This is a helpful article from my associate, Jeff Evans, who is a mortgage broker with Centum. We work with many first time home buyers and if you are looking for your first home, contact me, we can help make buying a home easy.
First time home buyers are often overwhelmed with the home purchase process. As a mortgage broker, part of my job is to help make sure that you understand the process and to make it as easy as possible.
First Time Home Buyer Process Step 1: Meet With A Mortgage Broker For Pre-Qualification
Before you can go out and buy a home, it is a good idea to find out if you can qualify for a mortgage, and how much of a mortgage you can qualify for. After a short meeting, I will have all the information necessary to work on your application and typically within 24 hours I can get a rate hold in place for you and tell you what you could qualify for. If you have RRSP savings available to you, they could help you get the down-payment you may need to qualify for a mortgage. Please see my Home Buyers Plan page for more details. As a first time home buyer, you are also eligible for the CRA First Time Home Buyer's Tax Credit.
Step 2: Work With a Realtor On Finding Your Home
A good realtor is an important part of the process of buying a home, particularly as a first time home buyer. After being pre-qualified, they will help you to find a home in your price range that you will be enjoy. Once you find the property that is right for you, your realtor will negotiate on your behalf with the sellers on price and terms. In the contract, you will usually specify subjects that you will have to meet before providing a deposit. There are usually 2 major subjects in a purchase contract. The first is a satisfactory property inspection. You will hire a property inspector to ensure that the property is in the kind of condition you would expect. The second subject in the purchase contract would be mortgage financing. That leads me to the next step.
Step 3: Final Mortgage Approval
Your realtor would inform me of your accepted offer and will provide me with the necessary documents to obtain your firm mortgage approval. Providing you have already been pre-qualified to purchase, this is usually a fairly straight forward process. As part of this process, you will choose a solicitor to complete the legal documents with at closing.
Step 4: Subject Removal and Providing a Deposit
Once you are satisfied with the inspection on the property and you have a firm mortgage approval, you would sign a form to make the purchase contract firm and give a deposit, usually in the range of 5% of the purchase price. If you have funds in your RRSP, you can use these funds for your deposit by withdrawing them through the First Time Home Buyer Plan.
Step 5: Signing the Purchase and Mortgage Documents
Within a few days of your closing date, you will meet with your solicitor and make arrangements to sign all the documents to complete the purchase of your new home. Your solicitor will let you know if you require more money to complete the purchase. This can include:
- Additional down-payment you may make on the purchase
- Solicitors fees
- BC Property Transfer Tax (if applicable)
You can read more about closing costs on my closing costs page.
Step 5: Moving In To Your New Home!
You have done everything necessary to have your new home in your name. Now, it is time to move! You can arrange a moving Van and do everything yourself, or you can hire someone to do it for you. It is advisable to give yourself some time from the time you have to be out of your old home and the time you take over to give yourself a chance to do some things to make the home comfortable for you to live in before moving all of your belongings in.
Getting Started with a Mortgage Pre-qualification
The home buying process is generally straight forward, and with good advisors such as a mortgage broker (myself) and a good realtor and solicitor, the process should be a smooth one, even for a first time home buyer. If you are considering buying a home and would like some more information, please fill out the short form below. I look forward to speaking with you.