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A Guide to Stress-Free Mortgage Applications in Canada

You’re finally ready to buy your first home! Applying for a mortgage is the key step of the process. While this is supposed to be an exciting time, recent changes in Canadian lending regulations and interest rate increases have made it a bit challenging for would-be homeowners.
The good news is if you take the right steps and get your financial affairs in order as early as possible, your first-time home buyer mortgage application process can go much more smoothly.

Government Incentives For First-Time Homeowners

If you are a first-time homeowner in 2022, you should know that several federal government incentives are available to make things easier for you and help you take the big step.

Here is a quick overview:

  • Land Transfer Tax Rebates for First-Time Home Buyers –Land transfer taxes are a hidden, often forgotten cost of buying a home. These are calculated as a percentage of the property value and can get expensive. The good news is that the government offers land transfer tax rebates to help offset this expense.First-time home buyers in Canadian provinces may receive a $4000 to $8000 tax refund, depending on the property’s price and location.

    In Ontario, for example, first-time home buyers purchasing a home with a price of $368,000 or less get the full rebate which essentially means they won’t have to pay any land transfer tax. If the purchase price is higher, they can receive a maximum refund of $4,000.

    Meanwhile, first-time buyers in Toronto can receive the full rebate if their purchase price is less than $400,000. They also get a municipal land transfer tax rebate of up to $4,475.

  • Home Buyers Plan –The Home Buyers’ Plan is the government’s way of helping first-time home buyers by allowing them to withdraw tax-free amounts from their registered retirement savings plan (RRSP) to buy or build a home.It’s been around since 2019, but it just got an upgrade. Previously, first-time home buyers could withdraw up to $25,000 tax-free, but now the limit has been increased to $35,000. This plan allows people to save more for their down payments rather than just their income after taxes.

    However, homeowners must repay the amount within 15 years.

  • First Time Home Buyer Incentive –The government introduced the First Time Home Buyer Incentive to help first-time owners with their downpayment, as long as they share ownership and any earnings when they sell their home. In exchange for home equity, the government will contribute 5% or 10% of the property’s price, which can help first-time homeowners cut down their interest payments and the cost of CMHC mortgage insurance premiums. On selling the property after a period of 25 years, the homebuyer must repay the incentive in full.

    With these programs and our help, you can save several thousand dollars and also avoid the stress that is part of the process.

    If you haven’t already, it’s time you take advantage of these amazing opportunities!

Assistance For First-Time Home Buyers

Get Your First Mortgage Without Stress

Buying a home for the first time is both a nervous and exciting process. It means you have already achieved some stability in your life and are ready to make an investment. At Certified Mortgage Brokers, we want this time in your life to be as stress-free as possible. We want you to enjoy your first home and not worry about the loan or possible debts.

We Help You Make The Right Decision

There are many different processes involved when purchasing a home, and it is important to have an expert by your side to guide you through them. We will explain every detail and answer every question, so you are prepared and confident about making decisions that are right for you.

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Do You Have Financial Stability?

We understand that purchasing a home is an exciting, life-altering decision, and this excitement can sometimes cloud our judgment. Since housing is becoming more costly, it is wise to plan ahead so you can live in the home of your dreams without regret.

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Here are 5 key ways to see if you can pay for your dream home:

  1. What is your credit score? The higher your score, the better your outlook for securing a loan. It’s a good indicator that shows your ability to make payments and pay debts on time.
  2. Compare your current expenses to the amount you have saved or invested to see if you are living within your means.
  3. Determine how much you can spend on housing each month without going into bankruptcy.
  4. How much would you need to add to your monthly expenses if you owned the home you plan to live in today?
  5. Consider how much money you’ll need for all upfront expenses (downpayment, insurance costs, land registration fees, legal or notary fees, moving fees, and more).
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If you’ve managed to pass each key step, congratulations are in order!

Now, you can begin the actual process of home ownership. A qualified mortgage broker can guide you on these next steps, be it refinancing or applying for a new mortgage.

Working with brokers will help you navigate the world of home financing smoothly and without stress. Best of all, as professionals, brokers recognize that every borrower has different financial circumstances and needs, so they’re well-versed in helping prospective buyers determine a budget that works for them.

Terms Related To Mortgages

 

  • Down Payment – You must have at least 5% as a down payment on your home—the bigger the down payment, the better the interest rate you can negotiate. A mortgage with a down payment of less than 20% will be subject to mortgage insurance. This is added as a lump sum to your mortgage and will increase the repayment amount.
  • Term – This is the period of your mortgage during which the terms and conditions will remain unchanged. This period can be anything from six months to ten years.
  • Amortization – The period that it will take you to pay off your property. This is usually 25 to 30 years.
  • Fixed Mortgage Rates – Favored by first-time home buyers, this is a contract with fixed interest rates over the mortgage term. While it will cost a little more, it ensures you can budget since the repayments over the term will remain the same even if the interest rates change.
  • Variable Mortgage Rates – These are linked to the prime interest rate and will change in line with changes in the Central Bank’s call rate. The advantage of variable rates is that they are typically lower over the longer term. However, if you have a low tolerance for risk, you should avoid going on this path.
  • Mortgage Penalties – A very important consideration for any lender is the mortgage penalty, the amount you will pay to your bank should you pay your mortgage early. Every bank charges different penalties and it can cost you tens of thousands of dollars if the contract is broken.
  • Pre-Payment Privileges – Lenders will allow you to make early payments of 10% to 20% of your mortgage without incurring penalties. Higher payments on your bond can save you thousands in interest over the mortgage term. Buying a home for the first time is a big step, and mistakes can be costly in the long term. Certified Mortgages Brokers Toronto can help you navigate the pitfalls.
  • Conclusion – As with any important financial process, the best way you can approach buying your first home is with a well-thought-out strategy. Knowing your financial well-being and taking advantage of the government incentives available to you is paramount to a stress-free mortgage application.
    Furthermore, choosing the right brokers can make the process easier and smoother. So when it comes to taking those first few steps for your first home, choose Certified Mortgage Brokers.

Google Reviews

Certified Mortgage Brokers
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Afton Jaskolski
2020-12-30

Getting a private mortgage was not easy to be honest, but at least with Mr. Leon it was doable. Thank you for your help!

Davin Mills
2020-12-26

There are a lot of mortgage brokers in toronto to choose from, I was a bit intimidated by that. Don't regret I picked CMB, they took the lead and made sure to cover all the bases

Tracy Wilhoite
2020-11-21

I was renting an apartment for a long time and finally decided to take a big step - get a mortgage instead. Team at certified Mortgage Brokers laid out various options for me. The actual process went smooth and quick, happy with my new home.

Ryder Turcotte
2020-11-16

My wife and I decided to refinance our mortgage and started looking for a mortgage broker in Toronto. There were so many options, so you can imagine how overwhelmed we got! After talking to Leon we decided to proceed with Certified, didn't regret that decision once. They always gave useful recommendations, were attentive, and constantly in touch. And most importantly (for us) they helped us to save some money!!

Lucy Zimmerman
2020-11-11

Vita was great. Helped my son with all the paperwork and got him very good interest rate. On the closing date called to follow up if everything went fine. Quite a pleasant experience. I would recommend this firm for anyone who is looking a mortgage broker.

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