First Time Buyer Tips

If you’re looking at purchasing your first home in the near future, the task of getting a Calgary mortgage can be somewhat daunting. Here are some tips to make the process a little easier!

- Build your credit: Prior to even thinking about obtaining a Calgary mortgage, it’s a good idea to be on top of your credit situation. Most lenders require that borrowers have at least two trade lines (such as a credit card, personal loan, vehicle loan, etc.) on their credit report to show that they can manage a decent amount of credit. Additionally, you’ll want to take care of any collections that might appear on your credit report. You can check into this by contact Equifax or TransUnion, the two major credit reporting agencies in Canada.
- Evaluate affordability: Before you speak to a Calgary mortgage broker, figure out how much you think you feel comfortable going towards a mortgage payment and housing per month. That way, you won’t feel pressured to buy a more expensive home if you qualify for a larger loan amount.
- Arrange a down payment: Whether your down payment is coming from your own savings or RRSPs, a gift from an immediate family member, or from some other source, you should know how much money ahead of time you plan on using as a down payment. This is important, since lenders now require a minimum 5% down payment.
- Ensure you have stable employment: Not only would it be a bad situation for you if you lost your job shortly after obtaining a mortgage, lenders also wouldn’t want that to happen. That is the reason that lenders require borrowers to have completed the probationary period at their place of work. Make sure that this is the case for you, and don’t plan on changing jobs or cutting down the hours you work until your mortgage has closed, since that can affect your ability to qualify.
- Get pre-approved: Go visit your Calgary mortgage broker and get a pre-approval. Speaking with them will give you a good idea of what to expect throughout the home buying process, and it will also give you an upper limit of what mortgage amount you qualify for (depending on what you feel comfortable with for a payment). Additionally, and mortgage broker can get you a rate hold for up to 120 days, so that if interest rates go up between the time you get your pre-approval and the time you buy, you’ll get the rate that was held for you.
- Get your documentation together: If your Calgary mortgage broker doesn’t ask for full documentation at the time of pre-approval, they will be doing so immediately upon you having an accepted offer on a property. That means that in order to make things proceed as fast as possible, you should have all your documentation lined up beforehand. Typical documentation includes (but is not limited to): a job letter and pay stub for each applicant, proof of down payment, property listing sheet, purchase contract and void cheque.

Your Calgary mortgage broker is also a valuable resource, so don’t count solely on this list! Speak to your mortgage broker – they’re ready and willing to answer all your questions and walk you through the mortgage process.