have a property inspected and appraised. An inspection will identify any potential problems with the home, such as structural damage or plumbing issues. An appraisal will provide an estimate of the home’s value, ensuring that you don’t pay more than the property is worth. Having both an inspection and appraisal conducted can give you the confidence that you are making a wise investment in your new home.
DEPOSIT
As a first-time homebuyer, you should know that you may pay a deposit besides the introductory purchase offer. The deposit is a way of demonstrating to the seller that you are serious about buying their property. It’s not required, but the deposit may reach up to 20% of the property’s price. The best way to deal with this decision and be prepared is to consult your attorney or real estate agent.
DOWN PAYMENT
It’s common among first-time homebuyers to misconceive that the deposit and the down payment are the same. Nevertheless, there is a big difference between them. The deposit is an act of goodwill towards your seller, while the down payment has to do with purchasing a first-time home. You will still be required to pay a down payment for the mortgage, even though you’ve already paid a deposit. The paid deposit will be deducted from the required down payment at closing.
FIRST-TIME HOMEBUYER ADVANTAGES
With the Homebuyer Plan program, you can withdraw up to $35K from your registered retirement savings plans (RRSP) in a calendar year and buy or build an applicable home for yourself or a disabled related person.
If you’re buying a home for the first time, claiming the first-time homebuyer credit can land you a total tax rebate of $750. This federal program is designed to help make homeownership more affordable for first-time homebuyers. This benefit is available for to all qualifying Canadian taxpayers.
As a first-time homebuyer in Ontario, you can qualify for an affordable refund. The Land Transfer Tax Rebate aims to provide new homeowners with up to $4k, equal to the total amount of the land transfer tax.
You may qualify to receive the GST (goods and services tax) or HST (harmonized sales tax) that you paid on the purchase price or on the cost of substantially renovating or building a major addition to your existing house. There are some situations where you may be eligible for a rebate that can reduce the amount of the tax you have to pay by up to $750.
You don’t have to be a first-time homebuyer to take advantage of this benefit! You can still get some of the best variant rebates by ensuring your home is energy efficient.
PROCEDURE OF BUYING HOME
REQUIRED DOCUMENTS FOR YOUR MORTGAGE
Current employment status and income amount as:
- Copy of current payroll.
- Proof of current electronic deposited pay.
- Associated Notice of Assessment (NOA) & T1 General.
- Additional income sources (if any).
- A List of your current assets and obligations.
- Bank account alongside transit number for payments.
- CIBC Pre-approved Mortgage Certificate (if valid).
- Statement of investments from within the latest 90 days or savings.
- Withdrawing an amount from RRSP through Homebuyer’s Plan (if valid).
- Gift letter.
- Copy of the sale agreement of a sold current asset.
- A copy of the real estate listing.
- A copy of the sale agreement and accepted purchase.
- Full address of the property (legal description and postal code).
- Tax estimates of the property, heating costs, and condo fees (commonly, you may find these details on the real estate listing).
- Well and septic certificate regarding rural properties.
- Lawyer’s full details (name – address – telephone and fax number – postal code).
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