Now Offering
In-Person &
Virtual Meetings

Book Now Book Now

Mortgage FAQs for First-Time Home Buyers

Mortgage FAQs for First-Time Home Buyers

view of neighbourhood with homes for sale

view of neighbourhood with homes for sale

When you buy your first house, you have so many mixed emotions roll through you. From the excitement of buying a home of your very own, to a fear of buying the wrong house, to simply being overwhelmed by the whole process overall. It’s no small decision, buying your first home. That’s why I like to explain the whole process step-by-step to my clients, answering all their questions along the way. From figuring out how much of a mortgage you can afford, to collect all the paperwork needed to submit your application right through to closing the deal after you’ve found your dream home — I love being the mortgage guy. There is just something so exhilarating about helping clients through this big step in their lives.

With every first-time buyer though, there are always common questions throughout the mortgage process. This is what Jeff had to say about working with me as he and his wife were buying their first home.

“Darren is an awesome broker! He helped me and my wife with the mortgage on our first house. As first-time home buyers, we had a lot of questions but he made the entire process quite easy for us. We highly recommend him.”

As he mentioned they had a lot of questions and that’s perfectly fine! I expect you to ask questions as a first-time homebuyer. In fact, the more questions you ask, the more educated your decision can be when it comes to securing the right mortgage for your needs.

So, what are these frequently asked mortgage questions first-time home buyers tend to ask? Read on to find out, and if you have any others that aren’t listed here feel free to give me a call at 705-315-0516 or book a meeting with me by clicking here.

What are the benefits of working with a mortgage broker?

When you work with a mortgage broker, you have access to more mortgage options and different mortgage rates than the banks offer. Most banks have a set mortgage package and there isn’t much wiggle room. When you work with an experienced mortgage broker like myself you can rest easy knowing I’ve searched the database for the best rate, verified that the mortgage you choose has the right options when it comes to being able to pay off a lump sum or that the mortgage suits your financial plan specific to your homeownership goals. For example, if you don’t have a strong application for the mortgage you want, I know how we can brush up your application in the right places to get you the approval you want.

How much do I need for a down payment?

If you are buying your first home and the purchase price is $500,000 or below. You need a minimum down payment of 5%. If you are buying a home between $500,000 and $1 million, you need 5% down on the first $500,000 plus 10% down on the remaining amount above the first $500,000. And, for a home $1 million or more you need 20% down.

What if I don’t have a down payment?

If you don’t have a down payment set aside already there are a few programs available to you that you can apply for. One being the Affordable Homeownership program, and another being the first-time homebuyer incentive program. Many young homeowners also look to their parents or grandparents to assist in loaning them the money for their down payment. If you aren’t able to take advantage of one of these options, getting a solid savings plan in place to help you set aside the funds you need for a mortgage down payment is your next best option. Having to wait for a little while to be able to gather the down payment you need is often better than getting yourself into too much debt in terms of loans. It’s also beneficial to wait because buying a home that’s less than what you wanted just to refinance in a year or two to get into the house you need often means paying extra in penalty fees unnecessarily.

Why should I get pre-approved for a mortgage?

Getting pre-approved for a mortgage is like setting a budget to spend on a monthly basis at the grocery store. When you get pre-approved for a mortgage, you know exactly what price range to look at when it comes to your house hunt. It also gives you the confidence you need in today’s fast-moving real estate world, to make a quick offer. If you’ve ever gone grocery shopping and gotten to the counter to find that your debit card declined your purchase, and you had to put a few items back, that’s the same feeling you avoid when buying a home outside of your budget. However, the difference is that if you put in a firm offer on a home, and you aren’t approved for that size of a mortgage it can put you in hot water from a legal perspective.

What if my mortgage application is denied?

If your mortgage application isn’t as strong as it needs to be to secure the mortgage you want, I’ll let you know that in advance of applying. You might just need to pay off your debt ahead of applying, or you could ask a parent or grandparent to become a co-signer or guarantor to help your application in areas that you don’t shine in financially. I help my clients get approved for the mortgage they need, or I help them create a financial plan that will get them there. I’m sort of like your financial friend to help you figure out what options you need, which mortgage to apply for, and how to make sure you can afford that mortgage long term once your home purchase closes.

What costs should I look out for aside from my down payment?

This is a great question that might not be asked quite enough. Aside from your mortgage down payment, you’ll also need to set aside money for closing costs. Closing costs are fees like land transfer tax, title searches, home inspection fees, and insurance.

Buying a home is exciting and it’s tough to think about all the details when all you want to do is head out house hunting to take a look at what might be your dream home. That’s why I’m here, to help make sure that you’ve added all the right details into your mortgage application to ensure your mortgage approval, and to review your mortgage options to make sure the mortgage you choose suits your life today and in the future. As an experienced mortgage broker in Barrie, I know what options are out there, what tricks help you get the best rate, and how to ensure you don’t get dinged with extra fees along the way in your real estate ownership journey. Your dream home is out there. Give me a call at 705-315-0516 and let’s get you approved for the mortgage you need.

× Close this modal popup