First Time Home Buyer in Ontario – The Dos and Donts of Getting a Mortgage
By : Mits Kantaria
If you’re a first time home buyer in Ontario, securing a mortgage will be one of the most important steps to get done early in the process. With pre-approval from conventional or private lenders in Ontario, you’ll be able to explore the market and find the home that perfectly suits your needs.
There are some do’s and don’ts to follow when you’re a first time home buyer in Ontario. We’ve got the tips to help you succeed.
The Do’s When Seeking a Mortgage Through Conventional or Private Lenders in Ontario
You might have some anxiety as a first time home buyer in Ontario, but the mortgage approval process is actually quite simple when you have some good advice and even some help from a mortgage broker in Ontario. Here’s what you should do when getting a mortgage.
Do Make Sure That You Get Pre-Approval
As a first time home buyer in Ontario, you might assume that the normal process is to talk to a local realtor and start looking for homes. While you can explore the market with freedom at any time, it makes much more sense to have pre-approval with conventional or private lenders in Ontario.
Pre-approval means that you can make an offer on a home when you find the right one. All of the work will be done and your mortgage will be lined up and ready for finalization.
Do Shop Around for the Best Rates with Conventional and Private Lenders in Ontario
When comparing large mainstream lenders and smaller private lenders in Ontario, you’ll find that the rates can vary significantly. Shopping around for the best rate is one of the most important things that a first time home buyer in Ontario can do. The difference in rates can be worth thousands over a five-year term.
You can explore the market yourself, although it’s much simpler and more efficient to use a mortgage broker in Ontario. Your broker will work as your advocate and can explore the market and engage with lenders with just a single credit check and document submission. The time saved compared to doing the work yourself is significant.
Do Gather All of Your Documentation
Make sure that you prepare all of your documentation before you seek pre-approval.
Typical documentation required by banks and private mortgage lenders includes:
- Government-issued identification.
- Bank account statements.
- Documentation for any large debts.
- Source of down payment.
- Consent for a credit check.
- Information on any current property or assets that you own.
Lenders may request additional documentation. The easiest way to ensure that you have everything available for banks and private mortgage lenders is to work with a mortgage broker in Ontario.
Do Stay in Touch With Your Mortgage Broker in Ontario
If you work with a broker, chose one that is communicative with a strong reputation. For buyers in Ontario, Mortgage Capital Investment is one of the most trusted brokers for first time home buyers. Stay in touch with your broker so that you can get timely updates on mortgage offers and pre-approval.
The Don’ts of Mortgage Pre-Approval
Just as there are certain things you should do when applying for pre-approval, there are several things that you should avoid in the process. Here’s what you should be careful of when you plan to buy your first home.
Don’t Seek Pre-Approval Beyond Your Budget
Private mortgage lenders may offer terms that you can’t afford in the long term. Just because all of your finances are in order today, it doesn’t mean that things won’t change in the future. It’s often better to seek pre-approval just below your expected budget because this will give you some flexibility if your financial situation changes throughout the term of the mortgage.
Don’t seek anything beyond your budget. Even if it gets approved, it could become problematic later on.
Don’t Make any Major Purchases
Changes to your overall financial situation could mean losing your pre-approval. If you make major purchases that diminish your savings, you could have a problem when it comes to loan finalization. Remember that purchasing a home is one of the biggest decisions that you will ever make. Hold off on the car, electronics, and other major purchases until you have finalized the mortgage and home buying process.
This applies to mortgages with banks and private mortgage lenders. Every lender in Canada will want to see you in a healthy financial position before extending any credit.
Don’t Change Your Job or Resign
Changing your job or quitting during the home buying process can introduce a lot of risks. Lenders won’t have any guarantee that you will find new work, which could lead to your pre-approval being rejected. Stability is important for lenders. Avoid making any major career decisions while you are in the process of buying a home for the first time.
Don’t Apply for Credit
Banks and private mortgage lenders will see a red flag if you apply for new credit when you are seeking mortgage approval. You need to have a healthy credit score without any recent major items. Lenders want to know that you’re in a good financial position and that you can comfortably meet repayments once the mortgage is all signed.
Ready to Start Looking for the Best Mortgage?
A mortgage broker in Ontario is the best way to get a mortgage that you can afford. Brokers find the best rates for first-time buyers and will work closely with you to understand your budget and your unique needs. A mortgage broker in Ontario will explore the market beyond the big banks to find better deals with private lenders in Ontario. Ultimately, you’ll have more choices with better offers than if you explored the market on your own.
Follow our do’s and don’t’s for getting a mortgage and enjoy an easier process as a first time home buyer in Ontario.
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||Bank Rate|
|3 Year Fixed/ 25 yrs||3.79%||4.19%|
|3 Year Variable/ 25 yrs||2.10% Promo||2.86%|
|5 Year Fixed/ 25 yrs||3.94%||4.24%|
|5 Year Variable/ 25 yrs||2.20% Promo||2.75%|
|5 Year Fixed/ 30 yrs||4.49% Promo||4.99%|
|5 Year Variable/30y||2.70%||3.40%|
Updated: May 16, 2022
* Current promotion rates may provide an additional 0.05% discount or may be anytime discontinued at the Lender discretion . Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA* * Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.