Are you ready to buy your first home? Applying for the mortgage is the most important step. Find out what you need to know to get started today with our first time home buyers guide to applying for a mortgage below.
Check Your Credit Score
Few lenders will work with you if your credit score is lower than 600, so before you start applying for a mortgage it’s wise to check your credit score first. If there are any errors, now’s the time to have them corrected before you apply for a mortgage. In the event that your credit score is low, you can take the steps necessary to raise it to a level where you can qualify. Even if you have a decent credit score, you might want to consider increasing it now. The higher the credit score, the lower the rates, saving you hundreds of dollars in interest fees.
Set Up a Phone Appointment with a Mortgage Broker/Agent
The mortgage options that your bank offers might not be the best for your financial situation. But you won’t know what other options are out there if you don’t shop around. The role of a mortgage advisor is to do just that – assess your needs and review all the different mortgage plans and rates to find a mortgage that suits your budget and lifestyle. So before you contact your bank, reach out to a mortgage advisor to review all of your options.
Before you start looking for properties, you should get pre-qualified or pre-approved for a mortgage. This will help you to understand exactly how much you can afford before you start house hunting. It can also signal to sellers that you’re serious about buying and have the money ready to purchase now.
Get All Your Documentation Ready
Your mortgage advisor will need a number of documents from you to start the process. This will include income and employment verification, as well as proof of down payment. Your mortgage advisor will let you know exactly what documents to have ready for your first meeting and as part of the conditions when you are approved.
Research the Incentives
There are a number of incentives available to you that will help you qualify and reduce your monthly mortgage payments as a first-time homebuyer. One is the First Time Home Buyer Incentive offered by CMHC that is a shared equity mortgage with the Government and offers 5 to 10% for a newly constructed home or 5% for a resale home. This added bonus can help offset the down payment to lower the monthly costs. Your mortgage advisor will explain all the available incentives and help you to decide which ones are right for you.
There’s a lot to learn when it comes to navigating through your first mortgage. Fortunately, a mortgage advisor will help you every step of the way. You can check our mortgage calculator to have a first estimation or contact us to set up your consultation today.