Triston Rans - Calgary Mortgage Associate

First Time Home Buyer Mortgages

Congratulations! Buying a home for the first time is a fun and exciting process. You have good credit, a job, and now you’re ready to buy your first home!

Buying your first home is a big decision and it’s a decision you’ve likely put a lot of thought into. Now that you’re ready to buy your first home you might be asking “Where do I start?”

First time home buyers can take advantage of many financing offers not available to seasoned home purchasers. These first time home owner initiatives include the Home Buyers Plan (HBP), Gifted Down Payments and 100% Financing.

What Are the Steps to Buying Your First Home?

1. Get Pre-Approved for a Mortgage
2. Prepare Your Down Payment
3. Hire a Realtor
4. Hire a Home Inspector
5. Have all your Documents Ready
6. Hire a Real Estate Lawyer
7. Take Possession!

1. Get Mortgage Pre-Approval

If you are even thinking about purchasing a home, have played with a mortgage calculator, maybe browsed the Calgary home listings on MLS.ca or gone through an open house, you’ve already started the home buying process.

Now it’s time to see what you can afford BEFORE you fall in love with a house that is out of your budget.

Getting mortgage pre-approval is a must in Alberta’s booming real estate market. Getting pre-approved for a Calgary mortgage lets you know the maximum amount you will be allowed to borrow for your home. Knowing your mortgage limits will help you house-hunt with confidence. Mortgage pre-approvals also let sellers know that you are serious about buying their home.

You mortgage pre-approval interest rate is a guaranteed rate for 90-120 days after pre-approval. This ensures that you receive the best mortgage rates possible when it comes time to make your offer. If interest rates drop between the time you are pre-approved for your mortgage and when you find your new home – ask your Calgary mortgage broker about locking in at the lower interest rate. View current mortgage rates here.

To get pre-approved for a mortgage today fill out an Online Mortgage Application Form or email Triston Rans. Your first time home buyer mortgage pre-approval can usually be done in under half an hour and you can get mortgage pre-approval directly over the phone.

2. Prepare Your Down Payment

One of the hardest parts of buying a new house is saving up a down payment. As a recent graduate, newlywed, or if you are new to the workforce saving up a down payment can be nearly impossible. Traditional home down payments are 20% of the purchase price. In Calgary, where home prices are nearing an average of $500,000 this can mean a $100,000 down payment.

As a first time buyer you have the opportunity to take advantage of the Home Buyers Plan. The Home Buyers Plan allows you to withdraw up to $20,000 from your RRSPs. If you plan to take advantage of the Home Buyers Plan, you should make sure that you have notified your financial adviser. You will then be required to fill out a T1036 form for Revenue Canada. Receipt of your funds may take some time so it is important that you request your funds early on in your home buying process.

First time home purchasers are also able to receive a portion of their down payment as a “gift”. If you are receiving monetary help for your down payment you will be required to supply proof in the form of a letter that states who is giving you the money and what it will be used for.

No RRSPs? No lump sums of cash coming from friends and family? No Problem!

New home owners can take advantage of 100% financing for their new home purchase. If you have no down payment, good credit, have been in the same line of work for 2 years and have been at your job for 6 months or more you can buy a house with 0% down payment. All you need are the funds to cover a deposit and legal fees. When exercising this option, the Canada Mortgage & Housing Corporation (CMHC) / Genowrth high ratio insurance comes into play.

For more information on which first time home buyer financing options are right for you, contact Triston Rans today.

3. Hire an Experienced Realtor

Working with a Realtor can make the process of finding a house a lot simpler. Let your real estate agent know what location, size, amenities and price you are looking for and they can find the Calgary homes for sale that fit your needs. Calgary Realtors can also book private showings and answer the tough questions you’ll want to know about your future home such as neighborhood characteristics and property prices before you buy.

Your Realtor will also be able to negotiate the best price for you when you find the home of your dreams.

Triston Rans works with dozens of Calgary Realtors. If you would like the assistance of a Realtor to help you find your dream home, feel free to contact the Calgary Realtors below or contact Triston for a recommendation.

4. Hire a Home Inspector

Home inspectors ensure that your dream home doesn’t become a nightmare. Hiring a home inspector to make sure the Calgary home you love is a safe and sound building and investment can save you time, money, and worries. Home inspector reports will let you know the full extent of damages and deficiencies to your new home. If there are substantial home inspection short comings and you still wish to purchase the home you may also be able to negotiate a lower home purchase price.

5. Have all your documents ready

From mortgage pre-approval to signing the final purchase contract, there are many documents you will need to sign and provide to complete the mortgage process. Triston Rans will let you know exactly which documents are needed and when they needed. For most mortgage applications you will be required to provide:

  1. A Letter of Employment
  2. Your Most Recent Pay Stub
  3. Statements indicating the source of your down payment. If you are putting a 5% down payment on your mortgage, lenders may ask that you provide 3 months history of your down payment by providing them with your bank records. Mortgage down payments of 5% down will also require proof that you can pay 1.5% of the purchase price for closing costs.
  4. Home Purchase Contract and All Amendments
  5. A Void Cheque for Mortgage Payment Account Information
  6. A Copy of Your Drivers License and One Other Piece of ID

6. Hire a Real Estate Lawyer

Real estate lawyers know your rights as a first time Calgary home buyer. They will advise and guide you on the home purchase contract and other mortgage documents. Your Calgary real estate lawyer will also be able to answer questions you have about the legal terminology in those documents in a way us non-lawyers can understand.

Most real estate lawyers will want to meet with you a month before your closing or possession date to review the legal documents associated with your new home purchase.

7. Take Possession!

Roll out the welcome mat and call your friends with trucks – you are now the proud owner of a new home!

Still have questions? Contact Triston for all your mortgage information.

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