A step by step guide to buying your first home

Taking your first step into the housing market? Congratulations! Buying your first home is a major milestone, and you should be proud of this accomplishment. However, buying a home for the first time has many unfamiliar steps involved and, let’s be honest, with it can come plenty of confusion and stress.

How are you possibly supposed to know the rules and regulations around financing and qualifying for mortgages, and what is CMHC, and what is this new loan offered in B.C., and– okay, slow down. The team at Interior Savings has your back. They know that first time home buyers want to have all of the information needed to make such a big decision, so they have provided a guide and, the good news is, you’re not alone.

Let this serve as your complete guide to get your foot through the door of your first home.

Do Your Homework

Before you set up any meetings, determine your wish-list of features you want in your future home. Consider factors like location, price range, zoning, amenities and transportation. Having a detailed checklist will save you both the time and disappointment of looking at homes that don’t fit into your criteria. If you map out both your wants and needs in order of importance ahead of time, your options will become much more focused.

Build your dream team

To get into your dream home, you’re going to need a dream team. Starting with a mortgage pro, you’ll also need a realtor, appraiser, home inspector and lawyer. You’ll find these professions work very closely together, so find someone you can trust, and they are sure to have some recommendations on who else would be a good fit for your team. Interior Savings even has a mobile mortgage specialists team readily available to meet you for coffee, at your office or at your home for convenience and comfort as you tackle this exciting experience.

Look for assistance

With the newly implemented qualifying rules by the Federal Government, the process can seem even more daunting. By restricting the amount you can borrow with less than 20% down (the slot where most first-time home buyers fit) the number of houses in your price range may have shrunk. However, B.C.’s provincial government has stepped in and are wanting to “partner” with first time home buyers to make their down payment more affordable.

Both the Provincial and Federal Governments have taken steps to assist you in the home-buying process. If you qualify for any one of these programs, they can be a valuable resource in turning your dream home into reality.

The First Time Home Buyers’ Program

The First Time Home Buyers’ Program was introduced in 2009 to reduce or eliminate the amount of property transfer tax you pay when you purchase your first home. Click here to see if you qualify for partial or full exemption from the tax.

The BC Home Owner Mortgage & Equity Partnership

Also known as the BC HOME Partnership, this program improves affordability for first time home buyers through a repayable down payment assistance loan. It is registered as a second mortgage, with a 25-year term and is interest and payment free for the first five years.

Borrowing from your RRSP

Canada Revenue Agency allows you to borrow up to $25,000 from your RRSP to put towards your first home. Follow this link to see if you are eligible for the program.

Get approved

The first step towards being approved for a mortgage is to understand the factors that define whether you qualify or not, typically broken down into four main components: your credit, your ability to pay, your down payment and your collateral.

It is best to work with a mortgage specialist and provide them with all the necessary information upfront to understand you and your goals for a mortgage loan. You will need to provide information about your employment, information about all sources of income, banking details, proof of any assets, details of loans or debts and evidence of a down payment.

Your credit

Simply put, credit is your reputation as a borrower, and it serves as an accurate indicator to the lender of your reliability. Your credit score will be the primary measurement factor when it comes to your mortgage. To check your credit online for free, check out this great resource from Credit.com.

Your ability to pay

Capacity is a combination of factors that indicate your ability to repay the loan, such as your income, savings and monthly debt payments.

Your down payment

Your down payment is summed up as how much money you will be investing in the property, also known as your capital. The amount needed for a down payment depends on the amount of the loan, along with the terms of the mortgage.

Your collateral

In this case the collateral is the property, which acts as the security provided to the lender. The property will be evaluated according to its value, locations, and characteristics even if you have been “pre-approved.”

Shop the 2017 market

Here’s the fun part. As you start looking at properties, it can be exciting to imagine your future based out of a new home, and having a team of professionals to guide you through the process can put your mind at ease. They will ensure that the decision you make today will have a positive effect on your future.

Your local Interior Savings Credit Union has a mobile mortgage specialists team ready to help you through every step of the process, and will work with you to build the independence, wealth and stability that can come from owning your home. Visit their website or call 1-844-841-HOME today to get started, and happy house hunting!